Volume 638 Week 39 - Thursday 22 March 2007 
Volume 638 Week 39 - Thursday 22 March 2007 
[Volume:638;Page:8255] 
Thursday 22 March 2007 
Madam Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Visitors 
Pakistan—National Assembly and Senate 
Madam SPEAKER 
: I have much pleasure in informing members that the parliamentary delegation from the National Assembly and Senate of Pakistan led by Mr HamidNasirChattha is present in the gallery. I am sure that members would like to welcome the delegation. 
Business Statement 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 Next week in the House priority will be given to the remaining stages of the Criminal Procedure Bill the Justices of the Peace Amendment Bill and the Immigration Advisers Licensing Bill and to the first reading of the Terrorism Suppression Amendment Bill. Wednesday of course is a members’ day. 
GERRY BROWNLEE (National—Ilam) 
: 
 I have two questions to ask the Leader of the House today. The first relates to some potential business of the House. A report released at 1.20 today suggested that the Government is about to introduce electoral reform legislation to the House. Firstly I ask Dr Cullen what the time line is for that and whether he intends to discuss that bill with all other parties. 
The second matter deals with what appears to be a growing amount of speculation around Parliament that the Government will afford urgency next week to Sue Bradford’s section 59 repeal bill. I suppose that the natural conclusion to draw is that it would be very tidy for the Government to introduce an electoral reform bill and the section 59 bill under one urgency motion in order perhaps to take away some of the bad headlines it could expect from the latter bill. So can the Leader of the House simply tell us whether there is an electoral reform bill due any time will there be consultation with all other parties and does the Government intend to take urgency to pass the bill known as Sue Bradford’s anti-smacking bill? 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 It would not be possible at the moment for Ms Bradford’s bill and the Government bill to be dealt with simultaneously as one is a member’s bill coming up on a members’ day and the other will be a Government bill coming up on a Government day. So that would be one rather large difficulty. 
Secondly of course it is the House that affords urgency not the Government. I would of course welcome support for any urgency in such matters. Thirdly obviously the National Party will be involved in discussion of any electoral reform bill that may be prepared because of course—that is called Parliament. 
RON MARK (NZ First) 
: 
 I raise a point of order Madam Speaker. Could the Leader of the House expand for the enlightenment of parties down this end of the House on whether those issues he was discussing with the National Party about an electoral reform bill will include legislation to prevent the sorts of things we have read about in the book  
The Hollow Men  
from ever being allowed to recur. 
Madam SPEAKER 
: That is not a point of order. 
GERRY BROWNLEE (National—Ilam) 
: 
 I thank the Leader of the House for his indications. In accepting that I am somewhat of a primitive in these matters compared with him I wonder whether I might put the question to him in a different way: does the Government intend to move a motion in order that Sue Bradford’s bill might pass under urgency next week? Further does he intend to consult with other political parties particularly the National Party prior to introducing an electoral reform bill also due imminently? 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 On the latter matter the Government’s practice is to consult with parties sufficiently to ensure that it has a majority before introducing a bill. It prefers to have the votes to pass the first reading before it actually introduces a bill. Of course the National Party will have full input on any matters that might trammel its capacity to repeat its performance as outlined in  
The Hollow Men 
 at the subsequent stages of that bill. 
On the second matter again the Government would not move urgency on any matter unless it had the assurance it had a majority to support that motion. 
PETER BROWN (Whip—NZ First) 
: 
 I raise a point of order Madam Speaker. Is Dr Cullen in a position to say whether if he does seek urgency on any matter he will go through official channels and party leadership or will he just approach individual MPs? 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 We adopt a variety of processes. This particular bill of course is a conscience matter for those caucuses not operating a party vote. That complicates procedural matters in this respect. But I would certainly be consulting with either the leader of New Zealand First or the acting leader depending on when Mr Peters is available. 
Hon TREVOR MALLARD (Minister for Economic Development) 
: 
 I ask the Leader of the House to clarify whether in fact it would be possible to do what Mr Brownlee has very kindly suggested if we got to legislation after 10 p.m. on a particular day. I think there might have been a suggestion from the Leader of the House that it was not possible but I have looked into it and I think it is a very good idea. 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 That would certainly not be the Government’s intention. If an electoral reform bill is introduced it will proceed through the normal channels—that is it will be introduced and lie upon the Table for at least 3 sitting days before it is afforded a first reading. 
GERRY BROWNLEE (National—Ilam) 
: 
 I am sure that many Labour members—probably 17—are surprised to learn that the repeal of section 59 of the Crimes Act is a conscience issue. But that is neither here nor there. The real point is whether we are now to assume that the Labour Government sees electoral reform in this country—and therefore the legislation that will follow from electoral reform—as just another suit in the hands it plays in order to stay in Government by appeasing its supporting parties. That would be utterly appalling. Such legislation should be considered by all parties. 
