Volume 699 Week 74 - Tuesday 27 May 2014Text is incorporated into the Bound VolumeVolume 699 Week 74 - Tuesday 27 May 2014[Sitting date: 27 May 2014. Volume:699;Page:18299. Text is incorporated into the Bound Volume.]Tuesday 27 May 2014Mr Speaker took the Chair at 2 p.m.Prayers.ResignationsHon Shane Jones New Zealand LabourMr SPEAKER: I wish to advise the House that I have received a letter from the Hon Shane Jones resigning his seat in the House with effect at midnight on 22 May 2014.List Member VacancyMr SPEAKER: I have been advised by the Electoral Commissioner that pursuant to section 137 of the Electoral Act 1993 Kelvin Glen Davis has been declared to be elected a member of the House of Representatives in place of Shane Geoffrey Jones. I understand that Kelvin Davis is present and wishes to take the oath. Would he please come forward to the chair on my right.Members SwornMr Speaker administered the Oath of Allegiance to Kelvin Davis who then took his seat in the House.Questions to MinistersImmigration Policy—Numbers and Impact1.TRACEY MARTIN (NZ First) to theMinister of Immigration: What is the Government doing to reduce the inflow of immigrants?Hon MICHAEL WOODHOUSE (Minister of Immigration): Talofa lava Mr Speaker. The Government is ensuring that our demand-driven policies deliver the right skills in the right places when they are needed as well as meeting family and humanitarian obligations. I note that this has resulted in a reduction in the number of immigrants gaining residence from more than 51000 when David Cunliffe was immigration Minister to fewer than 39000 last year. I would also be interested in whether that member believes as is implied in the question that the inflow should be reduced further and whether that reduction should come from engineers medical specialists IT experts or the construction workers whom we need to assist with the Canterbury rebuild because that is the practical implication of reducing the inflow further.Tracey Martin: In light of that answer with 147000 unemployed Kiwis why is the Government allowing record numbers of unskilled migrants into New Zealand?Hon MICHAEL WOODHOUSE: The question is simply not correct in implying that there are increases in the number of unskilled migrants coming into New Zealand to take jobs. The number of labour market - tested work visa holders has dropped materially through the recessionary period since 2008 and has flat-lined. I reject the question.Tracey Martin: I seek leave to table a Parliamentary Library document showing Immigration New Zealand figures that close to 50 percent of migrants in the 2013-14 year were not identified as skilled workers—Mr SPEAKER: Order! The document has been described. It was prepared by the Parliamentary Library presumably for the benefit of the member. Leave is sought to table that. Is there any objection? There appears to be none.Document by leave laid on the Table of the House.Tracey Martin: As the Government claims that New Zealand needs more skilled migrants to sustain economic growth why were close to 50 percent of the migrants granted residency last year not identified in the skilled worker category?Hon MICHAEL WOODHOUSE: It is important to understand the context of those figures. The Government has as there was under the previous Government a loose target of up to about 150000 over a 3-year period. I think the last 3 years have seen about 123000 residence visas granted so it is below the lower limit of the 3-year target. The balance of those includes the spouses partners and children of skilled migrants the partners of people who are Kiwis coming home having done overseas visits and our humanitarian Pacific and Samoan quota obligations. So it is absolutely appropriate that between 50 and 60 percent of those people gaining residence are skilled and the balance are connected.Tracey Martin: Will the Government cut the numbers of unskilled reunion migrants; if not why not?Hon MICHAEL WOODHOUSE: There is no such category as reunion migrants. There are categories for partners and for certain reunifications of family members. Those policy settings are accurate and I have no plans to adjust them.Tracey Martin: Why is the Government ignoring Treasury’s warnings around the impact on housing of 41500 extra people entering New Zealand in the 2014 year?Hon MICHAEL WOODHOUSE: I preface the answer to this question by pointing out that in 1999 to 2001 when there was large negative net migration house prices still went up materially particularly in Auckland. The report that the member refers to is a report on the question of the positive impact that immigration has on macroeconomic policy. In respect of housing it said that there was a tension there but that the dominant tension is in supply-side inelasticity—a pointy-headed way of saying that we are not building enough houses. We are fixing that by increasing land supply reducing the consenting barriers and reducing the cost of materials.Tracey Martin: How would the Minister explain to an unemployed worker in PoriruaŌpōtiki or South Auckland why his Government is allowing record numbers of migrant workers into New Zealand?Hon MICHAEL WOODHOUSE: If there is a record it is the record low in the residence programme particularly in recent years. As I said in an answer to an earlier question there are far fewer numbers being given residence than there were under the previous Government and that is because we have demand-driven policies. Ask any employer in this country about how hard it is to employ a migrant and to ensure that they pass the labour-market test and I think they would say that there are plenty of opportunities for those New Zealanders to get work.Budget 2014—Economic Programme2.Hon KATE WILKINSON (National—Waimakariri) to theMinister of Finance: How is Budget 2014 as part of the Government’s wider economic programme helping New Zealanders to get ahead?Hon BILL ENGLISH (Minister of Finance): It has been received positively especially the $500 million support package for families and children. It is helping New Zealanders to get ahead in several ways. For instance the economy grew by 3.1 percent in 2013—the fifth-highest growth rate in the developed economies. Growth is forecastto reach 4 percent next year a far cry from the deep domestic recession that we inherited in 2008. Average wages have increased by $3000 in the past 2 years and the average wage is forecast to rise by $7600 to $62300 by 2018.Hon Kate Wilkinson: How are the benefits of the Budget and the Government’s wider economic programme being reflected in the labour market and how do average wage increases compare with cost of living changes?Hon BILL ENGLISH: In the past year another 84000 jobs were created across New Zealand. Treasury forecasts 172000 jobs being created over the next 4 years. As some members of the House will recall—Andrew Little: You promised that 6 years ago.Hon BILL ENGLISH: —or as that member recalls—Budget 2011 did in fact forecast 171000 jobs to be added to the economy by mid-2014. That member will be pleased to know that we are exactly on track to achieve 171000 jobs as forecast in Budget 2011. These new jobs will help bring unemployment down to 4.4 percent according to Treasury forecasts. Of course low cost of living increases are helping. Inflation was just 1.5 percent in the year to March and the average weekly wage increased by 3.2 percent in the same period.Hon Kate Wilkinson: How have the Budget and the Government’s wider economic programme helped to address the twin fiscal and current account deficits this Government inherited 6 years ago?Hon BILL ENGLISH: When the Government came to office the previous Government’s final Budget set a course for a $3.9 billion deficit in 2008-09. The current account deficit was running at record levels of between 7 and 8 percent having doubled over the previous 9 years. Budget 2014 confirmed that the Government is on track for a small fiscal surplus next year and increasing surpluses to follow on. The current account deficit has fallen to 3.4 percent from 7 to 8 percent of GDP and is forecast to fall further over the coming year before extending after that.Hon David Parker: Does he agree with the New Zealand Institute of Economic Research and Treasury that on his economic settings the current account deficit will blow out to more than 6 percent of GDP by 2017 according to Treasury and to more than 7 percent by 2018 according to the New Zealand Institute of Economic Research close to $20 billion; or are the New Zealand Institute of Economic Research and Treasury wrong?Hon BILL ENGLISH: On recent forecasting history yes they probably are wrong. Over the last 4 years they have been forecasting that deterioration and it has not occurred. The current account is currently 3.4 percent in deficit. I think that forecasts in 2010 had it at 7 percent by now. But we do not follow the same policy settings as the previous Government which blew out the current account deficit and it is likely that the current account deficit certainly will not go back to record levels as it did under Labour.Hon David Parker: Does he agree with the New Zealand Institute of Economic Research in its recent report that “The current boosts to growth are from a post-drought rebound in farming acceleration in the Canterbury rebuild and net migration. All of these are likely to fade from next year.”?Hon BILL ENGLISH: The Government has been saying exactly the same and that is why we are focused on lifting the long-term supply capacity of this economy particularly through the wide range of policy initiatives in the Business Growth Agenda all of which are building confidence in businesses to invest for future growth and create more jobs. We are pretty pleased with progress on that.Hon Kate Wilkinson: How are the Budget and the Government’s wider programme helping to keep interest rates lower for longer and what reports has the Minister received suggesting more New Zealanders are supporting its programme?Mr SPEAKER: The Hon Bill English in as far as there is ministerial responsibility for the second part.Hon BILL ENGLISH: The Government is going to keep interest rates lower for longer first by constraining its own spending—if Government spending blew out now interest rates would be pushed higher—and secondly by focusing on influencing councils in their decisions about the housing market to ensure there is more supply of more houses. In answer to the second part of the question data from Statistics New Zealand shows that more New Zealanders are voting with their feet and coming home or staying home. There was a net loss of only 200 migrants to Australia in April—the lowest since the series began in 1996.Prime Minister—Statements3.Hon DAVID CUNLIFFE (Leader of the Opposition) to thePrime Minister: Talofa lava andsoifua. Does he stand by all his statements?Rt Hon JOHN KEY (Prime Minister): Yes particularly the one that says it would be superfluous using the Samoan language if you would not let any migrants in from Samoa.Hon David Cunliffe: In light of that answer is he aware that the Salvation Army reports that more than twice the number of New Zealanders of Pacific origin are unemployed now than when he took office?Rt Hon JOHN KEY: I have not seen the particular report but what I can say is that the Government is working hard to make sure everyone has a job.Hon David Cunliffe: Is he therefore satisfied that under his Government only 18.5 percent of Pacific people own their own home compared with 49.8 percent for the general population and 56.8 percent for those of European origin?Rt Hon JOHN KEY: One of the things the Government has been working very hard on is ensuring that people from the Pacific can participate in our education system as we would hope for everyone. That means a much greater focus on early childhood education. It means Pacific students are actually doing a lot better. And the very reason why all that is important of course is that as you know as people get better and higher levels of education they can afford to buy their own homes. But I am surprised that the member is in Parliament today pretending like he cares about the people of the Pacific because he does not. [Interruption]Grant Robertson: I raise a point of order Mr Speaker.Mr SPEAKER: Order! This is a point of order. It will be heard in silence.Grant Robertson: My point of order is that the Prime Minister—he did sit down just as I raised it—was moving into material that was outside the question which was about housing. He was attributing policies to the Opposition that are simply not correct.Mr SPEAKER: On this occasion the Prime Minister addressed the question to my satisfaction.Hon David Cunliffe: Does the Prime Minister if he does not wish to comment further about housing stand by his statement that the timber processing industry is not shrinking; if so what does he say to the 180 people who recently lost their jobs at Southern Cross Forest Products in South Otago?Rt Hon JOHN KEY: I do not know the exact details of why that particular mill is closing but what I do know is that forestry overall has actually been booming. What I also know is that for forestry processing to be successful two things are actuallyrequired: a reform of the Resource Management Act is one of those things that would substantially help and the second thing is a stable electricity supply—neither of which would occur under a Labour-led Government.Hon David Cunliffe: Why did the Prime Minister not take up the Labour Opposition’s offer to split the Resource Management Act amendment bill and speed up by bipartisan consensus the processing dimensions while preserving the core principles of the Act for future generations?Rt Hon JOHN KEY: Because it would not be possible to achieve the outcomes of cheaper and more affordable housing by doing that. And secondly we actually did not need his help to do that; we already had that from the Māori Party and United Future. If he wanted to have a proper and serious bill the member would have joined in the debate but he did not. He should be careful reading too much into the John Armstrong column at the weekend.Hon David Cunliffe: Eat your heart out Mr Prime Minister.Mr SPEAKER: Order! Can I just invite the member to start his supplementary question.Hon David Cunliffe: Does the Prime Minister know that Red Stag Timber in Rotorua has committed to almost double its current production if Labour is able to implement its forestry upgrade package of tax deferrals a pro-wood policy and secure wood supply thus providing higher-paying and better jobs?Rt Hon JOHN KEY: I have been to Red Stag Timber and I am quite aware of its operations. Actually its operations have been expanding anyway irrelevant of what goes on. Secondly the Government is supportive of the use of wood but it is not actually going to tell every building in the country that it has to be built out of wood. We do not think that makes sense.Hon David Cunliffe: Is he concerned that New Zealanders in other industries are also suffering like the 48 staff who were laid off recently at Griffin’s or the 125 who are going to lose their jobs atCerebos Gregg’s; and when will he show vision and a plan for growing better jobs and higher wages in the New Zealand economy?Rt Hon JOHN KEY: It is a little hard to take that comment seriously when the economy generated 84000 new jobs in the last 12 months. It is on track to create 170000-odd jobs as we said it would. Anybody who knows anything about the labour market knows that there are always companies that close or shed employees and that at exactly the same time in a fast-growing economy there are plenty of jobs that are created. In fact in New Zealand as Treasury documents show we are on track for a much lower level of unemployment.Louise Upston: Has he seen any statements regarding immigration?Rt Hon JOHN KEY: I have. I have seen a statement that says: “Migrants from all over the world play a vital role in the economic transformation and wonderful diversity of this country. … that role is set to increase in the future as our need for skilled talented people continues.” I’ve also seen this: “We know that we can’t sustain the economy we want without the skills investment and international connections that migrants can bring.” Finally I saw a statement that said: “So fostering immigration is a no-brainer.” Those statements were of course from the then immigration Minister David Cunliffe.Hon David Cunliffe: In light of that excellent response with which I thoroughly agree does he support the right of every young New Zealander to aspire to own their own home and of every parent to want that for their children and does he believe that a well-managed immigration policy should contribute to that goal?Rt Hon JOHN KEY: Yes. The Government is working hard to ensure that as many New Zealanders as practically cancan own a home. The way to fix that is actually tobuild more homes. But if the issue is solely one of migration well then why did 43000 leave under Labour? Why did Labour do nothing to reform the supply side of the housing issue? The reality is that when you are looking down the barrel of 30 percent and falling what you do is you have a whack at your core constituency. I remember when that member became the leader of the Labour Party. What happened? Someone came up with a Pacific lei—Mr SPEAKER: Order!Rt Hon JOHN KEY: —and put it around his neck.Mr SPEAKER: Order! This answer has now gone on for long enough.Methamphetamine Action Plan—Initiatives and Funding4.MIKE SABIN (National—Northland) to theMinister of Police: What steps is the Government taking to reduce the harm caused by methamphetamine in New Zealand?Mr SPEAKER: I inform the House my office has been advised that this answer may be somewhat longer than normal.Hon ANNE TOLLEY (Minister of Police): Yesterday the Prime Minister announced over $6 million worth of new initiatives to continue reducing the supply and demand of methamphetamine in New Zealand. This funding part of the Government’s Methamphetamine Action Plan will be used by Government agencies to target the drug trade and to help those affected by it to get the help they need. Over $3.8 million has been allocated to the police to target organised crime and drug syndicates and fund legal costs for civil actions to recover proceeds of crime. Health will receive $1.8 million to double existing support for mothers of young children and pregnant women who have alcohol and drug issues. Corrections will receive $300000 to help offenders with alcohol or drug issues to reintegrate back into the community and $105000 has been provided to justice to further support offenders seeking treatment through the alcohol and other drug treatment court. These initiatives are important steps that will help police fight organised crime dealing methamphetamine and will ensure that addicts get the treatment that they need.Mike Sabin: How are these new initiatives being funded from those who profit from the drug trade?Hon ANNE TOLLEY: Funding for all of the initiatives announced by the Prime Minister yesterday is from money recovered under the Criminal Proceeds (Recovery) Act. As part of the Government’s Methamphetamine Action Plan we committed to using the money recovered from criminals who profit from the drug trade to fund actions against them and to help those affected by them to get addiction treatment. Since the Act came into force in 2009 the police have obtained forfeiture orders for assets worth approximately $38 million over half of which were related to methamphetamine offences. Since November 2013 over $10 million has been allocated from the proceeds of crime to increase residential alcohol and drug treatment enhance front-line screening at the border train drug dogs to detect large amounts of cash and fund the establishment of a police attaché officer in China.Mike Sabin: What results has the Government seen from the Methamphetamine Action Plan?Hon ANNE TOLLEY: The plan aims to reduce the demand and supply of methamphetamine in New Zealand. The latest progress report shows that the price purity and availability of methamphetamine remain high. The average price of a gram of methamphetamine increased from $678 in 2012 to $684 in 2013 indicating a possible scarcity in supply. The report also shows that since 2004 more offenders are receiving drug and alcohol assessments as a condition of their sentence up from 5percent in 2004 to 20 percent in 2013. In addition since 2008 there has been a 1500 percent increase in the number of drug and alcohol treatment places in our prisons. The plan is hitting criminals where it hurts reducing the supply and demand for methamphetamine and then using their illegal profits to disrupt the market.Home Insulation—Warm Up New Zealand Programmes andChristchurch Recovery5.METIRIA TUREI (Co-Leader—Green) to thePrime Minister: Does he stand by all his statements?Rt Hon JOHN KEY (Prime Minister): Yes.Metiria Turei: Does the Prime Minister stand by his statement that the Warm Up New Zealand: Heat Smart scheme run with the Green Party as part of our memorandum of understanding with National was “potentially one of the most significant public health initiatives of the decade.”?Rt Hon JOHN KEY: Yes.Metiria Turei: Is it not then the case that it is ordinary Kiwi families who are missing out on a warm dry home and not millionaires when only 12000 homes have been insulated under his restricted scheme compared with 60000 homes in the final year of the Greens-National Heat Smart programme?Rt Hon JOHN KEY: I am not sure I can agree with the figures of the member but what I can say is that under the Warm Up New Zealand: Heat Smart programme that we ran approximately 238000 homes were insulated at a cost of about $347 million. In addition to that the Warm Up New Zealand: Healthy Homes scheme in Budget 2013 was allocated over $100 million over 3 years and that will insulate a further 46000 homes. So in total that is around 300000 homes.Metiria Turei: Can the Prime Minister confirm that an ordinary family with two kids on the median income earns about $30000 too much to qualify for support under his restricted insulation scheme?Rt Hon JOHN KEY: What I can confirm is that the scheme has changed from the early days where essentially it was a scheme where the Government put in about a third of the contribution and about two-thirds was paid by the individual. What we actually agreed with our partners the Māori Party in Budget 2013 was that the real focus should go on those who have got no capacity to make a contribution. So we allocated $100 million and we said that those 46000 homes would be the total focus of that programme and they would be for very low-income New Zealanders. I think that is actually a good thing to do. They are people who are in desperate need and normally seem to be the people whom the member wants to stand up for. Today she seems to be saying that middle-income New Zealanders should get it at those people’s expense.Metiria Turei: Why has the Prime Minister given the vast majority of Christchurch families the cold shoulder by rejecting the Green Party’s proposal to allocate $60 million for ceiling wall and floor insulation just as Christchurch approaches its fourth post-earthquake winter?Rt Hon JOHN KEY: I think it is a real stretch to make the claim that the member has. If you look for instance just at the Clean Heat and clean air programmes that we ran in Canterbury over 10000 homes between 2009 and 2013 were converted to clean heat or clean air. A great many of the 300000-odd homes including all of the State homes that could be insulated were part of that programme. I think that for the most part the people of Christchurch would say that they had been fairly treated by the Government.Metiria Turei: Why is the Prime Minister locking out most ordinary Kiwi families from support to insulate their homes when he himself has said: “Warmer drier homesmean energy savings lower power bills and healthier communities. The programme also stimulates the economy and creates jobs.”?Rt Hon JOHN KEY: I think it is a stretch to say that we are. This is a Government that when it came into office was committed to this programme. It has seen 300000 homes insulated under our watch. That is massive multiples more than had been the case under the previous Government which over 9 years insulated very few homes. I simply say to that member that it is all very well getting up and making promises that she will insulate so many homes but to do that she would actually have to be part of the Government. I do not know whether she got the memo but according to Labour it wants to marry New Zealand First. It does not want a bar of you. You are just a welcome mat.Metiria Turei: Given the Prime Minister’s support for a scheme that provided significant access for ordinary Kiwi families to insulate their homes to keep their children healthy and well will he now commit to supporting the Green Party’s extended Warm Up New Zealand: Heat Smart programme of $300 million over 3 years to ensure that another 200000 New Zealand homes are insulated as well as the Warm Up Christchurch programme of $60 million to make sure that Christchurch homes are as warm and dry as possible?Rt Hon JOHN KEY: No. What I can say is that the Government has run an extensive programme over the course of the last 6 years. It has seen 300000 homes insulated. The Government may consider its options of what it wants to do in the future. But what I find absolutely incredible is that the member was here in the House last week telling me that I should basically be extending greater benefits and resources to children of beneficiary homes. Today she is telling me that they are probably the very homes that arguably we are insulating under the programme we are doing with the Māori Party. She does not want us to do that; she wants us to go back and give more money to middle New Zealand. I just cannot work the member out which is probably why the Labour Party does not want her and is trying to marry New Zealand First.Housing Affordable—Overseas Buyers6.PHIL TWYFORD (Labour—TeAtatū) to theMinister of Housing: Does he stand by his statement that a register of foreign ownership “would be a waste of money”?Hon Dr NICK SMITH (Minister of Housing): As I said last week I am open to having more information on overseas ownership but I do not favour a register. For it to be accurate it would need to trace not only the 80000 houses per year that are sold but the 1 million - plus people who come and go from New Zealand. That is because a significant number of overseas homeowners are people who are in the process of gaining residency and for the register to be accurate it would need to trace people’s immigration and residency status.Phil Twyford: How much would it cost to require the conveyancing solicitor to certify whether or not the purchaser is a resident or a citizen?Hon Dr NICK SMITH: For a register to be accurate it would need to do more than that. It would also need to follow any change in people’s residency or immigration status after that point. Otherwise the moment the register is created it would be inaccurate. I do note with some interest though that in 2005 after even higher house-price inflation and even higher immigration a previous Labour Minister said when a register and restrictions were suggested that it would be “impossible and absolutely stupid”. That Minister was Dr Michael Cullen.Phil Twyford: How many of the 39000 houses he has promised to build in Auckland over the next 2 years will be sold to cashed-up overseas buyers shutting outlocal Kiwi families and what restrictions has he placed on these homes to ensure they do not end up in offshore ownership?Hon Dr NICK SMITH: I would suggest that the member has a chat with the leader of his party who has been facilitating overseas persons buying homes in Auckland. We are a party that takes an open view of New Zealand and I am confident that those tens of thousands of additional homes that we are building will go to goodol’ New Zealand families.Rt Hon John Key: Has the Minister seen reports of a German who is looking to buy a very large home in New Zealand and does the Minister think it would be unusual for a party that is opposed to foreigners buying homes to then want to form a Government with that said German?Hon Dr NICK SMITH: I have noticed that there is a German overseas interest who has a big interest in owning very large homes and I note that Labour is keen to form a coalition with the—Mr SPEAKER: Order! That part has nothing to do with the Minister’s responsibility.Phil Twyford: Is he aware that the new Australian Federal Government has launched an inquiry into Australia’s foreign ownership restrictions which is aimed at toughening up the rules and increasing enforcement and is this just another example of the Minister being right and everybody else being wrong?Hon Dr NICK SMITH: I am taking a considerable interest in the Australian inquiry because it has been triggered because their overseas ownership restrictions have been proven to not work—that is there is a huge number of people who get around them by creating properties in trust it is very difficult to trace the change in residency and in fact Australia has a higher level of overseas ownership than New Zealand has despite their restrictions.Phil Twyford: Why is the Productivity Commission concerned in its report that New Zealand residential property is becoming more attractive to overseas buyers and to what extent does an average Auckland house price of over $700000 increasing by over $1000 a week make residential property less attractive to Kiwi families and even more attractive to offshore speculators?Hon Dr NICK SMITH: I am delighted the member has raised the issue of the Productivity Commission because the commission did a comprehensive report on housing affordability. It received over 200 submissions and it did not make a single recommendation saying that a capital gains tax would work. It also said that the issues of overseas ownership would have absolutely no effect. It said that there were five important issues that needed to be addressed. The Government is addressing all five of those because we are interested in the substance and not the politics of housing affordability.Budget 2014—Cancer Treatment Services and Diagnostic Testing7.SHANE ARDERN (National—Taranaki - King Country) to theMinister of Health: What investment is the Government making in Budget 2014 to improve cancer services?Hon TONY RYALL (Minister of Health): Budget 2014 builds on the John Key - led Government’s strong record of providing better and faster cancer treatment services and improving the early detection of cancer. A $33 million funding boost over 4 years will further improve cancer services including further funding for breast and cervical screening and reduced waiting times for colonoscopies. Every year more than 20000 New Zealanders are diagnosed with cancer and this Government is committed to providing them with better faster cancer diagnostic and treatment services.Shane Ardern: What difference will this funding make for patients with cancer and their families?Hon TONY RYALL: As the member will appreciate being diagnosed with cancer can be an incredibly anxious time not only for the patient but also for their family as they deal with not only the emotional anxiety but also the financial strain. That is why Budget 2014 picks up on the recommendations of a large number of cancer groups and they are to improve the psychological support that we are providing cancer patients and their families. Part of this money will go to establishing six psychologists across the six cancer centres in New Zealand who will provide dedicated assessments and advice on how these people can be further supported. We expect also to fund up to 20 cancer care workers across the nation based out of the major hospitals who will provide further psychological support and counselling for patients and their families.Teachers and Support Staff Payroll—Problems withNovopay Payment System8.CHRIS HIPKINS (Labour—Rimutaka) to theMinister responsible forNovopay: Does he stand by his statement with regards toNovopay “I want to see within three months a situation where as much as possible workloads from administrators are back to where they were before this thing started”; if so when did he make that statement?Hon STEVEN JOYCE (Minister responsible forNovopay): Yes. I can advise the member that the most recent pay period reports show complaints and notifications for pay periods two three and four this year were at 0.09 percent 0.11 percent and 0.18 percent respectively. With the exception of issues that arose for the three start-of-year pay periods this year all pay periods since the time I made that statement have been below the 0.5 percent steady-state level identified by theNovopay technical review and that statement was made in March of last year.Chris Hipkins: Is he satisfied that the workload of school administrators is back to where it was given that over a year after he made that statement over 1250 schools still had outstanding backlog issues and almost 2000 schools were reporting that they were still experiencing problems; if so why?Hon STEVEN JOYCE: Well I am not sure where the member is getting that particular piece of information from but the reality is actually that the numbers are considerably lower than that from pay period to pay period. There are historic things that are being still resolved as there have been for many years including the previous system which the member recommended be replaced to the Minister at the time because it had too many issues with it.Chris Hipkins: For the Minister’s help I seek leave to table the Weekly Backlog Clearance Unit Report from the Ministry of Education to the Minister from 7 February.Mr SPEAKER: I will put the leave. Leave is sought to table that particular document. Is there any objection? There is none. It can be tabled.Document by leave laid on the Table of the House.Chris Hipkins: Supplementary question? [Interruption]Mr SPEAKER: Order! [Interruption] Order! I am just waiting.Chris Hipkins: Is he satisfied that a year after he made that statementNovopay still had over $9.3 million in debts outstanding to recover and it was still making errors that resulted in hundreds of thousands of dollars of new debt being created; if so why?Hon STEVEN JOYCE: The member needs to be clear that the total amount of outstanding debt originally was $18 million and actually about $10 million of that has been collected. Yes there is still debt to be collected. That relies of course on people paying that money back which they are doing over a period of time. In fact both thissystem and the previous system create debt through overpayments that need to be repaid. In fact this system inherited a number from the previous system—Andrew Little: Oh rubbish! What rubbish!Hon STEVEN JOYCE: Well actually it is true which is why that member advised the previous Government to change that system. I only wish it had not listened.Chris Hipkins: Is he satisfied thatNovopay will ever be able to work effectively given that recent defect reports still highlighted 125 serious or very serious defects with the system itself; if so why?Hon STEVEN JOYCE: I think it identified about two very serious defects in that previous report. There are some other serious defects—there is no doubt about that—but it is down from around 600 about 14 months ago to some today. Those defects do occur but I can tell the member that the system is running a lot better and is actually well within what the technical review said. If he is about to suggest that we replaceNovopay I probably will not take his advice with respect and I only wish that the previous Government had not taken his advice when it decided to replace theDatacom system.Chris Hipkins: Will schools be given any further support to cover the cost of administering theNovopay payroll system given that over a year and a half has now passed and it is still experiencing major problems resulting in time and energy that should be going into supporting kids’ education instead going into dealing with the ongoing payroll chaos thatNovopay has created?Hon STEVEN JOYCE: The member completely mischaracterises the situation today. He completely mischaracterises it. I appreciate that this was the same sort of panicky approach that he took back when he was advising the Minister about replacing the previous pay system but actually the system is running a lot better. There are still some issues—Dr David Clark: Why does the Minister hate teachers?Hon STEVEN JOYCE: Oh for goodness’ sake—Mr SPEAKER: Order!Hon STEVEN JOYCE: —shut up. [Interruption] Shut up you clown.Mr SPEAKER: Order! [Interruption] Order! When I rise to my feet I expect the member to stop his barracking.Hon Paula Bennett: Bit angry about the polls are you?Mr SPEAKER: Order! And I would also be grateful if there were fewer interjections on this side of the House.Better Public Services Targets—Advanced Trade Qualifications Diplomasand Degrees9.Dr CAM CALDER (National) to theMinister for Tertiary Education Skills and Employment: How is the Government lifting the skill levels of New Zealanders to lift productivity and deliver higher economic growth?Hon STEVEN JOYCE (Minister for Tertiary Education Skills and Employment): Improving skills is a key part of National’s agenda to get more people into work to help businesses grow to improve productivity and to build a stronger economy with higher-paying jobs. Today I released the Ministry of Education report on tertiary education enrolments for 2013. It shows that 56 percent of study by New Zealanders at tertiary level in 2013 was at degree or post-graduate levels which is a big increase compared with 48 percent 10 years ago. Domestic enrolments by younger people—those aged 18 to 24 years—in Bachelor’s degrees and higher qualifications continue to increase by 1 percent from 2012 to 2013. Demand for tertiary education remains high. Around 418000 students were enrolled in formal tertiary programmes last year. In part that is due to the improved performance of students in NationalCertificate of Educational Achievement and that flows through into the tertiary figures. That of course is also a key focus of this Government.Dr Cam Calder: How is the Government delivering more apprentices?Hon STEVEN JOYCE: I am pleased to announce that new enrolments in apprenticeships training have grown by 24 percent since 2012 following the introduction of the apprenticeship reboot. That programme has been very successful and in the Budget a couple of weeks ago we announced a further $20 million for 6000 new apprentices through the apprenticeship reboot. That will bring the total funding for that programme to nearly $70 million. The average number of people signing up to apprenticeships in New Zealand has risen from 827 a month in 2012 to 1028 now. Last year there were 33000 people in apprenticeship training and so far this year there are 27000. A big part of vocational training has always been apprenticeships but under Labour the importance of that slipped in favour of more generic industry training.Dr Cam Calder: What are the outcomes for individuals from having higher skill levels?Hon STEVEN JOYCE: Well the income premium for people with higher skills is quite substantial. A further Ministry of Education report shows that people with a Bachelor’s degree or higher earn on average 62 percent more than those without a qualification. There is a very large jump in earnings between those who hold a degree and those who hold a lower-level qualification which is why the Government has put a lot of emphasis on getting young people to study at higher levels. In some fields there is a larger income premium from higher-level study—in science technology engineering and maths for example—and it is for that reason that the Government has boosted investment in many of those areas most recently in the Budget 2 weeks ago.Immigration Policy—Medical Considerations10.Dr RAJEN PRASAD (Labour) to theAssociate Minister of Immigration: Is she satisfied with all aspects of her decision onSanil Kumar?Hon NIKKI KAYE (Associate Minister of Immigration): Yes I am.Dr Rajen Prasad: What weight did she give to the advice she received from Cathy O’Malley of the New Zealand Ministry of Health that “The Government of Fiji funds 3 months’ free treatment for local patients needing to start dialysis. During this time they need to either find a live donor and be prepared to pay for their treatment thereafter or get their affairs in order in preparation for their death a week or two after dialysis is withdrawn.”