Volume 703 Week 10 - Thursday 12 March 2015Text is incorporated into the Bound VolumeVolume 703 Week 10 - Thursday 12 March 2015[Sitting date: 12 March 2015. Volume:703;Page:2201. Text is incorporated into the Bound Volume.]Thursday 12 March 2015Mr Speaker took the Chair at 2 p.m.Prayers.Business StatementHon GERRY BROWNLEE (Leader of the House):When the House resumes on Tuesday 17 March the Government will look to progress a number of bills on the Order Paper including the Human Rights Amendment Bill the Construction Contracts Amendment Bill and the Statutes Amendment Bill (No 4).CHRIS HIPKINS (Senior Whip—Labour): I wonder whether the Leader of the House could advise us whether the Government has any intentions to progress matters regarding members’ remuneration during next week and whether in fact he envisages that replacing the members’ day that would normally be scheduled for Wednesday.Hon GERRY BROWNLEE (Leader of the House): It is most definitely the Government’s intention to progress that legislation. It is not the Government’s intention for it to impede members’ day.Questions to MinistersPrime Minister—Northland By-election1.RON MARK (NZ First) to the Prime Minister: Does he stand by all his statements?Hon BILL ENGLISH (Deputy Prime Minister) on behalf of thePrime Minister: Yes.Ron Mark: Given that the Prime Minister said “last week we were looking through the various policies we want to announce—so they were finalised I suppose last week.” on what date and at what time then was the decision taken to double-lane the eight Northland bridges not listed in the draft Northland regional land transport plan 2015-21?Hon BILL ENGLISH: I cannot give exactly that detail other than to say it was before it was announced. But it is certainly the Government’s plan to campaign on what it plans to do for Northland. The issue for New Zealand First is whether or not it is for or against the bridges being double-laned.Ron Mark: I raise a point of order Mr Speaker. My colleague Tracey Martin yesterday asked this very question. It has been 24 hours since that question was put. We would have thought that by this stage the Prime Minister’s office might be able to give you that answer—Mr SPEAKER: Order! Can I refer the member to the primary question he has asked: “Does the Prime Minister stand by all his statements?”. Then he asked a supplementary question that said: “On what particular date and at what time was this decision made?”. The Minister is quite at liberty to say when he rises to answer that question that he does not have that information with him.Ron Mark: Since the 3 NewsReid Research Services poll of 5 March 2015 what is the cumulative value of policy pledges made by Ministers to Northland?Hon BILL ENGLISH: I think that National Party policy is the one that has been announced because we are campaigning to get an MP into Parliament who represents Northland not one who represents Southland.Ron Mark: I raise a point of order Mr Speaker.Mr SPEAKER: Order! [Interruption] Order! This is a point of order.Ron Mark: The question was nothing to do about what the National Party is campaigning to do; it was about the value of—Mr SPEAKER: Order! The member is now making exactly the same point as he made just before. If he asks a very general primary question such as “Does the Prime Minister stand by all his statements?” and then he moves on to ask quite specific supplementary questions about a cumulative dollar value he cannot expect the Minister to have that information with him. Does the member wish to ask further supplementary questions or shall we move to question No. 2?Ron Mark: Further to the Prime Minister’s points of order yesterday are the pledges he is making to the people of Northland being made in his capacity as the Prime Minister or as the leader of a very nervous National Party?Hon BILL ENGLISH: There is no responsibility for the Prime Minister’s role as leader of the National Party but I can say that they are promises made out of respect for the voters of Northland who need to know what they are voting for not what they are voting against. Part of the plan is to get an MP who will service Northland not a new New Zealand First MP from Invercargill which is what that member is campaigning for.Ron Mark: Then how many Ministers have visited Northland since 5 March and what specific ministerial duties have they been performing whilst they are up there?Hon BILL ENGLISH: If the member spent more time up there and not trying to elect an MP from Southland for Northland he would know. There have been quite a few ministerial visits because the Government does a lot in Northland and it plans to do a lot more. And we believe that Northland voters deserve to see what the plan is.Government Financial Position—Return to Surplus and Ministerial Responsibility2.GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he stand by his statement “every Minister believes that the decision that affects them is the one that makes all the difference to the surplus or the deficit”?Hon BILL ENGLISH (Minister of Finance): Yes I do because I am sure there are any number of Ministers who believe that their decisions or decisions about their portfolio were responsible for the fact that Treasury announced in the 7 months to January a $77 million surplus the first one in a number of years. Of course it is too early to tell whether that will translate into a surplus for the full year but we are quite happy for any and every Minister to claim credit for the fiscal management that has gone into generating that $77 million surplus.Grant Robertson: Does every Minister have advice from their own department Treasury the Ministry of Business Innovation and Employment and outside agencies that they are in a position to save New Zealand businesses and workers $350 million as the Minister for ACC had?Hon BILL ENGLISH: All I say to that member is that when those members attacked the manufacturing sector by saying it was in crisis it came right and now that they are attacking the surplus we have got one.Grant Robertson: I raise a point of order Mr Speaker.Mr SPEAKER: Can I invite the member to repeat his question.Grant Robertson: Do not interrupt him this time Gerry—Mr SPEAKER: Order! [Interruption] Order! I have been gracious enough to the member to allow him to ask his question. I would now be grateful if he would.Grant Robertson: Does every Minister have advice from their own department Treasury the Ministry of Business Innovation and Employment and outside agencies that they are in a position to save New Zealand businesses and workers $350 million as the Minister for ACC had?Hon BILL ENGLISH: No but I think that a number of Ministers have had advice that protests outside Government agencies over restructuring and excessive wage rises would probably make it harder to get to the surplus and that member has organised such—Mr SPEAKER: Order! [Interruption] Order! The question was answered at the very start.Grant Robertson: Has the Minister of Revenue expressed the belief to him that decisions around the implementation of the child support system will make the difference between surplus and deficit given that the cost of that project had blown out from $30 million to $210 million?Hon BILL ENGLISH: I think he may have done and as I think has been discussed both here and in the select committee the child support changes were made a great deal more complex by the select committee. It turns out that the cost of inserting those more complex changes into a very old tax system were high and the Minister took a number of policy decisions to wind them back and reduce the cost and that has helped us get to a surplus.Grant Robertson: How often did the Minister of Revenue report to him about the escalation of $180 million of cost on the implementation of the child support system?Hon BILL ENGLISH: Oh pretty regularly over a period of 2 or 3 years. I mean it is a large complex area of policy where striking a balance between administrative cost and fairness has proven to be very difficult. Every member of this House gets to deal with people who feel like they are on the wrong end of the child support law and I thought that the member might have been a bit more understanding about the reality for many New Zealand families.Grant Robertson: As Minister of Finance has he sought to hold anyone accountable for a blowout of $180 million in the implementation of the child support system?Hon BILL ENGLISH: Yes. There have been a lot of discussions about clarity and accountability and I think as the Commissioner of Inland Revenue has stated in the last few days ultimately she is accountable.Grant Robertson: If she is accountable what action does the Government intend to take?Hon BILL ENGLISH: Well the Government has a lot of confidence actually in the Commissioner of Inland Revenue. It has taken a series of decisions to minimise the cost and actually if the member took the time to understand the issues involved he would probably be asking a different set of questions.Grant Robertson: So can we confirm for the House’s benefit that the Minister of Finance does not believe that he needs to do anything in particular about the fact that there has been a $180 million blowout in the cost of implementing the child support system?Hon BILL ENGLISH: No I would not confirm that because it is not the case. The Government has worked on this issue for 3 if not 4 years trying to deal with the complexity and cost of delivering more fairness for New Zealand families who find themselves in pretty difficult situations and I think that every member of Parliament knows how hard these issues are. It turned out to cost more than was originally expected. A number of decisions were taken to wind that cost back considerably.Monetary Policy Statement—March 2015 Forecasts3.Dr JIAN YANG (National) to the Minister of Finance: What recent reports has he received about the growth outlook for the New Zealand economy?Hon BILL ENGLISH (Minister of Finance): Today the Reserve Bank issued its Monetary Policy Statement for March with updated forecasts that the economy will grow by 3 to 4 percent over each of the next 2 years after estimated growth of over 3 percent in 2014. The bank says that the domestic economy remains strong supported by growth in employment and construction activity. Business investment and household income and consumption are moderately strong supported by low interest rates high net migration rising house prices and the flow-on effects of high commodity export prices in the last dairy season. As the Reserve Bank pointed out of course there are some risks to this scenario over the next couple of years. It also forecast that annual inflation to March 2015 would be zero which I think is unprecedented and revised down its estimates of increases in the cost of living to 1.3 percent for the year to March 2016.Dr Jian Yang: What does the Reserve Bank see as the main drivers of inflation and the economic outlook?Hon BILL ENGLISH: The Reserve Bank says that headline inflation forecasts reflect a high exchange rate weak global inflation and falling oil prices so effectively New Zealand is importing deflation from offshore. Domestic or non-tradable inflation is higher at 2.4 percent but it does remain well below the long-term average. Oil prices are expected to remain at their current level over the next 2 years moderating tradables inflation and boosting incomes and economic activity. The Reserve Bank says the outlook for the economy depends on these four factors: oil prices dairy prices and farmers’ spending domestic capacity pressures and the housing market.Dr Jian Yang: What is the role of housing in the outlook from the Reserve Bank?Hon BILL ENGLISH: The Reserve Bank seems to spend a lot of time focusing on the housing market because in an economy where most things seem to be pointing towards sustained economic growth for some time which will lift incomes and households across the country the housing market in Auckland is one obvious imbalance. Projected building work continues to rise with the Canterbury rebuild and building work continues to rise in response to the housing shortage in Auckland. House price inflation is being driven in part by net migration and by falling interest rates but also the Reserve Bank agrees with the Government’s view that shortage of supply is a critical driver of house price increases in Auckland.Dr Jian Yang: What steps is the Government taking to improve housing supply and take pressure off interest rates?Hon BILL ENGLISH: Of course the critical thing about housing supply to understand is that it is councils that make the decisions. So the Government is working closely with councils to create special housing areas; we are reforming the Resource Management Act which I know will have support from the Opposition members who are keen to see the supply of housing expanded; and we are spending $1.9 billion a year on accommodation support. On 1 April the Government’s KiwiSaver HomeStart programme will get under way and that will also encourage new supply of housing.Roading Northland—Spending4.PHIL TWYFORD (Labour—Te Atatū) to the Minister of Transport: How much has been spent in total by the New Zealand Transport Agency on roads in the Northland region under National Land Transport Programmes set by the current Government since it was elected in November 2008?Hon SIMON BRIDGES (Minister of Transport): I cannot be as precise as the member seeks because records on spending are kept only year on year and start in July and finish in June the following year. But starting in July 2008 through to June 2015 this Government has spent $750 million on Northland roads some 40 percent more than the Labour Government did in the same period of time. We back Northland unlike the Labour Party and New Zealand First.Phil Twyford: I raise a point of order Mr Speaker. The question was on notice. The National Land Transport Programme provides detailed information on yearly disbursements. It is not good enough for the Minister to say he cannot answer that question in detail or accurately.Mr SPEAKER: Order! No no. As I understood the Minister he then talked about the financial year so he gave a figure from 1 July 2008 of $750 million. The question has undoubtedly been addressed. If the member feels it is an unreasonable answer I suggest he now makes progress with his supplementary questions.Phil Twyford: When he told the media and the House that National had spent $750 million on Northland roads was he aware that that includes a quarter of a billion dollars budgeted or spent by the then Labour Government; if so why is he trying to deceive the people of this country about his cuts to the road funding in Northland?Mr SPEAKER: The Hon Simon Bridges—either of those supplementary questions.Hon SIMON BRIDGES: The member is plain simple wrong. We have spent $750 million over 7 years. But here is the thing Mr Twyford: no matter how you cut the numbers year on year month on month we have spent more than you.Mr SPEAKER: Order! It is not—[Interruption]Hon Annette King: I raise a point of order Mr Speaker.Mr SPEAKER: Order! I am on my feet.Hon Annette King: Yes Mr Speaker. I see that.Mr SPEAKER: I am on my feet.Hon Annette King: Would you like me to sit down?Mr SPEAKER: I would like that. I was going to say to the Minister that it is not appropriate to bring the Speaker into this debate.Hon Annette King: If the Minister quoted from an official document when he gave the figures to the House today could he please table it? I am waiting for—Mr SPEAKER: Order! It is easily resolved. Did the Minister quote from an official document? [Interruption] Order!Phil Twyford: Why is he refusing to release the cost-benefit analyses completed for each of the 10 new bridges and which projects have been cut or delayed to free up the funding for his by-election announcement?Mr SPEAKER: Again either of those two supplementary questions the Hon Simon Bridges.Hon SIMON BRIDGES: I appreciate it is difficult for the member. This is the second question he has asked me ever—some 200 percent in 1 week—so I say congratulations on asking a question. The projects stack up. There are three bridges that will be prioritised in the first 3 years. All are in the regional land transport plan. It is quite clear to the people of Northland that these are important projects that need to be done and we back Northland.Phil Twyford: Was he aware when planning to widen—[Interruption]Mr SPEAKER: Order! The member can start his question again.Phil Twyford: Was he aware when planning to widen the “Darby and Joan” kauri bridge in Waipoua Forest that it is not actually a bridge but a single-lane section of road left that way in order to protect two ancient kauri trees? What does this Government have against ancient kauri trees—first the Resource Management Act reforms and now they are in the way of National’s pork barrel?Mr SPEAKER: Again the Hon Simon Bridges—either of those two supplementary questions.Hon SIMON BRIDGES: I can assure the member that “Darby and Joan” are safe and sound.Phil Twyford: Had he seen the widely published photograph of his colleagues putting up an election hoarding close to a busy main road before he announced—Mr SPEAKER: Order! There is no ministerial responsibility in that question.Phil Twyford: I raise a point of order Mr Speaker. The ministerial responsibility lies in the fact that the question—you did not listen to the full question—Mr SPEAKER: Order! The member will resume his seat. He is very lucky that he is remaining in the Chamber today. I have ruled that question out of order. I will on this occasion give the member the opportunity to have another question otherwise we are moving on.Phil Twyford: Has he been advised that the widely published photograph of his colleagues putting up an election hoarding was done before his announcement of the 10 new bridges in Northland; if so is he embarrassed that local people are taking the large pig standing in the photograph as a metaphor for his announcement?Mr SPEAKER: I fail to see much ministerial responsibility. I will leave it for the Minister to answer. I call the Hon Simon Bridges but he has a certain amount of latitude.Hon SIMON BRIDGES: I understand the anger and disappointment from the member opposite. It must be gutting to know—[Interruption]Mr SPEAKER: Order! The member will remove that sign immediately from the Chamber. The member will remove that from the Chamber. Does the Minister wish to complete his answer?Hon SIMON BRIDGES: I appreciate it is gutting—[Interruption]Mr SPEAKER: Order! Because of the way that was taken from the Chamber the member can remove himself for the balance of question time.Chris Hipkins: I raise a point of order Mr Speaker.Mr SPEAKER: No first of all I want the member to remove himself.Phil Twyfordwithdrew from the Chamber.Mr SPEAKER: Order! This is a point of order. It will be heard in silence.Chris Hipkins: There are some quite clear Speakers’ rulings around the use of props in the House and I wonder whether you could indicate for future reference so that members can comply with those which of those you feel Mr Twyford did not comply with.Mr SPEAKER: I can. If the member wants to look at Speakers’ rulings 56 and 57 there are a number of rulings about the use of visual aids. If they are of value to the House then they can be used. That one I determined was straight electioneering and under no circumstances will I allow that. [Interruption] Order! Under no circumstances will I allow that to be displayed in this Chamber. Then I asked the member to remove it. The way he then removed it by displaying it to everybody in this House I found totally unacceptable. On that basis I have asked the member to leave the Chamber.Hon Annette King: I raise a point of order Mr Speaker.Mr SPEAKER: Is it a relitigation?Hon Annette King: No not at all. I wish to table the New Zealand Transport Agency figures from 2007-08 2008-09 to 2013-14 showing that—Mr SPEAKER: Order! The member has explained what she is attempting to table. I just need to check whether the information is freely available on the website.Hon Members: Yes.Mr SPEAKER: Yes it is and I will not—[Interruption] If other people wish to leave and accompany their colleague I can assist.Hon Annette King: I raise a point of order Mr Speaker. Can I just clarify because the Minister said they were not available—Mr SPEAKER: Order! The member is really testing my patience. I have explained on many occasions the purpose of tabling a document. It is not to make a political point. It is to further inform the proceedings of the House. On this occasion I have ruled that if it is freely available to members they have the ability after question time to go back and if they want that information get it on the website. Members need to bear in mind the tabling of documents is not to make a political point.Julie Anne Genter: Can the Minister confirm according to advice from his own officials that funding ranges for local roads road maintenance and road safety were reduced by National in 2009 and 2012 in order to increase funding ranges for a few expensive new State highways none of which are in Northland?Hon SIMON BRIDGES: That is incorrect. I appreciate though the member’s interest in public transport. We have not made an announcement on that in Northland yet. Can I say we have not talked about buses. That is lucky though because that is what the Labour Party through—Mr SPEAKER: Order! That will not help the order of this House. [Interruption] Order! I will be asking somebody to leave and it will be from the front bench on my left at this stage.Julie Anne Genter: I seek leave to table this report from the Ministry of Transport stating that funding ranges for new and improved State highways were significantly increased in 2009 and 2012—Mr SPEAKER: Order! The document has been described. I just again need to check the source. Is it freely available to members on the web?Julie Anne Genter: No it was not.Mr SPEAKER: I will take the member’s word and therefore put the leave. It is a Ministry of Transport report that is not freely available to members. I am putting the leave. The House can decide. Is there any objection to that being tabled? There is not. It can be tabled.Document by leave laid on the Table of the House.Independent Police Conduct Authority—Iriheke Pere Case5.MARAMA FOX (Co-Leader—Māori Party) to the Minister of Police: What advice if any has he received about Iriheke Pere given that it is over 18 months since he was shot in the back while he was handcuffed and not resisting arrest?Hon SIMON BRIDGES (Associate Minister of Justice) on behalf of theMinister of Justice: I appreciate the member’s interest in the matter. Of course it is the subject of an Independent Police Conduct Authority inquiry. The authority is independent in its day-to-day operations and it does not report to the Minister of Justice on individual complaints so I have not received any advice on the matter.Marama Fox: Although we acknowledge that the Independent Police Conduct Authority is an independent authority we would like to know whether the Minister has any indication of when Iriheke Pere and his whānau expect to receive a report explaining why he was shot.Hon SIMON BRIDGES: As the member acknowledges the Independent Police Conduct Authority is independent in its operations and it would not be appropriate for me to comment on a specific case. The member will if she has a strong interest in it—and I am sure she does—need to take this particular matter up with the authority.Marama Fox: What assurances can the Minister give that the delay in the timing of the report will not impact on Iriheke Pere’s potential claim for personal injury given that the statute of limitations for personal injuries ends in August 2015?Hon SIMON BRIDGES: As I say the Independent Police Conduct Authority is independent. I think that given the tenor of the member’s question it is a matter on which Iriheke Pere would be wise to take legal advice.Roading Waikato—Waikato Expressway6.DAVID BENNETT (National—Hamilton East) to the Minister of Transport: What progress has the Government made on completing the Waikato Expressway Road of National Significance?Hon SIMON BRIDGES (Minister of Transport): Earlier this week I was delighted to announce that over $1 billion worth of funding has been approved by the New Zealand Transport Agency for work to complete the remaining three sections of the Waikato Expressway. The funding means that planning and work on the final three sections of this motorway can get under way which when completed will see the expressway extend 102 kilometres from Cambridge to the base of the Bombay Hills. The new funding will also bring the Government’s total investment in the expressway to around $2 billion. Just