Madam SPEAKER 
: I think that the member is now verging into the realms of matters for debate. I was not sure whether there was an issue there but maybe— 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I am happy to speak to the point of order Madam Speaker. Within my memory National in its past as a National Government has over the heads of a Labour Opposition passed electoral legislation that disfranchised large numbers of New Zealanders. 
Questions to Ministers 
Maori Customary Rights—Water 
1. TE URUROA FLAVELL (Maori Party—Waiariki) 
 to the  
Minister for the Environment 
: He aha nga kupu tohutohukuawhiwhi e ia mai ingaropuMaoriwhiriwhiri kaupapa me Te PuniKokiri e paana ki te mana tuku iho o te Maorimo te wai? 
[ 
What advice has he received from Maori reference groups and Te PuniKokiri regarding Maori customary rights to water? 
] 
Hon NANAIA MAHUTA (Associate Minister for the Environment) 
 on behalf of the 
 Minister for the Environment 
: Mo te Minita o te Taiao kareanoiwhiwhiingawhakaaro a Te PuniKokirimotenei kaupapa. Mena ka whakaarohiataua mema ki nga mahi a tetehikomitiMaorina te hiahia o ngakaiwhakahaere a-iwi iwhakatu kia whakamaramainga mahi a te Sustainable Water Programme of Action. Kuawhiwhi o ratouwhakaaroitetehi hui i te 31 o Hanuere. Kei ngaMinitainaianei maratou hei whakaarohia e ngawhakautu.  
The Minister for the Environment has not yet received specific advice from Te PuniKokiri officials on this matter. The member will be referring perhaps to proposals by a Maori technical advisory group set up by iwi to facilitate engagement with Maori under the Sustainable Water Programme of Action. These proposals were passed to officials at a meeting of chief executives on 31 January earlier this year. They have been passed on to Ministers who will be considering them in due course at which time a Government response will be provided. 
Te Ururoa Flavell 
: Kia ora Madam Speaker. If the Sustainable Water Programme of Action is about sustainability only why is the Government promoting it with the slogan: “Four million careful owners” thereby misinforming the public that water is owned by the Crown on their behalf when the very clear advice from the Maori reference groups and Te PuniKokiri is that Maori customary rights to water still exist or are at the very least contestable in court? 
Hon NANAIA MAHUTA 
: The Government has been very clear on its position and approach to water—that is that water is a public resource. A lot of views are currently being considered. The best way for that to be done proactively is through the Sustainable Water Programme of Action. 
Charles Chauvel 
: What discussions with Maori have taken place on the Sustainable Water Programme of Action? 
Hon NANAIA MAHUTA 
: In addition to the latest proposals I can advise that extensive consultation has already taken place with Maori. Key issues raised by Maori include the need to act to improve poor water quality and the need for more robust environment bottom-lines in water allocation processes more public awareness of the importance of freshwater resources better incorporation and understanding of Maori knowledge in management processes better capacity for Maori and local government to work together on decision making for water resources and no privatisation of water resources. Those issues are currently being raised by Maori and are being considered by this Government. 
Tariana Turia 
: Tena koutou. What is the Minister’s response to the statement that the deliberate Government campaign to blur the issue of water ownership is to create the illusion of Crown ownership of water for the public good so that the Government can be free to sell off water rights to overseas conglomerates as it is doing with chunks of foreshore and seabed prime coastal properties and farmland? 
Hon NANAIA MAHUTA 
: I can state categorically that the Government’s position is that water is a public resource that the Government and local authorities will continue to manage on behalf of all New Zealanders. Importantly water is precious to us all and I can advise the member that this Government has no intention of privatising water. 
Metiria 
Turei 
: If the Government is so committed to the concept of water being a public resource managed by the Crown on behalf of everyone what then is the point of an extensive consultation to get advice from Maori about what it might mean for them both under their Treaty obligations and under tikanga and is it simply that these apparently extensive consultations are a sham when in fact at the end of the day all of that advice will be disregarded by the Government as it makes its decisions based on its already committed view that water is a public resource and is not in the hands of Maori at all? 
Hon NANAIA MAHUTA 
: That is certainly not the starting position of the Government. It is acknowledged that water is a public resource that is precious to us all and because it is precious to us all we have to find ways to reconcile how that resource can be utilised for the benefit of everybody. 