?Hon NIKKI KAYE: The member has asked a question that goes to the heart of the case. I asked Mr Kumar for a privacy waiver in this case before he died. He declined to give me that privacy waiver. I have said to the member previously that I would appreciate his not making incorrect statements. In terms of generally though I am happy to make general statements around the advice that I receive. In this particular case I did seek advice in terms of the care that is available in Fiji and I can confirm that both dialysis is available and also access to transplants.Dr Rajen Prasad: I raise a point of order Mr Speaker. The question arises from a quote that the Minister provided herself—Mr SPEAKER: Order! If the member is leading to saying he does not think the question has been adequately addressed then I am ruling that it has been particularly in the light of the information that the Minister gave at the start where the Minister did not want to get into any personal details.Dr Rajen Prasad: What weight did the Minister give to the information provided to Immigration New Zealand on 7 March and confirmed on 23 April that the family waswell on its way to raising the funds to pay for the kidney transplant and that his cousin was undergoing tissue-matching procedures to be a donor?Hon NIKKI KAYE: Again the member asks a specific question that cuts to the heart of the case. I have been very clear with the member on a number of occasions that I requested a privacy waiver from Mr Kumar. He declined that privacy waiver. If the family did provide the ability for me to talk about the case via their providing a privacy waiver I would be happy to give further information. But there is a difference. Sometimes in this House members get privacy waivers but the Minister does not. That sometimes happens and that is what has happened in this case. It does not mean that I can speak to those bits of paper. The other thing I would say to the member specifically though is that I did take a very unusual step in this case of writing to Dr Prasad and saying two things: that he was making inaccurate statements specifically regarding the cost of treatment and that I would ask that Dr Prasad stop making inaccurate statements particularly given the circumstances in this case.Dr Rajen Prasad: I seek leave of the House to table the report to the Minister from Cathy O’Malley a deputy director-general of the New Zealand Ministry of Health in which the quote I came up with—[Interruption]Mr SPEAKER: Order! The member has sought leave to table a document that was supplied to the Minister—[Interruption] I am ruling on a point of order. When I have finished the member can raise his point of order. The member has sought leave to table a document written by Cathy O’Malley that was presented to the Minister. Leave is sought to table—Hon Trevor Mallard: I raise a point of order Mr Speaker.Mr SPEAKER: I will put the leave and then I will—Hon Trevor Mallard: No before you put it—Mr SPEAKER: Order! I will hear from the Hon Trevor Mallard.Hon Trevor Mallard: It is the normal practice of this House to seek an assurance from the member that he has a privacy waiver or has the permission of the family to table a document that goes to an individual case. I would like to know whether he has that permission.Mr SPEAKER: I was just assuming maybe incorrectly that that waiver had been obtained by Dr Rajen Prasad. But to clarify the matter we will clarify that with Dr Prasad.Dr Rajen Prasad: Yes. I have the approval.Mr SPEAKER: Then leave is sought to table this particular document. Is there any objection to it being tabled? There is none. It will be tabled.Document by leave laid on the Table of the House.Dr Rajen Prasad: To the Minister—[Interruption]Mr SPEAKER: Order! Can we just move to the supplementary question?Hon David Cunliffe: I raise a point of order Mr Speaker. [Interruption]Mr SPEAKER: Order! This is a point of order from David Cunliffe and it will be heard.Hon David Cunliffe: Can I seek your guidance? Firstly the Minister has declared that she cannot answer the member’s question because she does not have a privacy waiver yet the Minister has been referring to a document that she has released and the Minister has then called into question the member’s integrity. That is the first point. The second is that the Leader of the House no less is now barracking across the Chamber and calling into question the member’s integrity again. I ask you what protection there is for members of this House who are following due process and obeying the Standing Orders because that is abuse.Hon Gerry Brownlee: I think the point is that the member over the other side clearly has some information that the Minister does not have or cannot use in answer to the question—[Interruption]Hon David Cunliffe: Oh rubbish!Hon Gerry Brownlee: I am sorry are we hearing a point of order or not?Mr SPEAKER: Yes we are hearing a point of order.Hon Gerry Brownlee: Or she cannot use it because she does not have the permission of the family to use it. For a Minister to be put on the hotplate when the member over there knows full well that there is a whole lot more to this story than the Minister is able to tell is completely unreasonable and frankly it does question his integrity.Mr SPEAKER: Can I ask the Hon David Cunliffe to refer to Speaker’s ruling 173/1. It is a relatively lengthy ruling but a recent one by Speaker Wilson whereby it is certainly acceptable for any Minister in this House to rise in answering a question and effectively to invoke a privacy reason as to why she does not want to give personal details.Hon David Cunliffe: I raise a point of order Mr Speaker. I seek your clarification of firstly whether that Speaker’s ruling still applies when the Minister concerned has already released the very same information to the member of Parliament who is asking the question. Secondly that member of Parliament has given an assurance to this House that he has received a privacy waiver from the family concerned so that no question of privacy could possible arise.Mr SPEAKER: No I do not agree with the last part of the member’s point of order. That Speaker’s ruling is still applicable today. The Minister has seen fit to answer the question in the way that she has. The honourable Dr Rajen Prasad has then sought leave to table a particular document which he said he had permission of the family to table. It has now been tabled. That is the end of the matter.Dr Rajen Prasad: When the Minister received assurances from Cathy O’Malley of the Ministry of Health that treatment was available toSanil Kumar in Fiji did she factor in thatSanil Kumar’s family lived inBa dialysis was available only in Suva and Nadi and that other local hospitals could not treatSanil for any complications and also provide dialysis?Hon NIKKI KAYE: Again I want to make a couple of points here. Although I requested a privacy waiver Mr Kumar declined it. I am aware that he gave Opposition members a privacy waiver and I actually wrote to Opposition members telling them information about the case after I was assured that they had a privacy waiver. That is not the same thing as my being able to release that information even if they have it in their hands. That is a very different scenario for me as the Associate Minister. The second point I would like to make is that there are a range of factors that are considered in a particular case and I will take into account the cost of medical services criminal convictions and family members as have previous Ministers in this House. The final point that I would like to make is that I did seek certain advice regarding access to treatment. What I would say is that there is no requirement for immigration officers under immigration instructions to look at the availability of services overseas but I personally—Mr SPEAKER: Order! Just bring the answer to an end.Hon NIKKI KAYE: —took the step of taking a further step in this case.Dr Rajen Prasad: What would have been the harm to New Zealand had she enabledSanil Kumar through issuing an appropriate visa to undergo treatment for which funds had been raised a donor was undergoing tissue-matching and a payment plan was in place for the arrears owed to theWaitematā District Health Board?Hon NIKKI KAYE: Again I do not have a privacy waiver on this case. The thing that I would say to the member is that there were a number of statements the member made that are incorrect.Dr Rajen Prasad: Would it not have been wise and compassionate to enableSanil Kumar to undergo treatment in New Zealand before returning to Fiji given these facts:Sanil Kumar was admitted to a hospital inBa after contracting an infection; he had to be discharged from hospital to take a 3-hour round trip to Nadi each time he needed dialysis treatment and then be readmitted on his return; when he was transferred toLautoka Hospital as a critical patient he was not able to be given treatment consistent with his limited kidney function; and he died yesterday morning?Hon NIKKI KAYE: Can I first express condolences to the family—Mr SPEAKER: Would the Minister just answer the question in so far as there is ministerial responsibility.Hon NIKKI KAYE: Yes but can I first express condolences to the family. Secondly can I say that overall I think we have a very compassionate health and immigration policy in New Zealand. I can confirm that the New Zealand Government under our Government invests over $25 million into providing access to health care in the Pacific. We also have the ability of the ministerial discretion. As Associate Minister I do know that there are many cases—I will not go into the detail—where I have enabled people who have conditions that have high costs to stay in New Zealand but I take into account a range of factors that often are not in the public domain. What I really appreciate in this House are those members of Parliament who talk to me about particular cases and get their facts right. The facts are that I can talk about specific details regarding Mr Kumar that are in the public domain. Those are that he was here unlawfully he was unwell I sought advice regarding the fact that there are treatment facilities available but overall I declined his case.Dr Rajen Prasad: I seek leave to make a personal statement.Mr SPEAKER: Leave is sought—can you explain?Dr Rajen Prasad: Yes I am happy to. It is concerning the allegations the Minister has just made about the information that I have and that she does not have. I want to make a personal statement about that. [Interruption]Mr SPEAKER: Order! This is easily decided by the House. Leave is sought to make a personal explanation in regard to some statements that have been made today in question time by the Minister. I will put that leave. Is it accepted? OK it is not. [Interruption] Order! The matter has been determined. That is the end of the matter.Hon David Cunliffe: I raise a point of order Mr Speaker. [Interruption]Mr SPEAKER: I expect this point of order to be heard in silence.Hon David Cunliffe: I seek your general advice as to whether there are any other avenues available to my colleague Dr Prasad who has sought to use the Standing Orders in an appropriate way. The leave has been denied; that is accepted. The Minister has impugned Dr Prasad’s integrity and has hidden behind a punitive privacy waiver in respect of a document that has already—[Interruption]Mr SPEAKER: Order! I am listening to a point of order. I have asked for it to be heard in silence and I do not want any interjections from members on my right-hand side.Hon David Cunliffe: A document has already been released to members opposite. That leaves Dr Prasad in an impossible position. The Minister has used her reply to the question to impugn his integrity and he has been—I must say almost without precedent—denied an opportunity to make a personal statement in reply. Does he have any other remedy?Mr SPEAKER: Yes he does. I refer the member to Standing Order 355 which sets out exactly the process now by which the member if he feels he is being misrepresented in this House can take the matter further.Immigration—Trends and Support for Migrants11.SIMON O’CONNOR (National—Tāmaki) to theMinister of Immigration: What steps has the Government taken to encourage better outcomes for migrants?Hon MICHAEL WOODHOUSE (Minister of Immigration): Last week I announced an extra $7.6 million in Budget 2014 to help combat migrant exploitation in Canterbury. This weekend I announced an extra $5.6 million over 4 years to help newly arrived quota refugees settle into New Zealand life and get into work. One in four New Zealanders was born overseas and although the National-led Government is focused on putting New Zealanders at the front of the job queue we recognise the value of migration and the huge contribution that migrants make to our economy to rebuilding Christchurch and to our communities.Simon O’Connor: What recent trends have we seen in migration?Hon MICHAEL WOODHOUSE: Breaking down the recent trends in net migration the story is one of more New Zealanders coming home from abroad and fewer New Zealanders leaving which this side of the House believes is a very good thing. Estimates for this year put net migration at around 30000 which is largely due to 15000 fewer New Zealanders leaving than was the case 5 years ago. Another concerning migration trend is the increased risk of an attempt by asylum seekers to travel by boat to New Zealand. That is a trend about which I am very concerned.Simon O’Connor: What other reports has he seen on the increased risk of a maritime arrival?Hon MICHAEL WOODHOUSE: I have seen a report that showed that not only did Labour and the Greens oppose the legislation passed to deter and manage a mass arrival should one occur but one speaker trivialising the risk stated that “There is no protection from alien landings and that is exactly the same probability of an alien invasion from Mars as there is of boat people from Indonesia or ‘Wogistan’—exactly the same probability.” That came from the present leader of the Labour Party David Cunliffe. That is not something I suspect that the public would expect to come from someone who aspires to be the Prime Minister.Emissions Trading Scheme—Commentary and Progress12.Dr KENNEDY GRAHAM (Green) to theMinister for Climate Change Issues: What is his response to comments by former New Zealand climate ambassador Dr AdrianMacey that the New Zealand emissions trading scheme has led in the “opposite direction to that of the intended policy and is most likely to delay New Zealand’s transition to a low-carbon economy”?Hon TIM GROSER (Minister for Climate Change Issues): My response to DrMacey would be: “Compared with what?”. Is it compared with Australia which is in the process of removing its climate change policies and the institutions that underlie it? Is it compared with Japan which has removed an earlier offer to reduce emissions by minus 25 percent and replaced it with a positive 3 percent? Would he be comparing us with the United States which must rely now entirely on the Clean Air Act since there is no political possibility of the US Congress ever passing an economy-wide measure? Or is he comparing New Zealand with Canada which unlike New Zealand has withdrawn from the Kyoto Protocol and has no intention whatsoever of fulfilling its Kyoto Protocol commitments?Dr Kennedy Graham: Given that the answer is probably Europe has the former climate ambassador got it wrong when he says that the emissions trading scheme was designed to incentivise emission reductions clean technology and tree planting but that under current policy settings none of these is happening?Hon TIM GROSER: I would agree very strongly with the first part of the statement. That is exactly what I understood were the intentions and continue to be the intentions of the emissions trading scheme. But as I have made clear on numerous occasions at the current international price it does not drive that process forward in a fast way and that is entirely the point of the difference between DrMacey’s analysis and this Government’s analysis—we do not wish to depart and put costs on New Zealand households and businesses that are higher than our competitors.Dr Kennedy Graham: Did the Parliamentary Commissioner for the Environment get it wrong when she said that the Government’s changes to the emissions trading scheme notwithstanding international prices make a farce of New Zealand’s response to climate change?Hon TIM GROSER: Not at all. The response of the New Zealand Government has been to join that 7 percent of emissions that are actually covered by some type of price on carbon and to make a huge contribution internationally which is actually recognised in DrMacey’s article including leading the world in terms of emissions from agriculture which are exactly 100 times as large as New Zealand’s emissions of 0.14 percent.Dr Kennedy Graham: Can the Minister point to one expert who says that New Zealand’s emissions trading scheme has reduced our emissions incentivised tree planting and helped the transition to a low carbon economy—can he point to just one expert who says that the emissions trading scheme has been a success?Hon TIM GROSER: Yes. I can point the member to the OECD’s environment report prepared for the last environment Ministers meeting in Paris which I had the privilege of representing New Zealand at which described the New Zealand emissions trading scheme as one of the most advanced in the world.Dr Kennedy Graham: Mr Speaker— [Interruption]Mr SPEAKER: Order! This is a point of order?Dr Kennedy Graham: I seek leave to table two documents relevant to the question. One is the article inPolicy Quarterly by the former climate ambassador we referred to headed “Climate Change towards Policy Coherence”. The second is the press release covering the submission by the Parliamentary Commissioner for the Environment headed “ETS changes a farce”.Mr SPEAKER: Order! Well I will not be putting leave for the second one. With regard to the first one theMacey article is it freely available or difficult for members to get hold of?Dr Kennedy Graham: It is reasonably difficult and this will help the House.Mr SPEAKER: I will accept the member. Leave is sought to table the article by Dr AdrianMacey. Is there any objection to that? It will be tabled.Document by leave laid on the Table of the House.Hon Gerry Brownlee: I raise a point of order Mr Speaker. Although the House did not object to that tabling it might have been useful to note that the Minister gave answers to DrMacey’s report clearly having seen it so it is not exactly difficult for members to get hold of it.Mr SPEAKER: The tabling of documents is a means by which we inform other members. I accept that Mr Groser as the Minister responsible may well have read the article. What I was doing was ensuring that other members who might be vitallyinterested in reading such an article have the opportunity. Therefore I put the leave and if the Hon Gerry Brownlee was so incensed he had the opportunity to decline it.Local Government Act 2002 Amendment Bill (No 3)Second ReadingDebate resumed from 22 May.IAIN LEES-GALLOWAY (Labour—Palmerston North): The centrepiece of this legislation which the Government seems so excited about is its measures that it claims will improve housing affordability by restricting the application of the development contributions that developers make to city and district councils when they are developing sites whether they be for residential or commercial development. Although this may make a rather insignificant impact on the affordability of housing it is I suppose a minuscule step in the right direction. It is an addition to the Government’s other infinitesimally small step towards improving housing affordability that was in the Budget—that being its removal of anti-dumping tariffs which the Government guessed may reduce the cost of building a new home by $3500 an extraordinary amount in the context of what would normally be about a $500000 house.What we are seeing here from this Government is an extraordinarily inadequate response to the single-biggest issue out there in the public. On the day the Budget was announced the front page of theDominion Postran a survey of what were the most important issues to New Zealanders. Right there at the top at No. 1 was housing affordability. What this legislation claims to do is to address that No. 1 issue. Well it is a woeful attempt at addressing that issue. House prices are absolutely rampant and out of control and what does this Government do in response? It has a guessed $3500 reduction in the cost of building a new home which is highly unlikely to be passed on to the actual purchaser of that new home and these provisions to tinker with the development levies are anticipated to reduce the cost by $750—$750. So there we have got a combined total of around $4000 off the cost of building a new home—Sue Moroney: Maybe.IAIN LEES-GALLOWAY: —perhaps. There is absolutely no evidence that even that ridiculously small cost reduction will actually occur. And that is it—that is it. That is the National Government’s response to the housing affordability crisis—$4000. That is it—nothing else not a jot.Well we have got some better ideas on this side of the House. We have actually got a plan to deal with housing affordability. If Labour were in Government the first part of the plan would be to build some houses. What we actually need to see happening is some houses coming on to the market that are affordable that people trying to buy their first home can actually buy. Labour will build 100000 homes over 10 years. That is the first part of the plan.The second part of the plan is to introduce a capital gains tax because we need to take the heat out of the speculation in residential property. National backs the speculators; Labour backs the first-home buyers. We want to support people to get into their own homes. We do not want to sponsor the speculators; we want to support clever investment in New Zealand in the productive sector. We want investment in things that create jobs not in things that just push house prices up.Thirdly we need to cap the offshore speculation in residential property. Foreign capital can be very very useful when it creates jobs and when it supports innovation but foreign investment in our residential property does only one thing: it drives up thecost of houses for hard-working Kiwi folk who just want the opportunity to buy their first home and get ahead in life.That is the stark difference between the provisions in this legislation when added to the other paltry attempt in the Budget from the National Government and what the Labour Party plans to do. This side of the House has a plan for housing and that side of the House can offer nothing but tinkering around the edges. That is the sum total of the effort from that side of the House when it comes to housing affordability. There is absolutely no guarantee whatsoever if there are any savings from these tiny changes to the way development contributions are made—absolutely no guarantee at all—that those savings will be passed on to the home buyer particularly in Auckland. Of course it is from Auckland that a lot of this housing affordability issue is being driven. There is a large divergence there between the cost of building a home and the price at which they are actually sold.So I think it is courageous of this Government to seriously believe that its little effort in tinkering here will actually result in changes that would be experienced by the homebuyer by those families who are doing all the right things by people who are working hard in their jobs and saving their deposits. And of course saving for a deposit has got a whole lot harder under this Government as well because of its failure to address the housing affordability crisis in Auckland. That is impacting right across the country. So all those people who are doing all the right things and saving hard still do not have an opportunity to get into their first home and this bill simply will not do the job. It might be helpful for the National Party’s donors those property developers who make substantial donations to the National Party. They might get a little bit of help out of this but it will do absolutely nothing for those people struggling to get into their first home.The ASSISTANT SPEAKER (H V Ross Robertson): It is a split call?Eugenie Sage: It is.The ASSISTANT SPEAKER (H V Ross Robertson): I call the honourable member Eugenie Sage.EUGENIE SAGE (Green): I am pleased to speak to the Local Government Act 2002 Amendment Bill (No 3)—not that it is a bill that the Green Party is supporting. My colleague Denise Roche described why the Green Party is opposing this bill. It is because of the changes it is making around development contributions and the much narrower definition of community infrastructure in the bill. I would like to talk a bit more about that because that very narrow definition will prevent development contributions being used to fund quite basic and quite essential community facilities like swimming pools museums reserves and other recreational facilities.This bill will hit Christchurch hard because of course in Christchurch with the residential red zones and people there having lost their homes there is a lot of new greenfield development. When the bill comes into effect it will prevent Christchurch City Council from recovering from developers development contributions to help fund facilities like new swimming pools. It is this very narrow-minded approach in the bill that risks encouraging subdivisions that are like ghettos. You need these community facilities as places where people meet places where children can play and places where the community can have a heart. So if development contributions are not going to be allowed as a way of funding these facilities then the burden is pushed on to ratepayers or the facilities do not get built. In the case of Christchurch where the city council asked for an exemption and asked for a delay in the provisions in the bill coming into effect there is a very real risk with the major financial challenges that face the city council that a lot of these essential community facilities will not get built in our new greenfield subdivisions.It is also really narrow-minded because reserves funded by development contributions are often a way of buffering industrial and commercial areas from residential areas yet the bill means that councils will not be able to charge the developers of industrial land to help create these reserves. So the bill is leading to urban areas that are the very opposite of what the Green Party sees us needing in our cities and towns. We want urban development where workers can go to lunch in a local park where they can go swimming at lunch time not just large warehouses or row after row of suburban houses without these facilities.One of the other reasons we are objecting to the bill is that it undermines local democracy by encouraging the replacement of competent councils with local boards with much weaker powers. That is because this bill allows the Local Government Commission in any current or proposed reorganisation to axe district and city councils and replace them with weaker local boards. Local boards have no ability to hold property. They have no ability to employ or remove staff. They cannot make by-laws and they cannot levy rates.This bill is the Government’s answer to rolling out the Auckland super-city model elsewhere in the country by replacing our district city and regional councils with big unitary councils by centralising power with fewer councillors on those unitary councils and by then having local boards which can only recommend by-laws and have much more limited powers. At the moment the law is that you can have these local boards only in metropolitan centres with over 400000 people but this bill will allow them to be rolled out everywhere and that is why the Green Party is objecting to the bill—because it is undermining local democracy.It was very interesting at the select committee when we had Margaret Murray-Benge who was a long-time councillor for theWaimairi County Council in Christchurch. She said she is a long-time National Party supporter but she totally opposed the bill because it was ripping the heart out of local government and as she said there is nothing that says that bigger units of local government will be more efficient or that they will represent people effectively. So when you have strong National supporters querying the bill because of what it does to undermine local government the Green Party knows that we are on the right ground too because there is widespread opposition to these provisions which undermine local democracy and local government.The question was put that the amendments recommended by the Local Government and Environment Committee by majority be agreed to.A party vote was called for on the questionThat the question be agreed to.Ayes110New Zealand National 59; New Zealand Labour 34; Green Party 14; Mana 1; ACT New Zealand 1; United Future 1.Noes10New Zealand First 7; Māori Party 3.Question agreed to.A party vote was called for on the questionThat the Local Government Act 2002 Amendment Bill (No 3) be now read a second time.Ayes95New Zealand National 59; New Zealand Labour 34; ACT New Zealand 1; United Future 1.Noes25Green Party 14; New Zealand First 7; Māori Party 3; Mana 1.Bill read a second time.Taxation (Annual Rates Employee Allowances and Remedial Matters) BillSecond ReadingHon TODD McCLAY (Minister of Revenue): I moveThat the Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill be now read a second time. This omnibus bill continues the Government’s work to bring greater clarity to the tax rules in order to ensure that they remain fit for purpose that they are easy for businesses and other taxpayers to understand and to comply with that they support businesses and innovation and that everyone pays their fair share of tax. With those principles in mind the majority of the proposals in this bill have been shaped by earlier feedback from businesses and other taxpayers to ensure that the proposed changes are practical pragmatic and consistent across the tax system.The main features in this bill seek to clarify the tax treatment of employer-provided accommodation accommodation allowances and other payments provided by employers to employees to reimburse them for expenditure incurred. The bill provides practical rules to help determine where to draw the line between what is taxable and what is not. This has been an area of particular concern for employers and employees particularly when payments are linked to business travel secondments and projects. To deal with these concerns the bill proposes that accommodation and accommodation payments provided to employees who are required to work away from their normal workplace on secondment or capital projects will be exempt from income tax under defined circumstances. This includes an exemption for up to 5 years for people working on the Canterbury earthquake recovery projects. An exemption is also included for payments for meals on work-related travel for up to 3 months. There is a specific exemption proposed for distinctive work clothing and an exemption for plain-clothes allowances when a person has been provided with a uniform as part of their employment but because of the nature of their current duties they are required to also wear plain clothes. Together these measures should give businesses more clarity and certainty on how the employee allowances provisions should be applied.The second group of proposals in this bill will help support business growth and innovation by clarifying certain rules and removing distortions in the way some current rules apply. The first of these deals with the uncertainty and distortions arising from the current “black hole” tax treatment of certain types of expenditure. Under the changes proposed in the bill the deductibility of certain company running costs will be clarified and expenditure on abandoned applications for patents resource consents and plant variety rights will be immediately deductible.A suite of clarifications is also proposed to the GST rules to make them easier to understand and apply. These include clarifying the definitions of “dwelling” and “commercial dwelling” in the Goods and Services Tax Act 1985; an amendment to the apportionment rules so that non-profit bodies can claim all of their GST inputdeductions apart from those on inputs that relate to the making of exempt supplies; and clarifying the GST treatment of immigration and other services. The acquisition date of land and agreements for the sale and purchase of property or services in foreign currencies have also been clarified to give greater certainty to taxpayers as have the tax rules for charities that have been removed from the Charities Register. Other proposals in the bill such as changes to tighten the thin capitalisation rules and the rules relating to the tax treatment of land-related lease payments are intended to remove distortions and protect New Zealand’s tax base.One aspect of the bill has attracted attention. As you are aware Mr Assistant Speaker Robertson an intergovernmental agreement is currently being negotiated between New Zealand and the United States in readiness for changes following the enactment of the United States Foreign Account Tax Compliance Act which is due to take effect on 1 July of this year. This bill therefore contains provisions to allow our financial institutions to more easily comply with that intergovernmental agreement once it has been finalised and any future similar agreements.These are the main proposals in the bill. In addition I wish to advise that I shall be—Dr David Clark: Has it been finalised Minister?Hon TODD McCLAY: Listen. I will come to that in a moment if you listen carefully. In addition I wish to advise that I shall introduce a Supplementary Order Paper at the Committee of the whole House stage which will contain a small number of minor technical amendments to ensure that the tax rules operate as intended.At this point I would like to acknowledge and thank the Finance and Expenditure Committee for its careful consideration of these wide-ranging tax changes in the bill and for the recommendations it made to further enhance the legislation. It gives me great pleasure to commend this bill to the House.Dr DAVID CLARK (Labour—Dunedin North): The member who has just resumed his seat Todd McClay needs to table the agreement that will come into effect in July this year. It is an agreement that has been negotiated behind closed doors. That is proper in the negotiation process. The Government has been very slow to finalise the agreement. That is why we are being asked as a Parliament to ratify an intergovernmental agreement we have yet to see. I have reason to believe that the Minister of Revenue has seen the agreement and that the agreement has now passed a stage where it is in its final text and is ready for Cabinet to sign it off.Hon Todd McClay: Haven’t seen it.Dr DAVID CLARK: The Minister claims he has not seen it. He may be the only person in Cabinet who is being kept in the dark but I doubt it very much. I challenge the Minister to table that document before this legislation the Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill is passed. Transparency is a very important principle and unfortunately this Government has a bad track record on transparency. We know that with the Skycity deal we know that with the conversations around extra payments to Chorus we know that with the matter ofOravida and there are plenty more. But here where the agreement has been negotiated and is awaiting Cabinet approval it is incumbent upon the Minister to table it in the House so that we can have a look at the agreement and we can see whether the text has been well negotiated because it is very unusual.Officials noted this. Officials noted this when we interviewed them at the Finance and Expenditure Committee. They said that it was very unusual for a select committee to be passing enabling legislation before the negotiated document had been tabled.Hon Todd McClay: Ask me tomorrow.Dr DAVID CLARK: This is very very unusual behaviour. I think that member opposite said that it was going to be tabled tomorrow.Hon Todd McClay: I said you can ask me at the committee tomorrow.Dr DAVID CLARK: He says I can ask him in the committee tomorrow. Well that is promising. I wish the member would do it sooner. The member has never seen it before but having been challenged he is confident that tomorrow it may be available to be released. I think that indicates a certain defensiveness and it is a great shame that the member could not come clean first off and table the document in the House because this is not the way this process should be done. It should not be the case that the cart comes before the horse that Parliament is asked not to scrutinise the negotiated legislation and that Parliament is asked simply to swish it through and wait and see what happens. That is not why Parliament is here. Parliament is here to properly examine such agreements.This agreement the Foreign Account Tax Compliance Act affects 20000 New Zealanders who were born in the US who have as we understand no further relationship with the USA. It affects those New Zealanders who have lived and worked in the USA. More broadly it will affect their families whose bank account details will be released along with those US citizens back to the United States. These people are giving up on their privacy by virtue of this legislation that is passing through the House. That is one thing that we can be pretty confident of having not yet even seen the text. But this Government does not seem to take seriously those matters of privacy and the matter of an international negotiation being properly ratified through this Parliament through the normal processes. Instead we have a very unusual process through the House right now.The Labour Party stands for reciprocity in tax agreements. We do want to crack down on tax avoidance and tax evasion. That Government across the Chamber has a very poor record in that regard. We know for example that Google declares less than 5 percent of its revenues out of New Zealand for tax purposes and yet the Government does nothing about it. We know that Facebook pays less tax than many members in this House despite having 2.2 million users in New Zealand which it values according to its initial public offering much more highly and says that if it was a New Zealand - based company based on its initial public offering of 2012 it would be paying roughly 100 times as much tax in New Zealand if it was a responsible tax-paying organisation based here.These questions are of little concern to that Government across the Chamber. It seems much more interested in swathes of rhetoric around beneficiaries than in actually chasing the huge tax-avoidance problem that we have. The Government says that we will get into the multinational process—the base erosion and profit shifting process. You wait. Mr Goldsmith will pop up in a minute and defend the OECD process whilst the US unilaterally goes out and makes New Zealanders pay for banks to collect data on their own people and to send the data across to the USA. That is what this Government will get up and defend in a minute.The reason that we might enter into such an agreement is that the US has unilaterally said that it will charge 30 percent extra on wholesale lending if New Zealand does not comply. We may end up in that space but it is incumbent upon us in a negotiation to put our side of the case which is reciprocity. It is actually about making sure that tax avoidance is tackled wherever it falls in the world not just where it is in the US’s advantage to tackle tax avoidance but also where it is in New Zealand’s advantage to tackle it.But this Government will not do that. In the select committee it blocked putting the principle of reciprocity in the legislation. Mr Goldsmith I am sure will tell you when he gets up that there was good reason for not wanting reciprocity written into the agreement. We have yet to hear a plausible explanation as to why the Government doesnot want us to go after tax avoiders in New Zealand in the way that it is asking us to go after US tax avoiders at our own cost. There must be a reason there. Perhaps it is just the embarrassment of the Government that it has left this negotiation too late and it has happened too slowly. The officials clearly have not had the guidance or the leadership that they should have had from this Government because they are very competent officials. I know that from having dealt with them previously. The fault rests