like for other regions such as Northland there is no question that the Government is fully committed to supporting the Waikato and ensuring that it realises its economic growth potential.David Bennett: What benefits will the Waikato Expressway deliver?Hon SIMON BRIDGES: Many benefits. At least 1000 jobs will be created once the final three stages of the expressway get under way. The expressway is a vital piece of infrastructure which once completed will become the key strategic route for the Waikato region. It will connect the agricultural tourism and business centres in the wider Waikato and Bay of Plenty areas with Auckland. This improved connection will increase capacity while reducing travel times reducing fuel and vehicle operating costs and reducing the number and severity of accidents in the region.Tim Macindoe: What reports has the Minister seen on the announcement this week that work on the final three sections of the Waikato Expressway is set to get under way?Hon SIMON BRIDGES: I have seen a report from the chair of the Waikato Regional Transport Committee who says: “This is fantastic news and the work will give a further shot in the arm to the regional economy road safety and quicker journeys for both business and the public.” I have also seen a quote from the Mayor of Hamilton Julie Hardaker saying: “This project is a major contributor to economic prosperity not only for our region but for New Zealand. Easy safer and quicker travel times between Auckland and Hamilton will provide another boost to Hamilton’s liveability and economy. We have already experienced the benefits of this roading project with the sections completed to date.” It is clear from these comments that the Government is really delivering for the people of Waikato. Indeed we are doing so throughout the regions of New Zealand.Climate Change Issues Minister—Performance7.Dr RUSSEL NORMAN (Co-Leader—Green) to the Minister for Climate Change Issues: Is the Government’s objective to increase New Zealand’s net greenhouse gas emissions or is the Government’s objective to decrease New Zealand’s net greenhouse gas emissions?Hon TIM GROSER (Minister for Climate Change Issues): Decrease.Dr Russel Norman: In light of that reassuring answer that the objective is to decrease does he think he has been a successful climate change Minister given that New Zealand’s net greenhouse gas emissions have increased by 20 percent since this Government was elected in 2008?Hon TIM GROSER: The spectre of the tall-poppy syndrome hangs menacingly above my head. I will leave it to others to make a judgment on that.Dr Russel Norman: Does he think he has been a successful climate change Minister given that according to United Nations figures New Zealand’s carbon intensity has increased by 14 percent since his Government was elected?Hon TIM GROSER: Leaving the first part of the question aside for the same reason let me just say that that figure is completely misunderstood. The reality is that the Government measures emissions intensity in terms of percentage of emissions per unit of real GDP. On that basis—Hon Ruth Dyson: The rest of the world is wrong; only Tim Groser is right.Hon TIM GROSER: No it has been misquoted. On that basis emissions intensity in New Zealand has decreased by 30 percent between 1990 and 2012—the exact figure is 29.2 percent.Dr Russel Norman: I seek leave to table a report from the Parliamentary Library showing emissions intensity has increased by 14 percent.Mr SPEAKER: Leave is sought to table that particular information. Is there any objection? There is none. It can be tabled.Document by leave laid on the Table of the House.Dr Russel Norman: I seek leave to table a document from the library showing that New Zealand’s net greenhouse gas emissions have increased 20 percent since 2008.Mr SPEAKER: Leave is sought to table that particular information. Is there any objection? There is objection.Dr Russel Norman: Does he believe he has been successful as a climate change Minister given that the Ministry for the Environment is projecting a further 48 percent increase in New Zealand’s net greenhouse gas emissions in the next decade?Hon TIM GROSER: The Government is on track not only to meet its 2008-12 commitment to reduce net emissions to 1990 levels but it is absolutely on track to achieve its objective of reducing emissions further to a minimum of minus 5 percent. Those are the commitments that we have taken; those are the commitments that we will meet.Dr Russel Norman: Is the Government on track to meet its publicly announced target of decreasing emissions by 50 percent by 2050 in light of the Government’s own projections that show emissions will increase by 50 percent in one decade?Hon TIM GROSER: I am still confident that can be achieved for a number of reasons: No. 1 because our forestry cycle will swing sharply back in the other direction to being a sink for carbon emissions after 2030. Secondly I think this country has got every reason to be optimistic that we will find long-term solutions for 70 percent of our gross emissions in the longer term because approximately 50 percent are agriculture—48.5 percent is the exact figure. There is major scientific research coming through that is extremely promising that should be available on the commercial market in 5 to 10 years. And this country if you had been listening to the statements Mr Bridges has been making is actually ideally placed to make major reductions in transport emissions which are 20 percent of New Zealand emissions as the cost of hybrids and electric vehiclescontinues to reduce given the massive share of renewable electricity in our country. So if he is—Mr SPEAKER: Order! That is a very long answer.Dr Russel Norman: This graph is relevant to my question Mr Speaker. Is he proud of the fact—[Interruption] Yes that is right; the National Party will cheer but this shows New Zealand’s emissions intensity.Mr SPEAKER: Order! I know there may be some confusion about what the particular graph is showing but the member still deserves the opportunity to ask his question.Hon Steven Joyce: I raise a point of order Mr Speaker. This may help the House. I do not think you are allowed to table political polls in the House.Mr SPEAKER: That is not a legitimate point of order. Would the member now get on with his question.Dr Russel Norman: Is the Minister proud of the fact that the blue line in this graph is the line of New Zealand’s greenhouse gas emissions going up by 48 percent—is he proud of the fact that New Zealand’s emissions are going to go up by 48 percent—and that the blue line also happens to be the colour of the governing party and is he surprised by that?Hon TIM GROSER: Putting aside exactly what that graph represents and its authenticity the answer is that I am very proud to be part of a Government that is going to deliver on the two international commitments we have to reduce our net emissions.Dr Russel Norman: Is it not true that when he is called the Minister for climate change he really is the Minister for climate change and a very successful Minister at that?Hon TIM GROSER: Until the Prime Minister suggests otherwise I think I do consider myself the Minister responsible for climate change issues.Hon Hekia Parata: I raise a point of order Mr Speaker. This is a wharenui and I think it is totally inappropriate to have props like that thrown around on the floor of our House.Mr SPEAKER: It is a very large prop. The member might have found it easier to handle if it had been somewhat smaller but he is allowed a visual aid if it assists—Hon Member: It’s on the floor.Mr SPEAKER: Order! I do note it fell on the floor—[Interruption] Order! I do not think that is satisfactory. I was going to allow the member to finish his line of questioning and then certainly if he was not moving to pick it up I would be asking him to do so.Dr Russel Norman: Given the facts that I have presented showing rapidly increasing greenhouse emissions does he want to change his answer to the primary question which is that the Government’s objective is actually to increase New Zealand’s net greenhouse gas emissions and it is doing a jolly good job of it?Hon TIM GROSER: No.Dr Russel Norman: Will the Minister rise to what he himself has called the great challenge of our age—climate change—and match the recently announced European climate target of a 40 percent emissions reduction or will he continue to keep New Zealand on track for a 48 percent increase in emissions in the next decade?Hon TIM GROSER: We will meet our existing international contributions and we will be consulting the New Zealand public shortly on what should be the next level. In the process of doing so we will be pointing out that for a particular set of reasons that will be clear when members read the discussion document there is no low-hanging fruit in New Zealand. If we look at Germany for example the 25 percent reduction in gross emissions was achieved almost exclusively prior to the introduction of the European emissions trading scheme by closing down lignite coal stations in eastern Germany. These soft options do not exist for New Zealand.Regional Economies—Northland8.Dr SHANE RETI (National—Whangarei) to the Minister for Economic Development: What reports has he received on GDP growth in New Zealand’s regions?Hon STEVEN JOYCE (Minister for Economic Development): Yesterday regional GDP figures for the year ended March 2014 were released by Statistics New Zealand. They show growth across all New Zealand regions with a national increase of 6.7 percent. This nominal GDP data combined with the household labour force survey data last month showing employment growth of 80000 jobs in the last year paints a strong picture of a broad-based economic recovery. It also highlights the results of the Government’s continuing focus on economic policies that encourage business investment in regions right across New Zealand.Dr Shane Reti: How is the Northland economy performing compared with the rest of the economy?Hon STEVEN JOYCE: Northland’s economy grew at 7.8 percent in the year to March 2014 which is well above the national average. This—[Interruption] I know that the Opposition wants to talk that down but it is the region’s highest annual growth rate since 2007 and places Northland as one of the top three regions for growth in the North Island in that year. This strong performance is expected to continue with the recent ANZ Regional Trends report highlighting that Northland had recorded the strongest annual rate of economic growth in the country in December: up 5.1 percent. Northland is a region that has struggled historically but these figures highlight that under this Government Northland’s fortunes are turning round.Dr Shane Reti: What other reports has he received on growth in Northland?Hon STEVEN JOYCE: The regional GDP figures continue a strong run of economic indicators for Northland with figures out this week also showing that the region’s tourism sector is having a good run.Sue Moroney: People who live there are wrong! They don’t know what’s going on!Hon STEVEN JOYCE: Shh! Too noisy. Northland’s guest nights grew 5.3 percent. [Interruption] For the member Northland’s guest nights grew 5.3 percent in the year to January and the annual growth in guest nights is now running at 8.1 percent against the New Zealand - wide growth rate of 5.6 percent. When you add that to the—Dr Megan Woods: That’s the March figures. What about before that?Hon STEVEN JOYCE: Shh! When you add that to the 7500 extra new jobs created in Northland in the last year it is clear that the region has turned the corner and is beginning to grow well. To put that employment growth into perspective the entire country grew 80000 jobs last year. So Northland generated on its own nearly 10 percent of the country’s job growth.Partnership Schools—Te Kura Hourua ki Whangaruru Contractual Arrangements9.CHRIS HIPKINS (Labour—Rimutaka) to the Minister of Education: Does she stand by her statement that in the event a charter school closes before the end of its contract “we will use the usual commercial instruments available to us to recover costs invested by the Government”; if so which specific provisions of the contract with Whangaruru School allow for the recovery of funds in the event the school closes?Hon HEKIA PARATA (Minister of Education): Yes to the first part of the question; in respect of the second part it would be inappropriate for me to predetermine the outcome of the process that the school in Whangaruru is currently in.Chris Hipkins: I raise a point of order Mr Speaker. I was not speculating that the school was about to close and it is a question on notice. It is not unreasonable to ask that the Minister actually give a fulsome answer to a question that has been lodged on notice.Mr SPEAKER: I think that the way forward is I will allow the member an additional supplementary question.Chris Hipkins: Who owns the 100 hectares of farmland that have been purchased for Whangaruru School and which provisions if any of the contract with that school allow for the Crown to make any claim to that land in the event that the school closes?Hon HEKIA PARATA: The sponsoring trust owns the assets of the school. If I were to predetermine the outcome of that I would be anticipating the kind of legal action we might need to take in the hypothetical situation that that particular school might arrive at a particular end to the process it is currently in.Chris Hipkins: Do charter school contracts allow the Government to reclaim any of the set-up costs or unspent operating costs in the event that any charter school closes before its contract has been completed; if so which clauses in the standard contract allow for that?Mr SPEAKER: Hon Hekia Parata—either of those two supplementary questions.Hon HEKIA PARATA: Helpfully the contract is online and has been publicly available for some considerable period of time so I could direct the member to it. It would depend on the nature of the breach of the termination were it to occur as to the remedies available.Chris Hipkins: Do charter school contracts allow the Government to recoup any assets at the end of the contract if it is not renewed?Hon HEKIA PARATA: We have no contracts with charter schools. We have contracts with partnership schools.Hon Members: Ha ha!Hon HEKIA PARATA: Well I want to answer truthfully. So no I do not have any charter school contracts.Chris Hipkins: I raise a point of order Mr Speaker. This is a question on notice. The words “charter school” are used in the primary question. The words “charter school” are used in the Government’s confidence and supply agreement with the ACT Party which resulted in these schools being established. If the Minister had a problem with the terminology there was plenty of opportunity for her to address that prior to now. To simply not answer a question based on the fact that she does not like the terminology that is being used is unacceptable. It is an offence to the House.Mr SPEAKER: Order! No I—Hon HEKIA PARATA: I raise a point of order Mr Speaker.Mr SPEAKER: I will allow the Minister to respond.Hon HEKIA PARATA: The legislation that was passed establishing these legal entities called partnership schools and that member was a member of the select committee makes it clear at law that what exists is a partnership school. Because the member is now verging into technicalities relating to the contract I have said I do not have a contract with a charter school.Chris Hipkins: Point of order Mr Speaker.Mr SPEAKER: No I do not need further assistance. The difficulty I have with the Minister’s argument is that when I look at the primary question which has been accepted as a question on notice it does utilise the words “charter schools”. It probably should not have at the time. It has been there now. I am going to invite the member to ask that question again.Chris Hipkins: Do partnership school contracts allow the Government to recoup any assets in the event that a contract is not renewed?Hon HEKIA PARATA: As I have said already the contract provides for remedies dependent on the breach were a school’s contract to be terminated. So I cannot anticipate which path we might go down in the hypothetical situation of a school having its contract terminated.Chris Hipkins: I raise a point of order Mr Speaker. I think the Minister might have misheard the end part of the question. I was not asking about termination; I was asking about a contract not being renewed. Those two things are actually quite separate.Mr SPEAKER: I think on this occasion the Minister adequately addressed the question that was asked.Chris Hipkins: Do partnership school contracts allow the school operators to claim additional “committed costs” from the Government in the event of early termination of their contracts; if so what is the nature of those conditions?Mr SPEAKER: The Hon Hekia Parata—either of those two questions.Hon HEKIA PARATA: I am going to have to ask the member to repeat his question because I am not clear which particular—Mr SPEAKER: Order! That is easy for me to manage. Would the member please repeat the question and hopefully it is just one question.Chris Hipkins: Do partnership school contracts allow the school operators to claim additional “committed costs” from the Government in the event of early termination of their contracts?Hon HEKIA PARATA: I would have to take advice on that because I do not want to mislead the House and that is a particular technical question in the contracts. I am happy to come back.Hon Trevor Mallard: Didn’t she sign the contracts?Hon HEKIA PARATA: I am not a lawyer.Chris Hipkins: How many students are currently on the roll at Whangaruru School and how many students is it being funded for?Hon HEKIA PARATA: I am advised that there are 37 on the roll and it is being funded for 40.Children’s Action Plan—Guidelines for Employers and Statistics10.Dr PARMJEET PARMAR (National) to the Minister for Social Development: What recent announcements has she made on steps to protect children?Hon ANNE TOLLEY (Minister for Social Development): On Tuesday I launched two new guidelines for people and organisations who are working with children as part of the Government’s Children’s Action Plan. These guidelines are the first step to help organisations meet their obligations under the Vulnerable Children Act 2014. The guidelines Safer Recruitment Safer Children and Safer Organisations Safer Children advise on how employers of the children’s workforce can consistently recruit safe people to work with children and develop good child protection policies. Regulations are being developed as part of the next step of this process which will cover the mandatory requirements that Government agencies must comply with.Dr Parmjeet Parmar: How will children benefit from these new guidelines?Hon ANNE TOLLEY: The guidelines provide organisations with a standard quality child protection policy to better identify and respond to the needs of vulnerable children. The recruitment guidelines ensure that people recruited to work with children are assessed in a consistent way. The guidelines give a good cross-sector approach to good practice and safety checking from sports clubs to voluntary homework clubs and cultural groups. Although the vast majority of our children’s workers are safe and conscientious we do know that predators will seek to work with and be around children and we must have robust safeguards in our workforce.Darroch Ball: Does the Minister have confidence in the recent Better Public Services result showing a sharp decline in the number of substantiated cases of child abuse and neglect?Hon ANNE TOLLEY: It is true that this year we have seen the first decrease in the number of substantiated cases of abuse of children but I would say that although we might celebrate that it is too early at this stage to be sure that that is a trend.Darroch Ball: I raise a point of order Mr Speaker. I asked the Minister quite specifically whether she had confidence in the recent result and she did not mention any confidence or no confidence in that.Mr SPEAKER: Does the Minister want to just add to the answer in order to satisfy the member? I cannot assist.Hon ANNE TOLLEY: The latest child abuse statistics show that the number of children abused in the year ended June 2014 fell by 2306 or 12 percent on the previous year. I would say that the numbers are actually still appallingly high—Tracey Martin: Do you have confidence?Hon ANNE TOLLEY: Do I have confidence in the work of Child Youth and Family? Yes of course but I think what I am saying to you is that it is too soon to know whether this is a continuing trend. We will have to watch and wait and see and continue the work we are doing over the next year or so before we can tell whether that decrease is going to be continued.Darroch Ball: How can the Minister be confident now or even in the future in the Better Public Services results without a public independent audit on how her ministry is achieving them or is she going to continue to allow the ministry to act like a self-licking ice cream and manipulate its own results?Mr SPEAKER: Either of those supplementary questions.Hon ANNE TOLLEY: It is very easy to stand in this House and make stupid comments about some very hard-working public servants who are out there doing their very best. I have to say that this Government in introducing a green paper a white paper and a Children’s Action Plan and passing the Vulnerable Children Act has done more to protect vulnerable children in this country than that Labour Partyover there did in Government or than any Government that that member’s party has supported.Accident Compensation Corporation—Levies and Impact on Government Financial Position11.SUE MORONEY (Labour) to the Minister for ACC: Does she have confidence in the ACC Board?Hon NIKKI KAYE (Minister for ACC): Yes.Sue Moroney: Was ACC’s recommendation to reduce levies in the work and earners accounts ignored by the Government in 2013 and then again in 2015 in order to help the Government’s books into surplus as the Prime Minister confirmed in Parliament on Tuesday when he said it was a factor in that decision?Hon NIKKI KAYE: The Government has been very consistent in what we have said about this. We have said that a range of factors are taken into account. Surplus may be one factor but also a number of other factors are taken into account. Long-term view in terms of claimants our current costs around the scheme the discount rate—a range of things are taken into account.Sue Moroney: Will she seek an urgent reconsideration of the Government’s levy rates in light of ACC’s advice to the select committee this morning that its work account and earners account have already reached the top end of their funding bands—that is the work account has reached 140 percent of what it needs to fully fund the lifetime costs of accidents and injuries in December—Hon NIKKI KAYE: No that is just not true.Sue Moroney: —that is what the ACC board told the select committee this morning—while the earners account reached 130 percent of what it requires at the same time?Hon NIKKI KAYE: I think the member needs to listen at the select committee hearing. What I understand the chair told the select committee today—Sue Moroney: You weren’t there.Hon NIKKI KAYE: —from National members who were there—was that there has been a $4 billion shift in January around the overall claims liability. That swung back by $2 billion in February but what that demonstrates is the Government’s very fiscally prudent approach to take a long-term view in terms of ACC.Sue Moroney: Is the Minister denying that in December last year the earners account achieved 140 percent of its funding ratio and is she denying that the work account achieved 130 percent of its funding ratio?Hon NIKKI KAYE: In terms of the work account I would encourage her to understand ACC a bit better and to understand gradual process because when you take into account—Sue Moroney: I raise a point of order Mr Speaker.Hon NIKKI KAYE: —gradual process it is not—Mr SPEAKER: Order! We do have a point of order.Sue Moroney: It was a very specific and direct question—Mr SPEAKER: Order! There is a lot of noise in the House today. Would the member please just repeat the question for the Minister to answer.Sue Moroney: I cannot read it specifically but I will relate it. [Interruption] I will relate it—Mr SPEAKER: Order!Sue Moroney: —because it is not written down. Is the Minister denying that the work account has achieved 140 percent of its funding ratio as at December last year and that the earners account has achieved 130 percent as at December last year?Hon NIKKI KAYE: With regard to the work account as I said she has not taken into account gradual process—and that is what she continues to fail to