Te Ururoa Flavell 
: Is the Minister aware that Wakatu and NgatiRarua - Atiawa Iwi Trust had jointly applied for rights to take water from the Motueka Plains aquifer and does he support claims made by Wakatu chief executive Keith Palmer that landowners should have the first right to the precious resource of Motueka groundwater; if not why not? 
Hon NANAIA MAHUTA 
: I am sure the Minister is considering the views of Wakatu at this moment. 
Laboratory Services Auckland—Conflict of Interest 
2.  
Hon TONY RYALL (National—Bay of Plenty) 
 to the  
Minister of Health 
: When did he first become aware that there may be conflict of interest concerns over the greater Auckland district health boards’ consideration of changes to community laboratory services and what action did he take? 
Hon ANNETTE KING (Minister of State Services) 
 on behalf of the 
 Minister of Health 
: Madam Speaker— 
Hon Dr Nick Smith 
: Oh! 
Hon ANNETTE KING 
: I have at least pleased Dr Smith today! The Minister of Health became aware that there might be a conflict of interest in terms of the Auckland laboratory tender on 16 July 2006 when Dr Paul Hutchison asked him a parliamentary question. He was advised by the ministry which had spoken directly to the Auckland District Health Board that Dr Tony Bierre an Auckland District Health Board member was a shareholder in Labtests Auckland. He was also advised that Dr Bierre had stood down from all board business 6 months prior to the issuing of the community laboratory request for proposal. The Minister provided that advice to Dr Paul Hutchison. However Justice Asher’s judgment states that Dr Bierre actually stood down on 21 December 2005 some 18 days before the issuing of the request for proposal. 
Hon Tony Ryall 
: What other action has the Minister taken to satisfy himself as to the handling of the conflict of interest? 
Hon ANNETTE KING 
: The Minister relied on the information that was provided at the time by the Ministry of Health. He believed in good faith that the information provided was the correct information. What the Minister could not bargain on was that Dr Tony Bierre was prepared to mislead not only the chair and deputy chair of the district health board but all members of the district health board in terms of his actions. 
Heather Roy 
: Does the Minister stand by the statement in his letter to me dated 19 July 2006 regarding the tendering of laboratory services: “Those processes need to be transparent and open.”; if so why did he steadfastly refuse to do his job and take proper oversight of the tendering process in Auckland a process that he knew on 16 July—3 days earlier than that letter—was an inside job riddled with conflict of interest? 
Hon ANNETTE KING 
: Of course the Minister believes there ought to be transparency in tenders. That is what is expected but it is just not possible for the Minister of Health to oversee 16500 contracts or tenders. No Minister of Health whom I am aware of has taken personal responsibility for tenders and contracts. Those Ministers did not do so under a National Government and they have not under a Labour Government. 
Keith Locke 
: Does the Minister now regret defending to the hilt last year the new provider in light of the huge public disquiet at the time about both Dr Bierre’s conflict of interest and his proposed slashing of Auckland lab testing services such as when the Minister told Parliament in October last year that the new provider was “building a high-quality laboratory service for Aucklanders”? 
Hon ANNETTE KING 
: The Minister regrets that the appropriate processes that he believed ought to be followed were shown by the judgment not to have been followed. 
Hon Tony Ryall 
: What assurance or advice on the conflict did the Minister seek from each of the three district health board chairs in Auckland Mr Brown Kay McKelvie and Pat Snedden? 
Hon ANNETTE KING 
: The Minister received information via the Ministry of Health which contacted the Auckland District Health Board to ask about the allegations made in the question by Dr Hutchison. The Minister was then assured that the conflict of interest had been dealt with. 
Peter Brown 
: Does the Minister accept that a conflict of interest was evident when the chairman of the Auckland District Health Board made very disparaging remarks towards the staff of Diagnostic Medlab; if he does accept that then why does he not take a leaf out of Dr Cullen’s book and advise the chairman that ethics won he lost so he should eat that and that Wayne Brown should be the recipient of his own advice and go and drive a taxi? 
Hon ANNETTE KING 
: I think the member is being a little harsh in terms of decision making. There are more people than Wayne Brown on the district health board. Responsibility rests with the board for the decisions it has made—that is not with just one member but with the board. 
Hon Tony Ryall 
: Further to my previous supplementary question is that all the Minister did? 
Hon ANNETTE KING 
: Until the Minister was made aware of the conflict in the High Court judgment that came out he believed he had received the appropriate information from the Ministry of Health. However if he had received the copy of Dr Hutchison’s letter that was provided to Mr Brown he may well have been a little confused. I happen to have the letter that Dr Hutchison wrote to Mr Brown. It states: “I enclose a copy of the letter from Dr Tony Bierre a pathologist for whom I personally have great respect. Dr Bierre is well respected nationally. Clearly he has a conflict of interest in being a member of the Auckland District Health Board. Nevertheless I would be grateful if you would look at this letter carefully as I believe having choice is very important. The service is to be tendered on an open-book basis. Thank you for your consideration of this application.” 