with the leadership of this Government and its failure to set down a set of expectations around reducing tax avoidance and tax evasion. Many New Zealanders will be feeling uncomfortable with this change and with the fact that we are here putting the cart before the horse and not scrutinising properly the legislation that is being passed through this House.This Government does have a record of being slap-happy in respect of agreements. I have already mentioned the Skycity Casino deal. We know about theOravida one and about the Government’s support partners—we can think of a matter before the courts currently where there seems to have been a slap-happy arrangement in respect of the way in which financial issues are treated. This cuts to the core of these members opposite who are concerned about the corporate interest and not concerned about putting people first.We on this side of the House the Labour members have a view that New Zealand ought to have a fairer tax system. Everybody ought to pay their fair share and that is so that we can have the schools the hospitals the roads the safe society and the courts that give us a good society—the New Zealand that we all know and love from previous generations where there is high trust where we have a social safety net and so forth. But across the way members are content to see things slip content to see things go in the interests of the big players and content to buckle under pressure and have Parliament do some very unusual things—Paul Goldsmith: This is a very rambling speech—a rambling speech.Dr DAVID CLARK: —Mr Goldsmith some very unusual things—in passing legislation that is not properly scrutinised by Parliament.I should also note that there is around $8 billion in outstanding debt that this Government is unable to chase. It was reluctant to write it off probably because it came down to part of its Budget-balancing exercise. It is tinkering here in this legislation with some other things that are positive. We will actually in the end support this legislation because we know there are some positive measures in it but we are deeply concerned about the process and the way it has been done. We would not want to see the banks put in a difficult position where they would have to pay 30 percent withholding tax because this Government had not got around to doing its homework and had not got around to sorting this matter out long ago.We would also like to draw attention to the challenges around community housing entities. The Minister will have wide-ranging discretionary powers to approve or disapprove of charitable exemptions as a result of this legislation. This delegation to the Minister of the effective right to confer lower taxes on some but not all taxpayers is just simply bad law. It is quite simply put terrible law where the Minister has such wide-ranging discretionary powers to say “You’ll pay a lower tax rate than this person over here.”It has been a rushed process. That is why we have ended up with this sloppy law. The Government put these changes out for consultation around Christmas-time and expected people to get back in early February. It was a rushed process. It tried to bury this. It shows where we end up when we have bad processes: we end up with bad law. The useful stuff in this law is forcing us to support it but overall we are very disappointed with the process because the law could be so much better. The problems also could beironed out around exemptions which KPMG drew to the attention of the committee—the taxable nature of an employer-provided allowance or benefit such as accommodation. We heard countless examples of exemptions in that area. Again it is sloppy law being made that will require tidying up later.PAUL GOLDSMITH (National): I rise to speak on the Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill. I think that previous speech by David Clark was by way of saying that Labour was going to support this bill but it was a roundabout way of getting to that story. I do want to thank the members of the Finance and Expenditure Committee who worked together. I pay tribute to the Hon Shane Jones who was part of the select committee and has now gone off to other pastures having concluded that the prospect or the possibility of being an economic development Minister in a party that does not believe in economic development was not one that he wanted to pursue any further. So we wish him well in his career. The rest of the committee carried on and we welcome the arrival of Mr Robertson to work on the committee. I was interested in the comments that the previous speaker made about Facebook. He did not repeat his threat to close down Facebook if it did not bow to the knee of the New Zealand taxpayer and I think all the hundreds of thousands of Facebook users in this country will be grateful for that.Drilling down into this bill it is all about building a more competitive and productive economy and that is one of National’s key priorities. When we come to taxation the most important thing is that the Government can raise the revenue that it requires not through hiking tax rates but by ensuring that the existing tax bases are efficient and are applied fairly. So this is a piece of maintenance legislation that is about ensuring that taxpayers can understand and comply with the rules. It is necessary for the rules to be cohesive and fair and to apply consistently and be regularly maintained given the cleverness of people who seek to get around the rules.The first thing that a Government can do in tax policy is make sure that its spending is under control so that we are not having to hike rates or dream up new sorts of taxes like capital gains taxes as proposed on the other side of the House. This Budget that we passed and were debating last week has reduced pressure by keeping Government spending under control. We are now back to around 30 percent of GDP and are on track to get lower for core Government spending and that means that we do not have to be quite so rapacious in our tax gathering as previous Governments have been.Drilling down into the details of this bill I will look first at the area of employee allowances. The select committee received 97 submissions from interested groups and individuals and we heard oral evidence from 30 submitters. To be fair most of those oral submissions related to the foreign account information-sharing agreements and theForeign Account Tax Compliance Act. That unfortunately is not something that is around maintenance of the tax system in New Zealand; it has been forced upon us by the very unusual tax system that the United States has which taxes US persons rather than residents and by the changes that were being brought about through their changes that were going to come into effect on 1 July 2014. We did hear from a number of US persons who have been living in New Zealand who were concerned about the possible ramifications.I suppose the main point to make is that this bill does not change tax law in the United States and it does not change any obligations of US citizens living in New Zealand. The obligations are no different from what they were before after the passing of this bill. What this bill does do is to allow New Zealand banks to pass information on to the US in relation to US persons once they cross a certain threshold and that threshold will be set by the intergovernmental agreement. So people underneath that threshold need not worry and it is only people who are identified as US persons andwho have had those tax obligations. We have heard a lot of concern about this but this is ultimately about collecting taxes across international borders. More broadly speaking the select committee did support global efforts to combat international tax evasion and accept that New Zealand’s global reputation would suffer if we were not seen to be playing our part. So although this is a difficult piece of legislation for some people overall we believe that this legislation is important for the New Zealand economy.The only other thing I would quickly draw attention to is the review of employee allowances. We heard a lot of submissions and made several changes there just to try to clarify the rules so that the tax treatment of employer-provided accommodation and accommodation allowances and reimbursements were made clear and so that taxpayers will minimise compliance and administration costs in any of those areas. On that basis I commend this bill to the House. Thank you.Hon DAVID PARKER (Deputy Leader—Labour): I rise to take a call on the Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill. Labour will be supporting this bill. There are some good provisions in this legislation but I do want to just deal with some of the submissions that were made to the Finance and Expenditure Committee in respect of the intergovernmental agreement on tax enforcement which the United States Government is effectively enforcing on the New Zealand Government.I want to deal with some of the concerns that have been raised by the submitters on the bill. Can I say at the outset that the Labour Party does not support tax avoidance. We think that there is too much tax avoidance around the world and in New Zealand. It is concentrated amongst the wealthiest. Some of that avoidance is legal through tax loopholes like the absence of a capital gains tax in New Zealand which of course is the largest gaping hole in our tax affairs and means that middle-income groups pay higher rates of overall taxation on their income and spending than higher-income people do because middle-income people spend most of their income. Their economic income is normally in the form of taxable income and is taxed under the Income Tax Act their spending is captured by GST and their savings are not as high as higher-income people who also have the benefit of avoiding tax on irregular capital income payments which we know are disproportionately received by the wealthiest in society. If there is a glaring omission in this bill it is to curb that hole in our tax system which should be curbed for both reasons of fairness and reasons of economic efficiency.It is no coincidence the OECD the IMF the Reserve Bank and Treasury all in their own way say that this tax bias that we have at the moment which shields some forms of economic income from being taxed even though they are economic income relied upon by the recipients—all of those agencies say that curbing that hole is one of the best things that could be done for the strength of the New Zealand economy so that firstly we would have people paying their fair share of tax so other people do not have to pay it for them and secondly we would have a stronger economy because we would have investment going into the productive parts of our economy rather than disproportionately into speculation on land-based assets.The Prime Minister’s plaintive cries that we already have a capital gains tax are of course nonsense. They are seen by the vast majority of the public to be nonsense. What is true is that there are some categories of transactions involving land that are tantamount to trading in land or trading in changes in the value of land occasioned by changes in planning status for example which cause those transactions to be treated as income. It is not a capital gains tax; it is a tax on income-related activities for people who are traders.David Bennett: Higher tax rate too.Hon DAVID PARKER: What is that?David Bennett: It’s actually a higher tax rate if it’s income and not capital gains isn’t it?Hon DAVID PARKER: Well that is true. When it is called income they pay tax as income rather than as a capital gain but only a very small fraction of capital returns are taxed in that matter. Indeed when they are they are not being taxed on a capital account; they are being taxed on an income account. So that is one example and it is probably the most egregious example of tax avoidance in New Zealand—that people can classify certain types of income in a way that our economic income—David Bennett: Why don’t you answer the question David?Hon DAVID PARKER: Actually I did not hear the question otherwise I would have an answer to it. The member can take a call and explain to New Zealand why it is fair that the richest people in New Zealand do not pay as high a rate of tax on their overall economic income as middle-class taxpayers who cannot take advantage of some of those tax loopholes.In respect of international tax avoidance there are people who hide income from their home jurisdiction by failing to disclose it. America has got an enormous budget deficit at the moment unlike New Zealand. Unlike New Zealand they did not have a progressive Government during the 2000s. It is notable that the big difference between the tax policy of America and that of New Zealand is that in the 2000s New Zealand had a progressive Labour Government. It ran enormous Budget surpluses and therefore did not have this huge debt overhanging it at the time of the global financial crisis and did not have to cut back spending in a way that caused the downward spiral in the tax take that we have seen occur in places like the United States and parts of Europe.As a consequence the New Zealand Government on the back of those surpluses of low debt and low unemployment it has inherited has not had the same need to curb Government expenditure in the same way as had happened overseas and it has been able to get back to surplus in 6 years which is a good thing. But in the United States they are not in that happy position because they had a Government that did exactly as the National Opposition said the Labour Government should have done: they had a Government that during those times of plenty still ran deficits and ran up Government debt. So it is now scrambling around trying to enforce every little last bit of tax that it can—except from the wealthy actually in the case of the United States as well. The United States Government is trying to crack down on some of this international tax avoidance including from its own citizens who might live in a country like New Zealand but be due to pay tax in America.This is where it gets quite complex because the American system of taxation is different from virtually any other country in the world in that it taxes on the basis of citizenship rather than where people live and earn their money. In New Zealand if you are a New Zealand resident while you are here you pay tax. If you move overseas even if you remain a citizen and if you become a resident of some overseas country and that is where you are living and you are not back here frequently then you actually do not have to pay tax in New Zealand.Under the American system you are taxed for ever if you are still a citizen. That causes problems for people who have also become New Zealand residents left the United States come to New Zealand are living New Zealand lives have not renounced their US citizenship—and even if they did they would occur enormous tax penalties when they did—and are really in a cleft stick. They are worried that the Foreign Account Tax Compliance Act will effectively mean that the American Internal Revenue Service will come to them while they are living in New Zealand and even though they have paid New Zealand taxes in accordance with New Zealand law the Americans can theoretically say that they want them to pay a second lot of tax in America. That ofcourse is patently unfair but that unfairness arises not from New Zealand’s tax laws; that arises from the American tax laws.As has already been pointed out by Paul Goldsmith—and I agree with him on this point—this legislation that we are passing through another stage today does not change that reality but it does put those citizens perhaps more at risk because that information will or may be shared with the Americans under this agreement. We were assured by the officials that it is not intended to be chasing those sorts of people but I can understand their nervousness that that might be the case in some future time.So why then is New Zealand forced into a position where we actually have to pass this legislation? Well because as other countries have found around the world if we do not effectively there will be additional taxes taken from New Zealanders who are meeting their obligations in respect of investment vehicles that have some investments in America. I do not think there would be many people in this House who think that we should be imposing those additional tax obligations on New Zealand investors for example in their KiwiSaver schemes that have investments in America. That would be unfair on them.As a consequence we do think it is necessary to sign these agreements. However we did ask for a simple amendment to the legislation. We will have in Committee stage an amendment to this effect. There should be in the empowering legislation an obligation that these agreements are reciprocal. At the moment this legislation has got no principles setting out the limits to the discretion of the Inland Revenue Department to enter into these intergovernmental agreements. We think that the discretion of the revenue department should be limited so that the agreements have got to be reciprocal. It would be good if we could put some of these other protections in.As well as that we thought we should be using this point of leverage to try to exert some pressure on America in respect of companies like Google and Facebook which are not paying their fair share of tax in New Zealand on their New Zealand - derived revenue. We thought this opportunity should be used to try to fix that wrong as well. The Government in respect of both of those suggested amendments said no.GARETH HUGHES (Green): Kia ora Mr Assistant Speaker. Ngā mihi nui ki a koutou. Kia ora. I rise to oppose the Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill. I am opposing this bill because this is a fossil fuel subsidy bill—plain and simple. That is what this bill is about. It is an omnibus bill. There are some parts in it that we can support like the clothing allowance—non-controversial changes such as that. But there are some other parts of it that we are concerned about such as the Foreign Account Tax Compliance Act provisions where the bill is deeply surprising. It is quite novel to be agreeing in legislation to an international treaty system that is yet to have its negotiations concluded. I share the Labour Party’s minority view on that. We will be opposing this bill and we will be opposing this bill because of the $6 million in tax breaks for the oil industry.This is one of the wealthiest industries in the world and it is one of the last industries in the world that we should be subsidising with New Zealand taxpayer dollars and incentivising with tax breaks. What this bill does is extend the previous Labour Government’s non-resident offshore oil rig and seismic vessel tax exemptions.Our vision in the Green Party is for a clean-energy economy—a clean-energy economy that delivers greater jobs greater profits greater taxes greater prosperity. This is the recipe for a richer New Zealand. The recipe for New Zealand’s economy is not to entice theAnadarkos thePetrobrases the TAG Oils and members of the oil industry from around the world down to our shores risking our environment and risking the economy that depends on it. That is not a recipe for a richer New Zealand. It is not even a credible economic strategy. It is simply hoping that someone finds something downthere and that they do not leave too much of a mess as they get it out. It is symptomatic of the entire economic strategy of the National Government which is predicated simply on raw logs milk powder and hoping for oil.What we saw in the Budget was that Bill English wants to focus on just the fiscal surplus. What we did see was a surplus of poverty. We saw that 290000 Kiwi kids or 30 percent are growing up in poverty. There was a surplus of poverty and a surplus of inequality but also a deficit. It was a deficit of ideas a deficit of innovation looking towards the future. A progressive Government would look to the future to a richer New Zealand that builds on our strengths which is our current clean-energy expertise and would take it forward. So we are not supporting tax breaks for the fossil fuel industry—the $6 million that officials advised—because we listen to the scientists. We listen to the scientists on the Intergovernmental Panel on Climate Change who have recently warned us in dire tones of the consequences of increased fossil fuel emissions going into the atmosphere. Scientists down in Antarctica have warned us of the potentially irreversible collapse of the West Antarctica ice sheet. If these facts are not going to persuade the Government to stop playing fast and loose with taxpayer dollars to promote a dirty industry that warms our planet and risks our livelihood and literally the lives of tens of hundreds of thousands of people around the world you have to ask what will.The Government should be listening to the International Energy Agency and to UN head ChristianaFigueres who urge Governments like New Zealand’s to leave two-thirds of the fossil fuels in the ground. Obviously we are still an oil-dependent economy. We still need oil to get around for our industrial activity. What we need to be doing is transitioning to a clean economy urgently. What we know is that these oil reserves which Minister Heatley was spending a lot of his time trying to uncover in New Zealand’s waters were assets—or so-called assets—that we could not afford to burn. The scientists are saying that we cannot afford to burn two-thirds of them if we want a stable climate for our kids to grow up in. So these are toxic assets. It is a carbon bubble that the Green Party would avoid because we would focus on the clean-energy opportunities for New Zealand.As well as the $6 million in subsidies contained in this bill which is soon to become an Act there is the $46 million in tax breaks going to the oil industry which the World Wide Fund for Nature calculated last financial year—$46 million of taxpayers’ money going to the oil industry to promote more oil drilling and to promote more fossil fuels. There is the $25 million in free seismic survey information which is a direct subsidy to this industry. You have got to question the motives of this Government when it is subsidising the oil industry. There are handouts forTīwai Point and laws for Anadarko.I would rather be focusing on the real New Zealanders who are struggling with the high cost of living the high cost of housing and the low wages compared with other developed countries. You know we work some of the longest hours for some of the smallest wages and pay one of the highest costs of living in the world. There are real people in real houses and real families who need support but sadly this Government seems to be more focused on theAnadarkos thePetrobrases and theTīwai Points. It is time to focus on real New Zealanders.This Government will change the law under urgency. It will spend tens of millions of taxpayer dollars to promote oil drilling. What would the Green Party do? Well the Green Party would promote a clean-energy economy. We would get us to 100 percent electricity faster than the other parties would get us to 90 percent. We would transition our oil industry. We are opposed to deep-sea oil drilling. Onshore oil drilling which does not carry the same risk profile we would transition away. It is a good thing because from what we know from the data there are four times more jobs in cleanenergy than in fossil fuel. We would build a clean-energy export economy. This is something that Investment New Zealand says could be a $150 billion export opportunity by the 2030s. Through the Green Investment Bank which we have recently announced we could empower Kiwi businesses to be exporting the technology the expertise and the intellectual property selling the world what it needs and selling the world what it wants. At the moment when you subsidise the oil industry and you send those economic incentives we are looking to last century’s economy—an economy that the science now says cannot go on and on for ever. What we have seen globally is a tipping point. In 2001 according to Bloomberg more net capital investment was invested in clean energy than in all the fossil fuels and all the nuclear plants for electricity. The world is looking in one direction but sadly the National Government is looking in the other direction.We need to embrace the clean-energy export economy. That is what New Zealanders want. It is more secure and more resilient it is about energy freedom and it is about new jobs but it is also about a richer New Zealand. PricewaterhouseCoopers estimates that we have a $7 billion to $22 billion annual economic opportunity from clean energy. So we would promote it through Government leadership through an updated energy strategy. We would promote new businesses through the Green Investment Bank. We would have a strong and effective carbon price signal. We would update and modernise our laws for a climate reality world. We would work with the wind energy sector the wave energy sector and the biofuels sector to support them with research and development.This is the richer future for New Zealand. My vision is not a handful of mostly foreign people working on these oil rigs risking our jobs albeit with taxpayer subsidies and taxpayer-funded tax breaks to entice them down here. My vision for the future of New Zealand is thousands of Kiwis installing insulation under people’s roofs. As we know that has a 4:1 benefit. My vision is installing insulation under people’s roofs and putting solar panels on the top. It is exporting clean-energy technology which the world wants needs and is paying top dollar for. That is the recipe for a rich New Zealand not subsidising the fossil fuel industry with more tax breaks. Kia ora.SIMON O’CONNOR (National—Tāmaki): I am very pleased to rise to speak on the Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill and not so much on the green economy which we have heard about from Gareth Hughes the last speaker—CaptainPicard I believe if I looked correctly in the newspaper this morning at theStar Trek convention.I wanted to raise a couple of points particularly from the Greens. I am sad that they are opposing this bill. Any tax bill is obviously designed to make the economy work more efficiently and to provide the Crown with an ability to pay for what it needs. The irony that we are seeing from the Greens is that they want to spend more and more money on we are hearing now a gold-plated insulation system but they are not actually interested in a bill like this which provides tax revenue. We also heard what I think is a massive contradiction around the opposition to subsidies. Those Green members see the desire to have oil rig exemptions for foreign seismic vessels and the like which was introduced by a Labour Government and happily rolled over by the National Government as a subsidy but then they continue on to talk about subsidies for biofuel subsidies for other clean green smart technologies—of course they are never really specific about what they are—and also subsidies that are effectively in the nature of the Green Investment Bank that they talk about.On the other side we heard from Labour members about the continuing disquiet around Facebook and Google. As my colleague Paul Goldsmith pointed out they are not quite talking about the ban on those sites that they had initially suggested. We heardfrom another speaker from Labour a little earlier that the key to economic growth in New Zealand is to create more taxes such as a capital gains tax. It does not make sense.This bill does make sense. It is an omnibus bill and it is addressing a number of issues in the economy—a number of issues that have been fed back to us by employees and by employers of course. It is addressing areas around employee allowances first and foremost—those elements from travel to meals—and seeking clarification there. This is a party about removing red tape and providing clarity. The bill is also looking as we have heard about at the Foreign Account Tax Compliance Act in America. The thing I would add there of course is that if you are a citizen of a country or a member of a club you play by those rules be you a New Zealander a Canadian an Australian or an American. That is really quite critical so we are putting those mechanisms in place. We are also working around the whole thin capitalisation approach where at the moment people are able to load debt against their investments. We have looked at that and said that that is not appropriate. This is a wide-ranging bill as you would expect with an omnibus bill. I support it in its second reading and look forward to the Committee of the whole House.ANDREW WILLIAMS (NZ First): On behalf of New Zealand First I take a call on the Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill. It is a great pleasure to follow on from Mr Simon O’Connor talking about clubs—the capital club and the corporate club but in the Government’s case it is the Cabinet club—and tax concessions. It would be very interesting to know what sort of tax deductibility there is for donations to the Cabinet club but I am sure they are all tax deductible—Hon Dr Nick Smith: Don’t be jealous. Just because you can’t raise funds.ANDREW WILLIAMS: Indeed. I am sure they are very tax deductible and significant.In terms of this particular bill New Zealand First is supporting it because we are a party that stands for simplifying the taxation system improving on it and streamlining tax matters. We have always said in New Zealand First that there is a need for a total overhaul of the taxation system to try to get more streamlining and to cut out a lot of the red tape that is in there. In this particular case in terms of the employee allowances we support the moves to improve the definition of “accommodation” so that accommodation provided in conjunction with employment would not be subject to tax and that reimbursements are much clearer in terms of accommodation and also to reduce administration costs revolving around employees being accommodated and taking part in work activities. It also refers to meal payments and light refreshments for a work-related activity or event. Again that simplifies things and reduces the amount of red tape around meal payments.This bill will also allow deductions for expenditure on failed or aborted applications for resource consents patents and plant variety rights. Again it is sensible to do that. Some of these situations with patents are long-extended and very risky ventures. It is the same with resource consents. They should rightly have definitions for expenditure if they fail.Also in terms of charities this bill provides for charities that cease to exist or are deregistered. For them it provides for the calculation of tax on accumulated assets from the day the entity is removed from the Charities Register. Again in this situation there can quite often be a situation where what is termed a charity no longer operates but may have built up a sizable asset base and again whether that should be determined in terms of its tax liabilities comes through in this particular bill and rightfully so. We would not want people to miss out on paying their rightful tax simply because they move from a charity into another entity but then try to get away on the basis that it was a charity in the first place.This bill also provides for community housing entities providing affordable housing—that they would be eligible for tax exemption and donee organisation status. Again if we are to support affordable housing and encourage community housing to be developed there is great merit in providing certain levels of tax exemption there. There is no point in the Government supporting community housing—the taxpayers of New Zealand supporting provision for affordable housing—to then turn round and tax that housing to add costs to it when in actual fact we are all trying to deliver it at the lowest possible price.The thin capitalisation rules in this bill will also ensure that foreign-owned companies investing in New Zealand will pay their fair share of tax. They cannot allow excessive gearing of their companies’ New Zealand investments to load their debt in New Zealand in order to limit their tax exposure here. Again this is sensible. We do not want international interests to use this as a soft-touch country to come to load up their debt buy into organisations buy into companies here in New Zealand leverage it to the maximum take maximum tax credits from it and then depart the country at a later date leaving a great tax loss to this country. That will not be permitted under this bill.The other two parts confirm the tax rates for the year. They confirm the annual rates of income tax for the 2014-15 year. It is a very standard administrative area of tax. One concern that New Zealand First has always expressed however is about the 2010 tax cuts that the National Government brought in whereby the very wealthiest top 10 percent of New Zealanders got sizable tax cuts. In the case of the Prime Minister it was something in the order of a $1000-a-week tax reduction. In the case of the then chief executive of Telecom it was $5000 a week in tax cuts that that individual was given on top of his multimillion-dollar salary. That is an area where New Zealand First disagrees with what the Government has done. However in this bill this is confirming the current year’s tax rates and we have to support that in order to ensure that there is continuity of a sound and stable tax system.The last bit of this is the Foreign Account Tax Compliance Act that the United States is bringing in on 1 July 2014—very soon—which basically is a worldwide effort to combat international tax evasion. We have been advised and information has been provided that New Zealand is part of a global signatory to this to ensure that there is tax compliance worldwide and that the New Zealand Inland Revenue Department will be able to hold records for US citizens who are resident here and domiciled here or who are active in business here and that they in turn can provide that information through to the Inland Revenue Service in the United States in situations where they are required to ensure that the appropriate taxes have been paid.It is very much an administrative bill. For everyone tax is something in your life. Tax and death are two of the things that you must have in your life. Two of the things you cannot get away from are tax and death. In that respect New Zealand First will be supporting this bill.DAVID BENNETT (National—Hamilton East): It is good to see that last party New Zealand First supporting the Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill.Andrew Williams: We’re such a sensible party.DAVID BENNETT: Well not really. When we come and have a look at the speech of David Parker it is interesting that one thing he was talking about was the capital gains tax. I asked him a question about what the treatment of capital gains would be under his tax policy for those people who are now paying capital gains tax as investors in property. He dismissed the Prime Minister’s arguments that there already is a capital gains tax on those who buy and sell property generally within that 10-year period. They would be seen as a trader and therefore they would generally pay tax. Mr Parker wasdeliberately silent in this House and would not answer that question. I ask Labour members who will be speaking later on this bill to actually answer the questions so that the New Zealand public can know what will happen to those traders. Will they be paying tax under the capital gains tax rate? Or will they be paying tax as they do now on a revenue-based amount? Because all capital gains taxes around the world generally are at a lower rate than an income tax rate.If you look at the Australian rate for example they take off a value for the incremental increase in inflation. Under the Labour policy those people trading in properties would actually potentially be paying less tax. They would be paying less tax than those people pay who are investing in properties and reselling for the sake of that. That goes against what they are saying they want a capital gains tax for. I want someone from the Labour Party to actually answer their tax policy and tell us what rate people will be paying if under a capital gains tax they were buying or selling property. At the moment they will be paying more than under a Labour approach. Thank you.ANDREW LITTLE (Labour): In conjunction with my colleague Carol Beaumont who was shifting seats at the time I was called I want to record once again that we support the Taxation (Annual Rates Employee Allowances and Remedial Matters) Billbecause it does make some important clarifications in a number of tax areas and that is good. The principles of tax law and tax administration are that the tax payable and the tax system should be as simple as possible should be accessible as possible in terms of understanding it and should be easy to administer both for workers who are taxed and for their employers or the tax collectors who are administering their tax affairs in terms of collection before imparting the tax collected to the Inland Revenue Department. So the objectives of the legislation are perfectly sensible and normal.I want to focus my comments on the employment-related aspects of the bill which cover the taxation—or non-taxation—of accommodation payments meal allowances and clothing allowances. We have had a good tradition in this country for many years of costs incurred by workers or by employers on behalf of workers so that workers can execute their duties as an employee and carry out their work normally winning some sort of tax deductibility because they are costs incurred in going about earning an income by that worker but nevertheless are costs that need to be incurred in order to do so. They are costs that should not be incurred by the worker and indeed from the employer’s point of view they have a number of business expenses but the expenses incurred—for example in providing accommodation providing a meal or providing clothing—are costs that would otherwise be a burden to the business and may in fact be an impediment to the generation of that extra employment. So there are good policy reasons as to why there have been tax deductions.I have to say that it is somewhat surprising that in this day and age this House finds itself in the position of passing legislation that is so prescriptive and so specific on these particular allowances when I think that it has been commonly understood for a long time that expenses incurred in the carrying out of a worker’s duties are typically tax deductible. When we look at the provisions in this bill in relation to accommodation expenses they make perfect sense where a worker has to travel away from their normal point of domicile to another place in order to carry out their duties. We would expect that in relation to the Christchurch rebuild just as we have seen in so many other industries over so many years. The extractive industries particularly oil and gas are classic examples where people typically do travel long distances to do their work. They will do a 2 or 3-week hitch they will finish their duties and tasks and they will then go away for 2 or 3 weeks before they resume their work. Tax deductibility encourages or promotes mobility of the workforce and flexibility of deployment particularly for those tasks and occupations that are specialist in nature and where the workforce is not easy totrain up and where it not easy to create skilled labour in a jiffy. So these sorts of allowances perform a very important task when it comes to the workforce and to mobility and flexibility.When it comes to the meal allowance provisions the bill provides that certain work-related meals will be tax deductible will not be taxable and will not be subject to fringe benefit tax. That is right and proper. That is the appropriate thing to do. Either paying a meal allowance or paying a reimbursement for a meal is not to be treated as income in the hands of the worker and therefore is payable tax-free. The legislation does not make it clear but it is possible of course that a meal eaten by a National MP at a Cabinet club could of course come under this provision. It may well be that a meal that is eaten enjoyed or sucked up by a National MP at the Northern Club the Wellesley Club or the Wellington Club falls within their duties. Let us face it—if the recent media accounts are anything to go by supping at the table of the Northern Club the Wellesley Club and the