do—which means that the solvency rates come down as a result of that. But the second point that I would make—and this is the main point here—is that you can take these accounts at a point in time but if you do that you end up in the situation that we had of having a $5 billion deficit in ACC because you need to take a long-term view because of the significant shifts in the account. The Labour Party needs to understand that what businesses need is certainty and stability around levies not the yo-yo effect of what it is proposing.Sue Moroney: Given that ACC takes into account all of those factors she just mentioned before it makes recommendations to the Government will she stop just making a different excuse every other day about why she will not return ACC levies to the right amount and stop overcharging businesses and workers for—Mr SPEAKER: Order! Now the question is going on for too long.Hon NIKKI KAYE: Let me make a couple of points. The first point is as I have said before we need to take a long-term view because otherwise we will end up in the situation where we have a $5 billion hole. The second point that I would make to the member is that under our Government we have gone from the $5 billion hole to essentially a fully funded scheme. But what businesses do not need is a yo-yo effect which is what the Labour Party is promoting. The other point that I would make is that there has been $1.5 billion worth of reductions under this Government. It is money back.Sue Moroney: Is she aware that section 6 of the Accident Compensation Act which she referred to in Parliament on Tuesday is in fact the interpretation section of the Act which just tells us what various words mean and can she explain how that section of the Act gives her the legal authority to use ACC levies which are supposed to be gathered to pay for injuries and accidents to achieve a surplus in the Government’s books instead?Mr SPEAKER: Well there are two question there.Hon NIKKI KAYE: Yes I am aware that section 6 is the interpretation section but she needs to read it in the context of both section 330 and section 331(5) and I will read that out for her—Mr SPEAKER: Order! No no—[Interruption] Order! That will not be necessary. The Minister was asked the question “Is she aware …” and she has answered it.Small Businesses—Growth12.SCOTT SIMPSON (National—Coromandel) to the Minister for Small Business: What steps is this Government taking to support growth for small business?Hon CRAIG FOSS (Minister for Small Business): Small businesses are the backbone of the New Zealand economy. This Government has taken a number of steps through the Business Growth Agenda and the Better Public Services targets to support growth for small businesses. Another initiative is the regional business partners programme which aims to deliver a service valued by small and medium sized businesses in the regions across New Zealand. In the 6 months to 31 December 2014 the Regional Business Partner Network has worked with over 1500 businesses looking to grow and innovate providing one-off advice and information such as raising awareness of the support available to them simplifying guidelines and communications and improving the consistency of services delivered to small and medium sized enterprises.Scott Simpson: What reports has the Minister seen that show that there is growth in small and medium sized businesses?Hon CRAIG FOSS: I have seen a number of recent reports that confirm there is growth among small and medium sized businesses. The ANZ Business Outlook report stated: “Business confidence is buoyant … Businesses remain very optimistic … [and as a result] a net 22 per cent expect to be investing more.” The report also talked about business growth being strongly correlated to GDP growth. New Zealand’s GDP growth of 3.2 percent and strong GDP growth in the regions of New Zealand will give small and medium sized businesses even more confidence to grow under the policies and economic management of this Government.Scott Simpson: What factors would stifle the growth of small business?Hon CRAIG FOSS: There are a number of factors that would remove flexibility and stifle the growth of small businesses. They include adding complex new taxes which would stifle the growth of small businesses; enforcing and making compulsory unionised workplaces which would stifle the growth of small businesses; and reducing the ability of small businesses to employ people for trial periods would stifle their growth. If we want small businesses to grow and hire more Kiwis the last thing they need is those initiatives which are promoted—Mr SPEAKER: Order!Barbara Stewart: Can the Minister list his five favourite regulations benefiting small business from the 1246 statutory regulations gazetted in the 50th Parliament?Hon CRAIG FOSS: Well I might find that there are probably a whole lot more than five but I suppose they are the rules and regulations in and around small business; creating a low tax environment; simplifying the tax system; bringing our accounts into surplus to keep interest rates lower; the 90-day trial system which is covered in regulations—I could go on but it is a Thursday. I suggest that the member could look at the Business Growth Agenda in which she would see 350 actions of which over half are now well completed.Jacinda Ardern: Will he consult the Small Business Development Group the panel of small-business owners who advise Government on small-business issues on their view on current ACC levies at their next meeting on 15 April?Hon CRAIG FOSS: I can pre-empt that. I have been in discussions with members of that group and they are very thankful for the $1.5 billion of ACC levy reductions that are now locked in from 2012 to this year. So the Small Business Development Group is quite pleased with the moves we have done to make ACC financially sustainable and of course to bring the levy reductions into play.Jacinda Ardern: I will be verifying that. Can the Minister confirm that of the approximately 31 patsy questions he has asked himself this term—Hon Steven Joyce: 32 including yours.Jacinda Ardern: No 31 I added the extra—[Interruption]Mr SPEAKER: Order! I do not want to have to deal with—[Interruption] I do not want to have to deal severely with anybody on the Government side of the House at this stage of proceedings. The member might want to start the question again.Jacinda Ardern: Yes I am happy to. Can the Minister confirm that of the 31 patsy questions he has asked himself—Hon Gerry Brownlee: I raise a point of order Mr Speaker. I do not believe that there is any such procedure in this House for the asking formally of a patsy question. There is however an opportunity for Opposition parties to ask questions but of course they do not because they do not like the answers particularly in this case. [Interruption]Mr SPEAKER: Order! I have been in the House somewhat longer than Mr Brownlee—not much—but I have heard many many patsy questions asked in question time.Jacinda Ardern: I am going to start again. Can the Minister confirm that of the 31 patsy questions he has asked himself not one has included anything substantive to reduce the cost of doing business; if so will he accept our suggestion that he use his next patsy question to announce a reduction in ACC levies?Mr SPEAKER: Again the Minister the Hon Craig Foss can answer either of those two.Hon CRAIG FOSS: Well technically I have not asked myself any questions actually but I wait with pleasure every day when the member gets up and asks me questions about small business because it is such an easy hit. Everything that that member talks about on Labour’s policy be it voting against $1.5 billion of ACC cuts capital gains tax compulsory unionism—you name it—compliance frenzy the member can shake her—Mr SPEAKER: Order! I have heard enough.New Zealand Flag Referendums BillFirst ReadingHon BILL ENGLISH (Deputy Prime Minister): I move That the New Zealand Flag Referendums Bill be now read a first time. I nominate the Justice and Electoral Committee to consider the bill. At the appropriate time I intend to move that the bill be reported back to the House by 29 July 2015. The Government has made a commitment to hold a binding referendum on the New Zealand flag well before the 2017 general election. As the Prime Minister said last year it is now an appropriate time for the debate about the New Zealand flag to be resolved through a careful and considered process the main feature of which is to enable New Zealanders to make the decision.Legislation is required to create a binding referendum process. The Government has taken a non-partisan approach to this legislation and to the flag consideration process. This bill has been shaped by a cross-party group of MPs working with initial proposals set forward by Cabinet. The bill sets out the structure the procedures and the requirements for the referendums; and the requirements for voters advertisers and the Electoral Commission because it is a unique process. The referendum process will uphold the decision of New Zealanders whether they vote for a new flag ultimately or vote to keep the flag that we have. If a majority of voters choose a new flag the bill provides for this to become the official flag of New Zealand by amending the Flags Emblems and Names Protection Act 1981. So it puts those provisions in place which does not drive any particular outcome but anticipates a change in the flag.The Government carefully considered the options around the referendum process and decided on a two-stage postal process. This begins with a vote on alternative flag designs and concludes with a clear choice between the current New Zealand flag and the most preferred alternative design. The first referendum is needed to choose which alternative flag is most preferred by New Zealanders including by those who may ultimately vote against change. The two-stage process means that when voters choose whether to change our flag they know what the alternative is. The dates of the referendums will be confirmed by Order in Council which offers some flexibility. The first referendum though is currently planned for November/December this year and the second referendum planned for March 2016—and this timetable has been discussed by the cross-party group.The decision about the voting systems was also made essentially by the cross-party group. They disagreed with the original proposal put forward by Cabinet and Cabinet went with the cross-party group’s view. The first referendum will use preferential voting and will ask New Zealanders to rank four alternative flag designs. They will be free to rank as many or as few flags as they wish. Preferential voting helps ensure that the alternative flag goes through with a majority support of voters’ preferences. This system means that all voters can help choose the most preferred alternative flag so that the second referendum is really between a representative view and the current flag. Regardless of how a voter ranks designs in the first referendum they will be able to make a clear choice between the current flag and a new flag in the second referendum. I am sure some people who are strongly motivated will vote for the worst-looking flag in the first referendum to make sure that it loses in the second one. Those options are freely available to every New Zealander.On this point I have seen in a media report that Labour Party members may not support the bill because they think that at the time of the first referendum people should say whether or not they want change. This issue has been canvassed and the view set out in this bill is that a basic tenet of voting is that you need to know what you are voting for or against. No one is going to know at the time of the first referendum what an alternative New Zealand flag will look like. They will know that it could be any one of four options but that is quite different from having a simple alternative to the current flag. So the bill proposes referendums that are the right way around—first voters choose an alternative flag design from the four that are on offer and then they choose between the alternative and the current flag. The plan that says whether or not you want the current flag without knowing what the alternative is just does not seem feasible. You would be voting blind for or against a change to the current flag. I have to say that for myself like many New Zealanders I am kind of biased in favour of the current flag because I know it but I am keen to see the alternative in order to decide whether to vote for change. So the voting paper and the wording of the questions are set out in this bill.The four alternative flag designs for the first referendum will be determined through consultation with the public. I must stress that that consultation will be organised and led by an independent panel. The Flag Consideration Panel will recommend flag designs to me as the responsible Minister and Cabinet will confirm the four options to be added to the first referendum voting paper by Order in Council. I think the independence of that process is absolutely vital. I have worked with the chair of the Flag Consideration Panel in the past and I am sure that the professor will make sure it remains independent because the process here is as important as the result. The Flag Consideration Panel’s consultation and how it will choose the shortlist of designs is not part of this bill. It is not a matter for Parliament and it is not a matter for Cabinet; it is a matter for the panel. The submission of flag designs to the panel will be separate from the select committee stage for this bill. The bill simply provides that the designs recommended by the panel and confirmed by Cabinet are inserted into the voting paper by Order in Council. The select committee stage will give the public the opportunity to make submissions about the referendumprocess itself not about flag designs although I am sure that will become part of the discussion.The Electoral Commission will discuss these referendums and it has robust systems in place. A District Court judge will observe the secure processing and counting of the votes. The votes will be processed centrally as they are returned over a 3-week postal voting period. The order of the flags on the voting paper will be determined randomly. All eligible voters on the electoral roll will be able to vote. As with elections voters who are overseas will also be able to participate.The bill also sets out rules for the regulation ofreferendumadvertising. The Government on the recommendation of the cross-party group has decided that this regulation should not be heavy-handed. An advertiser will not be subject to rules or limits on its spending. The only requirement will be that promotional advertisements contain a promoter statement. This requirement will not apply to the display of the current New Zealand flag or alternative designs that are on the voting paper unless they are accompanied by further promotional material about voting in the referendums. People should be free to display the flag of their country unencumbered. This will allow for wide public discussion on the flag without unnecessarily restricting freedom of expression. If voters choose to change the flag this will trigger provisions in the bill to change to the new flag within 6 months. It is important that people do not see these provisions in the bill as predetermining the outcome of the referendum; they simply put in place the mechanism needed if the flag changes. If it does not those mechanisms will not be required. The only legal requirements for the use of the official flag relate to drivers’ licences and New Zealand - registered ships. If the flag changes there will be a further 6-month transitional period.I am grateful for the input of members from other parties who participated in the development of this bill which will give New Zealanders a chance to have their say on a vital symbol of nationhood. I suspect that once the Cricket World Cup passes which has excited strong feelings of patriotism and hopefully more this will become a matter of some wide public interest. I welcome the public debate and consideration as this bill passes through the select committee. I commend this bill to the House.Hon TREVOR MALLARD (Labour—Hutt South): I agree with quite a lot of what the Deputy Prime Minister has said in his introductory speech on the bill. I think he has summarised the issues relatively well save for one or two. According to the latest published poll done by Television New Zealand 65 percent of voters are opposed to changing the flag and 2 percent of New Zealanders think that it is an important issue. Labour believes as was the case with the MMP referenda series that New Zealanders should have the right to say no as part of the first referendum rather than having to wait until the second. We think that if there is a clear view early on that New Zealanders do not want to proceed with a change in the flag then we should not spend the tens of millions of dollars that will be involved in conducting a second referendum. I might say that the Labour Party was not alone at the select committee with that point of view. At the final meeting of the committee there was only one party—and that was the National Party—opposed to New Zealanders having the right to say no as part of the first referendum. So let us make it clear that every other party that was represented and present at what was meant to be a multi-party consensus-building - committee is opposed to or has indicated they were opposed to the approach that Mr English is taking with this referendum. I think that also for me shows a bit of the problem.This has clearly become what might be described as a “vanity project” for the Prime Minister. It is something that he strongly believes in. I actually think we should change our flag. I am of the view that it is time to change the flag but what is really important is that we get the process right. I just totally reject—totally reject—the suggestion by the Deputy Prime Minister that New Zealanders are not bright enough to understand that they have a yes/no vote twice. It was maybe 20 years ago that we went through a similar process to change our electoral system where we had a yes/no vote and a run-off of choices as part of the first ballot and the second ballot was the then current system versus the new system. People could understand that. People are not thick. But it left them with the choice to say no at the beginning. And in this particular case it would save tens of millions of dollars. Frankly anyone who spends a bit of time in a constituency who talks to parents with special needs kids who looks into schools and their operational funding and who looks at the poverty in New Zealand knows that there are many better uses for the tens of millions of dollars that are going to be spent including on the second part of the process than a flag referendum. But as we know this is a vanity project for the Prime Minister.I must say that Jonathan Young is looking fitter as a result of this process. I do not think I have ever seen anyone run up and down the Beehive stairs as much as Jonathan Young did in consulting with the Deputy Prime Minister on this particular issue. Frankly I have been involved in a couple of multi-party committees of this sort in the past and I have never seen one where the Government pulled the strings of the chair in such a way. I like Mr Young. I think he is a good character. He actually comes from a damn solid family but in this particular case he did not understand the role of the chair in defending the views of the other parties to the executive and he allowed himself to be dictated to by them.The Flag Consideration Panel itself I think it is fair to say is a mixture. It is a mixture of some wonderful people and a few National Party hacks. It is sad—it is really sad—that the executive that Cabinet was not prepared to accept the list that was prepared by the multi-party committee which had plenty of extra choices.Hon Bill English: Most of them are.Hon TREVOR MALLARD: No eight out of the 12 are and four out of the eight—four out of the eight—are people whom Jonathan Young nominated. So actually a third of the people who are on that panel are people who were nominated by other parties. So just do not interrupt and do not interject Bill English when you do not know what you are talking about. When you do not know what you are talking about Bill English it pays to keep those slightly split lips together. It pays to keep those slightly split lips together Mr English.There were some other revealing things at the committee. I learnt as part of the committee a lot about the ACT Party and its attitude to primary industry in New Zealand. It is a quote that will stay with me for ever—the quote from David Seymour the leader of the ACT Party. He indicated that farmers are not business people. We had a couple of nominations there for farmers to be on the panel and Mr Seymour said: “Unless they invented dairy farming they’re not real business people.” That is an Epsom indication of the value of agriculture to New Zealand if ever I saw it. At the moment what is happening is that the National Party is relying on a person with that sort of attitude towards primary production for its majority.Another point goes to timing. I will accept that there are times when a committee accepts your point of view and there are times when it does not. This is one time when the committee clearly did not accept my point of view. I think that having the second referendum—and I think possibly we should not—in the lead-up to the centenary of the first commemoration of Gallipoli lacks taste. I think it lacks taste. I think having a 3-week period less than a month before the centenary of the first commemoration of Gallipoli is something where our soldiers—we had only had the flag for 13 years at the time of Gallipoli but I think there is a certain lack of sensitivity and a denigrating of the role of the military. I am an old Viet Nam protester but I think some of the attitudes of members from that side of the House towards people who have served New Zealand leave something to be desired. The timing insisted on by the Deputy Prime Minister for this is part of that.So it is with a slightly heavy heart—because I do want to change our flag—that I am indicating that Labour will not support this bill until New Zealanders get the right to say no as a part of the first referendum.JACQUI DEAN (National—Waitaki): Well if all Labour members can come up with as a reason not to support this bill is that they do not like the way the questions are asked then it seems like a pretty flimsy reason to me. I mean really is that it? Is that the strength of the argument that Labour members could promote—that actually they do not like the order of the questions?Here is how I think about it. If I am going to make a decision about whether or not New Zealand is going to have a change of flag I would like to think that I would be given some context about what I might potentially be voting for or not. And in the first referendum I can withhold that choice and that gives me quite a bit of power actually. I do not know whether the Assistant Speaker has actually thought it through very much to be frank. If I felt really passionately about it I could design a flag myself. How powerful is that? So that is three goes that I have got over this.In the first instance if I felt really really strongly about replicating that little hand-embroidered kiwi that my mum had on her knapsack when she went hitchhiking around the UK 50 years ago—and she felt so proud to be a Kiwi to be a New Zealander—if I felt so proud of that which I do then I could promote that as my idea for the flag. The commission that will be enacted under this bill will be able to evaluate that against all of the other suggestions that come through from fellow New Zealanders. It might be a kiwi like the one on my mum’s knapsack or it might be a silver fern or it might be that wonderful—wonderful—image of a silver fern with the servicemen marching off into the distance: a really poignant symbol for many people of what it means to be a New Zealander and it has been translated into a tattoo and has gone viral around the world. People feel really strongly about this kind of thing.How come I am standing up here in this Parliament for example remembering that my mum had an embroidered kiwi on her knapsack 50 years ago when she went off on her big adventure? Why? Because it meant a lot to her and it means a lot to me. So the flag is a really important aspect of us as New Zealanders defining who we think we are. What is it in our flag that defines who we are? Not only is it when we are remembering the wonderful things that New Zealanders have done for us and by us and to us—not just that—but it is also our outward-facing nature which we do so well in this country. It is our face to the world and to a lot of people it means a lot. So strike one for me is that I have the opportunity which is described in this bill to design my own flag based on what is important to me and to submit it to be part of the consideration.Strike two is the first referendum question. That first referendum question is going to say: “Here are four alternatives. Which one do you like New Zealand?”