Hon Tony Ryall 
: Is the Minister saying to this House that conflicts of interest were raised not only in a written question on 16 July but also in a question in the House later in July that there have been numerous newspaper reports of concerns about a conflict of interest in this case that the Minister has received a large amount of correspondence on this issue and that all he did to satisfy himself was to ask his ministry officials to make a phone call? 
Hon ANNETTE KING 
: No there was not a question in this Parliament on 16 July. On 16 July a written question was received from Dr Hutchison. A reply was received and given to him on 20 July and the Ministry of Health provided that information from the district health board. It was a year after Dr Hutchison wrote the letter that he actually asked the question. 
Hon Dr Michael Cullen 
: Is the Minister telling the House that Dr Paul Hutchison knew of a conflict of interest yet despite that instead of recommending to the board that it did not accept any approach from Dr Bierre passed that approach on and supported the good character of Dr Bierre? 
Hon ANNETTE KING 
: I certainly can confirm that. In his comments Dr Hutchison has made it clear he is the good guy in this because he said that clearly there was a conflict of interest. However he did go on to say: “I would be grateful if you would look at this letter”—Dr Bierre’s letter—“carefully as I believe having choice is very important. The service is to be tendered on an open-book basis.” Now Dr Hutchison was in fact writing in support of the letter that was attached to his letter which I also happen to have and I am prepared to table both. 
Hon Tony Ryall 
: So now that the High Court has turned over a half-billion-dollar contract and has found that her hand-picked district health board chairman disobeyed every common principle of handling a conflict of interest is the fact that 1.25 million people have no certainty of lab contracts all Dr Paul Hutchison’s fault? 
Hon ANNETTE KING 
: Obviously it is not all Dr Paul Hutchison’s fault. In fact Dr Paul Hutchison is a very honourable member and he would have written that letter in good faith for his very good friend Dr Tony Bierre. The point I am raising is that there is more to this than has been put out by the National Party which is prepared to play politics with pathology services in order to make a few political points. For example in National’s singling out of Wayne Brown and Ross Keenan members would think those two men have never received appointments from a National Government. In fact both of them were appointed by National when it was in office to high positions. That included Ross Keenan who was made a director of Counties-Manukau Health in October 1999. He was good enough to be appointed by a National Government but suddenly those two men have become Labour Party lackeys. How did that happen? 
Hon Tony Ryall 
: Having read the judgment of the High Court does the Minister think that Mr Brown Kay McKelvie and Pat Snedden should have signed the Labtests Auckland contract knowing that Dr Bierre was actively involved in the formation and development of so much of this process and in light of the High Court saying that that contract should never have been signed? 
Hon ANNETTE KING 
: The Minister stands by the judgment made by the judge and released earlier this week. 
Hon Trevor Mallard 
: If in future members of Parliament are aware of this sort of conflict would the Minister of Health prefer that the matter be brought to his attention rather than be covered up? 
Madam SPEAKER 
: Contributions across the floor are getting out of hand again and we cannot hear what is being said. 
Hon ANNETTE KING 
: Yes the Minister would prefer that to happen. However it took Dr Hutchison a year from when he wrote the letter to Mr Brown—which I will table in a moment—to raise a question. I also have to ask what knowledge Dr Jackie Blue had because she was also a board member elected on the same ticket as Dr Bierre and Dr Bierre has said he was a close friend of Dr Jackie Blue. I would be interested to know what knowledge she had and what she passed on to the National Party in terms of knowing about that conflict of interest when she became a member of this House. 
Hon Tony Ryall 
: What action does the Minister think Wayne Brown should have taken upon receipt of Dr Hutchison’s letter and does she agree with the High Court that Wayne Brown did not take the appropriate action and should never have allowed Bierre to make a bid in this area? 
Hon ANNETTE KING 
: The Minister believes that Mr Brown at the time took the right action. He in fact wrote a letter on 8 July to Dr Tony Bierre in which he stated: “I must record my disappointment”—and this is in the judgment—“that this letter is the first time I was aware that your company was involved in negotiations with ADHB. I am advised that you should now be excluded from considerations on lab testing and the current regional process. I draw your attention to the obligations under the Crown Entities Act. Both Acts—the Public Health and Disability Act and the Crown Entities Act—set out very clearly the handling of conflicts of interest.” Mr Brown wrote that letter to Tony Bierre who then said he was mothballing any laboratory project he had. He did not do so and continued to mislead Mr Brown. I do not understand why the attack from the National Opposition is against Mr Brown and National is very carefully shielding Dr Tony Bierre. 