Wellington Club seems to be a regular undertaking by National MPs. That may also be tax deductible or at least members will find that a payment that is a reimbursement of that meal by Parliamentary Service or more likely the head honchos in the head office of the National Party will be able to be made tax-free. I am sure there will be National MPs who will be breathing a sigh of relief perhaps that this now very prescriptive provision will ease the burden that they are under of having to go and have all these meals and no doubt talk about great matters of policy immigration or otherwise.I think the interesting thing about all this however is that notwithstanding this provision for the tax-free nature of meal allowances and reimbursing payments for meals it runs counter to the other policy drive that this Government is making in its industrial legislation—and the honourable member David Bennett knows all about this because he is ramming it through at the moment—and that is the removal of scheduled meal breaks which have been a standard provision in employment agreements from time immemorial. There is an inconsistency in that on the one hand we have legislation that is about eliminating meal breaks altogether but on the other hand for those lucky enough to get a meal away from home they can get it reimbursed tax-free.The third aspect of the bill that I want to comment on is the payments for distinctive work clothing. Clause 23 covers off this particular area. It is a new section in the income tax legislation new section CW 17CC. The sections in the income tax legislation are now taking on the appearance of a registration number plate for a vehicle but anyway in new section CW 17CC there is a new provision providing for the tax-free provision of either allowances or clothing that is distinctive in nature. Presumably a high-visibility vest would be a distinctive item of clothing for those working in hazardous industries. It is just as well that the provision of a high-visibility vest would be tax-free and will not incur any tax burden because of course the health and safety legislation that this Government is passing requires—in a mandatory provision—employers to provide such clothing. So there at least is some consistency. Compare that with the meal allowance provision where this Government is busily abolishing meal breaks. At least in relation to the clothing provisions of this bill there is some consistency.The other thing that this bill does of course—at least in the form that it has come back to the House in from the Finance and Expenditure Committee—is that the insidious attempt to remove the allowance that plain-clothes police officers have traditionally had the benefit of has now at least been removed from the bill. Police officers—at least those carrying out plain-clothes work—can breathe easy at night knowing that they will continue to be supported in their very difficult and stressful roles and that they will not incur an extra burden just because they happen to getreimbursed or receive an extra allowance to provide for clothes outside the uniform that they would otherwise be provided. I make those interesting observations. It is good to have legislation that tidies these things up. Tax legislation should be simple. It should make our tax law accessible sensible and consistent. Ideally it would be consistent with other Government policy—and in this case there is at least one allowance that is not—but notwithstanding that we will support the bill.JAMI-LEE ROSS (National—Botany): I wish to speak only very briefly in support of the Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill. I want to touch on a couple of points. Firstly I just want to make the observation that it is a shame to see that even in a relatively benign tax bill like this Andrew Williams sought to go down that muckraking path talking about Cabinet clubs and the like. You would think that after the news media coverage on Television One and TV3 on Sunday night those members would have got the message that being nasty and muckraking is not going to help them but in the race to 20 percent they can keep doing what they want if they want.I just want to touch briefly on two parts of this bill. Firstly in relation to the accommodation allowance rules for employees that are being changed in this particular bill we did hear some submissions around boarding schools and the way in which they should treat student accommodation. I just want to put on the record the fact that the Finance and Expenditure Committee did consider those matters in quite a bit of detail. The question was around whether in a boarding school a matron’s flat of say 50 square metres sitting underneath the boarding house with lots of boys running around the boarding house in the middle of the night is worth the same amount of money as a 50 square metre piece of property down the road. The answer is probably no so the boarding schools had some issues around how they should value that piece of property within their boarding school. The committee did consider a range of options that the boarding schools wanted including at one end of the spectrum a full exemption from having to pay tax on that accommodation. Ultimately though the committee came down to the point of view that the Inland Revenue Department could issue some very detailed and helpful operational guidance to those taxpayers. We think that that will be a method by which those boarding schools and any other taxpayers in a similar situation will have some good guidance to allow them to properly assess the value of their property.The second point I also want to make briefly is around the Foreign Account Tax Compliance Act in the United States. It is legislation that is very complex and has led to a lot of concern from New Zealanders who also happen to be US residents for tax purposes. The committee did give a lot of consideration to this issue as well. Ultimately though that legislation is legislation in the United States. There is a requirement for those within New Zealand to comply with their tax obligations in the United States. If we were to do nothing as a country the risk would be that institutions that have operations in the United States would be subject to a 30 percent withholding tax if there were not appropriate agreements put in place between New Zealand and the United States. So the committee came to the point of view that it was appropriate that we enable the financial institutions within New Zealand to have agreements in place that will enable them to transmit the data required by the United States. People will consent to that data being transferred by way of agreements with their own financial institution. The risk to New Zealand taxpayers in doing nothing is very high and that is why the committee could not completely ignore the issue.I commend this bill to the House. There are some good legislative changes in this bill that will be helpful for New Zealanders.RICHARD PROSSER (NZ First): I raise a point of order Mr Speaker. I did not want to interrupt the previous member Jami-Lee Ross in the full flow of his speech but at the beginning he made reference to Andrew Williams. I wonder whether he might like to correct that because I think that Mr Williams has spoken in support of the bill and was not muckraking. Mr Ross may well have got his Andrews mixed up.Mr DEPUTY SPEAKER: That is actually a debating point; it is not something you raise as a point of order. If the member misheard or misunderstood that is not an occasion for a point of order. The next call is a split call—Darien Fenton.DARIEN FENTON (Labour): It is a pleasure to take a call in the second reading of the Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill. In listening to the debate about this bill one of the things that you hear about so often in this House is the difference of treatment where one set of rules for one set of people is completely different to another. It usually is to do with how much power you have either as a worker or as a taxpayer. The disappointing thing in looking at this bill in the first instance is that it not only changes a whole lot of rules that have been implemented under the former Minister of Revenue Peter Dunne such as the tax on plain-clothes workers and the accommodation tax on earthquake rebuild workers but it does nothing to address the issue of tax avoidance in this country.Last year the Inland Revenue Department found that 107 out of 161 high-wealth individuals who own or control more than $50 million worth of assets declared that their personal income in the last financial year was less than $70000. The starting point for the top tax bracket is 33c in the dollar. That is just disgraceful. These multimillionaires use a variety of 6800 tax-planning devices such as companies trusts and overseas bank accounts to avoid paying tax. One had a network of 197 entities. Although this bill is important and I do believe that the Finance and Expenditure Committee has done a good job on tidying it up it is disappointing to see that once again we have a tax bill in this House that does nothing—nothing—to address the biggest gap we have in our tax system which is tax avoidance from those who are already very well off and who do not need to be avoiding tax. In fact they should be paying their fair share. That is what tax is about. It is about people paying their fair share. So we support this bill because we support a fair tax system and we support tidying up rules that have been messy and confusing for people—not only employers but also employees.I do note the comment in the Labour minority report though about the rushed process. Once again I am sorry to have to repeat myself because I seem to say this quite a lot in the House but this is a very complex bill which has pages and pages of addenda to it. The process through the select committee was over the Christmas period which made it very difficult to address the issues. I again congratulate the select committee members who worked hard to get that done but I also congratulate the submitters who had to gather their thoughts and interrupt their Christmas and New Year to help the Government out because somehow somewhere along the way the process was mucked up.I wanted to also talk about some of the employee entitlements. Jami-Lee Ross said—well he was referring to Andrew Little I think when he talked about muckraking. I mean the member cannot help himself if he forgets. He has got such a stressful life. He does forget people’s names from time to time. It is not muckraking to talk about the differences in treatment of one piece of legislation and another. I cannot help but be struck by the fact that although this piece of legislation deals with tax breaks on mayoral entitlements we have another piece of legislation in this House that actually plans to reduce the rights to meals and rest breaks of every other worker in the country.Similarly with the accommodation treatment there is a range of situations that have been described. The select committee has extended that. It applies to mobile workers and others but then there are farmers and migrant workers working on farms. I particularly want to mention the Recognised Seasonal Employer scheme. The Recognised Seasonal Employer scheme was started by Labour. We depended on those migrant workers to come here and work to pick our fruit. But it was this Government that actually reduced the accommodation allowance for those workers. It used to be the minimum wage plus the accommodation allowance; it is now the minimum wage including the accommodation allowance. What about them? Then there are the clothing allowances. I had a call from someone who talked about how he works in the snow for a car rental company how he has to wash cars outside in the pouring rain and how he gets no clothing allowance and no clothing entitlement. It is not fair. I would like to see some balance in future legislation.JULIE ANNE GENTER (Green): I rise to take a short call on behalf of the Green Party on the Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill. I will speak about two things in this bill that we have grave concerns about and they are the primary reasons why we will not be supporting this bill.I have to start by correcting one of the previous speakers National Party member Simon O’Connor who said earlier that the Green Party was proposing a green bank that would involve subsidies to cleantech andgreentech. I think that Mr O’Connor is unclear on our actual policy because the Green Investment Bank—which the Green Party proposed and of course similar sorts of banks are operating successfully in many other jurisdictions—would be entirely on commercial terms. It would be a for-profit bank which would also help sustainable businesses to have access to capital by filling a niche in that area of lack. So I think that Mr O’Connor was mistaken.Of course that is the sort of smart green idea that we need unlike what is happening in this bill which is that the National Government is extending tax breaks for oil companies to come here and explore for oil. In 2014 that is the last thing that we should be giving companies tax breaks for because the world simply cannot afford to burn all of the fossil fuel reserves that oil companies already have on their books. We have got more coal and more oil that have already been found than we can afford to burn and still have a stable climate. So it seems strange that the Government will be encouraging and facilitating more fossil fuel exploration in New Zealand when in fact it is exactly the right time to be incentivising smart green technology which is going to enable our children and grandchildren to be prosperous for many decades to come.The other concern we have with this bill of course is the provision around the Foreign Account Tax Compliance Act—that is the foreign account information-sharing agreement. I am a US citizen myself—I am a dual citizen—and there are about 70000 New Zealanders who have US citizenship and we are in a very strange situation where the United States is one of the only countries in the world to tax on the basis of citizenship rather than on the basis of residency. New Zealand citizens who live overseas do not have a requirement to file taxes here in New Zealand but Unites States citizens even people who were born in the United States and never lived there their entire lives but happen to hold citizenship may not be aware that they have this legal requirement. What the United States is doing is exercising its economic power and acting unilaterally to force other countries to comply with new laws that it has around disclosure of foreign bank accounts.The Green Party is very much in favour of global moves to ensure transparency and the exchange of information for the purposes of tax. We want to see a crackdown on tax avoidance globally. That is a good thing. But unfortunately what is happening here isthat the United States is acting on its own and it is going out and forcing other countries to comply with its laws. It is not really being a team player.The OECD has this global forum which we in New Zealand and 121 other countries have been party to and that seems to us the appropriate way to go about information sharing because all the countries are cooperating together rather than just the United States forcing New Zealand and many other countries to provide information on people living in New Zealand who legally own bank accounts.It is interesting also I note that one of the members who spoke previously Mr O’Connor said something like “All tax legislation is reducing compliance costs and increasing efficiency.” In this particular case I am pretty sure it is going to be increasing compliance costs because our Inland Revenue Department is going to have to suddenly collect all this additional information on whether citizens or residents of New Zealand are citizens of the United States and all of the banks here in the New Zealand are going to have to do the same. If anything I think this is going to increase some compliance costs.We do have some concerns about privacy: the privacy of New Zealand residents and citizens who are living here having their information shared with the United States Internal Revenue Service and the fact that this is not really an agreement where we can be certain that New Zealand is getting anything in return for complying with the United States simply going around wielding its weight. But that seems pretty typical of this National Government. The US says “Jump.” and John Key says “How high?”.JACQUI DEAN (National—Waitaki): I am happy to take a call on the second reading of the Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill and I commend the bill to the House.A party vote was called for on the questionThat the Taxation (Annual Rates Employee Allowances and Remedial Matters) Bill be now read a second time.Ayes105New Zealand National 59; New Zealand Labour 34; New Zealand First 7; Māori Party 3; ACT New Zealand 1; United Future 1.Noes15Green Party 14; Mana 1.Bill read a second time.Food BillThird ReadingHon NIKKI KAYE (Minister for Food Safety): I moveThat the Food Bill be now read a third time. I am very pleased to stand here and speak on the third reading of the Food Bill. This bill has been a long time coming. For over 10 years it has been in development and its passing represents a very significant reform of New Zealand’s law. We cannot underestimate what this bill means to New Zealand from an economic perspective. We know that there are thousands of people in New Zealand who are employed in the food sector—in fact 18 percent of our working population. We know that many livelihoods and thousands of businesses rely on our food exports. In fact more than half of our exports are in food. We also know that there are many overseas visitors who come here and want to experience our food and beverage and that is why this bill is incredibly important for New Zealand.Given the importance of this bill to the food sector in New Zealand it is important to realise that the broad agreement in the previous debates about the need to replace the1981 Food Act has been very clear. As has been acknowledged the prescriptive one-size-fits-all approach of the current regime causes unnecessary cost to food businesses and also fails to ensure that all food safety risks are properly managed. There have been estimates that this bill could reduce compliance costs by over $40 million and that is a great thing for New Zealand. The need to move to a more flexible and risk-based approach to food safety was also recognised in last year’s report from the inquiry into the whey protein concentrate incident.Most New Zealanders understand that the way a food safety system works is that when you are exporting hundreds and millions of food products there will always be error. But what matters is that your food safety system is strong and that you can manage a decent response to that error. That is why it was pleasing that the inquiry found that New Zealand’s regulatory system for dairy food safety is considered to be among the best in the world. It did recommend though that there were areas where we should strengthen our food safety system. That is why this Government is incredibly proud to have developed a number of initiatives including progress on the New Zealand Food Safety Science and Research Centre but also in setting up a New Zealand Food Safety and Assurance Advisory Council. We have also moved on recall provisions which are in this bill. The need for new legislation is therefore widely accepted and this is incredibly positive.I do want to acknowledge that there were concerns during the passage of this bill through this House and some of those concerns related to community fund-raisers. So what I have been very clear about since I have become Minister for Food Safety is that we need to strike an appropriate balance to achieve good food safety while also ensuring that New Zealanders can get on and do what they have always done like community sausage sizzles.There are also of course some differences between sides of this House in the debate. I want to acknowledge the discussion that we had in terms of country-of-origin labelling. As I have said the House of Representatives in Australia is conducting an inquiry in this area. Although I do not have confidence in a comprehensive mandatory country-of-origin labelling scheme I think there is more work to do in this area and I do want to acknowledge that we have about 70 percent coverage in the area of voluntary country-of-origin labelling with regard to single-ingredient foods.The passing of the Food Bill is not the end of the process of law reform. There is a significant programme of work ahead to ensure that the bill is properly implemented. This will include developing and consulting on a package of regulations and other legislative instruments that will refine the final shape of the regulatory regime. The Ministry for Primary Industries has been working towards the implementation of this bill for some time as members across this House know.Finally I would like to close by again acknowledging not only the importance of this bill to New Zealand from an economic perspective but also that this is a modern risk-based framework that will reduce compliance costs in New Zealand. It will also enable us to improve our food safety in New Zealand whether that is through the greater intelligence that will come as a result of our system or whether that is through the on-the-spot fines that we will be able to give in areas like labelling.Also there are provisions in this bill that show our compassion as a nation. There are provisions in this bill that enable us to have more companies that are able to donate food in good faith and I do believe that those provisions—the good Samaritan clause—will be very helpful for some of the food banks of New Zealand.The process of reform has spanned two administrations. I acknowledge the contributions particularly of the Hon Annette King and the Hon Kate Wilkinson. The bill has been considered twice by the Primary Production Committee and I would reallylike to thank Shane Ardern in particular for his excellent chairing of this committee and the Opposition members of the committee for their constructive approach. I do want to thank all Opposition members for the work that they have done on this bill.I would also like to thank the many officials who have worked over the years on this legislation. I am not going to name all of them. I recognise that I will leave people out but can I acknowledge HilaryEade Karen Adair Carole Inkster as well and HowardStaveley. I have definitely missed people out and I apologise at this point but thank you. I understand the huge work that many public servants do in this country. Some will never be on the front page of the paper but they work behind the scenes to do a great job on legislation.I would like to acknowledge as well the many industry groups and other people who contributed to the development of this legislation. It is going to be a great piece of legislation for New Zealand. After many years of its development I commend this bill to the House.Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman): I am pleased to follow the Minister for Food Safety and acknowledge many of the things that she has said—firstly about the thousands of people around the country who will be very pleased to see the passage of the Food Bill. It is not only large in size a bit like an elephant; its gestation period is about the same length. It is at least 10 years I guess since this was conceived in terms of the need to bring together all the pieces of legislation and to have some alignment for a country that still relies for its wealth on the production of food. Ensuring that everyone involved in every part of the supply chain knows what they have to do—and that is produce process distribute handle and sell safe food—is what this country still depends upon. In spite of all our efforts to broaden the base of our economy primary production and the production of food and fibre still drive our wealth creation for the most part.The Minister pointed out the reality that we are relying on a risk-based system. Labour is supporting the legislation but we are also cautious because in 1992 a risk-based system was introduced for health and safety. Without proper monitoring proper resourcing and proper policing of this legislation we could very well end up with some major mistakes that we as a country cannot afford to make. We have seen a few mistakes lately in the food safety area. They have cost us literally hundreds of millions of dollars in terms of our international reputation and the efforts to get back into the market. The dairy industry is still floundering in some areas particularly in the area of infant formula after what was an unfortunate botch-up if you will pardon the pun. So we support a risk-based regime on the basis that oversight monitoring and where necessary penalties are fairly and appropriately implemented.There were a number of issues as we worked through the bill and then the Supplementary Order Papers—issues like recall powers the power of entry and all of those things around what we deem to be low risk and high risk—for example sausage sizzles were not deemed to be high risk. The Primary Production Committee has twice of course teased through these issues and I think we did our very best to reach the right balance and ensure that we have a healthy system for producing food but one that does not cripple the good old Kiwi ways of sausage sizzles exchanging food and getting on and helping one’s neighbour as we should.The issue of country-of-origin labelling raised by the Minister herself has been a debatable point at the end of the progress of this bill. I introduced Supplementary Order Paper 440 not to do anything more than our Tasman neighbours but to do the same as them. The Minister pointed to an inquiry taking place in Australia and she implied that it is to discredit the regime that they have in Australia. There will always be the need for ongoing reviews and improvements. That does not mean to say there is no value incountry-of-origin labelling. Australia is committed to it. We should be committed to it under the Food Standards Australia New Zealand agreement but we have an exemption. We applied for an exemption to not have country-of-origin labelling.For a country that depends upon the ongoing process of producing safe and fine foods for the world’s most discerning customers the question is why we would not have country-of-origin labelling. We impose—and this bill continues with that—quite tight restrictions on people producing food to make sure that it cannot be contaminated and that it is free of any unwanted pests diseases organisms or anything that might affect people’s health. In doing so we impose a cost on those producers. The very least we can do is to give them the pride to brand their product “product of New Zealand” so they can expect and rightfully get a premium for that product. That is why we believe that country-of-origin labelling is part of a smart branding strategy for New Zealand’s products which should go to the most discerning customers in the world who are able to pay the premium that we need to keep our farmers and our producers viable.It is not easy. Around the world primary producers are either peasants or highly subsidised; in New Zealand they are not. For the good farmers horticulturalists and viticulturists in this country to make a decent return on their investments and their efforts they need to know that their efforts will be acknowledged not by some big supermarket chain that dictates where their products are sold but by customers who want New Zealand produce because it is safe and of high quality. We have missed an opportunity. Labour commits when we come into office on 21 September that we will set about introducing country-of-origin labelling in order to be alongside our Australian partners and not to give them an upper hand as we go to the world market selling produce that is very similar in some ways theirs marked “product of Australia” and ours not necessarily marked “product of New Zealand”.There were a number of issues that were in the bill and I will touch on them just briefly I guess while not wanting to relitigate them all. I think it is important to know that we as a committee went through most areas of concern.There was one issue with the purpose of the bill. Even at the latter stages we sat down and said that what we are trying to do with the bill is actually “to maintain New Zealand’s reputation as a producer and exporter of safe and suitable food.” That was not one of the objects of the original bill but time has moved on—10 years—in this area and in terms of retail supply and control through the world the dynamics have changed. Supermarkets do have more power and it is harder for producers even though they are from New Zealand with our good reputation to get out there and leverage a fair position. So we figured that and I guess committed to putting upfront the object of this new piece of legislation to endorse the production of food from the country.We also put in that “the Minister or chief executive must give the greatest priority to that of food safety and the protection of public health.” That is very very important for this legislation. It is not just about selling good food; we are concerned about public health as well.There were issues for example about the clearance of imported food—the concerns we still have around biosecurity and how the current system deals with food. Pork of course is the most topical one. We are importing almost half of the pork we consume in this country with biosecurity risks. How should those risks be addressed and how does that affect the producers in this country?As I said I spoke of the power to search and the concerns around civil rights issues with that. I do not think any one of the officials wants to charge in on any individual unfairly but it is necessary should we consider there to be a major food scare that we have the right to recall and to take action on that.The sale of food by small producers—I have talked about that previously. We need to ensure that small producers who are often at the front edge of innovation are able to get out there and sell their food in the domestic market trial their products and then maybe build to a point where they can become major exporters.Labour supports this bill. We welcome its passage finally after 10 years through the House. It did take the National Government a while to get into gear on this but it has provided an opportunity to go back and scrutinise the bill once again address issues of recall powers that were raised by the botulism issue improve the bill and pass it through this House. But finally we warn Parliament that this bill without proper oversight scrutiny and resources could fail us just as the occupation health and safety legislation did. We cannot afford for that to happen. We support the Food Bill to support the producers and to support this country.SHANE ARDERN (National—Taranaki - King Country): I rise in support of the Food Bill as well. The member who has just resumed his seat Damien O’Connor who was a substantial contributor in the Primary Production Committee raised the issue of country-of-origin labelling. This was an issue of some debate I have to suggest during the deliberations at the select committee.One of the reasons the committee on balance was not able to reach the position the member is taking was just simply because of the complexity of being able to identify the country of origin of a multi-ingredient food. In some cases where it is a single-ingredient food the manufacturer or the processor of that food can have country-of-origin labelling and of course they would because there is an advantage commercially presumably for them to do so. But imagine having a product that has multiple ingredients and that one minor ingredient in there—maybe even something that is used in the process of producing the food as opposed to an ingredient itself or a cleaning process—has a foreign or non-New Zealand - based substance in it. If the company producing the product says in its labelling that it is a product of New Zealand or of New Zealand only and subsequently it is found out that something involved in the process is not from New Zealand it could end up as a potential contaminant in the food and it potentially would be in breach of that law.On balance it is going to be interesting to see what the Australians do because they have adopted that system. They are going through a thorough inquiry right now. Once we know the outcomes of that inquiry or what they do it will be interesting to see what they actually come up with. So I do not think we are quite at the point of the simplicity that is being described where we can just have a labelling system that identifies exactly the origin of the product and can go with that.Previous speakers have spoken of the fact that this bill does update some fairly old legislation. Probably the main one would be the current Food Act 1981 which is over 30 years old. When you look at what has happened in science and technology and the processing of food and at our need to be very sophisticated I guess in that regard to be competitive in the world—and bearing in mind that this country has an economy that is very dependent on food exports as 72 percent of our tradable exports come from the primary sector and most of that is food but not all of it—then obviously having legislation that is current and able to cope with the complexity of that is essential for New Zealand’s reputation.And that is really what it is all about. This bill is about “New Zealand Inc.” It is about the reputation of New Zealand as a source of high-quality products with systems that are able to respond quickly to any type of food scare—which there will be. We have had of course the recent whey protein concentrate case which was thoroughly investigated and responded to quickly and there will be more. Those who stand up in this House and suggest that it will never happen again are kidding themselves. Weexport thousands of tonnes of protein products all able to carry different types of bacteria so at some stage in the future there will be a further food scare for New Zealand in terms of its exports. That makes it essential to be able to respond in a way that is credible internationally and is backed well and truly by a solid legislative framework. This Food Bill in my opinion moves a long way towards being able to achieve that outcome in a modern sophisticated export market.At the same time it actually frees up a lot of what would be consideredKiwiana activities that were restricted and probably if you read the finer points of the old law were in breach of the law on many occasions. These include what you and I and everyone else in Parliament would consider as just normal activities like a school calf day a marae tangi the exchange of food at various church or other fund-raising activities and even down to the way that a private residence might from time to time take in some travelling guests which probably falls slightly short of what we would deem to be a bed and breakfast but nearly achieves that goal. These would have had to have full compliance and food-handling certificates which of course would make the activities uneconomic and destroy something about what is good about New Zealand.We also saw quite a heavy submission process around what are becoming more and more common—farmers markets and the small processors of various types of food that are traded at these farmers markets. They do not have a high turnover they are not substantial businesses but they do add a certain amount of flavour and colour to what it is to be a New Zealander and what it is to be able to travel around in some of our smaller provincial towns at times and visit these various outfits. They serve up a variety of different beverages and products and foods that are all part of what we enjoy.The legislation itself the Food Bill will replace a number of Acts. There is the Food Act 1981 which I have talked about. It also replaces the Food Hygiene Regulations 1974 and the Food (Safety) Regulations 2002. It amends the Animal Products Act 1999 and the Wine Act 2003. Just by hearing that you can understand the complexity of it. It does not just mean protein foods; there is a range of other products involved.I look forward to the passage of this bill through the House. The select committee did work well together. There was cross-party support on most issues in the select committee. I want to thank the officials. They certainly were put through their paces if you like. They had to work very hard to answer the many complex questions that were raised. The bill itself came out of the select committee and then was reported back to the select committee after the whey protein concentrate case pending the inquiry on that and further amendments were made. I recommend the passage of this bill. I look forward to the passage of the bill.RINO TIRIKATENE (Labour—Te Tai Tonga): Kia ora Mr Assistant Speaker. I too am pleased to speak at the third reading of the Food Bill. This bill is a major improvement on the current laws as they stand which impinge on all food businesses across the country. As previous speakers have mentioned currently we have the Food Act which is 30 years old and way out of date and also some even worse Food Hygiene Regulations which are about 40-plus years old. They are highly prescriptive highly outdated and have led to a whole bunch of misalignment and inconsistencies among territorial authorities and local councils right across the country. It has been a nightmare for small businesses—or for all businesses operating in the food area—to try to navigate their way through dealing with all of the complexities and trying to fit within the parameters or the strict prescribed requirements in the existing legislation. Thankfully we can all now say haererā. Haererā to that regime and haere mai to this good bill.It is a voluminous piece of legislation and a long time in the making. Ten-plus years ago this legislation was conceived under the Labour Government. There has been a lotof work going on. I commend also the officials who have worked tirelessly over the years to craft this piece of legislation. It is a significant piece of legislation but also it is very well drafted because it covers the full ambit the full scope of all food businesses whether they be a small coffee cart or a marae that might have a little catering operation or café and right through to major food exports manufacturers meal producers and the like. So it is a significant piece of legislation. It is really positive for our country because as speakers have mentioned the food sector is so important to our country to our livelihood and to our standard of living.I just want to repeat this because it is really important that people comprehend these numbers. Eighteen percent of the working population in New Zealand are employed directly or indirectly in the food sector. There are around 35000 to 40000 regulated businesses that operate food businesses right across the country. But even more important is the turnover. Food retailers turn over some $26 billion a year total food manufactured in New Zealand is worth over $41.5 billion a year and the food sector as a whole contributes over 52 percent of New Zealand’s total value of exports. Those numbers alone really demonstrate how important and how crucial the food industry is to our country and to our way of life. That is why it is really important that we have this piece of legislation now which is up to date which is modern and which has brought us into the 21st century whereby we are speaking the same language as our important customers our trade customers overseas.An important aspect of our trade and our export industries is that we benefit from free-trade agreements. Mutual recognition of our food safety systems is an important element of those free-trade agreements and they give our exporters an advantage in a highly competitive market place. It is really important that this piece of legislation is enacted so that we are walking the talk and we are providing a world-class modern risk-based flexible food safety system. By doing that we can give confidence to our customers—not only to New Zealand food businesses but also to our own local consumers. As we know when you produce food—Māoris especially know this very well—and when you are hosting manuhiri your mana is on the line. Your mana is at stake when you host