. We know we have got the old one and here it is in the bill. It is the third flag we have had in our history by the way. So there we are; we have got that one in the bag. We have had it since 1902. It has served us well. We are proud of it. But does it say who we are today? OK so we have that. The question for me and for every other New Zealander—except the Labour Party members because of course they do not want to have a question; they are going to oppose it. Except the Labour Party members because they do not like the way the questions are framed so they are not even going to play with us. Oh well that’s fine. But I as a New Zealander am going to. And when I have my second strike—my second choice—I am going to be able to vote and it is going to be a vote based on four flags that mean a lot to New Zealanders. Well what a wonderful opportunity that is. I am looking forward to thatvery much.As I read the bill very briefly this afternoon I think that that vote is going to happen around May 2016. So that is quite a tight time frame. If you have got a mind to start designing the flag I would get on to it this afternoon. I have got some blank paper; I might do it after this speech. That is my second strike and that is an exciting prospect for all of us because we all have the opportunity to make a choice. If we did not have our flag which we have here in the bill—if we did not have this one which one would we like? Which one most captures what it means to me to be a New Zealander? What a powerful question. Why does Labour not support that? Why does Labour not support the absolute power and freedom of a New Zealander to be able to answer a question like that? Well it beats me. [Interruption] Oh OK my colleague from Rangitīkei has just said: “Well because it wasn’t their idea.” OK I leave it at that.In around May next year an envelope will arrive in the mail for all of us who are registered electors and we will get the opportunity to choose between four options. At that point what that allows us to do apart from choosing something that speaks to us about being a New Zealander is to begin to weigh up in our minds: OK if we are not going to have the current flag what might we replace it with? Is that not a much better question than a simple yes or no? We will have something in front of us that we can look at—we will be able to see those designs. They will be in the newspaper. They will be in the media. They will be in social media no doubt. They will be on the voting papers. Is that not a more powerful position for us as New Zealanders to be able to say: “OK. Is it the old one or might it be one of these? I’m going to think about that and then I am going to have a vote.”? And for me I do not know yet. I do not know; I am open. But I am looking forward to those alternatives which I might vote on. So that is strike two.Then as enacted under this bill the commission goes away and determines a preference and then and only then puts that preference—and it might well be a silver fern on a red and blue background. It might well be a kiwi. It could be anything. It could be the Southern Cross. It could be a combination of the old flag and some aspect of New Zealand that speaks to us now. We do not know what it is going to be and that is what is so wonderful about this process. In due course—third strike—we are going to have another choice and that choice is going to be based on a bit of thinking. Unlike Sue Moroney who is sitting over on the other side of the House just yabbering away because I do not think she understands the issue—because what we are going to be able to do—Carmel Sepuloni: I think it’s Jacqui Dean who’s yabbering.JACQUI DEAN: Well that got them going. What we are going to be able to do in another 6 or so months’ time is make a decision based on knowledge—make a decision based on some options about what really speaks to us as New Zealanders. Well how wonderful is that? What an opportunity for us as New Zealanders. So when we do go to make that final vote in about a year and a half’s time we will be able to make a decision based on knowledge. And that is what the Labour Party is voting against. It does not want us to go to this referendum being able to make a decision based on knowledge. It has just knee-jerked: “We’ve got to oppose it we’ve got to oppose it we’ve got to oppose it. What could we oppose it on? I know: they’ve got the questions around the wrong way.” Well if that is the best that Labour members can come up with then maybe they deserve to be floundering around the 33 percent in the—what 33 32 percent? Are they in the 30s? Whatever.This bill puts a structure in place for New Zealanders to have a say about our flag—and it is our flag and it is not just going to be the Labour Party telling us how to vote. This is going to be a binding referendum for all New Zealanders. It is a marvellous opportunity and I support this bill. Thank you.Hon PHIL GOFF (Labour—Mt Roskill): There is a fundamental flaw in what Jacqui Dean was saying and I would just invite Mrs Dean to think back to the last time we had a binding referendum. It was in 2011 and it was on MMP—nothing more fundamental than our voting system. Was the first referendum—and there could have been two—on whether we wanted single transferable vote supplementary member first past the post or MMP and when we decided what the alternative was we would decide whether we kept the status quo? Of course not. The last time we had a binding referendum in this country the electorate of New Zealand was quite properly asked first of all: “Do you want to change the voting system?”. That is why the whole logic of the referendum on a flag if we are going to have the referendum is: let New Zealanders decide first of all whether we want to change the flag. Why would we spend $26 million on two referendums if the majority of New Zealanders did not want change?I have got the three latest polls on the flag and I have got to say that the Television New Zealand (TVNZ) one on September 2014 was 35 percent for change 65 percent against. The March 2014 New ZealandHerald poll was 40 percent for change and 52 percent against. The February 2014 TVNZ poll was 28 percent for change 72 percent against. So here we have got a Government that wants to have change—and I will come to what my view is on that shortly—but it is going to say what we are going to change to before it gives New Zealanders the right to say whether or not they want it. This is not a decision for 121 members of Parliament to make in this Chamber; this is a decision for all New Zealanders. Surely we should ask New Zealanders the first question in the logical order: “Do you want change?”. Is there anything that is not understandable about that priority? That is how we decided on our voting system. That is how we could be deciding on our flag.The other thing about those polls that I have just talked about is that the TVNZ poll found the total of all of the New Zealanders who thought that changing the flag was an important issue. Do you know what the total came to? Two percent—2 percent of New Zealanders thought that this was an important issue. It is therefore hard to understand what the obsession of the Prime Minister is with this issue. On the one hand it could be a vanity project. The Prime Minister is about to retire and he wants to be remembered for something. It is hard to think what he will be remembered for but maybe he could be remembered for changing the flag. The alternative explanation for why the Prime Minister has this obsession is that it is a bit like bread and circuses. It is a great diversion is it not? When things are not happening the way they should be around the country let them look at something else: “Watch this flag. See we could change this flag. Don’t worry about education. Don’t worry about the failure of the charter schools and the loss of public money. Don’t worry about the district health boards not having enough to provide decent health services. Don’t worry about the fact that we have cut policing in real terms every year in the last 5 years. Look at the flag.” That is a diversion.You know I probably share with most New Zealanders the kind of bemusement about why this is being put up as a priority issue. I noticed that the American comedian John Oliver also said that. He said that the New Zealand Prime Minister—to his audience if they knew where New Zealand is—was going to change the flag. Then he went on and said that John Key as the newly elected Prime Minister is “ready to tackle the most pressing issues facing the country.” Well I disagree—I disagree. John Oliver was obviously being sarcastic about that.Hon Members: No!Hon PHIL GOFF: Just for the dimmer members across the House I thought I should explain that in case Government members got excited.I think there are other priorities. I think the level of child poverty in our country is a priority. Why would we not be focusing on that in a debate this afternoon? I think the transport gridlock in Auckland is a priority. They have to worry about that—Ron Mark: No not to the National Party—not to the National Party.Hon PHIL GOFF: Well maybe not in the Wairarapa Mr Mark but certainly for a third of the country who are Aucklanders. I think the housing crisis where every year fewer and fewer New Zealanders get the chance to own their own home is a priority. So I do not know why we have a priority where we are going to be spending $26 million on a couple of referendums in the wrong order—a couple of referendums in the wrong order. I know that the people in Mt Roskill will be asking me when I go back there tonight: “Why are we spending $26 million? Is there nothing better that the National Government has got to spend it on?”. I could say that it is spending $65 million on sending 16 trainers to Iraq—that is not too good—and it is spending $69 million on trying to buy an election which is being totally counter-productive. So I guess my confession to my electorate will be that the Government is wasting lot of money and this $26 million is part of the wastage.There are a couple of other things that I think we need to take into account. If we are trying to cut down the cost of it it makes sense to have one referendum first to see whether people want to have change. But there is another proposal that I have for the House and that is that if we are going to have a referendum on something as significant as the symbol of the country the flag why would we not hold that at the same time as an election? There are two big advantages in that. The first of course is that it is much cheaper but the second advantage is that you are going to get a decent turnout. If you have a stand-alone referendum you might get 40 percent or maybe 50 percent going out to vote. I am saying that if you are going to change the flag at least get a genuine indicator of what people feel and the best way to do that is by coinciding a referendum with an election. Is it so pressing that we have to have two stand-alone referendums before the next election? Nobody thinks it is that pressing. Two percent of New Zealanders think that changing the flag is an important issue. So let us be logical.Let us in this House be sensible and I am directing this to the members of the National caucus. Why not have at the next election one referendum with two parts? Part A will ask: “Do you want to change the flag? Yes or no?”. Easy. Then Part B will ask: “If there is a majority that wants to change the flag which of these preferences do you prefer?”. You do not have to run it as two separate stand-alone referenda. You could hold it with one referendum coinciding with the election. What is illogical about that? It is totally sensible. It is what we should be doing. That is what every party on the cross-party committee wants to do with the exception of National and if you call it a stand-alone party ACT. That is what the majority of people in this House want.My own preference is that I would actually like to see a new flag—a 21st century flag—and I kind of like the one by Kyle Lockwood. It has the silver fern through the middle. It has the blue of the Pacific and the Southern Cross and it is three colours. It is quite attractive. But it is not my decision to make.There is something else I want to say about timing. When the RSA makes as strong a stand as it has I think we should do it the courtesy of listening to it. We all say: “What a debt we owe to our veterans.” and by God we do owe a debt to our veterans. So why would you as the Prime Minister introduce a bill to change the flag a month before the centenary of Anzac Day—a month before the most important day for our veterans and because it is the centenary the most important one in 100 years?Hon Dr Nick Smith: That’s pathetic.Hon PHIL GOFF: This is just throwing it up into their faces Mr Smith. That is what it is doing. Why could we not have waited for the RSA and our veterans? They feel strongly about it and I understand why they feel strongly about it. They fought under that flag Dr Smith something you and I have never had to do. They saw their mates die under that flag. They feel strongly about it. I have a different view on the flag but I do respect their view and I do respect the fact that in a month’s time we will be commemorating the centenary of the Anzacs. I think we could do them at least the courtesy of waiting until after that before we start this debate and bring this legislation into the House. I have to say that the logic is entirely in favour of having one referendum with the first question asking whether people want to change the flag and the second part asking what they want to change it to. We should do it at the same time as the general election to save the $26 million the Government is spending and to get a decent turnout in terms of the answers to both those questions.I have to say as well because it has been raised time and again with me that there is a panel of 12 people. Some of them are very good people. Some of them are National Party hacks. We could have cut that committee down. In my electorate where people are struggling to pay their rent and make sure their kids get what they want people are wondering why there is $600 to $800 a day being paid to National Party hacks to sit on the panel. That is wrong and I am against that as well.Mr DEPUTY SPEAKER: I would like to point out to the House before I call on the next speaker that the debate is relatively narrow. It is around process around timing and the previous speakers have covered that quite well. It is not an argument about what other things taxpayers’ funds could be expended on. It is not a wide-ranging debate. It is narrow and as we have heard from previous speakers there is plenty to talk about around the process the timing and the other provisions within the bill.JONO NAYLOR (National): This is a very great opportunity to be able to come and talk about something that is of such significance to New Zealand to our nation that we need to spend some significant time talking about it. We need to ensure we have a good process so that we make a good decision at the end of the process.This is a very important debate. It is not something you would do once every parliamentary term. It is not something you would do every 10 20 30 or even 40 years. But it is something that should or perhaps could be done every 100 years or so. The current flag was put in place in 1902 so it probably is a good time for us to stop and ponder the future of our flag in New Zealand. The last 100 years have seen some significant changes in our country good changes a lot of them; different changes at different times. But if a flag is to be a unifying symbol of sovereignty of our heritage and our values then from time to time albeit every 100 years or so perhaps it is appropriate for us to have another look at it and ask whether the flag still reflects our heritage our sovereignty our values and the make-up of our nation.It is an important debate but it is also an emotional debate. As has been said by many speakers this flag is one that has been fought under. It is one that people have died under. It is a flag that has been draped over the shoulders of gold medallists and has been raised while our anthem has been played on many different occasions. It is a flag that has been flown at half mast on sombre occasions. A lot of emotion is attached to those different events when the flag is involved. So we need to be careful in our process how we go about it and how we address any potential change to it.It is also a potentially divisive debate. We have already seen from what has been said in the House this afternoon that there are differing views even on the process and also differing views on what the flag of New Zealand should look like. If I may coin a phrase from the Australian State of Origin series it is the kind of issue that would pit mate against mate. It is the kind of thing that there will be much debate over at the barbecues in the pubs and in the school classrooms. Because it is a divisive debate it is something we need to handle with care. It is something we should not necessarily lump in with a general election; it is something that is deserving of having that singular focus in terms of the way we address this issue.Before really thinking about this I asked myself a number of questions. They were questions I asked myself but they were also questions other people have asked while I have been speaking to them as I have gone out and about on my business. The first question is why we are having this debate. Is it really worth the emotional trauma that seems to be going along with it? Is it really worth the potential divisiveness? The answer is yes because there has been a growing level of interest across our nation in debating this issue and in people having their say about whether we should retain the flag we have or change it.So it is worth it. It is something that reflects I think our society as it is where people are questioning all sorts of things from whether or not we should keep the monarchy—I do not want to get side-tracked into that debate today. While those questions are resounding around our communities it is absolutely worth us having this debate and this discussion. Whatever the outcome of this process whether it be that we keep the existing flag or we change the flag we will be better for it I believe as a nation because we will have really wrestled with the issues that surround our national heritage our national values and how we reflect that through a flag.So I asked myself the question why people are looking at this now. Why is it an important decision for people to be making now? What is so wrong with our current flag? One of the big things I hear from so many people is that in one corner of the flag is the Union Jack and that reflects only a very small part now of our New Zealand heritage. I know that for me my English heritage looks and can find St George’s cross and my Scottish heritage looks and can find the St Andrew’s cross. The part of me that is a bit Irish cannot find anything in there to celebrate. That is probably pretty much reflected I think by anybody with Irish descent when it comes to the Union Jack. But I think that although we have the Union Jack there there are some people who would do it. It reflects only one part of our culture.Ron Mark: A small part.JONO NAYLOR: Yes absolutely a small part. We hear at the moment just how many people we have from other nations not simply from the United Kingdom. This New Zealand place is not the United Kingdom. There is in fact a plethora of people from all sorts of cultures. There is nothing on our flag currently that for example really signifies anything of significance to do with Māori. I am not here to argue the fors and againsts of this flag but merely to highlight that a number of people have shown some issues with the flag and therefore it is worthy of debate.I find it really interesting actually that now New Zealand First members want to talk about it but when it came to being participants in the cross-party meeting we had about it they were nowhere to be seen. They did not want to be part of it then but now they want to shout across the House and talk about it. I find that a little bizarre. [Interruption] Anyway if I can possibly hear myself over the rant from the other side I might be able to carry on with what I really want to say.The question I then asked myself was whether this is the right process. This is such a significant process that it needs to be done formally. It needs to be done carefully and for all the reasons that have been outlined already in the House today it needs to be done respectfully. So we invited all of the parties to be a part of it and we have come up with a process that I think is one that is going to really bring out the very best result that we can achieve. I think that the approach we are taking is the right one. I know there was some discussion for example about the voting system that would be used and I am glad to see we are using a preferential system now. I think that that was a very good part of what came out of the cross-party discussion. I have got a bit of experience with preferential voting. We had the single transferable vote (STV) in my days as Mayor of Palmerston North and it served me pretty well I have to say; at least on the one occasion that we had STV when I was running for election. I think it is good because it ensures that whatever alternative comes up the fact that more than 50 percent of people agree is better than any other option that is on the table. I think that that is a very good process.I am not normally one in favour of referendums. When we had a lot of talk during the election about whether we should have binding citizens initiated referenda and the like I was not very happy about the idea because so often when you have a binding referendum of any kind the question can be very much flawed and lead to a level of ambiguity. But I think that the questions we have that are related to these two referendums clearly point us in the right direction to ensure we will get a very positive result for New Zealand.I want to address the order of the two questions and the order of the two referendums which has been sort of disputed I guess by the other side of the House. I am concerned that people do not want to engage in the debate before they simply write it off and that is what is being proposed by having this yes or no choice up front. I for one have not made up my mind as to whether or not I believe we should change the flag quite simply because I do not know what the alternative would be. There are many many people I know out there who are yet to make up their minds whether or not they believe we should change the flag because they are waiting to see what the alternative would be. Putting a yes or no choice up front eliminates them from the equation. So we have got the process right. We are moving in the right direction.Finally I just want to touch on the point that people have said there are more important issues right now for us to discuss. If I were to ask whether this is the most important issue for New Zealand right now of course the answer would be no. But I have complete confidence in this Government—while it is still working hard to improve the educational outcomes of New Zealand which we are doing; while we are working hard on delivering Better Public Services which we are doing; and while we are continuing to work towards better health targets which we are achieving—also being able to cope with this issue. That is something we are seeking to do.So Mr Assistant Speaker Tisch no doubt it is of no surprise to you in summary that I absolutely support this process. It is a good process it is a healthy process and it is one that I believe will deliver whatever result is the right result for New Zealand and for our flag going forward. Thank you.Dr KENNEDY GRAHAM (Green): We have before us the New Zealand Flag Referendums Bill. In one respect it can be seen as a matter of considerable political significance. In another sense there is less to it than meets the eye. What meets the eye is the visual symbolism of our national identity. Flags count at least in the