people and the last thing that you want to do and the last thing we as a nation would want to do to our manuhiri to our visitors is to have an outbreak of food-borne illnesses. I shudder at the thought of people falling crook or when we hear reports of serious outbreaks of—I will test Hansard people out—illness with names likecampylobacteriosissalmonellosis listeriosis other forms of -osis and E. coli and all those nasty food-borne illnesses.It is really important that we have legislation that is fit for purpose that is modern and that can deal with those high-risk businesses that are perhaps cutting a few corners or not being as stringent as they should be. It is also important that we are not putting unreasonable or overbearing compliance costs on those businesses or industries that really do not have to try to meet such high standards.One of the really commendable aspects of this bill is the sliding scale - type approach based on the risk that various industries and businesses have and the food they produce. Obviously a coffee cart is nowhere near as high risk as a major meal producer or exporter so this bill does very well in terms of capturing all of those different types of industry participants in the food sector which as I mentioned in previous contributions is very important to Māori. The primary sector the land and sea our bounty that we have in Aotearoa—Māori are major major stakeholders in those sectors. My colleagues across the floor know them well. Mr McKelvie would knowAtihau-Whanganui Incorporation up at the Whanganui River andMorikaunui Incorporation and those major sheep and beef producers. Mr Ardern would knowParininihi kiWaitōtara Incorporation. Māori are major participants in those fields and they are also moving upthe value chain. They are moving up the value chain—such as the likes ofMiraka Ltd a major Māori-owned dairy processor taking on Fonterra and giving it a good crack as well. I need only talk about my own iwi down in the south.NgāiTahu are making major plays into dairy conversions and growing the milk supply from out of the south.This piece of legislation is important for all New Zealand all Kiwi businesses for consumers for our customers for our reputation and it is really important also for Māori.I would just like to conclude by talking about as I call it the COOL aspect of this legislation—country-of-origin labelling—and Supplementary Order Paper 440 by Damien O’Connor which unfortunately was not adopted by the Government. I am heartened by the remarks from the Minister that it will be looking into that issue because we were simply basing it on aligning country-of-origin labelling between New Zealand and our major export market over there across the Tasman. So I look forward to seeing some progress in that area hopefully because Kiwis do like to know where our kai is coming from. I think that if people go down to buy a single-product item if you have got a pork chop there or a pork belly people will look again if they know that it is from Ontario or from some big major hog producer over in North America. So we hope to see progress in that area but otherwise this is a very very great piece of legislation and I commend it to the House. Kia oratātou.STEFFAN BROWNING (Green): I am pleased to be able to rise and say that the Green Party is supporting the Food Bill. Although we are supporting the Food Bill we still have some reservations and I will discuss those as we go. There have been some major changes to the bill particularly in the last couple of years from where it started effectively 11 years ago.We have followed its history. I personally have followed it since way back when it was first mooted in the New Zealand Food Safety Authority. I think Annette King was the food safety Minister then and she brought it to the authority’s consumer forum where I was as a concept of modernising and improving the risk-based approach to food safety with the different tiers of foods food production and the likes and how they should be handled and what sort of food plans and the likes that different food should go under. It was a great concept and it is a great concept and we have got this far.However there were a number of concerns from when the Food Bill had finished with the first part of the Primary Production Committee consideration before I was a member of Parliament. When it came back from there potentially it would have incorporated provisions on seed that is grown for anything whether it be pasture seed whether it be vegetable seed whether it be potatoes for planting whether it be sunflowers for planting or anything. All seed-propagating material was being caught up in it so it was very good that Kate Wilkinson the then food safety Minister very quickly realised that this was a mistake that there was no way that it should be incorporated that way and that only food that was going to be consumed should go through the Food Bill. So that was the first major change that was mooted and that was successfully changed.However there were other issues that were very concerning. Genetic engineering or “genetic modification” as the bill describes it had been taken out as something that should be considered as a food safety item. It took a fair amount of negotiation and lobbying and lots of submissions and emails to nearly all of us in the House from people who were very concerned about that. So it was really good that the new Minister for Food Safety Nikki Kaye saw that provision reinserted so that genetic modification is in the Food Bill as something that may be considered as a food safety issue and that seriously needs to be considered as a food safety issue. I will touch on that later.There were issues around the donating of food and whether food could be donated whether community groups could be dispensing food without being caught up in undue bureaucracy and whether people would be able to swap food. The way the bill could have been read suggested that that may not be legal in the full sense again unless there was some level of bureaucracy and registration of the people swapping it and the like. So I am very pleased to say that with negotiation and submissions and discussion in the Primary Production Committee that was corrected. The inclusion of a good Samaritan clause to allow people to keep donating food to those in need is well cemented in the bill. That is fantastic. There are assurances that swapping food will remain legal. People can swap among their neighbours and the community and their relations and there is no hint of any problems with that. These were major gains.One part that was most unfortunate which has not been a gain as yet was country-of-origin labelling. Labour very nicely joined the party with the Greens who have been lobbying. We have taken to Parliament the petition of a huge number of submitters wanting country-of-origin labelling—not any old country-of-origin labelling but mandatory country-of-origin labelling. The Minister has spoken about the voluntary system and says it has got something like 70 percent coverage. That is not good enough. Not only is it not good enough in terms of coverage but because it is voluntary there is no real system of auditing. Of course food safety is not audited well in terms of the domestic food supply in this country anyway and I will discuss that a bit more as we go.One hundred and five of New Zealand’s 120 trading partners have country-of-origin labelling. It is not a matter of being voluntary and maybe the supermarket chains will put up a voluntary level of it so that they do not have a stronger more comprehensive system enforced on them. They are taking—how do you call it—a token approach. Some of it is quite good but it is not good enough when consumers cannot make those proper choices. I have a member’s bill for the consumer’s right to know around food and country-of-origin labelling and I am hoping that in time that will be introduced. Not only that but it will probably be a fresh Government and Labour has now come to the party. After opposing country-of-origin labelling for so long Labour will obviously support the Greens in getting that through.I am concerned when the Minister says “Well hey Australia is reviewing it.” They have got quite comprehensive country-of-origin labelling there but it could again be somewhat better. If we are going to align with Australia we should align immediately and have mandatory country-of-origin labelling like them not after Tony Abbott has got amongst it and wrecked it like he is about to wreck so many other protections for consumers and the people of Australia. That is no example to follow for this country.The other concern is domestic food sovereignty. There was a lot of concern from submitters that we were losing our ability to make our own regulations around food safety in this country. They refer to international organisations like the CodexAlimentarius Commission where New Zealand has a reasonable role to play in the dairy section and in some other parts. The commission is the international food standard - setting body that helps with harmonisation of food standards throughout the world. That organisation was fine once. That organisation was truly independent and looked at truly independent science and made proper decisions that reflected the genuine risk. But that organisation now is subject to the same lobbying and interference that it seems our Food Standards Australia New Zealand our joint partnership with Australia seems to be subject to which interferes with the real decisions or what the real decisions should be around food safety for New Zealand or for New Zealanders in particular.It was really good that in the select committee we ended up seeing some move towards some independence around food safety decisions but the only way that that hashappened is that we have got food safety as a primacy as the most important part of the Food Bill. It was not. It was just one of the things that needed to be taken into account and trade is a major part of the things that need to be taken into account apparently. But in the situation where there is a question of whether it is a trade agreement that is driving it or whether it is food safety food safety has primacy. That is really good and that is one of the major achievements that has happened in very recent times to the Food Bill.However if there is a decision around food safety who is calling the shots on the science behind it? When the Minister was in front of the select committee for the committee’s consideration of the Budget estimates recently I put it to her about the labelling of genetically engineered food and that there was a real issue around the food safety of that—and there is. Animals fed genetically engineered food are in very bad shape. Their fecundity their fertility is dropping significantly. Their lifespan is dropping. Their gut mechanisms are badly influenced. There is severe ulceration in way more animals that are fed that. We are feeding it to animals in this country and the food from that—The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. His time has expired.Steffan Browning: I did not hear the bell.The ASSISTANT SPEAKER (Lindsay Tisch): Order! [Interruption] Order! Just before I call the next speaker can I just remind the member that the box that you have on your desk which talks about genetic engineering is not acceptable. It is not a visual aid in terms of promoting the speech and I would ask the member to remove it. I did not interrupt while the member was speaking. I did not want to interrupt his speech but we cannot have advertising of any sort other than visual aids that help in the presentation of your speech. That certainly was outside the realms of that.STEFFAN BROWNING (Green): I raise a point of order Mr Speaker. That was exactly what I was talking about as I sat down but I never heard a bell being rung.The ASSISTANT SPEAKER (Lindsay Tisch): Well you went for 10 minutes and I motioned at the time for you to wind up. It is not a requirement to ring a bell but the member had a 10-minute speech and I did motion 20 seconds out for the member to wind it up. You went for a good 10 minutes.COLIN KING (National—Kaikōura): It is a pleasure to speak during the third reading of the Food Bill. It is a piece of work that the Primary Production Committee worked long and hard over. When we as a Parliament think about what our dining habits were 40 years ago—the old meat and three vegetables—certainly today our consumption of food is a lot more complex than it was. Also from the point of view of the modern world around aligning the various Acts it became very evident that the Animal Products Act needed to align with the Food Act. That was duly done.As a nation we export 85 percent of what we produce. However in saying all that this particular bill covers all food sold in New Zealand including exported food and imported food. There has been a lot of commentary around country-of-origin labelling. It would be a mistake to confuse that with food safety. However that is a discussion for another day.The mechanism in the bill as it is written has various levels of risk-based assessment. From that point of view those who are producing high-risk foods will have to have a written food control plan and they will be audited against that. Those who produce medium to low risk foods will operate under a national food plan effectively. There are three levels of those food plans but again the verifiers will in actual fact audit under the national plan depending on the activities of the person who is operating that business. That is quite important because it gets away from the one-size-fits-allapproach that was in the old Act and is far more appropriate. There is a lot of complexity. When I think of my community in Marlborough it will be pretty straightforward but when you think of a massive city like Auckland it is going to be incredibly complex to work through.One point that needs to be made is that this is a very good piece of legislation. The Primary Production Committee applied itself to it very very well and worked very very collegially. However we do have to watch the cost that this could potentially add to business. That is going to be a responsibility no doubt of this Parliament going forward. It gives me great pleasure to see this bill get to this stage. I must give full commendation to the Minister for Food Safety Nikki Kaye for ushering it through Parliament. Thank you very much.RICHARD PROSSER (NZ First): I am pleased to rise on behalf of New Zealand First to speak to this third reading of the Food Bill. New Zealand First supports this bill. This bill has been a long time in the making—10 years or thereabouts—and even when it does finally become law it will not be completely up to date. This we know. But we know also that it is a necessary piece of legislation and that it is a very necessary update to what had become some very wide discrepancies between New Zealand’s food safety regulations and processes and the risks posed by various foodstuffs in various situations and also in the available science and best practice that may be brought to bear upon them. This is a very lengthy and detailed work of law—a veritable tome one could say. It is a tome but not a tomb. That is relevant because a tomb is where we will all wind up if we get it wrong with regards to food safety.Supplementary Order Paper 278 brought forward by the current Minister for Food Safety who has inherited this process and brought it to this point of fruition is larger still: 400 pages or thereabouts. It is a significant and overarching work and we congratulate the Minister on the very comprehensive reworking that she has undertaken of the bill as it was presented to her.There are many aspects of the law as it relates to food safety that we could focus on. Colleagues from across the House I am sure will touch on most of them. It is important to note I believe that this bill moves the focus on food safety for foods for consumption from one centred on the premises in which food is prepared to one centred on the level of risk associated with the food itself. There is sound reasoning behind this we believe and we are happy to support this change in mind-set. The inspection traceability and recall provisions contained in the bill provide a sound mechanism by which incidents such as the Fonterra botulism scare may be addressed in the future. These two considerations—the risk associated with food and the ability to trace and recall potentially dangerous foodstuffs and produce potentially carrying risk and intended either for domestic consumption or for export—are of very great importance in our opinion.In addition there is the issue of food sovereignty which was and is a very genuine concern held by a great many of the submitters. I want to address some of these considerations. Risk-based food assessment with regards to food safety covers many aspects of life in New Zealand. Some of the potential implications of it were a source of angst expressed by numerous submitters and indeed shared by many if not most of the Primary Production Committee. One of the defining features of our easygoing egalitarian Kiwi lifestyle is the ability for people to swap share sell and otherwise trade food and produce for fund-raising pocket money and indeed just for fun. The cake stall at the school gala the Lions club sausage sizzle out the front of the supermarket on a Saturday morning the beach barbecue and the jam raffle so that the volunteer fire brigade can buy a new inflatable boat for the surf lifesaving club—these things are dear to us as a people and although the select committee fully understood theneed to ensure that food for consumption is made to be as safe as possible the committee also understood very keenly the need to preserve those things that go to the heart of this country as a nation and as a people.Submitters impressed this view upon the committee and the committee in turn impressed it upon the officials from the Ministry for Primary Industries. To their credit the officials took that information on board and delivered what I believe is a good workable compromise that upholds and respects the rights of all concerned. They have done sterling service and they along with the select committee and the Minister deserve our recognition and appreciation. The bill they have delivered does not spell the end for the farmers markets sausage sizzles homemade jam or cake stalls. We can rest easy in our beds as far as that is concerned.Food sovereignty was at least as pressing a concern for many people as was the issue of small producers and fund-raisers. Many people held the fear that this bill would open the door to overseas standards and foreign companies to trade treaties taking priority over the need for food safety and to New Zealand facing the wrath of the World Trade Organization for having the temerity to require imported food to adhere to the standard that we deem acceptable in our own land. This bill does not require that that be so. It does not sell our collective national soul for a mess of pottage—whatever that is. Pottage—what is it? I confess I do not really know. It is genetically modified porridge perhaps. I am sure my erstwhile colleague from the Greens will be only too happy to enlighten me. But I digress perhaps just a little.I believe that this is somewhat justified. This has been a lengthy and mentally taxing process—this shepherding and this assisting to shepherd this weighty and truly voluminous text of law through the process of the Primary Production Committee on which I am privileged to sit as an observer. A more fine and august body of men and women it would be a challenge to find even from amongst such a splendid assemblage as we find ourselves in the presence of here in this House. But shepherded it has been and here we now find ourselves. The sovereignty of New Zealanders’ daily bread is not at risk from this bill. It may well be that some other insidious legation—perhaps one being crafted behind the closed doors of the Trans-Pacific Partnership—may come to threaten our right to self-determination in that particular manner. Time will tell but it is not this bill that is of concern in this regard.The bill is not perfect. There are some things that it could have done but will not be doing. Of greatest concern of course is the omission of country-of-origin labelling on all imported foodstuffs. It is a shame that the Government chose not to address this issue of its own volition. It could—and indeed should—have been an integral part of a bill intended primarily to address the safety of the food that we eat. Knowing where that food comes from is a fundamental part of that question I would contend. It is a shame the Government further chose to disregard the very fine Supplementary Order Paper 440 on the matter in the name of the Hon Damien O’Connor and the also very fine Supplementary Order Paper 449 in the name of Steffan Browning. It is a shame that the Government instead chose to put the issue of country-of-origin labelling in the too-hard basket. Other countries have it. Australia has it. It does not appear to be too hard for the Aussies. Perhaps Australians are a brighter bunch than this National Government.I am partially encouraged by some indications from the Minister that she may be thinking of looking at smart applications for the listing of origin labelling information. This would be a logical step. There is some truth in the argument that many food products contain ingredients from a number of different source countries and further that processing itself may take place in more than one jurisdiction. There will undeniably be a very great deal of information pertaining to the origins of some foods but that is not in our view a sufficient reason for effectively withholding thatinformation from the consumer. Technology exists now that can make the paper trail available and we would contend that such technology could and should be being used now.We would very much hope there is no truth in the suggestion that the Government may have caved into pressure from some quarters that tacitly implied that country-of-origin labelling could be perceived by some countries as a non-tariff barrier to trade. I would suggest in response that any such positioning from another country would serve only to reinforce the need for such labelling. There are some places in this world that I personally seek quite deliberately to avoid when choosing the sources for the food that I eat. I would like to know from the labels on the stuff that I buy whether or not those places are included in the list of ingredients.However it is not the end of the world and a future Government can always revisit this particular aspect of what is otherwise a fairly sound and reasonable piece of legislation. I will flag right now that this is something that a Government in which New Zealand First has influence will indeed be revisiting. All in all this is fundamentally a good and necessary bill and one that is certainly very overdue. New Zealand First supports this bill and having voiced such concerns as we do have I commend it to the House. Thank you.IAN McKELVIE (National—Rangitīkei): The Food Bill is one of the most important pieces of legislation that will be passed by this Parliament. It underpins what we are what we do and what we eat although listening to the last two speakers from the other side of the House you would wonder whether the chairman is going to retire from the House at the end of this term. He obviously was quite confused by the different opinions we have heard from down there. This bill has been in the incubator for some 10 years now and has emerged in the last weeks of the 50th Parliament after much serious scrutiny by at least three Ministers for Food Safety a couple of select committees and many hundreds of submitters.I was involved in the local government sector at the time this bill was first mooted. I would have to say there was significant fear in the local government sector. I would not say “fear” is the right word but there was definitely nervousness in the small foods sector and in many of our voluntary organisations that contribute to our community in such a strong way and that use food as a mode of fund-raising. There was also significant fear—or unrest I guess would be a better term—in the Māori community around what this bill might mean for the country. So I think it is a great tribute to Minister Kaye the previous Minister for Food Safety Kate Wilkinson the select committees and all those submitters that we now have what I think is a world-leading piece of legislation that will provide us with great security as we move forward. It also gives confidence to our communities that the food they buy and consume is safe.Food safety is all about safe and suitable food. It is about ensuring that our food is affordable that the regime we have put in place has integrity and that that regime is enforceable. This is primarily why the bill could not include things such as country-of-origin labelling. They are complex and could well be expensive.Another matter that impacted on the bill’s progress was the whey protein concentrate incident. Consequently some changes were recommended as a result of that primarily around recall processes although on the whole that inquiry gave the bill even more credence as it found that further changes were not necessary and that the bill would in fact complete its objectives and achieve what we in New Zealand wanted it to achieve. This bill is very important to New Zealand and I look forward to its passing into law in a few minutes’ time. Thank you.CAROL BEAUMONT (Labour): It is a pleasure to speak on what is—as others right across this House have said and I agree with them—a very important bill theFood Bill. Of course we are supporting this bill. Just putting it in context food is like shelter. It is a fundamental human need. It is an area where we require good regulation and others have talked about how outdated our legislation in this area has become and said that this was well and truly needed. It has taken a very long time to get here but we have got a comprehensive review and we all agree that in most regards this bill provides a useful and modern piece of legislation for what is not only an important human need—the need to eat—but also for us a very important source of our national wealth.I do want to say that the regulation in this area—and it is a bit like the consumer credit area which we are going to be speaking about next—is supported by Labour as a result of work that was started by Labour but it has had a very long gestation. I am not sure whether there are significant consequences as a result of the delays on this bill. I guess that others who were on the Primary Production Committee may be better placed to answer that particular question but certainly delays with the consumer credit legislation have had dire consequences for families and that will be a matter for us to talk about later this evening.Despite that we now have legislation as I say that replaces other legislation and that will replace other related legislation and regulations to create a modern piece of legislation with flexibility and that is appropriate to the diversity and complexity that is the food sector. Others have talked about our needing to look at dimensions around the production of food the processing of food the serving and retailing of food the importing and exporting of food and along the whole supply chain related to all of those areas. So it is quite a complex and significant area and that presumably accounts for the size of this bill.Food is an interesting issue in a country that is becoming increasingly unequal. I do want to note given that we are talking about food that for struggling families food has sadly become a discretionary item. It is hard to imagine really but food has become the bit of a household budget that people can reduce and they sometimes reduce it to an extent that is almost hard to imagine especially for people like the people in this House tonight. But some families are cutting back their expenditure on food to such an extent that it is hard to imagine how they are having a balanced nutritional set of meals in their house and in fact many times they are not.Why has it become discretionary? Well because you cannot change the accommodation costs you face and we know that the housing costs have been going upwards. I come from Auckland and accommodation costs there are huge so that takes a fair chunk of household income. Of course this is in the context of low wages for many people. So if housing prices are going up and 46 percent of people are not getting a pay increase you can see where the squeeze comes. As a country I think it is really to our shame that we see that children are having to be provided with food in schools—breakfast lunch—because there are children going to school without food. I do think that when we are talking about the Food Bill it is important to note some of those important matters.I just want to come back and say that this bill does substantially reform the regulatory regime for the safety and suitability of food and others have explained far more eloquently than I can about the risk regime that is being covered in this legislation. It is very important that we do that. We need to know that the food that we eat is safe. We need to know that the food that we produce and send to others to eat is safe. As has been said the food and beverage sector of our economy is huge. It is still huge to this day. We have an important comparative advantage in this area. It has been the lifeblood of this country and it remains so.There is a question—and it is a question that I believe is really significant—about whether we are looking at this sector in the right way and whether we are doing enough to lift the value in the sector to look at innovation and to ensure that we are moving to a value-added kind of thing rather than continuing to just sell milk powder. Are we looking at and doing enough to develop things like nutraceuticals? Are we looking at some of the areas where we can further process food—and in doing so create work here in this country—to ensure that we can get better prices for the food that we export? My view is that it is another area where the Government is failing to look enough at the Government’s role in economic development. What is the Government’s role in trying to make sure that we really go for the value-add in the food and beverage industry?But none the less food is worth 52 percent of our exports so it is hugely significant. People come to this country and even do food tourism or certainly even if they are not specifically doing food tourism part of the package of coming to this beautiful country is to eat some of the wonderful food that we produce here. So it is important not only for the money that we earn as a country; the domestic market is also of course significant. We need food to survive but of course food also has another dimension around hospitality and recreation. We share food with friends and family. We enjoy food. So I am glad to see that some of the concerns that were raised around sausage sizzles and the like have been dealt with by the select committee. You know I think that it was important that we got that balance right.For the food that we sell it is important that we have a hugely positive reputation in this area. We cannot—any of us—take any satisfaction from when our reputation as a food-exporting country is damaged. Of course we have had some recent occurrences that have not served us well and the whole country potentially suffers as a consequence of that if it is significant. I do think that the work around food safety has been important. I want to acknowledge the role of my colleague the Hon Damien O’Connor. I acknowledge him for the work he has done in making sure that we are very vocal about this and that we are saying that the way that things are set up at the moment is not right. The hurdles are high for our country. Other countries demand a lot from us in the food that we export. Particularly the high-end markets—the Japanese market the European market—demand high standards from us and we need to have a regulatory regime that stacks up against that.I want to finish by talking about the demands of consumers. I am Labour’s consumer affairs spokesperson. Internationally consumers are driving some of the regulation in the food and beverage sector particularly through the global supermarket companies. These food companies are hugely dominant global corporates. They are requiring more and more of us and of other countries and that includes being really clear about traceability being really clear about what is in food being clear about the safety regime and of course being clear about the origin of food. Country-of-origin labelling is important and it serves us well because we do still have a good reputation as a country for our safety and our quality of food. The fact that things come from New Zealand probably earns us extra money for those products. That is important.But I want to talk also about the need to have country-of-origin labelling that serves domestic consumers as well. This is why I think it is a real shame that that is not in this bill and that Damien O’Connor’s Supplementary Order Paper 440 was not supported. This is the way we need to move. All around the world country-of-origin labelling is becoming required. Our Australian colleagues with whom we share a standards code the Australia New Zealand Food Standards Code have country-of-origin labelling. We need to do more. Frankly it is not good enough to just say “Oh well it’s too complicated.” which I think an earlier speaker said and “It’s not possible due to the complexity.” Well actually it is possible and Labour will do it.MARK MITCHELL (National—Rodney): I commend this bill the Food Bill to the House.The ASSISTANT SPEAKER (Lindsay Tisch): I understand the next call is a split call—Meka Whaitiri 5 minutes.MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): Kia ora Mr Assistant Speaker. Tēnātātou katoa. Food safety lies at the heart of the New Zealand primary export sector and thus the nation’s economic fortunes. The purpose of the Food Bill is to improve the interface of the regulatory processes across food sectors as well as maintain New Zealand’s reputation as a producer and exporter of safe and suitable food. I join with all members of this House in supporting the third reading of this important bill. It is both timely and needed and it does ensure that New Zealand’s food standards are brought into the 21st century.I was not a member of the Primary Production Committee—I have only just recently joined it—but my contribution on the passage of this bill at this third reading is to acknowledge the historical context of it. As others have mentioned the bill has been 10 years in the making. Labour supported the first reading 4 years ago. I heard mention of the Hon Annette King and the Hon Kate Wilkinson so obviously it has been an important issue not just for this House but for the nation to ensure that our food safety standards and our reputation internationally are protected and this bill definitely does those things. Therefore I do commend the Minister Nikki Kaye for bringing the bill through today and of course all members of the select committee.I am not too sure Mr Assistant Speaker whether you do the shopping for your household but when I go shopping for my household not only am I really interested in the nutritional value of the food that I shop for in terms of energy calories and protein but one thing I really look for is the origin of the product that I am purchasing or am about to purchase. That is one of the fundamental things that I believe as consumers in this country we should do. We should know where food comes from. More and more Kiwis are very discerning about what they are putting in their bodies particularly as mothers. Of particular importance to me is what I am feeding my two teenage sons although they are monsters so they will pretty much eat everything. But there are a lot of families out there who do have issues about ensuring that we know where our food comes from.I join with the Hon Damien O’Connor who has put up Supplementary Order Paper 440 and debated quite rigorously in the select committee for country-of-origin labelling. I too heard that one of the reasons why we did not address it in the select committee was the complexity of it. For me Kiwis are quite ingenious. We never give up we never concede and we never take a backward step. If we are thrown the challenge of something being complex or too hard that Kiwi spirit gets into us and we work doubly hard to get over it. For me the remark that a speaker supporting this bill made in the House made me think of the days when we always fought for things that were in our best interests.I join particularly with members on this side of the House by saying that we have lost an opportunity by not having country-of-origin labelling. But I too believe that when voters go to the polls in September we will have a Labour-led Government and this will definitely be one of the areas in the Food Bill that we address to ensure that all consumers in this country can assure themselves that they know where the products they are purchasing come from. Thank you.MOJO MATHERS (Green): I am pleased to be rising to speak in support of this bill the Food Bill. Food safety is an incredibly important issue and it is great that it is now being made the overarching principle that this bill is based upon. A review of our laws is long overdue. Food-borne illnesses are extremely nasty they can be fatal andthey can have lasting health impacts. And as we have seen not long ago just one incident of food safety concerns in our food exports can have a lasting impact on our food-exporting industry. It is critical that we get food safety right in New Zealand.The Green Party strongly supports the risk-based approach that underpins this bill and that basically means recognising that some types of food pose a higher risk than other types of food and also that the scale of the food production is really important—whether it is local food production regional food production nationwide or for the export market and therefore the number of people who could potentially be seriously impacted by a food safety upset is taken into account.As I said at the previous reading one of the major concerns for non-commercial producers of food—ordinary everyday Kiwis—has been that they can continue to do what they have always done which is grow their own produce and be able to use the surplus from their gardens to swap with friends or donate to schools and clubs for fund-raising—whether it is fruit and vegetables jams and pickles baking eggs and so on. It is incredibly important for local food resilience that we can continue to do that and it is our expectation that this bill will not adversely impact on our ability to do these things and to continue to do them.We are extremely pleased that GE has been incorporated into the bill as a food safety issue. I remember reading about the negative impacts of GE food overseas and the host of serious health consequences. It is important that we do not become complacent and that we remain vigilant for these types of potential problems in New Zealand. But having said that although we like all of these things we are seriously disappointed that the Government did not take on board Supplementary Order Paper 449 and the proposed amendments to bring in country-of-origin labelling. This is something that consumers really really want—the right to know where their food comes from. It is fundamental. It is fundamental because of the safety concerns and it is fundamental because people want to be able to make their own informed decisions about the food they buy how it is made where it comes from and what the standards are in the country where the food has come from. They might be concerned about animal welfare standards. They may be concerned about environmental impacts. They may be concerned about the labour standards in countries overseas and prefer to purchase food from one country but not from another.Of course in New Zealand we really want to be able to support Kiwi producers and very often we will choose to do that over and above imported food. I still constantly meet people who are surprised that for example so much of the pork that is available at the supermarket and so on is not produced in New Zealand. There are people who really want to say: “But this is shocking. If I’d known that it was imported from Canada I