sense of self-perception. They depict who we think we are to paraphrase a recently departed colleague. The Canadians got it right back in the 1960s. The simple but compelling symbol of the maple leaf beautifully illustrates who the Canadians are. The world recognises them immediately and positively. Those of us in Australasia are a little slower in the maturation process. We have lingered with the Union Jack as both the colonial symbol and our national flag. The other symbol the Southern Cross is shared between our two countries. It simply serves to sow confusion as to our separate identities yet Brazil has the Southern Cross as well. So we could retain the stars and still have a separate identity. There is therefore a compelling reason to consider a change of flag. We would so to speak be proceeding down a road of national significance.But there is also less to this than meets the eye. The way in which the process has been generated is a trifle weird because it was the Prime Minister who took it upon himself to lead the nation in the idea of changing the flag. The explanatory note says: “For some time there has been public debate about whether New Zealand should consider changing its flag.” That is of course contestable as a quick review of the flag’s history will show. We have had the current version since it was first gazetted back in 1869 and affirmed in 1902. The insertion of the Southern Cross was done on the instruction of the Queen-in-Council—not exactly a public debate. As early as 1920 Parliament was asked to consider whether to have a flag that was distinct from that of Britain. Queries were already being received from the Canadian Parliament. New Zealand MPs replied then that there needed to be “a groundswell of public opinion before the Government should consider any change.” During World War II suggestions were made to the Prime Minister that a Māori emblem be included on the flag in recognition of the role of the Māori Battalion. Peter Fraser deferred the matter until the end of the war and it was never revisited.In 2004 a civic movement was formed to change the flag with a campaign for a citizens initiated referendum. But there was not enough support to force a vote. To the extent that there was any public debate the people pre-emptively voted for no change. The latest development was in 2009 with the refusal of Transit New Zealand to fly the Tino Rangatiratanga flag on the Auckland Harbour Bridge. The critical development that time was the decision by the Prime Minister to personally intervene. He said he would be happy to allow a Māori flag to be flown including in Parliament if there were agreement over a particular design. A series of hui followed to ascertain which of four flags Māori preferred. The choice was between the New Zealand flag the independence flag the red ensign and the Tino Rangatiratanga flag. The last one was chosen and it has flown on Waitangi Day ever since. But whether that represents a spontaneous and genuine public debate about changing our national flag is a separate thing and more than just a moot point.The Prime Minister with his instinct for vice-regal populism has actually sparked this latest round himself with his speech 1 year ago. He said then that he was outlining “a plan to hold a public discussion and vote next parliamentary term on New Zealand’s flag.” The Prime Minister cannot outline a plan to hold a public discussion about a change of flag and say on introducing the bill that for some time there has been a public debate. That is the debate he is planning to hold not one that he can acknowledge already exists.The second point of concern: in his speech last year the Prime Minister allowed himself the luxury of stating a personal belief. “The design of the current flag symbolises a colonial and post-colonial era whose time has passed.” he told an unsuspecting nation. He said: “I am proposing that we take one more step in the evolution of modern New Zealand by acknowledging our independence through a new flag.” Yet in the next breath the Prime Minister said he wanted to give a clear assurance and commitment that retaining the current flag was a very possible outcome from the process and there was to be no presumption in favour of change. The Prime Minister cannot have it both ways. He cannot gratuitously offer a personal view that the flag should be changed and in the same speech say there was no presumption in favour of change. Of course there is a presumption. It is on the part of the nation’s leader. Had he kept his personal views to himself the disclaimer might have come across as genuine. The conclusion is clear. The Prime Minister is not responding to a public clamour for change. He is personally stimulating a process for a decision and in that process has already stated his view.In fairness the way his Cabinet has structured the national decision process is broadly democratic. The explanatory note says: “To provide New Zealanders with a forum in which to progress this discussion in a formal and respectful way the Government decided to initiate a broad engagement process followed by the opportunity for the public to vote on the New Zealand Flag.” The cross-party group the citizens panel and the dual referenda are that process. But the basic presumption that there was a strong mandate for a change remains in question. That doubt has not been allayed; if anything it has been intensified by the refusal of Cabinet to agree to the recommendation of the cross-party group that the first referendum include a prior question: “Do you think the flag should be changed?”. If a simple majority were to say no there would not be a second referendum. That would have been truly democratic. That would have implemented the assurance that there was no presumption on his part for change. But Cabinet refused so we are obliged to go through the process of the two referenda.There are many people out there saying that this process is a distraction or a $26 million waste of public funds when there are more pressing social and political needs. It would have been consistent with those concerns for the Prime Minister to agree that the basic question be asked first but he has presumed to override that. This fact alone brings into doubt the credibility of his claim that there is a public debate already existing but no presumption of change. In his 2014 speech the Prime Minister claimed that the decision over the flag is “bigger than party politics”. This is true. That is why he should have listened with more respect to the recommendation of the cross-party group.The Green Party will support this bill going to the select committee but we shall listen very carefully to the submissions and gauge the public mood. We shall not take the Prime Minister’s word for it that it is critically important to proceed. The decision to proceed should and must reflect a genuine national decision not a personal preference of a populist leader.DENIS O'ROURKE (NZ First): I am really quite saddened to have to speak on this bill today because I and we in New Zealand First do not see why it is needed at all. It is not clear why suddenly this legislation for a new flag has arisen under the leadership of the Prime Minister. The motivation is certainly not clear. For many years there has been sporadic public debate about whether New Zealand should consider changing its flag but it has been at a very very low level and it has nearly always been associated with the republican movement. So is National really just taking the first step towards republicanism? Has it become infected with republicanism and is that what it really is going to do later? Maybe this is just the first step. Or is it a career succession plan for John Key first President of New Zealand? What really is the motivation for this? It is certainly not clear to us.At the very least this is a way of diverting public attention away from much more urgent issues. It is a blue herring. We should be looking much more at spending our energy our money and our efforts on issues like child poverty; a rundown health service in many regions; a 1960s transport system on its last legs; an education system riddled with inequities and misguided investment; an undiversified economy far too dependent on one or two products dairying and tourism and one market China; an out-of-control immigration system resulting in excessive net migration—Paul Foster-Bell: What a load of rubbish.DENIS O'ROURKE: —a worsening housing crisis and the list goes on. If that member thinks it is a load of rubbish he should ask the people of New Zealand because they think those issues are much more—much more—important than a new flag for this country. You have only to ask them to find that out. The Government has appointed a flag consideration panel which it is paying at a rate of I understand somewhere between $600 and $800 per day its purpose being “to lead public engagement and to recommend alternative flag designs for New Zealanders to consider through referendum”. But this is not just a waste of millions of dollars of public money for no public benefit. In fact New Zealanders will not really get to make the decision at all because they will have presented to them only four options actually decided by others. The whole process is being so rushed that it is clear that the Government wants to make sure this is done before the next election for some reason—maybe as John Key’s legacy to New Zealand after he loses that election.Hon Maurice Williamson: Ha ha! In your dreams pal.DENIS O'ROURKE: And we will soon see—and we will soon see. The first step of that will be when the Government loses the Northland by-election in a few days’ time. The bill establishes a process for the holding of two postal referendums the first to determine which alternative flag design is preferred from only four alternatives and the second to determine whether that alternative or the current flag should be the New Zealand flag. That is the final part of the referendum. So there are two referendums effectively. If the voters decide in the second referendum that the flag is to change then legislation to actually put that into effect would have to follow.Although New Zealand First is usually in favour of referendums of this kind on matters that the people should decide as I have already said on this occasion the people will not in these referendums actually be deciding themselves because the Government has got it the wrong way around. Before spending millions of dollars on the two referendums planned there should be only one referendum before any panels are appointed or other expenses are incurred. The one referendum should start out by simply asking a simple question: do you want a new national flag to replace the current one? That is all we need to ask for a start. That should be the question. That is the primary question and that is the one that is being asked second in these two referendums and it should be first. And only if the answer is yes should we spend money on taking the matter any further. In actual fact as Phil Goff has said you could have both questions asked in one referendum but this Government wants a double diversion and to double the cost. How silly can you get?The process set out in this bill appears to be a way of the Government rigging the result actually influencing the public and making sure that the public do what the Government says. I do not think they will anyway but this is what the Government is trying to do. It is trying to pre-empt the real question which is “Do New Zealanders want a new flag or not?” by producing four flags that other people have chosen to be thrust upon New Zealanders. It is a back to front process. It is a blatant means of trying to influence the result. It is trickery but Kiwis will see through it. It is transparently clear that the Government and Mr Key are out of touch with what Kiwis want. This is not what they want. There are a lot of things they do want as I have said but this is not anywhere near a priority for the great majority of New Zealanders.In addition to that no detailed information has been given to people about the full cost. The first $26 million will be just the beginning. There will be many many more costs amounting to tens of millions of dollars after that because we will need to not just change flags on official places and also all military flags at embassies overseas and for the armed forces but pay many other costs of official publications and emblems. Even drivers’ licences and especially passports will have to be changed to catch up with the changes. So the real costs have not been identified and are huge. That money is better spent elsewhere on new homes on education and on better health services including New Zealand First’s new bill to give SuperGold cardholders three free doctors visits per year. The people who will get that would much rather have it than a new flag I am sure.There is also another very important reason for us to oppose this bill and this is that it will betray the men and women who fought and died under this flag our flag in many wars. We had 100000 men go to the First World War from New Zealand and 18000 of them died—not under the flag as one speaker said but they were buried under the flag. The respect that the current flag generates throughout the world will be lost because the new flag will take decades upon decades to even be recognised. Our current flag is rooted in history and that history needs to be respected and preserved. We need not adopt some fad—the fad of design this year or next year—for New Zealand’s flag. We have a wonderful flag which is respected which is recognised and which is New Zealand’s flag. It does not need redesigning. Everybody knows it. Everybody respects it. What else could you possibly want from a flag? What are we going to gain from a new one apart from the expenditure of a lot of money just to make one party feel better and to try to divert people from the real issues? This is not just “a flag of historical significance” as it will become if this bill is passed—because that is what it says it will do—it will really mean that this flag will be lost to us for ever.There is no genuine or significant public pressure for this change of flag nor for the flawed process to be followed. Instead there are much more important constitutional issues for us to be looking at such as the Māori seats a written constitution the size of Parliament and the size of electorates the length of the parliamentary term the Māori electoral option and participation and the role of the Treaty of Waitangi. Those are all genuine constitutional matters that are urgent but what is the Government doing about them? All it has said as a result of the recent review is “Let the conversation continue.” or in other words “Let’s do nothing about all of that. Instead let’s have a diversion just to change the flag.” That is not good enough and New Zealand First will not countenance it.JOANNE HAYES (National): I am pleased to stand and take a call on the New Zealand Flag Referendums Bill in its first reading. Yes it has been rather entertaining listening to the member from across the way over there talking about the flag. You know Mr O’Rourke this is the time for you to perhaps put your mailbox with a flag emblem on it up for consideration because I know that that is exactly what you would like to do when saying that. When the National Party came into Government—Denis O'Rourke: What a load of nonsense.JOANNE HAYES: —listen listen—we made the commitment that we would hold a binding referendum on the New Zealand flag. That is what we said we were going to do and we are committed to doing that. We are determined to have this flag debate and we are determined to have this referendum so let us start by looking at everything that has been said in the House today.I was quite entertained when the member Mr Goff turned round and said in this House today that our Prime Minister John Key was having this flag debate because he wanted it to go down in history as one of his key things to do as a Prime Minister. But Mr Goff forgets that the thing that our Prime Minister will go down in history for—one of the many things—is that he wiped the floor with Phil Goff in 2011 when we won that election. So that is one of the many things for which he will go down in history in his success as our Prime Minister.So I just want to look at our flag because I want to say that we have had a long history of flags in this country—changing flags using flags and having flags.Denis O'Rourke: There is not a long history of changing flags.JOANNE HAYES: There is. I had two grandfathers who were in the Māori Pioneer Battalion and who went to war in World War I. Yes they went in under the Union Jack but when they came back King George designed a flag to give to the Māori Pioneer Battalion but it was not recalled. It was called the king’s colour. It was designed and had on it big areas of red colour that recognised the blood that was shed in the First World War. So you know when you start to talk about that that is when I am reminded about that Māori Pioneer Battalion flag. It was one of 13 flags that were awarded to units of the New Zealand Expeditionary Force in the First World War.But unfortunately the king’s colour flag was not consecrated presented or paraded because the Māori Pioneer Battalion was not recalled as I said. So we had to wait. It went into storage. It was put into storage by the last commander of the battalion and in 1939 his widow presented the king’s colour flag to the Minister of Native Affairs back then hoping that it would be used for the 28th Māori Battalion. If you look at a few articles around that you will find that that flag lay in the museum until 1988 when the last commander of the 28th Māori Battalion Sir James Hēnare and others looked for it and brought it back. It was consecrated in 1993.Denis O'Rourke: It’s not a flag.JOANNE HAYES: This is all relevant to a flag referendum. It is all relevant. Look at your speaking notes Mr O’Rourke if you have any. We are lucky to have some.Let us have a look at the Māori flag—OK—the Confederation of the United Tribes of Aotearoa. In 1834 25 chiefs from the far north were called to Waitangi—James Shaw: I raise a point of order Mr Speaker. I beg your pardon. I am sorry I am having real trouble hearing the member who is speaking at the moment and I wonder whether you could ask the House to quieten down and allow her to speak.The ASSISTANT SPEAKER (Lindsay Tisch): Well I am a judge of that. So long as I can hear—[Interruption] Order! So long as I can hear what is being said; I am the judge of that. But I do ask that the barracking across the cross benches should be lower than that and I ask Jo Hayes to continue.JOANNE HAYES: Thank you Mr Assistant Speaker. I do not like yelling in the House either to be heard. As I say in 1834 25 chiefs from the far north gathered in Waitangi to choose a flag to represent New Zealand. This flag was actually initiated by James Busby—are we all listening? That meeting included 10 British commanders; so it was not just 25 chiefs sitting at the table. There were 10 British commanders and personnel from three American ships who attended that occasion.So the 25 chiefs chose out of the designs the Methodist one which became the flag of the Confederation of the United Tribes of Aotearoa and everybody knows that one because it is on a white backing. The Union Jack as we all know came into being post the signing of the Treaty of Waitangi yet we still keep that Confederation of the United Tribes flag for the iwi. New Zealand uses six other flags—there are six other flags we use. We have the Queen’s personal flag we use the Governor-General’s flag—Denis O'Rourke: We use one.JOANNE HAYES: These are all for occasions Mr O’Rourke. We use the New Zealand red ensign which was adopted in 1903 for merchant ships. These are all flags that signal great things that have happened in the history of this country and its development. We use the New Zealand white ensign which is the British one. We use the Royal New Zealand Air Force ensign and the New Zealand civil air ensign. Then of course there is the plethora of flags that iwi use. I am from the Whanganui River and when I go up into Ngāti Rangi—you want to see the plethora of flags that they fly. These are the flags and some of them have the little ensign that shows British rule but most of them are ensigns that represent their history so this is very important to them as well.What I also want to say is that my grandfathers—yes they fought under two flags; they did do that but I can stand here and argue that they would not have refused to fight because of the colour of the flag the shape of the flag. They went over there because they represented this country. They fought for our freedom; that is what they fought for. They fought for our freedom so our grandchildren can live in a world that is peaceful. That is what I can say and there is nobody in this House or outside this House who would refuse to do that because of the debate over this flag today—no they would not.As I am saying this whole debate around the flag is a good debate. It is the referendum that this Government said we would do and we are doing it. We are doing it we are listening we will be listening and it is all laid out within the bill.Ron Mark: No no no you’re not going to listen.JOANNE HAYES: Mr Mark you can sit over there and you can say “No no no no.” but we will be listening. I am sure that if my grandfathers were alive today they would be saying to me: “Mokopuna make sure that we have this flag so that when an Australian Prime Minister goes overseas he is not welcomed by a flag that is New Zealand’s flag because people cannot tell the difference between the Australian flag and the New Zealand flag.” It was written up in the media that that was what had happened. We want a flag that is representative of all of us and it is going to be the people’s choice as to how we do that and how that happens. I mean to say it is shameful when another Prime Minister goes into a foreign country and that country has the New Zealand flag to welcome him.So when you sit here in this House and say that everybody knows our flag they do not know our flag. We need a flag that resembles who we are so that everybody in this world can see that we are Kiwi we are the silver fern—we are all of those things. We need a flag that when it is raised will send chills up people’s spines and will bring tears not only to those watching the flag go up but to those who are watching them. That is the type of flag we need. We need a flag that tells the world that we are Aotearoa New Zealand. That is what we need. We need a flag where we can all stand proud and nobody in the whole globe is going to be confused over where it comes from.When I listened to the member of the Greens Kennedy Graham talk about the Canadian maple leaf everybody knows that. That is the type of thing we need so people of this globe know where we come from. They need to know that the flag represents people who are strong independent and believe in freedom. That is the type of flag we are looking at and we need a flag that represents pure New Zealand because that is what we are—ake ake ake āmine I tell you now.In closing I strongly urge all New Zealanders to take the opportunity to participate in this referendum. Do not sit back—participate in it. Participate in it and have your say because that is what we have asked for. We are committed to that as a Government and we are going to continue to drive that. I am very proud to stand here today and commend this bill to the House and I also urge everybody throughout Aotearoa New Zealand watching this debate to please participate. Kia ora.The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call. James Shaw—5 minutes.JAMES SHAW (Green): A number of people who have spoken before in this debate have mentioned the level of public interest in this issue and the fact that the House of Representatives is fairly empty for this debate is actually quite representative of the level of public interest. So this is one of those occasions where interest in the House does seem to roughly represent the level of interest outside it.My personal view as a modern New Zealander is that we do need to change our flag and that we need a flag that tells all of our stories. In general the Green Party supports the idea of a public referendum to adopt a new flag that better represents the more independent and multicultural identity of present day New Zealand. We do want the public to have a say on this issue and we will be supporting the bill’s referral to a select committee.There are three points that I would like to make about this bill however. First of all I would like to