wouldn’t be buying it. It should be labelled.” It should be and it is simple and straightforward to do with single-ingredient products. We should have mandatory labelling. The other advantage of mandatory labelling—The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member but the time has come for me to leave the Chair.Sitting suspended from 6 p.m. to 7.30 p.m.JONATHAN YOUNG (National—New Plymouth): I am very pleased to stand in support of the Food Bill. Indeed it was an issue back in the 2011 election. It is something that is very important to New Zealanders. Our food and beverages industry is a key part of our economy and the work that has been undertaken on this Food Bill over 10 years has brought about a very effective piece of legislation that will do our country good in the years to come. I am very pleased to commend this bill to the House.Bill read a third time.Credit Contracts and Consumer Finance Amendment BillFinancial Service Providers (Registration and Dispute Resolution) Amendment BillThird ReadingsHon CRAIG FOSS (Minister of Consumer Affairs): I moveThat the Credit Contracts and Consumer Finance Amendment Bill and the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill be now read a third time. The legislation sets out significant reforms to the Credit Contracts and Consumer Finance Act more commonly known as the CCCFA; the Financial Service Providers (Registration and Dispute Resolution) Act; the Private Security Personnel and Private Investigators Act; and the Personal Property Securities Act. In addition the legislation repeals the Credit (Repossession) Act and incorporates its content into an expanded Credit Contracts and Consumer Finance Act.I would like to thank the House and the Commerce Committee for the immense support that this legislation has received. This support reflects robust consultation and a shared view on delivering positive outcomes. Thanks are also due to previous Ministers of Consumer Affairs who have guided this work—and there have been one or two—to officials and to the large number of stakeholders who have been involved throughout the credit review and who have made submissions on both the exposure draft and the legislation.The improvements made by this legislation represent the first major change to consumer credit legislation since the enactment of the Credit Contracts and Consumer Finance Act in 2003 and reflect the Government’s commitment to protecting vulnerable consumers and facilitating the fair efficient and transparent operation of consumer credit markets. The three key features of the legislation include the introduction of a responsible lending framework strengthened provisions around disclosure and fees and incorporating and strengthening the rules around credit repossession. The legislation also strengthens registration provisions in the Financial Service Providers (Registration and Dispute Resolution) Act to prevent the misuse of the registrar by overseas-based entities. I would like to take a few moments to elaborate on these features.The responsible lending framework requires lenders to exercise the care diligence and skill of a responsible lender throughout the life of a credit contract. This explicit direction ensures that lenders take responsibility for the likely effect of the credit they provide. A responsible lender is one who meets the specific lender requirements to first make inquiries to be satisfied that the borrower can meet repayments without suffering substantial hardship; second assist borrowers to reach an informed decision when entering into the agreement; and third treat borrowers and their property reasonably and in an ethical manner. A creditor who repeatedly fails to comply with the lender responsibility principles can be banned from the market.The Responsible Lending Code will be important in providing guidance as to how lenders can comply with the lender responsibility principles. I expect that the code will elaborate on important matters including how a responsible lender can assist borrowers to reach an informed decision given the borrower’s circumstances and objectives—for example where the borrower’s first language is not English—and how a responsible lender can comply with the prohibitions on charging unreasonable fees. The legislation improves transparency requirements recognising that consumers make better decisions when they are fully informed. Such improvements include requiring lenders to disclosethe credit terms to the borrower before the contract is entered into—this compares with the current requirement where disclosure can be made up to 5 working days after the contract is entered into—and requiring lenders to provide to consumers free of charge and upon request their standard form contract terms and information on the cost of borrowing. This will allow consumers and others to compare the standard terms and costs of borrowing offered by different creditors in the market and make an informed decision based upon this information.Unreasonable fees have been a key issue for consumers and have contributed to families often finding themselves in unmanageable situations of debt. The legislation clarifies that fees charged by a lender must reflect the costs and losses associated with the credit rather than recovering an element of profit. The cost recovery principle should enable consumers to compare interest rates across the market without worrying about additional hidden and often extortionate fees contributing to the cost. The clarification should assist in making these provisions more enforceable.Other changes worth mentioning include that all creditors must be registered under the Financial Service Providers (Registration and Dispute Resolution) Act and be a member of an approved dispute resolution scheme. Furthermore as part of initial disclosure requirements to borrowers lenders must disclose the dispute resolution scheme of which they are a member. Lenders who do not register as a financial services provider under the Financial Service Providers (Registration and Dispute Resolution) Act will have no legal right to charge interest or fees on credit until they are registered.Some of the current practices relating to credit repossession processes can have significant detrimental impacts upon vulnerable consumers and families. The legislation significantly improves protections in this area by a number of measures such as incorporating the credit repossession provisions in an expanded Credit Contracts and Consumer Finance Act requiring that any item that a creditor wishes to repossess be specifically identified in the contract prohibiting altogether certain essential items like beds and cooking equipment from being repossessed requiring repossession agents to be licensed or to hold a certificate of approval under the Private Security Personnel and Private Investigators Act and providing that the Commerce Commission will be responsible for enforcing the rules relating to credit repossession along with its other functions across the rest of the Credit Contracts and Consumer Finance Act.The legislation also makes changes to financial service provider registration and dispute resolution. In particular it will provide the Financial Markets Authority with the power to prevent offshore financial service providers from registering in New Zealand solely to take advantage of our good standing as a well-regulated jurisdiction. This change will be important in maintaining the international reputation of our regulatory system. Changes to allow the Government to adjust the rules of approved dispute resolution schemes will ensure that the dispute resolution regime continues to be effective and meet consumers’ needs.The Commerce Commission will play an important role in enforcing and taking action against irresponsible practices in the market. In relation to enforcement and deterrents the legislation increases the maximum penalties for breaches to $200000 for an individual and $600000 for a company. The Commerce Commission will also have the ability to issue infringement notices for minor straightforward breaches of the Act. Together with the range of provisions outlined above these should assist in providing the commission with a flexible range of tools to address and target behaviour of concern in these markets.In conclusion overall the amendments in the legislation will support effective fair and transparent markets while also providing adequate protections to vulnerable consumers and families. I commend these bills to the House.CAROL BEAUMONT (Labour): Talofa lava Mr Assistant Speaker. Today people will be taking out loans at interest rates of 50 percent. Today some people will be taking out loans at interest rates of over 1000 percent. These interest rates are unacceptable and are not going to be dealt with by the passage of this legislation the Credit Contracts and Consumer Finance Amendment Bill and the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill. I think that people should think hard about that because I know that nobody in this House would try to justify those kinds of interest rates. And yet here we are. I could go through a list of examples including one of particularly high interest rates from when I went to Palmerston North most recently with my colleague Iain Lees-Galloway. I know that people in this House know that those interest rates exist out there and I think it is wrong that we are passing legislation without dealing with that issue.I stand to speak in favour of this legislation. Labour has supported the passage of these bills throughout as the Minister of Consumer Affairs has noted because we want to see change in the area of consumer credit. Why is it that people take out loans one might ask? Why is it that loans with interest rates like the sort that I have talked about are being taken out? Well the fact of the matter is that lots and lots of New Zealanders are struggling to make ends meet. It is interesting that in Samoan Language Week we are talking about this legislation. In fact today is the day thatThis is Home: An Update on the State of Pasifika People in New Zealand was officially launched by the Salvation Army. I just want to note that in that report it talks about Pacific people continuing to receive the lowest median weekly income of any ethnic group and this has remained unchanged for the past 5 years or so. The Pasifika community has an unemployment rate of 13 percent compared with 6.2 percent of the overall unemployment rate.You might be asking why I am talking about this when we are talking about the Credit Contracts and Consumer Finance Amendment Bill and the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill. Well part of the reason that people take out loans is that they cannot make ends meet. Something happens and they need some money. The car breaks down or whatever and they go for a loan. There are too many unscrupulous operators—fringe lenders loan sharks third-tier lenders whatever way you want to describe them—who are there to provide credit. They have in fact thrived in tough economic times. They have thrived where there is high unemployment and low wages as is the case in this country. So that is partly why. But of course they can get away with it because there is no limit on what they can charge and there will not be after the passing of this legislation. Clearly there are other reasons why people are taking out loans at that interest rate. Some of the other credit providers I am sure need to step up to the plate a little better. Our credit unions for example are an alternative to loan sharks as are social lending provisions which Labour has promoted for some considerable time now and the Government recently announced some work in there. There are some other options around credit. And there is a need for financial literacy—no question about that.But what are the consequences of interest rates like the sort that I have talked about? The consequences are that usually people pay them. The research shows that people work very very hard to pay off the loans they take out including the interest rates that are on them. What does that mean? Well it means that actually they are taking money away from the needs in their own family. It is a struggle often to pay these loans back. For those who do not make it there is a cycle of debt and despair that has developed. There is no question about it. Just ask our budgeting services; they will tell you. Everybudgeting service no matter where in New Zealand can illustrate the consequences of this. So I just ask whether any member in this House would consider the sorts of interest rates I have talked about as acceptable or ethical. I am certain that the answer would be no they do not. But here we are 4 months from a general election passing legislation that will no doubt make improvements to the consumer credit market but it will not deal with extortionate interest rates that are out there in our communities. It will not deal with them despite the obvious need to do so despite community abhorrence of those types of interest rates and despite what other countries have accepted as a reality—that there is a need to take a very direct response to excessive interest rates.We have heard over the course of considering this legislation of a lengthy list of countries around the world. Just for the record they include: Australia the United States most European jurisdictions the United Kingdom Japan Singapore most countries in Africa Canada Mexico and most of South America. Right throughout the world Governments have realised that to actually deal with this issue requires very specific action to control interest rates. Why are we so different here? What is different in New Zealand? Well it is really unclear because the opportunity we had was not taken to really look into the issue of interest rate controls as part of the work on this legislation. We just had the same old tired clichés put out there about it having unintended consequences driving loan sharks underground and becoming the target rather than a cap. Well OK how do we know that? And why has that not been the case elsewhere? Why if that is the case has Canada not repealed its legislation that it has had in place for 8 years? Why are we so different here? That is still the question that people ask me. Why are we not doing it? To be honest I cannot answer that question.Can I say that the behaviour of fringe predatory lenders loan sharks is unacceptable and is hurting our most vulnerable families and that the extortionate interest rates that they charge are a significant element of that. But it is not the only thing; I absolutely accept that. They have thrived over recent years. In 2007 Labour commenced a review. Labour started with financial summits in South Auckland. As the Minister has outlined the Credit Contracts and Consumer Finance Act was seen to not be adequate to deal with some of what we were seeing in this consumer credit area.Unfortunately one of my other concerns about this legislation is that it has taken far too long to get here. The work was deprioritised by the incoming National Government. A member’s bill in my name was voted down. It had responsible lending and interest rate controls in it. Cynically it seemed to me the then Minister Simon Power announced immediately prior to the 2011 election that National was going to get tough on loan sharks. Well that was prior to the 2011 election and here we are now about to complete the third reading of this legislation. So it has taken 6 years to get to the point we are at now. I ask the question: how many thousands of families have suffered as a result of this Government’s inaction?There are many good features in this legislation and I have articulated them at the various stages of it. I think that the responsible lending principles the code which of course is yet to be developed and the fact that we have finally sorted out the hardship provisions are positives. I think that the fact that financial service providers will not be able to charge interest if they are not registered is very positive. Guarantors are being covered by the Responsible Lending Code. There are a number of very positive provisions in this legislation. They are good features and I look forward to them being implemented.There are as I say some negatives. The negative around not controlling interest rate caps is the outstanding one. The watering down during the Commerce Committee of the provision around the clarification of fees was another thing that I think is not a positive outcome. And I do ask the question—and I asked the Minister throughout the debate onthis legislation—about adequate resourcing. We need adequate resourcing to ensure that we put real effort into making sure that people understand what their rights are under this legislation but also adequate resourcing for enforcing this legislation. We do have better penalties which is a good provision of this legislation as well but how are we going to make sure that it is enforced? We would all know if we were honest that the sorts of people who are taking loans from some of our third-tier lenders are not necessarily going to be the best place to enforce this legislation. One new person as I understand it has been taken on by the Commerce Commission—not sufficient.I want to end up by acknowledging some people: budget services and citizens advice bureaus for the work that they do the submitters on this legislation and the officials who worked so hard. I also want to acknowledge a man called AndrewShann who has really been passionate about this issue over many years. We will bring interest rate caps in when we are in Government. Thank you.JONATHAN YOUNG (National—New Plymouth): I am very pleased to stand in support of the Credit Contracts and Consumer Finance Amendment Bill and the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill in their third readings. I would like to acknowledge the Minister of Consumer Affairs Craig Foss for his work as well as the Minister at the time the legislation was introduced Simon Power and also my colleague Sam Lotu-Iiga who has put considerable effort into this legislation as well.We understand that the availability of credit is a very important thing for our economy both for businesses and for consumers. It is fundamental to the sound operation of a modern economy so credit law is very important. Many goods and services are purchased through consumer transactions that are partly or completely financed by credit. Without credit such purchases would not occur and consumers and businesses would be worse off so getting it right is important.We understand that in the world of credit finance there are three essential tiers of operators. Firstly there are the registered banks; secondly there are lenders including building societies credit unions the Co-operative Bank and now the deposit-taking financial institutions; and thirdly the third-tier of lenders are providers of personal non-mortgage credit that are not banks credit unions building societies deposit-taking institutions or credit card providers. Third-tier lenders include finance companies pay-day lenders and moneylenders. Third-tier lenders operate in a market where it is easier to engage in practices that potentially take advantage of vulnerable consumers because many of the borrowers have lower levels of financial literacy or have low incomes and cannot access affordable credit. Because of this occurrence this legislation has come into being.When people have to work hard to pay their bills put food on the table and provide for their families it is unacceptable that they are taken advantage of by people whom we call loan sharks. If you borrow $1000 but you cannot pay it back the lender says they can take anything in your house to pay the loan including toys beds and even things that do not belong to you. That is wrong. If you get sick you lose your job or your partner and you cannot pay the loan the loan company will not reduce your payments so you face hardship. It is hard hard yakka for many people. Or if your relative is a guarantor for your car loan no one explains that this means that your relative will have to pay back the loan if you do not make the payments.We saw in the Commerce Committee one of the documents of a car purchase from a South Auckland car firm a motor retailer. This vehicle was worth $13000 but added to that were loan fees credit fees insurance interest—and interest that was at a particularly high level because this was a third-tier loan. Then there was a line item in that transaction called a contingent fee for $2000. I wondered what that contingent feewas. That was the fee just in case anything went wrong. You would think that if there was a high-risk loan that of course the work would be done to ensure that the person who was going to borrow the money would be able to afford to pay it back or certainly if it was a high-risk loan that the interest rates would reflect that for the lender. But then to have $2000 added to the transaction just in case seems wrong and we felt as we looked at this legislation that that seems to be an unreasonable fee.So looking at the whole area of fees and reasonable fees was a very important part of this. It was important when National came into Government in 2008 that investor confidence in the financial sector which had been rocked by collapses of the finance companies was shored up. But the other side of the equation in terms of transactions is that credit providers who have mainly been unregulated and have no conduct requirements needed to come into some regulation and enforcement and this legislation certainly does that.One of the things that it does in relation to unreasonable fees which are prohibited under the Credit Contracts and Consumer Finance Act is include more explicit tests for different kinds of credit fees. These fees include establishment repayment default or third-party fees. The legislation also clarifies that the default interest may be charged on only the amount in default and not the entire amount of the loan. There are a number of great provisions right through this legislation that no doubt members of the committee and other members of Parliament will speak on.One of the things it does is it brings a sense of reasonableness to this whole aspect of lending and borrowing money. It restores confidence to that financial sector and that is a very important thing indeed. We want to have lenders acting responsibly and consumers having the information they need to make informed decisions and there are serious consequences for those who breach this legislation. I believe that New Zealand is going to be better off our economy is going to be better off and people who borrow money are going to be better off in terms of what this legislation will offer them. I am very pleased to commend this legislation to the House.LOUISA WALL (Labour—Manurewa): Talofa lava Mr Assistant Speaker. It gives me great pleasure to speak on this the third readings of the Credit Contracts and Consumer Finance Amendment Bill and the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill. I acknowledge that this legislation came through the House via the Commerce Committee and I would like to acknowledge the members of the Commerce Committee for the great work that they have done. I would also like to take the opportunity to congratulate Minister Craig Foss who is responsible for consumer affairs and also to acknowledge my colleague Carol Beaumont who is Labour’s spokesperson on consumer affairs.What I would like to highlight is that this issue is one where many vulnerable New Zealanders have been caught within a context of taking out loans and then having to repay those loans at interest rates that have seen both them and their families stuck in this poverty trap. So underlying this legislation is a recognition that something had to be done to stop this vicious poverty trap that has engulfed many of our particularly vulnerable families.I want to recognise that this legislation is the result of work that began in 2007 so there was a review of the Credit Contracts and Consumer Finance Act 2003. It has been interesting as someone who has not been a member of the select committee to look at some of the evidence about what the problem actually is. So for example I know from an article written byCatrionaMacLennan titled “Cap an easy way to protect vulnerable from loan sharks” that between 2006 and 2011 there had been a 60 percent growth in the number of third-tier lending outlets and up to 40 percent of those new outlets were flouting the law by not registering as financial service providers. That meant that therewere 127 new lenders that had entered the market. What is the relevance to the number? Well again it has been interesting looking at some of the articles that have been written as this legislation has progressed.TheDominion Post in March this year published a story titled “Counting the cost of loan sharks”. There was a case study of a woman. Her name isPoea Rangi. She is the mother of five children aged between 7 and 18 years.Poea’s story is I guess a story typical of people who get trapped by these loan sharks.Poea has a net income of $600 per week and from that $600 per week she is paying $200 per week in loan repayments. What does that mean for her family? It means that at the end of the day she has $140 to feed herself and her children to clothe her children to make sure her children have opportunities to participate in sporting events and to fix the car if it gets broken.What happens to people likePoea however is that these lenders systematically target them. One of the quotes in the article fromPoea is that “There is never a day when someone doesn’t knock on your door.” to lend you money. The reality of these third-tier loan providers is that they are very calculating. What they sell is a dream. And do you know what the dream for some of our families is? They are asked “Do you want a TV? Do you want aniPad? Do you want to buy your child a new bike?”. Our vulnerable communities actually get sucked in by this instant gratification. It is almost like Lotto: “We’re going to give you this wonderful prize.” But the problem with this type of Lotto is that in fact a number of our families cannot actually get to a point where they pay off the loan so they are always continually spending quite a significant portion of their weekly income on repaying these loans.There has been quite a bit of commentary about the need for either regulation or a mechanism to identify what the loan cap rate should be. I have had a very interesting conversation with my colleague Carol Beaumont. I said that if we are going to follow the Australians and have a cap of 48 percent then we should just put that in the bill. But I think the issue is that it might not necessarily be 48 percent. Picking up on what Carol shared earlier again I did a little bit of research—The ASSISTANT SPEAKER (H V Ross Robertson): The member’s full name.LOUISA WALL: —sorry—and what I know is that we are now not enacting legislation that is best practice.In July 2013 Australia introduced a capping interest rate of a maximum of 48 percent. In 2013 Finland introduced a law providing that the interest to be paid on 1-month loans of€100 is 4 percent. Five years ago Japan lowered its maximum interest rate for consumer lending to 20 percent. The monthly interest rate for short-term loans in South Africa in 2007 was a maximum of 5 percent. South Carolina has a maximum consumer interest rate of 18 percent. In Washington state it is 25 percent. As we can see around the world many countries actually have introduced a rate a level.I can understand why maybe we do not want to introduce a rate but I would have thought that this bill should have created a mechanism for such a regulation which is what I know that my colleague Carol Beaumont had been advocating for. In fact the most pertinent research from here in New Zealand is from Associate Professor Louise Signal who headed up a study on third-tier lenders for Otago University. Her I guess assessment of this legislation is that without the cap the current legislation is not strong enough to protect the community.I started my contribution with the rationale for why this legislation is being introduced. It is being introduced because we as a Parliament recognise that some of our consumers need protection. I know that some people think that people should just assert personal responsibility and they should understand what they are signing up for but the reality is that—and again it is highlighted in the article asPoea Rangi talked about—some of the people who are targeted have really low literacy levels. They do notunderstand the agreements they are entering into. They need a society and a Parliament that will protect them. The whole thrust of this legislation is to protect our most vulnerable consumers.As somebody who did not sit on the select committee but now has had the privilege of speaking in this third reading of the bill I lament the fact that I believe we have had a lost opportunity to ensure the protection of the most vulnerable the people who get caught within the web of those third-tier lenders and that we did not actually set a cap. I am not going to say what that cap should have been but I am sure that there are people within the industry who could have provided guidance to this House about that. That is all I really wanted to say other than to commend those people who have been fighting hard for the rights of the most vulnerable. I commend the work they have done their advocacy to make sure that the case studies that I highlighted actually did contribute to the discussion that went both through the select committee and the House tonight. Talofa.JULIE ANNE GENTER (Green): Tēnā koe Mr Assistant Speaker. Tēnā koutou e te Whare. I rise on the third reading of the legislation arising from the Credit Contracts and Financial Services Law Reform Bill to give a contribution from the Green Party. The Green Party is working towards a smarter greener economy to support all New Zealanders. What we really want is a fairer New Zealand and one where everyone has a chance and has a fair go.At the moment unfortunately New Zealand like many other rich countries is seeing an increasing concentration of wealth amongst a small group of people and things are becoming more and more difficult for those at the lower end of the spectrum those who are on a lower income. The minimum wage is not really high enough to meet all of the needs for people to raise a family and that is unacceptable. It is within this context of inequality and worsening inequality that this legislation has come before the House to deal with the problem of third-tier lenders or loan sharks. It is only when you have people having a difficult time making ends meet that suddenly there are the right conditions for people to set up shop and start ripping them off as loan sharks do. So we know that we have a serious problem.We have increasingly seen a proliferation of third-tier lenders or loan sharks in areas like South Auckland and Porirua—those communities where people have been struggling and where there has been a loss of jobs and increasing power prices and house prices. It is for that reason that people very understandably are susceptible to the idea of a short-term loan. Third-tier lenders are able to prey upon the fact that people are not as financially literate as the lenders may be and do not fully understand the implications of compounding interest. It is for that reason that this legislation has come before the House.I have to congratulate the officials whom I do believe were working very hard on this for very many years. It did take many years for this to finally come through the House. I know that they are working with the affected communities and are out there trying to address this problem. I have to especially congratulate the hard work of Carol Beaumont my colleague on the Commerce Committee who I feel really led the charge and is incredibly passionate about this issue. The Green Party supported her Supplementary Order Paper 430 which would have introduced interest rate caps.I think that the biggest regret I have about the legislation that is going to be passed in the House tonight is that it does not introduce a mechanism by which we could have put in place interest rate caps. Of course interest rate caps have been introduced in recent years in many comparable jurisdictions: in Australia the United Kingdom Canada the United States Japan and Finland. Most other rich countries that have the problem of third-tier lenders have responded with interest rate caps. Unfortunately the argumentsthat we heard at the select committee were quite spurious. The two arguments that were mounted against interest rate caps were that firstly the interest rate cap would become a target and therefore all lenders would suddenly raise their interest rates up to the level of the cap. Of course that certainly has not been the case in other jurisdictions. There is no reason to think that that would be the case now.The second reason was that interest rate caps would reduce access to short-term credit. This is where I come back to the problem of inequality and the problem of a lack of a living wage in this country. People should not have to access short-term credit to put food on the table. They should not have to access short-term credit to pay the power bills or to pay the rent or to make sure that their kids have shoes to go to school in. If these households do not have the means for the basics then that is the fundamental problem that we need to address. Not putting in interest rate caps means ultimately we are going to continue having the problem of spiralling out-of-control debt which is not good for our economy and it is not good for our people. That is what will happen. It is entirely possible.I would like to believe that the principles and the framework that has been set out in this legislation will be enough to address the problem—I hope that it is—but in the case that it is not how many years are we going to have to wait for a real solution? It took several years for this to come before the House. That is what would have to happen again if after several years we find that this simply was not enough. We should have at least put in place the possibility of introducing an interest rate cap—let it be completely independent from the Government let it be the Reserve Bank or someone else who decides. At least you would have the framework in place and you could try it and see what happens see if it works see if it does not work. Unfortunately it could take years. If this is not enough it could take years for us to actually address the problem.I think that the problems that we need to address are not simply interest rate caps; they are ensuring that families in New Zealand have what they need so that their kids can go to school and not be hungry so that they can learn and get a great education and have every opportunity that other kids have kids whose parents have higher incomes. They should all have the same opportunities. That is why the Green Party has introduced a number of positive solutions like our school hubs plan which would look after kids—Hon Simon Bridges: No that’s not on topic.JULIE ANNE GENTER: We would be continuing to roll out the home insulation programme which the Minister is quite happy to cut short. The Minister is not interested in extending the home insulation programme even though it has been very successful and it has achieved great health outcomes economic outcomes and job creation benefits. We would like to see that extended in Christchurch in particular because it is going to be a very cold winter for the people in Christchurch. So the Green Party has a number of positive solutions that would help address inequality in this country.We would also like to see further improvements in looking out for those communities that are the worst off the most vulnerable communities. This legislation goes some of the way but it does not go all the way. So the Green Party will be working towards a smarter greener economy and a fairer New Zealand for all New Zealanders not just those at the top. Thank you.KANWALJIT SINGH BAKSHI (National): Satsriakaal Mr Assistant Speaker. Talofa lava. This is Samoan Language Week so I want to greet you in the Samoan language.The ASSISTANT SPEAKER (H V Ross Robertson): O a maioe? That’s got you!KANWALJIT SINGH BAKSHI: Never mind—next time I will learn a little bit more and come back with a reply. It is my privilege to stand and speak in the third reading of this legislation the Credit Contracts and Consumer Finance Amendment Bill and the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill. It is crucial reform legislation to keep up with the times. The Government is well aware of the hardship that the public is undergoing having to deal with unscrupulous moneylenders. Some lenders are irresponsible in their lending practices and some consumers make mistakes and poor decisions. This contributes to cases of spiralling debt and financial hardship among vulnerable consumers.This legislation protects borrowers from dubious finance companies and dealers. It is important that members of the public are well informed before they make critical financial decisions that will impact upon their lives. This legislation seeks to do just that. The legislation is the biggest overhaul of consumer law in a decade and encompasses wide-ranging changes to the consumer credit and repossession laws.I would like to acknowledge the Hon Craig Foss for introducing this bill and would also like to acknowledge the chair of the Commerce Committee Jonathan Young and the hard-working member of Parliament for Rodney Mark Mitchell for his contribution. I would also like to acknowledge the Hon Peseta Sam Lotu-Iiga who is very passionate about this legislation. With these words I commend this legislation to the House.ANDREW WILLIAMS (NZ First): It is a great pleasure to take a call on behalf of New Zealand First following those lovely comments from the previous National speaker Kanwaljit Singh Bakshi about all his colleagues—and there are a few more you could have thanked as well who are sitting over there.But we will move on to the real subject tonight which is loan sharks. It is not all about thanking other National Party people for their contributions at the Commerce Committee and not about doing all that sort of backslapping. At the end of the day you can have all the fine print about what the moneylenders and the loan sharks will be required to do but the fine print is so small that it can hardly be read and hardly be seen. Many of the people affected by these bills the Credit Contracts and Consumer Finance Amendment Bill and the Financial Services Providers (Registration and Dispute Resolution) Amendment Bill do not speak English or have very limited understanding of English. They will simply be still taken for a ride as vulnerable people in our society who are borrowing money from unscrupulous loan sharks and moneylenders.In that respect there is one party in this House that has been consistent on this and that is New Zealand First. We have been consistent in saying that in terms of this legislation the Government is badly falling short. It is not recognising the fact that that last essential element of putting caps on interest rates would have been the ultimate determinant in this legislation that would have really made all the difference. So you can have all the fine print you like and you can have all the assurances you like but rest assured that the unscrupulous lenders will still find ways around it and will still find people who will sign up to things but cannot afford to borrow the money and will end up paying exorbitant interest rates.We cannot understand the rationale of this National Government in turning its back on other jurisdictions such as the United Kingdom the United States Canada Australia South Africa and Finland and most of the countries in Europe. The National Government here in New Zealand says it knows better—far better than all these other countries—and it will not put caps on interest rates and yet these other countries will. We have heard other speakers tonight mention some of the caps that are in place in some of these countries—the likes of 4 percent or 5 percent per month that sort of thing—to keep things realistic to keep things in single figures to keep things inperspective to what people may realistically be able to afford to then pay back. But we have not heard from the National Government how it is going to address interest rates that are into double