say as my colleague Dr Kennedy Graham indicated that the flag has long been regarded as an antiquated relic of empire. Although between 1840 and 1902 the Union Jack was the official flag of New Zealand the current flag was gazetted in 1869 and used aboard New Zealand ships. In 1902 a statute instituted the current design as the official flag of New Zealand on land and sea. This flag’s design reflects a desire to identify New Zealand as a self-governing but essentially still British colony in nationality culture and outlook. Does anyone here think that New Zealanders today still think of themselves as British? I say this as a proud Kiwi who was born and raised in this country and is also a naturalised British citizen.The New Zealand of 2015 is a multicultural independent society and our links with Britain are more economic than cultural. Having lived in the United Kingdom for the better part of 13 years it is very clear to me that our countries are extremely different. Although it is clear that we still have family historical and cultural relationships with that country we are a different country. According to the 2013 census 12 percent of the New Zealand population identifies as Asian and that number is expected to grow in the next few decades. Twelve percent of our population identifies as Māori but our current flag ignores the indigenous people of this land. If a flag is supposed to be a symbol of national identity the current flag is inadequate.The second thing I would like to say is that we do have concerns about the proposed process that has been outlined in the bill. Having two referendums is costly and unnecessary. The Government argued against the citizens initiated referenda on asset sales last year on the basis of cost—that it was costly and unnecessary—and now it is giving us two referenda on a flag rather than on the economic direction of the country. The Government is proposing having one referendum to determine a viable alternative before having a second first-past-the-post referendumbetween the alternative and the current flag. In our view it would be much cheaper to simply have one preferential voting referendumbetween the current flag and a number of alternatives.Other countries’ experiences suggest alternate approaches that the Government might consider. In Canada the Maple Leaf Flag which has been referred to as one of the more successful changes of flag was adopted in 1965 after the country’s Prime Minister formed a committee to consider the flag question. In Jamaica Parliament approved a new flag on the recommendation of a special committee that had sifted through public submissions.The third and final point that I would like to make is that there is a need for a wider constitutional debate and that we are putting the cart before the horse in looking at the symbol of our country. As this Government moves into its third term its focus on populist gestures over meaningful reform is becoming ever more apparent. Instead of tackling broader questions about the constitution the Prime Minister is attempting to distract the public with a flag debate. As I said previously we support the principle of changing the flag but we would prefer that to be part of a broader debate not a political stunt.For instance the Government could tackle electoral reform. The Electoral Commission recommended changes to MMP after the 2011 referendumbut the Government refused to enact them because it wanted to protect its support partners. There was a constitutional review in which a huge amount of extremely good work was done and that similarly has gone to ground. One other question is: should we remain a constitutional monarchy or should we have a Kiwi head of State? What are the prospects for greater Māori autonomy or self-governance? We do not pretend to have a monopoly on wisdom regarding those issues—The ASSISTANT SPEAKER (Lindsay Tisch): Order! I am sorry—the member’s time has expired. I call Marama Fox—5 minutes.MARAMA FOX (Co-Leader—Māori Party): I am also pleased to be part of the cross-parliamentary team that has been established to engage with this issue of the New Zealand flag to ensure the debate has integrity and that we put in place a process to create public confidence in the nature of the debate.I want to remind us all not to duplicate the process that was spearheaded by the Māori Party in 2009 where a national conversation was held about the preference of the people for a Māori flag. In July and August 2009 21 public hui were held across the motu and it came down to a matter of four flags—the New Zealand flag the New Zealand red ensign the United Tribes of New Zealand flag and the tino rangatiratanga flag. For those who do not know that flag that was the flag carried during the hīkoi to Parliament on that auspicious day 5 May 2004. We will never forget that incredible sight when the forecourt was filled with tino rangatiratanga flags—just saying. But the pathway to tino rangatiratanga was seen not only in the red white and black colours. At the time of our consultation process in 2009 kaumātua Matiu Tarawa a fine 85 years old said that he had supported the flag of theHe Whakaputanga o te Rangatiratanga o Nū Tīrenifor some 70 years. He saw it as the tuakana to all flags—the elder sibling.What I loved about the comment from Matiu is the pride and the passion that he had for the flag that he thought most denoted his nationhood. I feel much the same way about the concept of a new national anthem for example. I would love to engage in discussion around the motu about what we might consider would best represent the diverse voices of this land. As a result of the national consultation process championed by the Māori Party a Māori flag will fly alongside whatever flag is eventually chosen to recognise the partnership that the Crown and Māori entered into when signing Te Tiriti o Waitangi. As a result of that process in 2009 the national Māori flag flies from the Auckland Harbour Bridge Premier House and any other significant sites on Waitangi Day.Is this a necessary step at this expense and is it worth it? I have come to the House to fight for those who suffer hardship and disparity. For me I would relish the chance to vote for a flag that recognises my duality of nationhood. The first symbol of nationhood recognised around the world should reflect our duality of nationhood. It is the tip of the iceberg of what else we might could and should address to address inequality and recognition of our place in this country. Let us be clear: the Māori Party has celebrated momentous occasions throughout its time in this House one of which was when we travelled to the United Nations Human Rights Council and Dr Pita Sharples signed the Declaration on the Rights of Indigenous Peoples in April 2010. Article 3 of the Declaration on the Rights of Indigenous Peoples states: “Indigenous peoples have the right to self-determination. By virtue of that right they freely determine their political status and freely pursue their economic social and cultural development.” Today as we debate the New Zealand Flag Referendums Bill I think back to the Declaration on the Rights of Indigenous Peoples which New Zealand is now a proud signatory to. I firmly believe that the placement of equal weighting between the Māori flag and the flag that will emerge out of this process of the referendum is an excellent way in which we can enhance relationships between tino rangatiratanga and kāwanatanga as provided for in Te Tiriti o Waitangi.On that basis the Māori Party stands to support this first reading through to the select committee process to receive submissions to hear what the rest of New Zealand thinks. Again it is the tip of the iceberg. It is the beginning of recognising duality of nationhood. Yes it is a great expense but it is an expense that will hopefully be the beginning of addressing a number of inequalities and disparities in our country. For this reason we support the New Zealand Flag Referendums Bill to the select committee process. Kia ora.Hon MAURICE WILLIAMSON (National—Pakuranga): I am delighted to take part in this debate because I think it is important to nail down a few particular issues. First of all this is not the silver bullet the be all and end all or the change that will make us the biggest wealthiest nation in the world but it is actually an important step along the way to nationhood. We need to understand we were a little colony at the bottom of the South Pacific. We called her “Mother England”. She literally took all of our goods and services and we were more British than you could get. Michael Joseph Savage’s famous speech in 1939 was: “Where Britain goes we go. Where Britain stands we stand.”Well that is no longer true. That is no longer true. They cut the apron strings. They kicked us out like a teenager gets kicked out of home. They did not even give us a bit of spending money to go. I have to say I am a bit down and dirty on the way the Poms got rid of us. They just gave us the boot. But that is fine. We have had to find new markets. We have had to become a country in our own right. And guess what? Of recent times brand New Zealand is getting to be so important around the world. There is stuff that Peter Jackson has done stuff that our wine industry is doing and stuff that is value-added to some of our technology our dairy and our meat products and so on. Brand New Zealand is getting to be more and more important so I think it is well overdue for us to look as a nation at what our symbol is. Obviously one of the symbols of your nationhood is your flag.So to those who are worried about the changing of the flag let us go through a few things. First of all the flag we have currently got is not New Zealand’s first one. It is not our first flag. Actually until 1902 it was the Union Jack. That was our flag. Let us just make sure that everyone understands what the Union Jack is. It is a combination of three sets of crosses: St David of Wales St George of England and St Andrew of Scotland. How does that have any relationship to us at the bottom of the South Pacific? How does a Union Jack have any relationship to us at all? It does not.The next thing I think is worth telling—and this is actually a true story Don McKinnon told us once in Cabinet. He was our foreign Minister and he attended a big United Nations function I think and so on. All the foreign Ministers were asked to come up pick their flag out of a big rotunda thing go and place it in these holders and then stand underneath it. It was done alphabetically so when McKinnon went up he was about halfway through as “n” for New Zealand. Our flag was not there. Don McKinnon went: “Uh oh.” Then he suddenly spotted the Australian flag was still there. Gareth Evans the then foreign Minister of Australian when he had walked up had gone up picked our flag and gone and stuck it up not realising he had got the wrong flag. So that is how similar they are. Why the hell our stars are red and theirs are white no one has ever been able to tell me. Other than that that is the only way I can spot the difference. They have got white stars; we have got red ones. They have got a bigger one but it is hardly that much of a difference. Frankly we want to be a nation in our own right. So I give absolutely full credit to the Prime Minister for saying it is time we began a process of identifying ourselves as a nation and having a symbol that represents it.I want to make it clear that a whole lot of my family members served. My father and his brother served on the HMNZS Achilles at the Battle of the River Plate two of his other brothers served in the New Zealand Army in the desert and two of them served in the air force in part of the Battle of Britain. I do not believe any one of them who have all passed on would say: “I served under a particular flag so I want that flag kept.” You know why they served? They served against the tyranny of—in that particular case—the Nazis and what they were doing in the world and they served for New Zealand. They served for their country and for the people of this country in order to keep it safe. The piece of linen that might have been fluttering above them on one day is not what they did it for. They did it for their nation and their people to keep them safe and secure.I have got a feeling that a lot of old soldiers many of whom have passed would be very happy for us to be now moving to the idea of a different flag that stood out and that was us—a flag that is New Zealand and that is us so when we go on the world stage everyone does not go: “Oh is that the Australian flag? No.” There are a number of other nations that have got the Union Jack sitting up in their top left-hand corner and everyone is saying: “Ah what country is that again?”. It would be great.Again we have heard about Canada and the maple leaf. What a stunningly good example of change. Ask any Canadian—please do because I have done it—whether they would go back. Ask any Canadian whether they would like to go back to their old flag. It is not even up for discussion. The maple leaf is now hoisted and they feel proud of it. It gives them some identity. It is their nation. It is not the same as anybody else’s. That is what I would love to see happen.I do not have a particularly strong view about the design other than a couple of things. I would like it to be as simple as it can be because kids like to draw flags. You want to stick a flag on the side of your car when your rugby team is playing so please do not make it so you have to be an artist of greatness and spend 3 hours drawing all the fancy bits to make it work. It should be something quite simple. In the case of the maple leaf you can flick your hand around and draw the maple leaf within a couple of seconds and that is it on a plain background. Just make it that it is a New Zealand icon that we can all be proud of and that can be put on products that we sell around the world or we can wear it as part of our sporting teams.I make this point: when we see the All Blacks go to the Rugby World Cup and we are cheering them on are they wearing the Union Jack? Come on! Have a look at any rugby stadium and see whether the kids are out there waving the Union Jack to support the All Blacks. They are not. They are out there waving the silver fern because at least at this point until we get this flag thing sorted it is the closest thing we can get to our nationhood. How awful would it be if we were up against the Poms in the final of the Rugby World Cup and we are waving a flag with the Union Jack on it? We would not do it.So it is not our first flag. We have changed it in the past. I do not accept the argument that people because they fought under it and died—and many hundreds of thousands along the way have given their lives in that service—do not want to see that change now. In fact I think the point has been made already that on many of our war graves around the world the silver fern is above every one of the commemorative little plaques for each of the soldiers—the silver fern is not the Union Jack with a couple of stars on the bottom of it. So this is a really important step forward for us as a nation and for where we go from here and I am delighted that we are taking it.To those members from the Labour Party—and I have heard a few of them getting stuck into this Government and saying: “Ah you know you’re boxing forward with this without the consent of the people.”—I want to say that they took some much bigger constitutional issue changes of this country than the flag with no consultation whatsoever and not to an election. What are they? Well let us go through them. How about we take getting rid of the Privy Council? I support it. I am not criticising them. I actually think that the time to cut the strings with the Privy Council was well overdue. I support it. But Labour just boxed on and got rid of it. It threw the Privy Council out. That is it. There was no referendum there was no consultation and it was not part of an election referendum—done. It was similar with our knighthood honours and so on. Labour decided that it did not like the knights and the dames that it was just going to change all of that—bang done did not consult on it and so on. So it is a bit rich when some people come into this House and say “Oh you haven’t consulted with us.” or “You’re not taking account of this.” when those Labour members alone went out and sort of banged things through.I want to finally say to New Zealanders that this is not massive. This is not the game-changer that will see us be the economic powerhouse to take on the world but it is a really important element of our becoming a nation. It is a really important part of us being an entity in the rest of the world and I would love to think that we ended up with a flag—and as I said before I do not have any preconceived ideas on it—that when New Zealanders are travelling they will have on their backpacks or have on their shirts. When we are at rugby matches and we see that flying or we see it at the—someone actually showed me a clip the other day of a couple of Commonwealth Games medal ceremonies. The flags were all going up in the air. All three had Union Jacks and one had some red stars and one had some white stars and you could not work out whether the Australians had got the gold or whether it was the New Zealanders who got the gold. If anyone from overseas was looking at it they would say: “Oh that country cleaned up on all three.”So it has to be different. It has to be unique. I agree with a couple of the people speaking from the perspective of Māoridom. It would be great if we could include something like the koru that Air New Zealand has done something that is uniquely Māori as part of it. I would love to see that. But in the end this country deserves to have a stake in the ground that people around the world recognise. It goes with our pride as a nation as we go forward.The ASSISTANT SPEAKER (Lindsay Tisch): The next call will be a split call.STUART NASH (Labour—Napier): What a load of absolute bollocks! If that member thinks that a flag defines who we are as a country then that represents the greatest level of colonial insecurity that I have come across in a long time. I tell you what a flag never defines how I view our country. Mr Williamson talked about his ancestors who had served this country. He talked about the fact that they did not stand under a piece of linen. Well I have had several members of my family who have put a hell of a lot of service into this country and if they thought for one moment that we were prioritising a flag over child poverty over unemployment over economic development then they would actually roll in their graves. This is an absolute disgrace.Mr Williamson said that we need something that we can take overseas and be proud of. Well for me I would be a hell of a lot prouder if I could go overseas as a Kiwi and say: “You know what? In New Zealand there is no child poverty. In New Zealand there is no unemployment and there is no Government debt.” But we cannot say those things at all. In fact all three of those are just examples of the absolute disgrace that this Government has presided over for the last 7 years.I get quite riled up about this because when I hear people say that a flag is what defines us as a nation I think how ridiculous. If New Zealanders think we are that shallow then heaven help us. I know that the vast majority of people whom I talk to and whom I associate with are not that shallow in any way shape or form.What I would like to talk about in the next 4 minutes is the actual process. The thing I like doing when I look at these bills is going through the regulatory impact statement because what the regulatory impact statement is supposed to be is a rather objective view of how the bill is going to impact on New Zealanders written by Government officials who are not supposed to be in the pocket of the Government but who provide the Government with advice and the members on the select committee with a way forward in things they need to consider.The first thing this says is: “Any process considering change must be robust in that it needs to lead to a legitimate outcome which is accepted by the public.” We all agree on that. That is vitally important. But then we go through this and it says: “A number of decisions have been made by Cabinet limiting the focus of the [regulatory impact statement].” So immediately the Ministry of Justice has said: “OK well we can’t consider a whole lot of options because the Cabinet has said so.” Then it says: “We have not considered status quo as a feasible option due to decisions already made by Cabinet.”—already made by Cabinet. So immediately what we have got are decisions made by Cabinet that are going to influence this whole process.Then we have got here: “We have not considered holding a ballot together with a general election due to the Prime Minister’s indication that the process should be completed before the 2017 General Election.” So yet again we have got the Prime Minister dictating this whole process. This is not going to be accepted by the public as a legitimate outcome.Why this process? If it is done in a general election we get about 80 percent turnout. You are going to get the majority of Kiwis who are going to vote because they go to the polling booth anyway. The history of postal ballots is around about 50 percent the absolute maximum so we are not going to get the vast majority of Kiwis engaging in this. In fact it says “we might expect”—we might—“that consideration of the New Zealand Flag is an issue New Zealanders will find engaging. This could mean higher voter turnout”—in a postal poll—“as long as the referendum is well-timed and the question(s) well-framed.” If that is not an official saying: “This is not a very good idea but we can’t say that because we don’t want to annoy Cabinet” then I do not know what is.This is a process that is being driven by Cabinet and the Prime Minister in a way that I actually believe is possibly—well if it is not unconstitutional then it is certainly unfair. If we really do want to change the flag if New Zealanders really do want a change then make it easy—as this document says it has to be. In fact in this statement it actually outlines the fact that public accessibility on the option put forward by the Government—it says it is medium. Public accessibility means “a referendum process that is easy to understand and participate in where voters understand the implications of their vote.” And the Ministry of Justice says that is not that high. New Zealanders will not engage. Thank you.LOUISA WALL (Labour—Manurewa): Kia ora Mr Assistant Speaker. It actually is a privilege to speak on this bill the New Zealand Flag Referendums Bill proposed by the Hon Bill English and I do so acknowledging that this is the beginning of the end of the $3.9 million constitutional conversation that Bill English oversaw. In fact what was really interesting about that constitutional conversation is that Mr English said that if there was to be any significant change it would “require either broad cross-party agreement or the majority support of voters at a referendum.” So the mandate for this piece of legislation comes from the “other issues” section of the recommendations of that constitutional conversation that said “the role and functions of the Head of State and symbols of state”—I presume that is where the mandate for this comes from from Bill English’s perspective.The reality of the question: “Are you in favour of changing the New Zealand flag?”