digits—skyrocketing accumulative interest rates that end up in triple digits in some cases where people simply have no way of repaying the loans.Families end up suffering. At the end of the day it is the children who end up suffering in many cases. The children go without because simply the family is having to repay such huge amounts of interest to the loan sharks and the moneylenders. It is very sad that the National Government once again shows its lack of respect for social justice and its lack of empathy for those who are in most need of being protected and who are the most vulnerable in our society. Once again it is probably because the National members all come from backgrounds where this does not apply to them. It does not affect them. They are not affected they probably do not have people in their families affected by it and therefore it is out of sight out of mind. They do not care—too bad hard luck ain’t going to go there. Quite frankly it is very saddening that the National Government cannot recognise the fact that we as a Parliament and as the House of Representatives have a duty of care and a duty of responsibility to the people of New Zealand to protect those who are most at risk and those who are most vulnerable.It is also interesting that Carol Beaumont brought in Supplementary Order Paper 430 to put a cap on interest rates which was a follow-on from a member’s bill a couple of years ago the Credit Reforms (Responsible Lending) Bill which Charles Chauvel originally drew up. When it was a member’s bill it was put through with the support of the Hon Peter Dunne in those days—3 years ago. Peter Dunne is on record—in fact he wrote to one of his constituents—saying that he was pleased to be supporting that particular piece of legislation which included caps on interest rates and he would look forward to its being successful in the future. It is interesting that a couple of years later the Hon Peter Dunne then the Minister of Revenue and a lackey to the National Government went back on all those former assurances to support caps on interest rates and voted against it.A couple of weeks ago when this legislation was in Committee and when that amendment was put to the Committee to bring in a cap on interest rates it was lost by one vote. Again whose vote was it lost on? You do not have to guess. It was Peter Dunne’s. Once again Peter Dunne was the casting vote to ensure that caps were not brought in on interest rates. Talk about as the Rt Hon Winston Peters has said in the past double-crossing the bridge when he comes to it. That is Peter Dunne for you. He certainly double-crossed the bridge and double-crossed the people of New Zealand in terms of this bill to ensure that interest rates had caps put on them.Just in conclusion I am not going to labour the point but in some future Government that New Zealand First has a role in and where we have influence we will certainly ensure that the people of New Zealand the vulnerable people of New Zealand are protected in a greater manner and that interest rate caps are brought in. We believe that it is in the interests of all New Zealanders to have that. We believe that we should be no different from many of the other major countries that I mentioned earlier and that as a result of that New Zealand would be a far better place. We do not want to see the moneylenders and the loan sharks ripping off good hard-working Kiwi families and good hard-working Kiwi workers. We want to protect them. New Zealand First will stand up for them and ensure that that is the case.Dr JIAN YANG (National): Nihao. I am happy to rise to take a short call on the Credit Contracts and Consumer Finance Amendment Bill and the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill at their third readings. This is comprehensive legislation. It reforms the entire suite of legislation that governsconsumer credit contracts from before their inception until their termination or enforcement. The legislation covers different areas including responsible lending disclosure fees repossession enforcement etc. This legislation is the biggest overhaul of all consumer law in a decade and it encompasses wide-ranging changes to consumer credit and repossession laws.Under this legislation lenders must act responsibly and consumers must have the information they need to make informed decisions and there are serious consequences for those who breach the law. Some lenders have irresponsible lending practices and some consumers make poor decisions. This contributes to cases of spiralling debt and financial hardship among vulnerable consumers. We are fully aware of that. That is why the Government is going to pilot a microfinance scheme to help low-income people avoid debt traps.This legislation is part of the Business Growth Agenda and will contribute to aligning business law between New Zealand and Australia. I commend the legislation to the House. Thank you.CLARE CURRAN (Labour—Dunedin South): Talofa lava Mr Assistant Speaker. Labour stands for opportunity for all New Zealanders. It stands for everybody having a decent job with a decent wage with a house that they can afford to live in where their children can grow up and have opportunities and not live in poverty unlike the 285000 New Zealand children who are currently living in poverty. Sadly this is the country we are living in at the moment and this is the country in which this legislation the Credit Contracts and Consumer Finance Amendment Bill and the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill is badly needed even though it remains flawed.Last night the co-authors ofThe Spirit Level Professors Richard Wilkinson and Kate Pickett spoke at a lecture at the university in Dunedin about how health and social ills are linked to economic inequality. They spoke about—it is not rocket science—how the more equal countries consistently fare better in life expectancy imprisonment infant mortality addictions social mobility obesity literacy and other measures. As would be expected their research shows that New Zealand has high levels of both economic inequality and social problems.Sadly I could not be at that lecture last night. Why was that? Because I was meeting with a group that is trying to become the voice for one of the poorest and most unequal parts of our country—that is South Dunedin. Just on the other side of town from where that lecture was being given is one of the poorest parts of our country. If you do not believe me—but I am sure you do believe me Mr Assistant Speaker—the most recent New Zealand deprivation index was released just recently which clearly showed that the area of South Dunedin is one of the poorest parts of our country. It is one of the areas that has the highest density and the lowest income. Certainly it is not the only area like that but it is the area within which I live it is where my office is situated and it is literally minutes away from where I actually live. It is an area that has growing numbers of third-tier lenders popping up and it is an area where we have more debt management services also emerging in that community.We have this legislation before the House today 11 years—11 years—since a review was first done as to what needed to be the next steps around credit management in this country. It has taken 11 years to get to this point where we have got legislation coming before the House that almost all of the House supports. We know that it is flawed but we also know that we need it and it has taken 11 years for it to get before this House.Last week I attended the announcement of a new debt management service in the South Dunedin area. It is called Christians Against Poverty. It is a service that is clearly a Christian-related service and it is offering a whole range of management services thatare already currently being provided in the city but the fact that there is a new service popping up in one of the poorest parts of the city indicates the depth of the issues related to poverty. We heard stories at this announcement last week of people who hide at night when there is a knock at the door or when the telephone rings because either it will be someone trying to sell them something or it will be one of the debt management people coming round to collect the money or to take away their possessions. This is an absolutely unacceptable situation in my city of Dunedin it is an unacceptable situation in New Zealand and we have to address it.This legislation goes some of the way towards addressing this issue. It does not address the whole issue but it goes some of the way towards doing it. It goes some of the way because it introduces the Responsible Lending Code which is an instrument that sets out detailed guidance for lenders to comply with responsible lending principles. This is actually a very important part of this legislation. It is the part of this legislation that we really do support. There was a lot of work put into it and I am sure that we have heard a lot about that tonight.The legislation also recognises unforeseen hardship which means that borrowers can apply to a creditor to change their loan term or to reduce or postpone payments on the grounds of unforeseen hardship. That is also a really important part of the legislation. Again it does not go far enough but it is an important part.I would also like to acknowledge tonight that after concerns were raised in the Commerce Committee by my colleague Clayton Cosgrove the select committee agreed to add a provision requiring credit card statements to include a prescribed warning about minimum repayments. That also seems like a simple thing but it actually is really quite important. That was added due to the hard work being done by members on this side of the House to make provisions that would actually be more effective.Labour also raised concerns at the select committee about those truck shop lenders. As a result the definition of “business premises” was expanded under clause 9 of the Credit Contracts and Consumer Finance Amendment Bill to include “a vehicle stand or stall from which goods are offered or exposed for sale or from which goods may be ordered if those goods may be sold under a credit sale.”Those measures are really important but as we have heard tonight the big gap in this legislation is the failure to include interest rate caps for third-tier lenders. If we had been able to include that in this legislation we would have made a huge difference in this country tonight to those communities throughout New Zealand that are really struggling and where there is extreme poverty. Unfortunately we could not go that far because on the Government side of the House for whatever ideological reason—or for the reason that those members were captured by some group—we could not actually manage it.I have said in this House previously when speaking on this legislation that I predict we will be back in this House within 2 years and we will be making changes to include interest rate caps. I stand here tonight giving that commitment because I know that we will do whatever we can to get this legislation changed to include a provision that has interest rate caps on it. Just as so many other countries in the world have such a provision we must have that provision in order for this legislation to be truly effective.Tonight I want to acknowledge the work done by Carol Beaumont my colleague on this bill. Without her hard work we would not have the legislation here in the state that it is in tonight. I know that the officials worked very hard. I am very pleased to commend this bill to the House.Hon CHRIS TREMAIN (National—Napier): Talofa lava and good evening. It is a pleasure to rise as the last speaker in the third reading of this credit contracts legislation. I just want to start by taking the opportunity to thank a range of people who havecontributed to this legislation no less than the Minister of Consumer Affairs Craig Foss who has been successful in bringing this legislation to this point. It has been long in its gestation. I am the first to admit that. I was one of the Ministers who shepherded it through for a period of time when I was the Minister of Consumer Affairs. So I understand deeply the issues that surround this legislation. I also want to thank Jonathan Young and the deputy chair of the Commerce Committee Clayton Cosgrove who have shepherded this legislation through the select committee and all members of the select committee for their contribution to this legislation. Most important I want to thank the House and those members of the House who are supporting this legislation tonight.Often members of the public see this House I guess through rose-tinted glasses or the view from the 6 o’clock news which often pits us at each others’ throats from across the Chamber. Actually 65 to 70 percent of the legislation that passes through this House is supported by the two main parties. If you asked the general public about that particular statistic they would probably shake their heads and say: “No surely that can’t be the case.” Well without having the exact statistics I would suggest that it is around that level. This legislation is supported across the House so we thank the Labour Party for its support on this.I also want to thank Sam Lotu-Iiga who has been a stalwart from this side. I know that the Opposition mentioned Carol Beaumont but on this side of the House Sam and Alfred members of our Polynesian community have been stalwarts in supporting this legislation. They have been at the centre of the communities that have suffered from irresponsible lending. They know first hand the impacts that it has on families and the difficulties that transpire as a result of irresponsible lending. So I just want to acknowledge those members of our caucus who have championed this legislation and got it to this point.In a nutshell this does change the legislation from start to finish. In my opinion even though it has had a long gestation period it does improve the situation and it does improve the position of those who are faced with difficult lending decisions often in the lower socio-economic demographic communities in New Zealand. I think it is a huge step forward. I acknowledge the Minister for his progress and those Ministers before him who have taken this path and I commend the legislation to the House. Thank you.The ASSISTANT SPEAKER (H V Ross Robertson): I call the honourable member Iain Lees-Galloway and ask whether this is a split call.Iain Lees-Galloway: That is a very good question. Is this a split call? It appears to be a split call.The ASSISTANT SPEAKER (H V Ross Robertson): Thank you. In that case the member will get a bell with 1 minute to go.IAIN LEES-GALLOWAY (Labour—Palmerston North): Labour is happy to support the Credit Contracts and Consumer Finance Amendment Bill and the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill. It is legislation that goes a small way towards achieving some of the improvements to credit finance law that my colleague Carol Beaumont has been calling for for some time. Although we can all pat each other on the back this evening and can be pleased with a job reasonably well done this legislation is a pale imitation of what Carol Beaumont has been calling for and what Labour thinks needs to be achieved.What we are really disappointed in is just how long it has actually taken for the Government to take this issue seriously and to progress this legislation through the House. Chris Tremain mentioned that for a period of time he was in charge of this legislation as the Minister of Consumer Affairs. I do not know how many Ministers have held the consumer affairs portfolio whilst this legislation has crawled through the House.Hon Maryan Street: Lost count.IAIN LEES-GALLOWAY: Well we have lost count actually but what we know is that this has not been a significant enough priority for this National Government because the people whom we are talking about here the people who suffer from this kind of predatory lending are the most vulnerable in society and they have never been a priority for that party on the other side of the House.Instead of supporting the Credit Reforms (Responsible Lending) Bill that Carol Beaumont brought to the House the National members voted against it. At the time National said that it was going to bring in comprehensive legislation. That was its reason for voting against Carol Beaumont’s bill—because it was going to do the same thing and it was going to do it much more comprehensively than what Labour was proposing. That was close to the beginning of the last term of Parliament. What we saw instead was a focus on a whole range of other things that have made life more difficult for the most vulnerable in society whilst this type of legislation has languished on the Order Paper for far too long.Many vulnerable consumers and many vulnerable citizens of New Zealand get trapped in cycles of debt and despair. A lot of people have been trapped in those cycles for far too long whilst this type of legislation has stayed on the backburner for the National Party. What we are seeing is that people who are on low incomes people whose real wages have gone backwards under this Government are unable now to afford what many of us take for granted as basics in life. Those things have become luxuries for a number of people and the only option available for them to enjoy those luxuries is often to go to a loan shark or to purchase from one of those awful things which I get an absolutely visceral reaction to every time I see them—Andrew Little: What Chris Finlayson?IAIN LEES-GALLOWAY: No no—the house trucks. I see them prowling around our most vulnerable communities. They are prowling around seeking out the most vulnerable consumers and offering them a pipe dream that really seems too good to be true. Frankly what they offer is too good to be true. This legislation goes the tiniest little way towards reigning in some of those predatory practices but it is not enough. When Labour is in Government we will be addressing this issue properly. We will be dealing with these issues because we do care about our vulnerable communities. We do care about vulnerable families. We care about children growing up in poverty in families that are trapped in never-ending cycles of debt. We will make it a priority unlike the party opposite.JAN LOGIE (Green): Talofa lava Mr Assistant Speaker. It is with pleasure that I rise to take a call on these the third readings ofthe Credit Contracts and Consumer Finance Amendment Bill and the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill which the Green Party is also pleased to be supporting. We recognise and share the concern at how long it has taken for this legislation to get to the House. We notice that the review of the Credit Contracts and Consumer Finance Act commenced in 2008 and that this legislation has had an incredibly long gestation. While we have been waiting and the Government has been moving ever so slowly people have been getting trapped into debt and further entrenched into poverty. As we know these delays have caused real harm. So it is a pleasure to at least have this in front of us tonight to be able to pass it and to move into that next stage of ensuring some protection for New Zealanders.I do need to speak to some of the reasons why we have to have this legislation and what drives people to need to borrow money. Those drivers are things that we believe should be addressed. It is not enough just to restrict ourselves to this kind of secondary measure of preventing the worst of the harm after people have been driven into poverty.We have a duty in this country I believe and the Green Party believes to actually eliminate poverty. We have enough wealth in this country to be able to distribute it in a way that we do not have poverty.I just really want to say that we have heard this evening some people talking about people being caught in these terrible contracts because of a lack of literacy or a lack of financial literacy. Also it is really important to actually just put on record that desperation I believe is probably the main driver for people getting into these agreements. Say you have got the opportunity for a job but it requires a car and you do not have one and you want to get yourself and your family out of poverty. If you do not have access to that cash then the only way you are going to enable that to happen—previously—is to get into this kind of arrangement. The people who have preyed on that desperation are worthy of our contempt not just our regulation.In front of the Commerce Committee some contracts from a company were shown that were from door-to-door sales. I do want to point out as well that I live in one of those communities that is targeted by these people. I have been a renter in Wellington for many years and moved around between communities where that has not been the case. I have never before moving to the community I now live in had people coming to my door to sell me things. That is now quite a normal reality in my community because it is a target community because it is a low-income community.Māngere Budgeting Services Trust in its submission to the select community gave an example from a door-to-door sales situation where a family had been sold a vacuum cleaner. It was available on TradeMe for about $400 but that family did not have that money up front. They ended up getting into this contract arrangement where they ended up paying over $5000 for a vacuum cleaner to be able to provide a clean house for themselves.It is pleasing that this legislation will go some way towards preventing that degree of exploitation but without the interest rate cap it is not going to fully protect these families who are going to continue to be preyed on by these companies. We know that it is not uncommon for the annual percentage interest rates to be over 50 percent 100 percent or even higher. People are paying well over 100 percent of the cost of the actual item. That deserves our contempt. This is one step towards changing that exploitation.Hon Peseta SAM LOTU-IIGA (Minister of Pacific Island Affairs): Talofa lava. It is a pleasure to take this the final call on these loan sharks bills the Credit Contracts and Consumer Finance Amendment Billand the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill. This is legislation that clamps down on nasty loan sharks. This is legislation that protects our most vulnerable families from these predators. This is legislation that fulfils the Government’s promise to deliver justice and equity for all New Zealanders.We have listened to the people who have said that this was a problem—the problem of loan sharks taking advantage of people who for various reasons are unable to repay loans on moneys advanced which as a result creates misery hardship and a vicious cycle of debt and poverty. The bill deals with this mainly through a responsible lending code and better disclosure of loan terms. It also complements the work that we have done in Budget 2014 where $22 million was delivered to budgeting services to help families make more informed decisions on spending. We have invested $10 million into a community finance partnership. This provides low-interest loans so that borrowing is more affordable.I have championed this issue with my comprehensive member’s bill. I am glad that this legislation takes up many of the provisions that I advanced in that bill particularly around the licensing of repossession agents and employees as well as limiting the assets that may be repossessed by those agents. This is one of my proudest days in thisParliament—a day where this Government again delivers on the issues for the people of Maungakiekie and everyday New Zealanders. I commend these bills to the House.A party vote was called for on the questionThat the Credit Contracts and Consumer Finance Amendment Bill be now read a third time.Ayes113New Zealand National 59; New Zealand Labour 34; Green Party 14; Māori Party 3; ACT New Zealand 1; Mana 1; United Future 1.Noes7New Zealand First 7.Bill read a third time.A party vote was called for on the questionThat the Financial Service Providers (Registration and Dispute Resolution) Amendment Bill be now read a third time.Ayes113New Zealand National 59; New Zealand Labour 34; Green Party 14; Māori Party 3; ACT New Zealand 1; Mana 1; United Future 1.Noes7New Zealand First 7.Bill read a third time.Third ReadingsHon JUDITH COLLINS (Minister of Justice): I moveThat the Victims’ Rights Amendment Bill the Children Young Persons and Their Families Amendment Bill (No 4) the Parole Amendment Bill (No 2) and the Sentencing Amendment Bill (No 2) be now read a third time. These four bills have been divided from the Victims of Crime Reform Bill. These bills are an additional step in the Government’s work programme to reduce the impact of crime on victims. They improve how victims of crime experience the justice system and make the system more responsive to their needs. These bills are part of an omnibus bill and strengthen existing legislation for victims of crime. They amend the Victims’ Rights Act of 2002 the Children Young Persons and Their Families Act 1989 the Parole Act 2002 and the Sentencing Act 2002.Over the last year the Government has introduced other legislation focused on protecting New Zealanders from violence and supporting victims. The Crimes Amendment Act (No 3) was enacted to strengthen offences relating to violence against children. The safety of protected people will also be increased via the Domestic Violence Amendment Act 2013. There are currently two bills before the House that are focused on the victims of serious offences. The Public Safety (Public Protection Orders) Bill which is currently before the Justice and Electoral Committee will introduce civil detention orders to protect the public from serious sexual or violent offending. The Victims’ Orders Against Violent Offenders Bill will introduce non-contact orders for victims of very serious offences. This Government has introduced specialist court service victims advisers for victims of sexual violence across New Zealand. This is funded by an offender levy that also funds another 14 entitlements and services for victims of serious offences.In my role both as a member of Parliament and before that as a lawyer I have spoken with many victims who have encountered distressing experiences as they are excluded from key parts of the justice system. I believe very firmly that courts must surely be there for the provision of justice for those who seek justice not for theproviders of services. This legislation gives victims the opportunity to be more involved in the criminal justice process and helps to ensure that they are better informed about their rights. In particular the bill makes changes to victim impact statements that will give victims greater freedom to express their feelings in their own words and allow victims of serious offences to read their statements in court. Under the legislation photographs and drawings may also be submitted in victim impact statements.The legislation increases the accountability and responsiveness of Government agencies providing services for victims. It requires agencies to deal with complaints from victims promptly and fairly. Each agency must report on the complaints they receive from victims. The legislation also requires the Ministry of Justice to develop a Victims Code. The Victims Code will provide victims with information on the services available their rights and the duties and responsibilities of Government agencies with criminal and youth justice obligations. The code will make Government agencies more accountable in their provision of services to victims of crime increase victims’ awareness of their rights and improve access to information. Meeting the needs of victims of crime is central to the Government’s objectives and direction for the justice sector. The bills divided from the Victims of Crime Reform Bill represent a significant step in improving the experience of victims as they through no fault of their own must encounter the justice system. I commend this legislation to the House.ANDREW LITTLE (Labour):Malo lesoifua in this Samoan Language Week. It is a pleasure to rise and take a call on the third reading of legislation arising from the Victims of Crime Reform Bill. I note following the Minister of Justice’s address to the House just now that she referred to at least three other pieces of legislation currently going through the House that are dealing with various different aspects of victims’ rights and their place in our justice system. That does highlight the need now I think at this point in the history of our criminal justice system for a cohesive and comprehensive piece of victims legislation—a comprehensive and properly set out charter of victims rights. There is a need for one place where victims and their advocates and their advisers can go to in order to understand exactly how it is that they can make their voice heard and make their considerations known in the course of the administration of justice by our criminal justice system.As it is this piece of legislation comprises four bills to achieve yet more progress at least incrementally anyway in providing for the place of victims in the criminal justice system. Once again it reflects the growing evolution this growing development of the place of victims—the previously hidden and sometimes even unknown voice and place of victims—in our criminal justice system. It is for that reason that we support the legislation. It makes improvements. It builds upon the work that was started in the fourth Labour Government in 1987 and again in the fifth Labour Government in 2002. What I suppose is surprising is that this legislation started its life in 2011 and 3 years on we are finally getting around to passing it. So this Government is in no position to say that it accords priority to victims’ rights and victims’ interests. This is an also-ran piece of legislation if you like. Close to an election the Government realises that it has to do something and it suddenly puts on the pace.But listen let us not quibble about it. Let us not be petty about it. This is nevertheless—Hon Christopher Finlayson: Let’s not.ANDREW LITTLE: —important legislation. Chris Finlayson QC the Attorney-General would know all about quibbling and being petty because if there is one thing that has defined his time in that office—that grand and high office which is very important to our criminal justice system—it is his innumerable capacity and capability to both quibble and be petty. But I do not want to be churlish in return; I want to begenerous at least in relation to this piece of legislation and to say that we nevertheless support it.As the Minister correctly said at the heart of this legislation is ensuring that victims have information so that they can decide and they can know when it is that they have their opportunity for input because the criminal justice system is not just for the lawyers and the Queen’s Counsel and the highly paid and the silks; it is the people’s justice. It is for people. The overlooked part of the criminal justice system has of course been the victims.The first bill the Victims’ Rights Amendment Bill ensures that victims are given information about the progress of the matter on a trial of the charge that has been laid against an offender so that they know when they can take their part and provide information and what have you. It creates positive obligations on the police on the prosecutor on other court officials and even on the judges to ensure that the victims’ voices are heard that the victims get to be interviewed that they can prepare their victim impact statements and that the judge has a positive duty having received a request from a victim to read their statement to enable that to happen with some provisos. The provisos are reasonable and are proper.We have to remember that in our justice system in our form of justice—[Interruption] It is a pity that Chris Auchinvole and Cam Calder think this is a light-hearted matter where they can talk jocularly about whatever issue is entertaining them at the moment. But this is a serious matter for the rest of us which is why members on this side of the House are giving it due solemnity.Victims must know that at an appropriate time in the disposal of a criminal matter they will get to have their say that a judge is required to give due weight to what they have to say and this legislation provides positively for that. I was about to say that of course the nature of our justice system is that it is still an adversarial system. We have inherited that system. Notwithstanding what some people say about it—that it is no longer about getting to the truth that it is a game of jousting between lawyers presided over by a judge—the reality is that the adversarial system does actually assist in getting to the truth. It tests the case put by the Crown. That is the system we have inherited.It is important in terms of the confidence of the public and the confidence of society that the Crown assumes the mantle of prosecuting the charge and that the defendant if they do not have the means to is assisted to provide their defence. But the case is put to the test. If following that contest of ideas and legal principle the charge is proven and a conviction is entered the victim must then be able to have their say. That provides a balance that we have not hitherto handled particularly well.This legislation deals specifically with the situation that we have seen developing perhaps more recently where judges have taken it upon themselves to edit victim impact statements or even to prevent them from entering the court record. So this makes a useful contribution in that regard. It also ensures in relation to parole hearings that the victim is kept advised of the progress and when a parole hearing may be taking place—all parole hearings related to the particular offender. It also provides specifically for the victim to be notified about bail hearings and to have their views relayed where appropriate at a bail hearing which hitherto had not been the case and when it comes to young offenders for a victim’s point of view and the impact on them of the offending to be heard in a family group conference dealing with the young offender. These are important new developments in the framework now applying to victims’ rights.Of course the legislation goes that far but a properly developed and evolved victims’ rights framework would go further. It is disappointing that this House has spent 3 years franklyfaffing about with this legislation when actually we could have got on to something more substantial. What about having a victims’ rights advocate or an“Office of the Victims Advocate”? The Minister has spoken publicly about having a victims commissioner. I am not quite sure what that is meant to add. The Minister has not specified that.Chris Auchinvole: Ha ha!ANDREW LITTLE: Once again Mr Auchinvole chortles heartily at the idea that victims might have an office in the justice system that would advocate for their interests and their rights. How disappointing that is from that member of the National Party—from the retiring National Party list member who hails from the West Coast. He knows better—he knows better. I would like to hear from him about why he finds this so funny.But what about an “Office of the Victims Advocate” so that there are victims advocates in each court whom victims can go to the police can go to and the prosecutor can go to that would make sure that the victims tied up in a case—always against their choice—can understand what is going on and get their rights attended to? What about ensuring that there is a statutory right for victims to ensure that the direct costs they incur as a result of participating in the criminal justice system are met by the Crown? And what about ensuring things like that they get a seat in the courtroom when the case they are at the heart of is heard? Why are those things not provided for? A Minister of Justice focused on their job and not charging about having secret dinners in China would have actually got on and got this legislation passed and be focused on the real issues which is what we need to do.As I said Labour will support this legislation but we are all behind the eight ball when it comes to developing victims’ rights. The next Labour-led Government will be at the forefront of ensuring there is a proper comprehensive and cohesive set of victims’ rights so that victims will know where they stand where to go and what they can expect in the criminal justice system. It will be better than is provided for in this legislation which has taken 3 years to get to this point.SCOTT SIMPSON (National—Coromandel): As chair of the Justice and Electoral Committee it is a great pleasure for me to rise and speak in support of the third reading of the legislation arising out of the Victims of Crime Reform Bill in the name of the Minister of Justice the Hon Judith Collins. Following AndrewLittle’s contribution I am very pleased to hear that the Labour Party is going to support this legislation because so often in the history of that party’s time in Government it has not supported victims or victims’ rights.Mr Little is of course correct when he makes the point that our criminal justice system is an adversarial system. It is a system that is based on the contest of evidence and cases and it is a system that has proved us well and our system well. But over the years it has not catered well for victims. Too often in our criminal justice system the victims are the forgotten players in the courtroom and for too long victims have not had an opportunity to have their views properly expressed and properly recorded for the court for the public and of course for offenders. This piece of comprehensive and innovative legislation is a very significant step forward in terms of correcting the non-involvement of victims in our criminal justice system.I am pleased also to note from the second reading that New Zealand First is I think supporting this legislation. I am pleased that those members are also supporting the rights of victims in our criminal justice system.This is omnibus legislation that amends the Victims’ Rights Act of 2002 the Children Young Persons and Their Families Act of 1989 the Parole Act of 2002 and also of course the Sentencing Act of 2002. Our Government was elected back in 2008 with a mandate to improve our justice system and particularly to improve the lot of those who find themselves the victims of crime and who are not in our criminal justicesystem by any act other than by mere accident or who are just partly to blame for being there in the wrong place at the wrong time perhaps—nothing more complicated than that.One of the key aspects of this legislation is to make significant changes in the role of the victim impact statement. The role of the victim impact statement has been a good part of our criminal justice system in recent years but there is an opportunity—and this legislation does it very nicely—to extend the role in a way that makes the statement far more meaningful for the victim. We are going to widen the scope and provide victims of serious offences with the right to read their statements out in court and to present a statement in whatever form suits them. This could include pictures graphics poems or a whole range of methods other than just the written word.Although legislation can never legislate away the pain and suffering faced by victims this legislation will go a long way to help ensure that victims are notrevictimised by their participation in the process that we call our criminal justice system. This is just another piece of legislation as part of a suite of new bills that have been introduced by Judith Collins and the justice team on this side of the House that will focus clearly—and we will make no apology for doing so—on putting victims first in our criminal justice system.It is very good to note that since our coming into Government in 2008 crime is at record lows the numbers for serious criminal offending are at lows and the job that this Government has been doing is a very fine one. It is a tribute to the Minister it is a tribute to this Government and it is a tribute to the foresight and innovative imagination of a Government that really does put victims first that we can bring this legislation to the House and that it can be widely supported across the House. It deserves to be passed. I fully and totally commend this legislation to the House.Hon MARYAN STREET (Labour): It gives me great pleasure to rise and follow Scott Simpson the chair of the Justice and Electoral Committee whom I consider to be a very capable chairperson.I rise to speak to the Victims of Crime Reform Bill and the four pieces of legislation into which it has been divided. This must be wash-up week. We have had Budget week and that is over and this must be wash-up week because we are arriving on the Order Paper at pieces of legislation that have been languishing for a very long time. So the Government has decided to see what it can do to win a few points—to be able to get out into the electorate before the general election and say: “Look what we did. Don’t look at how long we took to do it just look at what we did and we have got it done in time for Election 2014.”The report from the Justice and Electoral Committee on this piece of legislation is testimony to the tardiness of the Government actually in this respect. The committee membership list in the report back shows that four out of the nine members of Parliament who were on that committee at the time are no longer members of Parliament. They are not even here. We have Dr Jackie Blue Charles Chauvel the Hon Lianne Dalziel and Katrina Shanks all of whom left this Parliament some time ago. That is how long this legislation has been sitting around.In fact if one goes back to the whole point when the consultation on this legislation began it began in 2009. If you look at the regulatory impact statement from the Ministry of Justice there was quite extensive consultation in 2009. That resulted in the Victims of Crime Reform Bill being referred to the Justice and Electoral Committee on 4 October 2011. The Government spent 2 years or a bit more—from 2009 to late 2011—consulting with a range of people which is right and proper. It is good that it did that but it did take a long time doing it. Then the closing date for submissions to the select committee was 17 February 2012. We had the election in between the time thatthe bill came to the select committee and the time that submissions were to close. There were 34 submissions received and 12 submissions were heard. Then the legislation was not to see the light of day again for some time. So here we are at the end of May in 2014 5 years on from the time that the original consultation process started. Let us hope that this is not the way that New Zealand expects legislation to proceed.Since 1987 the New Zealand Parliament has dealt a number of times with the rights of victims of crime and with their interests. Labour initiatives such as the Victims of Offences Act 1987 and the Victims’ Rights Act 2002 were two such efforts to address the concerns and the sensitivities of victims of crime. Both of those initiatives adopted an incremental approach to changing the system and there are some critical issues here that I will get to in just a moment but the aim was to make the system more responsive and more sensitive to the victims of crime and to their families. We support this legislation because it moves along in that same tradition with some incremental change that addresses the rights of victims of crime. But we do think from the evidence that was presented to the select committee all those years ago that it is time to do more.The 49th Parliament repealed the partial defence of provocation and that went some way to remedying the dreadful situation that families of murdered victims in particular—or rather as a special example—found themselves in during trials. The reputation of a deceased loved one was distorted beyond recognition by the defence. Families simply feltrevictimised in the course of the process in court and that still happens. Further substantial reform to address and eliminate this practice is clearly needed.We believe that a reference asking how best to achieve this should go to the Law Commission as a matter of priority. It is important that Parliament does not attempt to alter the balance that exists in our judicial system currently but having the Law Commission apply itself to this may be one way of progressing victims’ rights through this Parliament in a bipartisan or a multipartisan way. It should be referred to the Law Commission as a matter of priority in our view. But even with the changes such as the introduction of victim impact reports prior to sentencing we still have an adversarial criminal system that recognises only the accused and the prosecution.We are very mindful of the exhortations of the Chief Justice and others not to violate the due process guarantees that exist in our system. Providing for an advocate for the victim however need not violate that balance inherent in our adversarial system. So we think that it is entirely possible to establish a role for a victims advocate without upsetting the system of balance between accused and prosecution that has developed over centuries and that exists in our criminal justice system at the moment. But the role of a victims advocate should be considered. It should include the ability to explain processes to victims’ families and to speak up on behalf of victims when statements about their interests and reputation are made.Victim Support as an organisation is already doing some of this work. We believe it should be given better statutory recognition and more secure funding but we do support this legislation.In the course of consultation there were numerous groups that were consulted. I dare say that some of them have forgotten that this legislation was sitting in the bowels of Parliament for as long as it has been and they may not be aware that it has finally seen the light of day. But I hope that those people who were consulted including the Chief Justice the Chief Judges of Family Court the Youth Court the District Court the New Zealand Council of Victim Support Groups the Sensible Sentencing Trust the NGO alliance associated with the Taskforce for Action on Violence within Families and TOAH-NNEST or TeOhaaki a Hine—National Network for Ending Sexual ViolenceTogether will have some notification that this legislation is finally passing its third reading.The legislation does enjoy support across the House. There are more things that we could do and Labour looks forward to doing them in Government. Thank you.DAVID CLENDON (Green): I am pleased to take a call on behalf of the Greens on technically these four bills—the Victims’ Rights Amendment Bill the Children Young Persons and Their Families Amendment Bill (No 4) the Parole Amendment Bill (No 2) and the Sentencing Amendment Bill (No 2)—but for the sake of convenience we will continue to treat them as the Victims of Crime Reform Bill. The Greens will continue to support this legislation as we have done up to this point but as with our Labour colleagues we do so without any particular enthusiasm. This legislation is much less than it could be.The legislation does do some useful things. It has elements of a restorative justice approach within it and that is something at the heart of our justice policy—a commitment to restorative justice a genuinely restorative form of justice. This legislation gives victims a greater freedom to express their feelings in their own words. It gives them an opportunity to speak directly to an offender in a court of law. It does broaden and strengthen the processes around victim notification of the ultimate fate of offenders and indeed inmates. It does some useful things things that have been called for. It could have done a great deal more though.In fact my colleague noted almost 3 years ago in the first reading of this legislation that to some extent the legislation draws on the Justice and Electoral Committee’s 2007Inquiry into Victims’ Rights which was actually a Green Party initiative and which developed some very useful recommendations. But sadly only about a third of those recommendations have seen the light of day and have been incorporated into this legislation. We look forward to a time when more of those very good recommendations in fact will be put into practice. We share with our Labour colleagues the view that we need a much more comprehensive approach.The Minister of Justice in introducing this reading I think referred to it as ambitious legislation. Her colleague Scott Simpson the chair of the Justice and Electoral Committee used words like “innovative” and “imaginative”. I have to say that if this legislation represents innovation imagination and ambition one must set a very low bar for those qualities or characteristics because frankly I fail to see much of them in this legislation. It is quite a tentative approach. It is a very incremental approach to improving the lot of victims. We do need and look forward to a time when we will do something much more comprehensive something rather more courageous and something that draws on recommendations that have been made here in New Zealand and we can look for ideas internationally. There are many constituencies countries where this is managed much better than we do it and I look forward to being part of that in the future.This legislation goes part-way towards a restorative approach but it runs the risk of trying to mix elements of a restorative process into what is essentially a combative adversarial system. Any budding young scientist knows that mixing together elements that are not compatible can lead to some unfortunate and even explosive outcomes. The idea of bringing victim impact statements into the court—a restorative element in as I say what is basically an adversarial context—can lead to some unfortunate consequences and some submitters made that point. A victim pouring out their heart explaining or expressing the hurt that has been done to their family and to their friends or whatever it might be and looking at an offender who might be laughing joking and really not taking it on board is not helping the victim in any way and even the good andwell-intentioned parts of the legislation do run the risk of not achieving particularly positive outcomes for victims.The point has been made in an earlier reading I think that there seems to be an unfortunate assumption on the part of some at least if not all Government members that victims’ rights can be advanced only at the cost of offenders’ rights. A restorative justice approach is to understand that one seeks to guarantee rights to all parties in the justice system and to the credit of this Government and a previous one we have seen some useful and positive advances. We do see restorative justice meetings conferences and the like. We have community justice panels doing some useful work particularly in Christchurch. We see the emergence of specialist courts such as the homeless court in Auckland and the trials around drug and alcohol courts. These are very positive moves forward and I think we need to resource them better and advance them more quickly. But sadly despite the assurances and in fact the commentary from some of the Government speakers who have suggested that they are actually doing a lot of work about advancing victims’ rights the approach is very tentative. It is very incremental.Sadly we still see too many instances where this Government is even complicit in creating victims. By that I mean the very many instances we have seen recently where the rights of offenders and indeed inmates in our prisons have not been respected—where inmates for example have been illegally deprived of basic rights basic conditions—and sadly no consequences have befallen those people in Government and management positions who have been responsible for allowing that illegal treatment to occur.As we know inmates and offenders have themselves often been victims. The relationship is very close and we know that that is well proven not only in New Zealand but elsewhere.Inmates and offenders have often been victims themselves many of them sadly through their long experience of the justice system. They know their rights very well and they know when their legal rights are being compromised or are not being met. What sort of message does it send to offenders when they see the Government agencies responsible for enforcing the law actually breaking the law? What price rehabilitation when offenders see a model of “Do as I say not as I do.”? That is where the Government needs to look very hard at itself and at its actions and needs to understand that it must be consistent in its approach. It is not difficult. Any good parent understands this. To the extent that this Government has established a “Do as I say not as I do.” model that will not advance the well-being of victims and certainly it will not advance New Zealand’s reputation as a country that respects human rights.On the face of it as I say the Greens will support and will continue to support this legislation because essentially it does no harm.Chris Auchinvole: Are you going to vote for it?DAVID CLENDON: Thank you we are going to vote sir. Listen carefully Mr Auchinvole. I have made that point. Listen carefully sir. We are going to support it because it does no particular harm. But what is actually needed was a comprehensive review. As I said I am pleased to hear Labour colleagues who agree that that is what is called for.The world has moved on. We need to get beyond the simplistic punitive approach that has sadly typified and characterised the evolution of justice legislation in New Zealand for at least the last two decades or indeed for probably longer than that. We look forward to a time when we are in a position to initiate and undertake something that is genuinely ambitious genuinely innovative and genuinely imaginative and we hope that that time comes very soon. Thank you.PAUL FOSTER-BELL (National): Talofa lava to you Mr Assistant Speaker. Can I begin by congratulating our assiduous hard-working and dedicated Minister of Justice on introducing the Victims of Crime Reform Bill and the four subsidiary bills—the Victims’ Rights Amendment Bill the Children Young Persons and Their Families Amendment Bill (No 4) the Parole Amendment Bill (No 2) and the Sentencing Amendment Bill (No 2)—that implement its provisions.I welcome this legislation particularly here in Wellington because on Saturday night I spent an evening out with the New Zealand Police on a ride-along and had an opportunity—Scott Simpson: Volunteering.PAUL FOSTER-BELL:—well volunteering yes. Actually it was very interesting. The sergeant Caroline and the two constables Jeremy and Colin noted that unfortunately the local member here does not seem to take much interest in their activities.Anyway I was out with the police on a ride-along and we got called up to a domestic incident in Karori. It was a very unfortunate incident in that the two adults involved—partners—had two young children who were witnesses to the incident. Without going into details given that it is a case that will probably eventually come up before the courts I think it is very safe to say that the children are victims in every sense of the word and that under this legislation they will be given the support and the assistance that victims need and deserve.I think that we on this side of the House should be very proud and completely unapologetic about the fact that we put the rights of victims above those of offenders and those who do evil in the community and who cause harm particularly to the most vulnerable—the youngest members of our community. So I welcome particularly the provision that deems those people who are witnesses to domestic violence in their households to be victims so that they can receive those sorts of support.I also welcome the provisions that allow them to make a statement in their own way or in their own words. In the case of these particular children who are very small children it might be a visual representation of the harm that they have experienced—utterly appropriate.I unhesitatingly commend this legislation to the House. Thank you.DENIS O’ROURKE (NZ First): This legislation arising from the Victims of Crime Reform Bill is a very welcome step forward in the emerging movement to do more to support and consider the rights and needs of the victims of crime. I have heard some speakers say that more still needs to be done but nevertheless this is a good step forward and for that reason New Zealand First does support the legislation.The four bills amend and improve the current legislation. They provide better for victims of crime generally to broaden the rights of victims of serious offences to provide more opportunities for victims to be involved in the criminal justice processes to ensure victims are better informed of their rights to increase responsible Government agencies’ accountability for and responsiveness to victims and to achieve consistent victims’ rights in all adult and youth criminal jurisdictions.These objectives have been substantially achieved in these four bills as amended following the select committee process. The Justice and Electoral Committee did I think a very good job in making several amendments to improve the legislation—minor in themselves but adding to the quality of each of the four bills.I want to comment on only some of the new provisions. Clause 10 of the Victims’ Rights Amendment Bill will ensure that a reference to all of a victim’s contact details in court would be restricted to ensure privacy. This adds to a victim’s sense of security and privacy. Currently a victim can berevictimised by their contact details becomingpublic with all the potential dangers that that could mean. One of the most useful changes though in this bill I think is the changes to new section 17 set out in clause 12 regarding information about the victims. This legislation would not be effective unless attention is paid to obtaining comprehensive information about the effects of a crime on the victim so that the offender can be made accountable in terms of reparations.The new Act will now require a prosecutor to find out from any victim all relevant information about the victim’s injuries losses and other effects of the offence. The words used in section 17(1) are: “The prosecutor must make all reasonable efforts to ensure that information about the matters specified in subsection (1A) is ascertained from the victim.” And subsection (1A) lists: “(a) any physical injury or emotional harm suffered by the victim … (b) any loss of or damage to property suffered by the victim … (c) any other effects of the offence on the victim; and (d) any other matter consistent with the purpose of victim impact statements …”.I think that is a very important provision because unless there are mechanisms provided to ensure that information is obtained we cannot expect any adequate reparation to be awarded. There are also several other worthwhile amendments and improvements to requirements for notice to victims where offenders are released from detention abscond are released on bail are recalled are convicted of breaches of bail or indeed die.With regard to the amendments to the Children Young Persons and Their Families Act 1989 clause 38 of the Children Young Persons and Their Families Amendment Bill (No 4) amends it to allow victims and their representatives to bring one or more support persons to the Youth Court as of right without having to seek permission from the judge although the judge of course can limit the number of supporters. The need to get that permission had operated as a disincentive to victims seeking the support that they often needed and there was no purpose in the consent of the court being required. It is now clear that the attendance of support people is a right for victims as it should be and I am very supportive of that new provision.New clauses 38A and 38B are also important. New clause 38A requires victims of offences committed by a child or young person to be notified should the child or young person abscond from a youth justice residence. New clause 38B requires that victims of offences committed by a child or young person would be notified should that person die in a youth justice residence. Again it would be most unsatisfactory for a victim to find out about these potential events from the news media or other informal sources. Victims need to know about these events so that they can take whatever actions if any they wish in response or at least be aware and perhaps be wary.With regard to the Parole Act 2002 the amendment to this Act set out in the Parole Amendment Bill (No 2) will restore a victim’s rights and entitlements that were incorrectly removed by the Parole Amendment Act 2007. Victims will therefore again be properly informed about the process and how they may participate in it. If a hearing is an attended one the victim must get notice of the details so that they can attend and the victim must be informed of their right to be interviewed if a hearing is to be unattended. If a hearing is to be unattended the victim would have the right to request that the decision to proceed in that way be reviewed. I think these are minor but actually very important provisions for a victim.Lastly amendments to the Sentencing Act 2002 set out in the Sentencing Amendment Bill (No 2) are aimed at improving the restorative justice process. I do not think I would agree with the comments of Mr Clendon on this. I do not think there is any danger in restorative justice processes and victims of rights of this kind beingattended to in a proceeding. After all it is when the offender has already been convicted that we are dealing with.Clause 44 of the bill inserts a new section 24A requiring the court to adjourn proceedings to allow an inquiry to determine whether restorative justice is “appropriate in the circumstances of the case”. I do think we can trust the courts to determine what is appropriate and what is not. The amendment now explicitly includes the wishes of the victims among the matters the inquiry must consider.Overall this is good legislation. It has benefited from the 34 submissions sent to the Justice and Electoral Committee and especially from the 12 submissions heard orally. I must say that these were some of the best submissions I have heard in a select committee process. Some of them were really quite compelling and dealt with personal experiences which I am sure many members of the committee felt were useful but also as I said very compelling.It has been a good process and these will be four good pieces of legislation as a result. New Zealand First will support all four bills as we have all the way so far. New Zealand First will always support legislation to assist victims so they are assisted by the processes of the criminal law and do not themselves becomerevictimised by it which has I am sad to say been the case too often in the past.This legislation will go some way to improve the old law and to help generate change in official attitudes towards victims. The new law will now be in place but the relevant parts of the Public Service will now need to play their part too in seeing that the culture change actually happens. Only then will we be able to say that all of the objectives I spoke of at the beginning of this speech have truly been achieved.JOANNE HAYES (National): Talofa lava Mr Assistant Speaker. Kia ora. I stand to take a short call on the legislation arising from the Victims of Crime Reform Bill. This is very good legislation. We are putting victims at the heart of the justice system with levies on offenders new laws and new services for victims.This legislation has been led by the forward-thinking Minister of Justice the Hon Judith Collins. I am privileged to commend the legislation to the House. Kia ora.JACINDA ARDERN (Labour): That was a short address to the House from Joanne Hayes. I think though that this legislation arising from the Victims of Crime Reform Bill is worthy of greater analysis than that. I know that my Labour colleagues have been contributing to the debate and the discussion because if we look at the wider context around victims’ rights and the criminal justice system there is still so much more that could be achieved. They are contentious areas though and I think this is the place and an opportunity for us to explore for instance some of those issues that arise out of the fact that we have an adversarial justice system and all of the issues that that brings up for a victim. There is the fact that the repeal of our provocation laws has not truly allowed us to protect families fromrevictimisation and so on. Those are some of the issues that I hope to touch on briefly in my short address.First though I want to discuss the context in which we are debating this legislation which is obviously focused on victims. Let us look at the context in which victims in New Zealand today find themselves. We are often reliant on our crime statistics to make a judgment on whether or not there are more victims out there this year than there were last year for instance. If you ask the Minister of Justice or indeed the Minister of Police she will tell you that crime is down. Therefore the great assumption that is left hanging is that the number of victims has reduced.The issue with our crime statistics—and this has always been an issue; it is not a new one—is that they are totally reliant on an individual reporting a crime to the police the police then recording that crime and it therefore being released in our statistics. The first flaw in that system is that it relies on an individual feeling like they will getsomething out of calling the police in order to motivate them to do that. You might argue that in property offences they will do it because they might have an insurance claim hanging off whether or not they have filed a police report. If you are poor you are less likely to have insurance. Crass as that sounds it is the truth.Who are our constantlyrevictimised victims? They are often our poorer communities. Who therefore are the people who are sometimes less well served by our criminal justice system? They are those same communities which therefore sometimes have a suspicion of the police if they feel less well served and so it continues. Therefore we have to remain with a healthy scepticism about our crime statistics. That is just a fact of life.It is borne out by additional surveys around crime experienced by New Zealanders. These are slightly older statistics but even several years ago 33 percent of all offences were reported to police—33 percent. That is why we have to make sure that we do keep these kinds of debates in context.I am particularly concerned about constantrevictimisation as well. We know that 6 percent of victims experience 54 percent of victimisation particularly our victims of domestic violence. For some reason—Chris Auchinvole: Are you voting for the bill?JACINDA ARDERN: The member Chris Auchinvole over there keeps asking whether we are voting for the legislation. I am sorry if he thinks that the only role we have in this House is to stand up and say we are in favour and sit down again. I think that there is a place for healthy debate and discussion. I am sorry if the National Government has given up on that tonight. When it comes to domestic—Chris Auchinvole: I just wanted to give significance to your statements.JACINDA ARDERN: This is the fourth speech from a Labour speaker and of course all of us have said we are voting for it.When it comes to domestic violence in particular I am particularly concerned because for some reason in New Zealand we tend to track higher when it comes to repeat victimisation than almost any other country. Someone who is a victim of domestic violence is likely to berevictimised over and over again. That should direct us to some of the kinds of interventions that we should be looking at in that space. That is the context. So when we come to look at mechanisms to support victims I think we should think about some of those issues particularlyrevictimisation.One of the issues that I am sure Andrew Little will have raised in particular—because he raised it at the Justice and Electoral Committee and in the Labour Party minority report—was whether or not it is time we looked at the notion of having an advocate for the victim as a formal statutory position in our court process. That is a way of trying to address the imbalance that is created by our adversarial court system but actually it is a really pragmatic idea as well.I remember that when I was quite young for one reason or another I was brought in to support a victim through the court system for a day. I remember how complex the process was and how nervous she was about what might happen in proceedings—whether or not she would see the offender; how she was meant to react at certain points in the process. There were lots of questions that I of course did not have the answers to. It never seemed like anyone who was involved in the court process at that time had the time or the space or the capacity to answer those questions. So at a practical level I can really see a role in our justice system for that kind of position.I think it would also help explain the process and the legal rights around victim impact statements. This has been a particularly controversial part of this debate. Most victims would think that if they were writing a victim impact statement that it is just that—they write down the impact a crime has had on them—and they might ask whythat should be edited or vetted. It is their view and it is their emotional experience that they are wanting to convey and yet there are limitations. Being really clear about that up front is perhaps a way of easing that process—by having someone who is obviously on your side helping you navigate through that part of the process.I also mentioned the importance of the repeal of the partial defence of provocation. I am really pleased that that happened in the last Parliament I think it was. We had some really clear cases where we saw that victims were beingrevictimised through the court process by having offenders trying to claim that they were somehow provoked into their heinous crime. But it still appears to be happening in our court system and I think the case has been made clearly by Labour that there is still some reform required in this area. Sending a reference to the Law Commission on this point might be one way to continue with that work.So those are some of the additional issues we wanted to raise and I think it is right that Labour raised them. We have got a proud history when it comes to enhancing victims’ rights. As much as the Government and the National Party would like torecharacterise the law and order space it was things like the Victims of Offences Act and the Victims’ Rights Act 2002—I vividly remember that Act. I was working for a time in Phil Goff’s office when he was the Minister of Justice. Not only was he working through critical reform around sentencing and parole but also high on his priority list was enhancing victims’ rights. That was when we started to see embedded into legislation the ideas around of course things like the Victims Charter which came out of that and it was also really putting Victim Support on a firm footing to be the recognised agency in working with our victims. I know that those working in our justice system—our police force for instance—absolutely value the role that Victim Support can play locally.One final point I could not speak on this bill without making a note of is that surely our ultimate goal has always got to be preventing victims from becoming victims in the first place—decent prevention. For some time the New Zealand Police has been running an agenda around Prevention First. That is what its focus has been on. Unfortunately the last Budget produced by this Government has severely undermined its ability to do decent preventative work. We have seen over $40 million cut out of the police budget and it is their operational budget so it is literally money that is coming out of both policing and prevention services. It is even coming out of some of the youth services that are focused on capturing young people in their community before they start entering into the harder end of offending by using programmes that I have seen make a real difference in communities. All of those areas are going to take a hit under the last Budget.So if we really want to have a focus on victims we must maintain a focus on preventing the people who are being victimised from being in that situation in the first place. To remove the tools of the front-line workers in our justice system to do that job properly and adequately and basing it on crime statistics alone when there are obvious flaws in doing that is I think very flawed thinking.PAUL GOLDSMITH (National): I commend this legislation arising from the Victims of Crime Reform Bill to the House.CAROL BEAUMONT (Labour): It is a pleasure to rise and speak on the legislation arising from the Victims of Crime Reform Bill. As others have eloquently outlined already we over on this side of the House are supporting this legislation. We have no doubt that the situation of victims in law and otherwise has greatly improved since Parliament first dealt with the issue in 1987. As I said we do not oppose this legislation but although most of the evidence that we have seen indicates that the reforms it will enact will be helpful to a greater or lesser extent we do think there is theneed to do more than just put in place further incremental change. Probably in no area is that more obvious than around victims of crimes like sexual crimes and domestic violence where there is a need to do a lot more than just put in place incremental change. Certainly those types of crimes—crimes against the person—are very often crimes committed by somebody known to and in fact close to that person. They are crimes that have significant costs to the individual to their family to our community and to our country. We need to be looking at whether there are fundamental changes that need to be made—changes in terms of trying to prevent those crimes changes in terms of how our police deal with those crimes and changes in how our court systems deal with them.Actually we need to effectively be acting in concert to make changes that are of a cultural nature—changes that mean that we have fewer victims of those crimes because we challenge and we get acceptance that those kinds of crimes are not acceptable in our community. That starts by recognising that we have a problem that the level of offending in terms of sexual and domestic violence in this county is extraordinarily high and that there is a culture of violence that we need to challenge.Just going back to the basis of this particular legislation the Justice and Electoral Committee conducted an inquiry into victims’ rights in 2007 which highlighted some of the issues that have finally been addressed by this legislation. In fact I think it might have been Lynne Pillay actually chairing that inquiry as I recall.Chris Auchinvole: Lynne Pillay?CAROL BEAUMONT: Yes. So that is how long this has been around. It has obviously taken quite some time to actually address the matters that are in this legislation. The Law Society has expressed some reservations about some of the initiatives presented by the Government particularly the expanding role of victims in the courtroom which might move the courts away from the dispassionate dispensing of justice. However it does support moves in the legislation to give adult victims the right to read their statements in court. I do think that it is an important thing that victims of crime should have the right to have it made absolutely clear to all concerned what the consequences and the impact of the crimes that have been perpetrated on them have actually been for them because often the consequences are very significant.I have been involved in the Inquiry into the Funding ofSpecialist Sexual Violence Social Services. The Social Services Committee heard submitter after submitter outline the consequences of crimes on those victims. The submissions traverse a whole range of different possibilities certainly around mental health issues substance abuse and self-harm. We had a very sad and moving submission from a police officer who came with a picture of his family—his wife and his children. His wife had killed herself as a consequence of the crimes that were perpetrated against her and the fact that she was unable to get the support that she needed. The consequences of crimes against the person can be very very significant and that sort of sexual and domestic offending often causes additional harm because of the nature of the relationship between the person who has had the crime committed on them and the person committing the crime.It is disappointing to us that if victims’ rights are supposedly a priority of the Government it took more than a year and a half since this legislation came back from the select committee for it to have a second reading. That does seem an awfully long time if the concerns around victims are matters that are of serious consequence to the Government. I do not know what the reason given for that was.Certainly in our report back from the Law and Order Committee we noted that since 1987 Parliament has dealt a number of times with the rights and interests of those who suffer as a result of criminal offending. There has been an attempt certainly under Labour Governments to put in place initiatives to deal with crimes. The Victims ofOffences Act 1987 and the Victims’ Rights Act 2002 were both Labour initiatives and both adopted a broadly similar approach to this legislation: incremental amendment to the existing system to try to make it more responsive and more sensitive to the victims of crime and of course to their families because often with the kind of offending that I have talked about the families are the people who suffer as well. In the example I gave of the police officer who came to our select committee very clearly it was the family who ended up suffering. They were the ones who lost their mother and in his case his wife and had to see her suffer for some considerable period of time before she did kill herself. That is the extreme obviously but families are also victims of crime.We certainly think that we need to look at things like our current adversarial criminal justice system particularly in terms of whether there needs to be in cases like sexual offending a different sort of approach. Labour I think will be much more interested in looking at the work that has been undertaken by the Law Commission in this regard. Although there are some fairly fundamental changes made we do believe that this warrants investigation into how we do deal with getting to the bottom of the crime finding out the truth and obtaining justice for people.Let us not forget that in the end with sexual offending there is one conviction in every 100 cases. So there are a lot of people not being brought to justice for their offending. That says a lot. It says a lot about the culture and it says a lot about how difficult it can be for people to lay complaints but it also says that when they do there are often then impediments for them to continue with that—impediments in terms of finding the necessary evidence and impediments about not wanting to go through our current adversarial system. The fact of the matter is that people know and people hear about the way that people are treated in the court system. It was not that long ago—within the last few months—that a Wellington defence lawyer said about a woman in a rape case: “Well she should have kept her legs closed.” If people are going to be put through that sort of treatment in our court system clearly it will put people off taking a complaint and pursuing their right to justice and their right to have the person who has perpetrated a crime against them held to account.There are fundamental changes that we need to make to ensure that we change that kind of system. We even have to look at the recent Roast Busters case and the first report on it coming out of the Independent Police Conduct Authority. This report is supposedly around the communication but what was the message sent to young women when you get a senior police officer standing up there saying “We can’t do anything until somebody lays a complaint.” when in fact some young women had made a complaint? They were being dismissed. They had been brave enough to make that complaint and then what they were hearing and what was going out into the public domain was that that complaint was dismissed. So there is a real need and although we support this legislation we do believe that it is incremental and does not go far enough to protect victims of crime.JAMI-LEE ROSS (National—Botany): I commend the legislation arising from the Victims of Crime Reform Bill to the House.Bills read a third time.The House adjourned at 10 p.m.