—actually New Zealanders have been asked that question. On 27 September last year in a poll of over 1000 voters on One News 65 percent of New Zealanders said no. On 25 February 2014 they had also been asked that question—this was a bit earlier in the process—and 72 percent said no. And if we look at 2004 which was 10 years ago 58 percent said no. So maybe there was a little bit of a window in 2004 and that was on the end of the Don Brash Ōrewa speech and the foreshore and seabed legislation.But what I want to contribute is that in fact the flag that we are discussing today is actually the third flag this country has had. The first flag actually was the flag of the United Tribes of Aotearoa. On 20 March 1834 25 chiefs in New Zealand asserted our sovereignty as a nation for the very first time. That was our first flag. On 6 February 1840 our flag changed again and it did become the Union Jack. Guess why? We signed a treaty with the British so New Zealand became part of the British Empire. The flag that we have today we actually adopted under the New Zealand Ensign and Code Signals Bill of 1902 in recognition of the 6500 New Zealanders who went and fought in the Boer War between 1899 and 1902. It was a very significant event because it was the first time as a country we had actually asserted ourselves internationally not as British citizens but actually as New Zealand citizens.So significant events have happened for us to look at our flag and my question is: has a significant incident happened for us to be debating this today? It is going to cost the country $26 million and as my colleague Stuart Nash pointed out we have got a whole lot of other things that we would rather spend $26 million on. So for the Government to make this its priority I guess we are a bit dumbfounded on this side of the House.So why change the flag? Actually there has been a history of MPs wanting to change the flag. In 1979 National MP Allan Higget—Grant Robertson: Highet.LOUISA WALL: Highet—thank you Grant. Thank you I was worried about that pronunciation. He was the Minister of Internal Affairs. He wanted to change the flag and guess what happened? There was no interest—no interest in changing the flag. In 1988 Labour MP Russell Marshall who was the Minister of Foreign Affairs mooted a change to the flag. Did New Zealanders support him? Of course they did not. In 1992 the leader of Mana Motuhake Matiu Rata a former Minister of Māori Affairs mooted a change to the flag. For him it was about our indigenous culture and our indigenous identity. In 1998 National MP Marie Hasler Minister of Cultural Affairs wanted to change the flag. No traction—no one wanted to do it. In 2004 Lloyd Morrison started the NZFlag.com Trust and he wanted to initiate a citizens initiated referendum to change the flag. Only 100000 New Zealanders signed that petition. It needed 270000 signatures so it failed.And today we have National MP John Key who is the Minister of Tourism the Minister for National Security and Intelligence and the Minister responsible for Ministerial Services—he wants to change the flag. If he really wants to change the flag why does he not go through a citizens initiated referendum? He needs only 330000 signatures to do that but what is he doing? He is using the privilege of being in Government to push this through and I think it is absolutely appalling at a time when child poverty is what it is. For this Government to abuse that power is absolutely disgusting. Kia ora.Dr PARMJEET PARMAR (National): Thank you for the opportunity to speak on the first reading of the New Zealand Flag Referendums Bill. I am not on the Justice and Electoral Committee which has been given this bill so it is a real privilege for me to be able to make this contribution to the bill. I acknowledge the Deputy Prime Minister Bill English as the Minister responsible for the flag consideration process and I acknowledge the work that the Deputy Prime Minister Bill English has put into this bill.What we are hearing from the other side tells us about their lack of a futuristic approach. They do not believe in giving a fair opportunity to Kiwis to contribute to this issue. We know that this issue is not a new issue. This debate has come up many times before since the 1970s so it is time that we give Kiwis a formal and respectful platform to have this discussion. It is a non-partisan public engagement process that this Government is initiating. We have been very open about this. New Zealanders have given National a strong mandate for this term. We intend to work in the interests of every New Zealander. Over the past 6 years we have been very transparent and straightforward about the decisions we have made and the direction we have taken. We will continue to do so and to take New Zealanders with us. The National-led Government is already getting to work quickly on our priorities.A flag is the symbol of the realm—our Government and our people. Our flag’s royal blue background represents the blue sea and clear sky surrounding us. The stars of the Southern Cross emphasise the country’s location in the Pacific Ocean. The Union Jack represents our strong ties to the United Kingdom both historical and ongoing. I have had many opportunities to discuss this issue with our communities when I go to community events and there are many different sides to this discussion. Initially I found that there was some confusion about the process. The public did not know how this process would be followed and whether they would be able to make an active contribution on the issue of the flag. I explained that this is not how the National Government works that this is a very sensitive issue and that public participation will be allowed. Then I started getting very positive responses. New Zealanders realise that the Government’s role is to put structures and mechanisms in place so that New Zealanders can engage in a discussion and then make a decision.The support I saw in communities for these two referendums was from a group that believes in having a flag that better reflects our current status as a modern and independent nation. I remember that during campaigning I was approached by a resident in Mount Roskill. She had already done a design that she wanted to propose. I promised her that I would get back to her when the process was set up and we started to accept designs. So I feel very proud of the fact that we are doing what we promised to do. Now this individual will have the opportunity to submit her design to the Flag Consideration Panel.As I said there are many sides to this discussion. One says yes we want to go ahead with this formal process so people can make their contribution and another says as we heard from the other side of the House that it is an expensive process. Yes it is an expensive process. We are not taking this issue lightly. It needs a genuine democratic process and I believe that the value of the emotions attached to a flag—emotions on both sides about the current flag and emotions about changing the flag—is much more than the spending that is going into this process. There is emotional attachment to our current flag as it has been part of our country’s history. This should be respected for the sacrifices our people made. As a migrant I immensely appreciate and respect our veterans and those in the Defence Force who serve under our current flag.For some a flag is about our current society and for others it is about our history. There are loads of sentiments on both sides of the discussions I have been having in the community. Therefore this discussion cannot be taken lightly. The Canadians went through this discussion in the 1960s and as a result they adopted their new flag with the maple leaf which is now one of the most striking flags in the world. Talking about the striking nature of the flag as we have heard from other members on this side there has been some confusion over our flag and the Australian flag.This bill is needed in order to proceed with the thorough process we want to follow. A two-stage binding referendum is planned to take place next year after public consultation and input. It is evident from this bill that the National-led Government is not taking it lightly. This is a process where full consultation is done and then we will proceed to the next step. If—and only if—voters decide in the second referendum that the New Zealand flag is to change then that will automatically lead to the necessary legislative changes and the status of the current flag will be recognised. It will be for the public to decide not members of Parliament and it will be done through public engagement and a referendum process.I have seen some support for the change of design but retaining the current flag is a very possible outcome of this process. Therefore there is no assumption that the flag is going to change. As we heard from the Hon Maurice Williamson New Zealand has had three flags in its history. The Prime Minister has said he supports a design incorporating a fern. The silver fern is a distinctive and unique New Zealand symbol. Having said that I want to make it clear that no decision has been made on alternative designs. It will be up to New Zealanders to submit possible designs.The first step was nominating suitable candidates for a Flag Consideration Panel. The Government has appointed 12 New Zealanders as members of the Flag Consideration Panel which will engage with the public about a possible new New Zealand flag. Each member of the panel has committed to undertake the flag consideration process carefully respectfully and with no assumption in favour of change. The next stage is to enable the proposed two binding referendums on the flag to go ahead. The first referendum will invite the public to choose a preferred design from a range put forward by the Flag Consideration Panel. The second referendum to be held in 2016 will be a runoff between the preferred design and our current design. The projected timeline and cost is already made clear. The public engagement process is required to ensure that the public is well informed and has the opportunity to participate. The public engagement process is expected to begin in May. This will be to invite New Zealanders to send in designs or ideas regarding a possible alternative flag. The shortlisted designs will first go through a postal referendum—and that will be a preferential voting system—inviting voters to rank the designs in order of their preference.The second referendum against the current New Zealand flag will be a binding referendum and that will be the first-past-the-post voting system. This process will give New Zealanders the rare privilege of having a say on one of the most important symbols of our country. The Flag Consideration Panel is going to work independently to carry out the process. The members reflect a number of criteria. They reflect our new New Zealand: national geographical coverage Māori representation representation of Pacific Island and ethnic communities a variety of age groups and gender balance. Along with the public engagement process this panel will also undertake any research that will be required to make sure there are no issues with those shortlisted or proposed designs to make sure they are available and to make sure there are no legal issues attached to them. It is a fair process. It is about giving choice to New Zealanders.Again it is a real privilege to be able to contribute to this bill. I support the bill and commend it to the House. Thank you.A party vote was called for on the question That the New Zealand Flag Referendums Bill be now read a first time.Ayes 76New Zealand National 59; Green Party 13; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 43New Zealand Labour 32; New Zealand First 11.Bill read a first time.Bill referred to the Justice and Electoral Committee.Hon PAUL GOLDSMITH (Minister of Commerce and Consumer Affairs) on behalf of theDeputy Prime Minister: I move That New Zealand Flag Referendums Bill be reported back to the House by 29 July 2015.Motion agreed to.Construction Contracts Amendment BillIn CommitteePart 1 Amendments to preliminary provisionsHon Dr NICK SMITH (Minister for Building and Housing): I firstly want to acknowledge the work of the Commerce Committee on this Construction Contracts Amendment Bill. It makes a number of changes to improve the dispute resolution process that was put in place in 2002. The first of those changes is to expand the dispute resolution process to include residential contracts. When we did a review of the Building Act that identified the fact that there were many residential building disputes that would be more easily resolved by the specific processes set out in the Construction Contracts Act. The second change it makes is that it includes professional design and quantity surveying and disputes in that respect that previously were not covered by the law. There are also some technical amendments that improve the way in which the dispute resolution system which overall has been good law works.The reason I have chosen to take a call early in the Committee stage is that members will be aware of a pretty significant debate that has gone on in the construction sector about the issue of retentions. Yesterday I tabled in Parliament Supplementary Order Paper 52 which makes substantive changes in respect of retentions and how they operate under law. This was an issue the select committee raised during submissions. Given the fact that actually the Supplementary Order Paper changes are in some respects more significant than the original bill I think it is worth just taking a moment before Parliament to note those significant changes around retentions what they mean and why the Government thinks we should progress with these changes.In the construction industry it is long-established practice not just in New Zealand but internationally for retentions to be held after construction work is completed to ensure that if there are any defects or difficulties with the work either the main contractor or the principal is able to ensure that those defects are fixed. Sometimes those retentions are 5 percent; I have seen contracts that have them as high as 10 percent. When you are talking about a construction industry that is currently riding an all-time boom—about $15 billion a year—the amount of moneys involved in these retentions come to many hundreds of millions of dollars. One of the concerns the Government has particularly for the subcontractors is that these retention moneys can be misused by main contractors who are effectively using them as working capital for the next project. The part that does not serve the public interest around that is that if another project gets into financial difficulty and the main contractor ends up in liquidation then you can have hundreds of subcontracting businesses that end up as unsecured creditors and are subsequently not paid. So the Government has given consideration over recent months to whether we could have better law in this regard.It is interesting to look at international practice. The Parliament of New South Wales has recently passed law in this respect and has introduced quite a strict structure where retentions would have to be held in separate trust funds separated from the main contractor and the subbie and would then be released when the work was found to be without defect or the like. In other jurisdictions you could set up a system. For instance I am responsible for running the tenancy bond system. What we do there is that when a bond is required in a residential tenancy that money is actually paid off to a Government fund. The Government manages that fund. In the event that there is a dispute or when the tenancy comes to an end the Government then refunds that bond.We have put in a lot of work and there has been a lot of consultation and discussion with industry with subcontractors and with the banking sector about what would be the right response for New Zealand. Our view is that law reform in this area is required and we are trying to find a balance between what would provide the right incentives for the management of risk within the construction industry and at the same time trying to minimise compliance costs. If you impose excessive compliance costs that is simply going to add to the cost of business to the cost of building houses commercially and to the cost of infrastructure across New Zealand. What the Supplementary Order Paper provides is what I would describe as a deemed trust model. It is not that the main contractor who is holding retentions is going to have to set up a separate bank account. It is not going to have to set up a lawyer’s trust account but it is going to have to treat retention moneys as deemed trust funds. That means that the main contractor will have to be far more transparent in the way in which they report those funds that are held in retentions. It also means that in the event of a liquidation as occurred very publicly and controversially around the Mainzeal Property and Construction collapse the deemed trust funds would have a higher security in a liquidation than other funds—i.e. those subcontractors would be above the unsecured creditors and would receive funding and payment for work that they actually did providing it was up to standard and met the normal tests. That would be a huge relief to people who are caught up in liquidations of those sorts.I commend the Supplementary Order Paper to the House. I think it makes a much-needed improvement to where the risks should sit within the building and construction industry. The Government has chosen an implementation date of 1 April 2016. We think that is a reasonable period of notice to be able to allow the construction industry to take on board this new legal framework for the way in which retentions are managed. Overall what the Government believes is that this change in the law around retentions will see the risk around collapse in the construction industry fit more appropriately with the parties end up with a more disciplined industry and require a more efficient albeit cautious response to commercial contracts. Of course an ambition of these changes is that fewer people in the building and construction industry end up doing work and not being paid for it. I commend the original bill but also the Supplementary Order Paper to the House.Hon CLAYTON COSGROVE (Labour): Firstly I want to say that the Labour Party will support the Construction Contracts Amendment Bill. We have our own Supplementary Order Paper 439 in my name which is an alternative measure to deal with many of the issues that the Minister for Building and Housing has raised. But I want firstly before I get down to the grit to express some goodwill and some bipartisan support. We support these measures. We note the collapse of Mainzeal Property and Construction and many others and this issue has been around for a long time. It is a difficult issue the retention issue. It places certain burdens and certain responsibilities some of which are hard to deal with so I do commend the Minister for coming to the party—late but coming to the party anyway.I note the Minister’s comments about having concern for subcontractors. The history of this is that when the previous Minister was in the chair just after the time of the collapse of Mainzeal Property and Construction and the controversy it was Maurice Williamson the then Minister for Building and Construction who wiped his hands of the whole thing. In fact he told this Parliament under questioning from this side that there was no issue—that he had consulted the industry there was no issue and everybody was happy with the status quo. There was no need to make any changes—that was communicated through the select committee process—because the industry was happy. This is even though a company collapsed under the stewardship in part of one former Prime Minister Jenny Shipley who—when coming before a number of select committees I say as an aside—was loath to make any explanation or take any accountability for the fact that a massive construction company collapsed with millions and millions of dollars lost and subcontractors were hung out to dry. I have to say to the Minister in the chair the Hon Nick Smith that to be fair to him he was not the Minister. I think he may have been sacked from Cabinet at that point. He was not the Minister at the time. It was Maurice Williamson. But the Government collectively wiped its hands of the whole issue. We were told in the Commerce Committee and it was only very very late in the piece when officials came to us and said: “Oh there’s been a bit of a rethink.” The jitters around the industry were that the Government was coming up to an election and the industry thought the Government might want to do something. That coincided with David Shearer and the Labour Party announcing that we would consult the industry and we came up with the proposition that we have today.Supplementary Order Paper 52 has been dropped on us in 24 hours. I look forward in goodwill to going through the detail in good faith and having a look at it. But I do say to the Minister that it is good. He is world-renowned for road to Damascus experiences. He has come to the battle almost when the war is won—late to the battlefield. It would be good for him to express a little bit of humility. If he could just have a look at the dates on the relevant Supplementary Order Papers. One is dated 1 year ago even though it was argued that this bill was out of scope to deal with retentions. Now it is back in scope. Oh what a surprise.This Supplementary Order Paper appears almost a year after the Labour Party proposed—and the Minister is right—a similar model to the New South Wales model and given that the Minister has outlined his I will outline mine. That proposal—and one of the deficiencies I think in the Minister’s model but I will be grateful if he will allay my fears—is that to have moneys deemed trust moneys is all very well but if you have crooks in a company who spend the money however it is deemed and it is gone even though it is higher in the hierarchy and in insolvency you cannot get blood out of a stone Minister I say through you Mr Chair. If it is gone it is gone and that is the thing that worries members on this side of the Chamber.We proposed a simple model—and we costed it out with the industry; a few hundred bucks basically effectively—a similar model to the New South Wales model which was to have if you like a contract trust a construction trust that would not interfere. It would be like a drop-box. It would not interfere. It would sit between the developer and the lead contractor and the subbies. It would not interfere with timing. It would not engage in dispute resolution. That is up to the contractual arrangements between the parties. It would not be onerous and it would not require multiple trusts and all this sort of thing; you could default to the Public Trust if you wanted to. But what would happen is that instead of the moneys flowing directly from developer to lead contractor and then to the subbies and if the lead contractor the Mainzeal Property and Construction goes boom it is all over and there is nothing there those moneys would flow in whatever contractual time frame was deemed by the parties not the trust—and that may vary from project to project—through from developer to trust and then is paid out as per the contract to subbies first then the lead.The difference in our proposal—unless I am to be corrected and I will wait to see—is that if you had a Mainzeal Property and Construction collapse if you had crooks in a company then that company then collapses and the money is frozen—[Bell rung] Mr Chair—The CHAIRPERSON (Hon Trevor Mallard): The Hon Clayton Cosgrove on Part 1.Hon CLAYTON COSGROVE: Thank you. I am just following the Minister’s lead. You did not pull him up when he explained his Supplementary Order Paper with respect. I think it is very helpful—The CHAIRPERSON (Hon Trevor Mallard): Order! Mr Cosgrove the Minister’s Supplementary Order Paper is to Part 1 of the bill as well as to Part 2. Your Supplementary Order Paper is to Part 2 of the bill and I am sure you will want to talk to it then.Hon CLAYTON COSGROVE: Thank you but I think as I say referring to being helpful that the Minister’s explanation deserves some sort of counterpunch in respect of Part 1. I think in fairness the concern we have with the Minister’s proposal and where we differ is that once those moneys are gone they are gone. They flow through a trust. If Mainzeal Property and Construction goes bang at least the moneys are quarantined within a construction trust and can be paid out. One of the benefits of that I think—and perhaps the Minister’s Supplementary Order Paper may deal with that as well—is it actually provides for those people who are supplying subcontractors for instance more confidence to extend credit and other facilities right through the supply chain. We will look forward to a number of explanations because these are quite technical amendments but we support the adjudication provisions and the notion of trying to straighten out these particular problems within the industry because at the end of the day subcontractors lose and when they lose they lose big time. Larger organisations have the ability to manage their financial affairs in a way that the one-person subcontractor brickie scaffolding person or whoever does not and they are vulnerable. They are extremely vulnerable.I am pleased that the Minister—but I would like an explanation as to why it took him a couple of years to change his mind—has come to propose some solutions in terms of the retention issue. The original proposition was that there was no problem according to his predecessor Maurice Williamson; that nothing was required to be done according to the reports that officials were getting and passing on to the select committee; and that the Government did not need to do a thing.And I just say I would be interested in the Minister’s comments and his analysis of the Mainzeal Property and Construction collapse because in this Parliament we have heard nothing. In fact I think Mrs Shipley is still the chair of a major power State-owned enterprise. I believe she was director or deputy chair but she was definitely on the board yet the murk that surrounded that collapse and the commercial and social carnage that occurred as a direct result of it through hundreds of subcontractors losing millions of dollars with many going out of business no one has provided an answer for. In fact it was well reported in the media that the Prime Minister stood shoulder to shoulder with Mrs Shipley and we have never had an explanation either from the Prime Minister in respect of that statement or from Mrs Shipley who now heads up and has been appointed—in fact I think she is on the flag committee. Is she or not? No? I am not sure but she has been appointed to many a Government entity and no one has provided an explanation as to whether she is fit and proper to be on those entities given the Mainzeal Property and Construction collapse.So I welcome the legislation. We will have questions—detailed questions—for the Minister but our main concern and why we did put up an alternative proposal over a year ago was that nothing was proposed by the Government. I would like an explanation to tell us whether if moneys are deemed to be in trust but thieves and vagabonds and rogues exist within the company and that money goes and is spent or misappropriated and is lost it will matter at any point whether it is higher on the hierarchy when the receiver comes over the fence to try to save it because there may well be nothing there. That is I think in goodwill where our proposals differ. The Labour Party remains open-minded and will listen to the explanations of the Minister and we remain open-minded as to whether we will accept and support those particular proposals or support our own.I think at least on both sides of the House we want to deal with this issue. We want to ensure that small businesses are protected. They do live up to their responsibilities and they do their work. All they ask is that they are paid for that work and all their suppliers ask is that they are paid for that work. But you have a Mainzeal Property and Construction collapse and everybody in the commercial chain like a set of dominoes falls over from retailers right through. So we all want to see that actually resolved. What we on this side of the Chamberseek is reassurance that this is the best possible option. It is very easy to say that the setting up of a construction trust is going to cost a whole lot of money. Well the information we had is that that would be very minimal. We too were mindful that we did not want to simply impose compliance cost on the industry. I look forward to the Minister’s reply.The CHAIRPERSON (Hon Trevor Mallard): Before I call Brett Hudson I am going to indicate to the member that I did reflect on his comments and he is accurate. I was too loose on the Minister. He had a very broad call. But I think it has happened now on both sides and we will speak to Part 1 of the bill which is very narrow and goes down just to clause 8.BRETT HUDSON (National): I will retain my comments on retention payments to Part 2 as you request Mr Chair. I will just draw attention of course to why we are here to debate this bill.The amendments we are making are in fact all about providing a productive efficient and accountable construction sector. But as the Minister has said I think that one of the key changes we are making in Part 1 in fact is ensuring that residential construction activities and projects will receive full and equal access to the processes under the Act. So in fact we are just making an amendment to have a definition of construction activities and not a separation or distinction between what might be commercial and what might be residential.In fact I think we can take it as read that by making them the same they do get full and equal treatment but I would be happy to have the Minister—if he feels it might be appropriate—perhaps just give us some illustration as to the risks that might exist today under the existing provisions where the treatments are different for different forms of construction. That elucidation might help give members across the Chamber some greater confidence as to what this specific provision change will achieve in reality for people who are undertaking work.It also of course does widen the scope to include those activities and services in construction that are provided by architects by engineers and also by quantity surveyors. So it makes sure that those rather important design and construction activities are also caught within the scope of the provisions of the bill.But the part that I would like to talk about and focus on in Part 1 as it is obviously very key is the amendment to section 9 of the Act in clause 7 which is in fact when these provisions will take effect. Supplementary Order Paper 52 which the Minister has put forward sets a commencement date or if you will a time of validity of 31 March 2016. That will give the industry a full year to adjust to all of the changes that this bill will introduce including the ones that we are not going to talk about right now that will in fact require change within the industry—they are around retentions but we will not cover the retentions themselves. But the start date is very relevant for that because it makes sure that those parties have sufficient time to prepare themselves their systems and their processes to be able to conduct business in accordance with the new provisions.I would note that the Supplementary Order Paper is changing the start date by over 6 months in effect. I think that is taking on board feedback from the industry and others that were we to rush into this too quickly then we would have a whole suite of obligations but really just not give the people who are obliged to comply with them sufficient time to get everything they might need in place to ensure that the consumers or the purchasers—the ones whom we are really looking to provide protection to—could have sufficient confidence that the new provisions were in place and were being administered fully. So it is good to see that we have extended it out a bit as I have said to ensure that the industry has sufficient time to get all of its processes in place.I do look forward to the next part of this bill when we will get into some meat of both the Supplementary Order Papers and a discussion—which I think we are all looking forward to—on retention payments but that is not to diminish the importance of Part 1 particularly as I have said the start date for when the provisions of the amendment will come into force. Thank you.Dr DAVID CLARK (Labour—Dunedin North): Labour will support the measures in this bill largely as a result of the road to Damascus experience that my colleague Clayton Cosgrove referred to earlier and what a very interesting and useful metaphor that is. I want to refer members—and I have some questions for the Minister—to section 6 in clause 6 where the meaning of “construction work” has been amended. It has been broadened and we see in subsection (1A)(b) that “quantity surveying work carried out in New Zealand” is captured within the amended definition. There is some debate about what that might mean and exactly how that might be applied. Design and engineering work carried out in New Zealand will be included as I understand it and I am just wondering whether this will really make a difference to the speeding up of the resolution of disputes and how that will flow down to subcontractorseventually.I want to mention a case that might be illuminating and give a concrete example of how this might be applied. So let us imagine a Government wanting to build a convention centre in a large city in New Zealand as an example of a process where we might want speedy construction and any disputes if there was a failure on behalf of the Government to be resolved speedily—brought to a head and resolved. In this hypothetical case that I am bringing to the discussion we know that Television New Zealand a local operator that is a neighbour of the site where a convention centre would be constructed had given over for the purposes of construction some land that carried a value to a deal that was done and we are told that the value of items brought to the party in this wider construction deal actually affect the final outcome and the solvency and the ability to deliver on the construction contract which is the fundamental case we have here.So we have got a dispute that is actually dare I say a very real dispute. It is not just hypothetical. It is playing out in New Zealand with a dispute over funding for the Auckland convention centre where the Government has said that there will be a cap of $402 million and concessions going to Skycity but Skycity is saying—The CHAIRPERSON (Hon Trevor Mallard): I am now going to ask the member to come to Part 1.Dr DAVID CLARK: I will come back certainly to Part 1 because what I want to ask is how it is determined in this example if Skycity said: “We can no longer build this convention centre for the money; we are going to have to fold. It is actually going to take our company under. We can buildonly a pup tent but we have got on to this and we are going to build it but we cannot actually finish the building.” If there was a dispute about this how much would go back to the value of the inputs—you know the work of the various quantity surveyors who worked out what that Television New Zealand land would be worth with different construction designs on it in the end picture and how much the deal was actually about the right amount of money if there was a legal dispute? How would those kinds of legal issues play out as they were resolved in working out whether the deal was properly funded in the first place and therefore what the implications for subcontractors would be?So I will be very interested if the Minister has a view. I know that there are a number of officials here ready to advise him but we are talking about a broader definition here and the legal implications of advice supplied along the way if I understand it correctly as well as the work committed by the subcontractors. Who is due what and where does the liability lie? That is the basic question I am asking and I think it is a fair question because what this bill is doing and what we actually support is hopefully leading to a speedier resolution process particularly where complex legal issues are applied.In this case we on this side of the Chamber have a particular view about that deal. We do not think it has been a good deal for the taxpayer. We think the Government has done a poor job and we think there could be implications further down the line for the taxpayer if the Government has not done its job right.Hon Dr NICK SMITH (Minister for Building and Housing): I would be delighted to answer the questions that have been raised by a number of members and I want to begin by saying how much I enjoy debating with members of the Labour Opposition and the way in which they want to continuously rewrite history. The first thing I would like to do is talk about the horror that was expressed by the last member Dr David Clark over the Skycity convention centre. The problem for the member is that I was sitting on his side of the Chamber when the Helen Clark Government brought a bill before the House—The CHAIRPERSON (Hon Trevor Mallard): Order! I am going to ask the member to resume his seat. I am going to ask him as I did the previous member to relate his comments to the bill.Hon Dr NICK SMITH: Well the bill is about construction disputes and the question that I have got from the member is whether the sorts of disputes that there have been about the construction of the convention centre apply to the great new international convention centre that John Key and Steven Joyce have very successfully been able to negotiate for the Government. The answer is with this bill that yes we are going to extend the dispute resolution process to include the design the engineering work and the quantity surveying which would not occur without this bill and the changes in Part 1. But I also want to assure the member of this: the design the engineering and the quantity surveying on the smaller convention centre which was negotiated as a trade-off for casino concessions by Helen Clark—exactly the same deal—would also apply to Part 1 provisions of the Construction Contracts Amendment Bill.The CHAIRPERSON (Hon Trevor Mallard): I think the member has now had two warnings. If he would like to continue to speak to Part 1 I suggest that he does and not relitigate ancient history which I think it is fair to say is not affected whatsoever by the bill.Hon Dr NICK SMITH: I think it is worthwhile as we debate the changes in Part 1 about the performance of the construction industry—and most important I think is consistency of a political party’s position on issues such as construction contracts. I saw the same sort of duplicity when I heard the comments from Mr Clayton Cosgrove because Mr Clayton Cosgrove—The CHAIRPERSON (Hon Trevor Mallard): Order! The member will withdraw the term and apologise.Hon Dr NICK SMITH: Can you clarify what particular term—The CHAIRPERSON (Hon Trevor Mallard): No I will not. The member knows absolutely which term. He is an experienced member.Hon Dr NICK SMITH: I am happy to apologise to take into account the concerns of the Chair.The CHAIRPERSON (Hon Trevor Mallard): The member will immediately withdraw and apologise unconditionally.Hon Dr NICK SMITH: I unconditionally withdraw and apologise. A point was made by Mr Clayton Cosgrove over the issues in Part 1 of this bill that my predecessor Maurice Williamson had ruled out any changes. That is grossly incorrect. When issues arose around the construction contracts dispute my predecessor Maurice Williamson made absolutely plain that there was a significant issue for us to work through in respect of construction contracts. In fact if you look at the paper trail it very clearly shows that the very issues that are covered in my Supplementary Order Paper were triggered as a consequence of the work that Maurice Williamson asked officials to do with the industry. The difference is this: the changes that National is proposing in its Supplementary Order Paper are changes that have been very carefully thought through are workable and will reduce compliance costs. Yet the Supplementary Order Paper that has been tabled by the Labour Opposition is not workable and if you look at the website—and the website for the Ministry of Business Innovation and Employment has a comprehensive—The CHAIRPERSON (Hon Trevor Mallard): The member will resume his seat. If I have to warn the member once more to stay on Part 1 of the bill I will terminate his speech. As has been pointed out to Mr Cosgrove his amendment does not relate to this part of the bill.Tim Macindoe: I raise a point of order Mr Chairperson. I am not questioning your ruling but I am genuinely confused and seek your elucidation. As I understand it the Minister is currently attempting to respond to questions that were put to him by Opposition speakers in their contributions on Part 1 of the bill. I am not sure how it is that the Minister has therefore transgressed when he is attempting to answer the questions.The CHAIRPERSON (Hon Trevor Mallard): I am happy to explain it to the member. It is that I did make clear after Mr Cosgrove’s speech that the matters that he was dealing with that related to his Supplementary Order Paper related to Part 2 of the bill and that I would not countenance further discussion on those items as part of the Part 1 debate.Hon Dr NICK SMITH: I do note that Supplementary Order Paper 52 that I have tabled on the bill does make changes to Part 1—The CHAIRPERSON (Hon Trevor Mallard): Yours does and Mr Cosgrove’s does not.Hon Dr NICK SMITH: I am pointing out to the Committee that in respect of my Supplementary Order Paper which makes changes to Part 1 of this bill there is a regulatory impact statement on the Ministry of Business Innovation and Employment’s website. In that regulatory impact statement there is a thorough analysis of the options that could be used in this bill to address the concerns around construction contracts. If members of the Committee look at that regulatory impact statement they will see that in the cost-benefit tests the options that the Government has in its Supplementary Order Paper are a more efficient way of dealing with those concerns. I would say to members of the Committee that the changes that we are proposing in this bill are sensible they are changes that will result in a more efficient construction industry and they are changes that will enable disputes in the construction industry to be able to be resolved more quickly. I think the changes in this part that extend the provision of the construction contracts dispute resolution process to residential contracts quantity surveying work and engineering work and those other provisions are sensible changes that the Committee should support.Dr David Clark: The regulatory impact statement is dodgy.Hon Dr NICK SMITH: Sorry?Dr David Clark: The officials say in the regulatory impact statement that the availability and robustness of data and the methodology used for it by the estimates is unsuitable—Hon Dr NICK SMITH: Well the member should take a call. I do not want to offend the Chair. I suspect that part of the regulatory impact statement is the Part 2 debate. I look forward to having a healthy debate on those issues and on why the Government’s Supplementary Order Paper is a far better option than the pretty messy Supplementary Order Paper that has been tabled by the Opposition which would not work.CLARE CURRAN (Labour—Dunedin South): Well I will do my best to be more obedient thanNick Smith the speaker before me in addressing my comments to Part 1 of this bill. There are several parts to this bill and clearly the changes being made to Part 2 have the most significance but Part 1 is important. I would also with your lenience Mr Chair like to go back a little bit in time in the history of this bill because it is of deep importance to the Committee given the extensive nature of Supplementary Order Paper 52 which was introduced 24 hours ago or less after as I understand it first going through Cabinet in August last year. This is something that I would like the Minister for Building and Housing when he again gets to his feet as I am sure he will during the process of this discussion to give us a little bit of information about—exactly what the consultation has involved with the industry around the impact of all of the measures contained in the Supplementary Order Paper including the measures that relate to Part 1 but in particular the measures that relate to retentions.With your lenience Mr Chair I will refer to my colleague Clayton Cosgrove’s Supplementary Order Paper 439. I will not talk about the substance of it because I know that we will certainly be having a wider discussion about that later on. The thing though is that this bill went through an extensive select committee process back in 2013 I think. There were 31 written submissions and we heard 22 submissions at that time. Almost without fail every submitter that came through the Commerce Committee raised the issue of retentions and the issue of the collapses that were happening in the construction industry and the impact that that was having on the construction industry. They spoke very lucidly about all of the other measures that were being proposed in the bill—the measures that are contained in Part 1 around the definition of “construction work” the process of complaints the definition of “construction site” and the operations that are critical to the completion of or preparatory to the scope of design engineering and quantity surveying work. That is one of the amendments in Part 1. Mr Chair I am just making sure that you know that I am addressing my comments to the part.These things were addressed but without fail for almost every one of them the real substance of their submissions to us was around what was a glaring gap in the bill. Just to back up my colleague Clayton Cosgrove despite being told that he is rewriting history this issue was ignored—it was ignored. It was ignored by members opposite right up until the very last minute when we were told oh no there could not be an inclusion in this bill of remedies for the retentions and the moneys that were being lost by subcontractors when there was a collapse—we could not include that information and that would have to be a separate item. As a result this bill has now sat and languished while another process was happening behind the scenes.As I have discovered there was as I understand it—and I would like the Minister to give us some clarification around this—a paper put to Cabinet in August by the Minister in the chair today Dr Nick Smith clarifying a set of proposals around this. My concern with any legislation that comes through this House when there is a substantial last-minute change that has not gone through the benefit of a select committee process and where there has not been any public consultation is that it is going to be bad law. We know that there have been other Supplementary Order Papers put forward during the course of this bill. We will be debating them in Part 2. But what has the process been for consultation?SIMON O'CONNOR (National—Tāmaki): I think there have been some really good contributions so far on Part 1 or rather those parts that are referring to Part 1. I have got a few questions of my own for the Minister partly as someone who is relatively new to the Commerce Committee and I am trying to get my head around some of the context.The first part really is around the whole issue of date changes. So Part 1 particularly through Supplementary Order Paper 52—I had better be clear actually to the Committee that while the Supplementary Order Paper recently tabled from the Minister deals across Parts 1 2 and beyond the main area being retentions is in Part 2. So for me at the moment—this is in Part 1 around the date obviously—this is just to signal to the Minister where the thinking is going. The other is around the choices of definition of what has been included in contracts. The third area that I am interested in is around services and why certain ones are being excluded.If I might start though with the date I see we have a dual split developing here in the Supplementary Order Paper. Obviously initially this bill was meant to be passed by November last year but I think as a number of people have indicated there have been some delays as we were making proper consideration of this. I think particularly if we reflect on the arguments in the Statutes Amendment Bill (No 4) yesterday parties in this House want us to take the appropriate time to get things correct. So I am interested to ask the Minister why do we have a split coming through here in Part 1? We have a commencement date for clause 8BC that is meant to be on 31 March 2016. So obviously that is very particular. Although the Minister is seeking that length of time for that clause he is equally happy for the other parts to come into force in July this year. I suspect—through you Mr Chair to the Minister—that the nature of that particular clause probably needs greater consideration particularly with the industry in order to deal with it.The next part really because I am sure we will end up in the title and the commencement debate later is around the whole definition of what is construction. I note in the Supplementary Order Paper in what is clause 6 that it seeks to amend section 6 so that construction work should be defined as “design or engineering work carried out in New Zealand in respect of work of the kind referred to” in various sections. I would be interested to know what particular elements of design—I assume we are talking architectural but does that stretch out as well to draftspeople and so forth? What level of design is required then?And then engineering—it probably sounds simple but is that for all people who use that title “engineer” or are we dealing with those who are particularly chartered to a recognised engineering profession? I think simply of friends of mine who are qualified engineers working in the various fields be it building construction mechanical and so forth. But equally I think of those whom I have met—The CHAIRPERSON (Hon Trevor Mallard): The time has come for me to report progress and I will report progress on the bill.Progress reported.Report adopted.The House adjourned at 5.56 p.m.