Peter Brown 
: Can the Minister explain why after the tender process had been approved Wayne Brown said that Diagnostic Medlab staff “can either work for the new company … or drive a taxi.”? 
Hon ANNETTE KING 
: I cannot explain the words of any person. That would have to be explained by the person himself. 
Hon Tony Ryall 
: I seek leave to table a copy of the High Court judgment in this case which states: “If Mr Brown had checked he would have found that Bierre had not abandoned his attempts”. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Hon ANNETTE KING 
: I seek leave to table Dr Paul Hutchison’s full letter to Mr Wayne Brown. 
Document by leave laid on the Table of the House. 
Hon ANNETTE KING 
: I seek leave to table the letter that Dr Tony Bierre sent to Dr Paul Hutchison seeking his support and a letter that was forwarded on by Dr Hutchison to Mr Brown. 
Document by leave laid on the Table of the House. 
Hon ANNETTE KING 
: I seek leave to table Mr Brown’s letter to Dr Tony Bierre where he sets out that he was very disappointed to find out for the first time that Dr Bierre’s company was involved in negotiations. 
Document by leave laid on the Table of the House. 
Heather Roy 
: I seek the leave of the House to table a letter from the Hon Pete Hodgson Minister of Health to myself dated 19 July 2006 in which he said it was important that laboratory tendering processes were transparent and open—that was 3 days after he knew there was a blatant conflict of interest in Auckland. 
Document by leave laid on the Table of the House. 
Peter Brown 
: I seek leave to table a  
New Zealand Herald  
report that quotes Wayne Brown as saying: “They can either work for the new company … or drive a taxi.” 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Dr Paul Hutchison 
: I seek leave to table the ruling from Justice Raynor Asher in which he points out that the letter I sent to Wayne Brown was both clear and careful. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. I am really tired of members intervening on points of order as I cannot hear above the normal chatter in the Chamber. 
Maori Youth—Employment 
3.  
MOANA MACKEY (Labour) 
 to the  
Minister of Youth Affairs 
: He aha ngaripoatakuawhiwhi e ia mongawhakatutukinga mahi e paana ki te hunga rangatahi Maori e whai mahi ana? 
[ 
What reports has she received on the performance of Maori youth in employment? 
] 
Hon NANAIA MAHUTA (Minister of Youth Affairs) 
: 
Kua kite au itetahi o ngaripoata e kiana e kaha e nga rangatahi kia whai mahi. He mea tino pai rawa atu tera. 
[ 
I have seen one of the reports stating that Maori youth in employment is strong. That is really wonderful. 
] 
I have been advised that the household labour force survey shows that the number of Maori youth aged between 15 and 19 years in employment increased between 1999 and 2006 by 25 percent. This is a greater increase than the overall change in this age group. Also these statistics show that the rate of unemployed Maori youth aged between 15 and 19 years decreased by nearly 20 percent over the same period. This shows a strong commitment by this Government to getting young Maori people into work further education training or employment. 
Moana Mackey 
: What reports has the Minister seen on progress to reduce the number of Maori young people receiving the unemployment benefit? 
Hon NANAIA MAHUTA 
: Unlike this Government the previous Government did not seem to care about young people. In 1999 when Labour came into Government the number of Maori aged between 18 and 19 years who were on the unemployment benefit stood at nearly 6000 and now there are only 875 Maori aged between 18 and 19 years on the unemployment benefit. There is a good story. 
Hon Trevor Mallard 
: I raise a point of order Madam Speaker. The member has a relatively strong voice and she is talking quite loudly but I am having trouble hearing those figures. Can she be asked to repeat them please? 
Madam SPEAKER 
: Yes I was having trouble at the end too. The point is that if members make throwaway comments about others that have no relevance to the question then they can expect to get a response in this House. I ask all members to stick in future to asking and answering them without superfluous comment. 
Hon NANAIA MAHUTA 
: This Government is making a difference in ensuring that young Maori are actively engaged. In fact the employment statistics show that when Labour came into office in 1999 the number of unemployed young Maori aged between 18 and 19 stood at 6000 and now it is 875. That is a good story that shows that more young Maori are in work and more young Maori are being encouraged to stay in education or get further training and get a job. 
District Health Boards Auckland—Deputy Chairman 
4.  
Hon TONY RYALL (National—Bay of Plenty) 
 to the  
Minister of Health 
: Why was Mr Ross Keenan appointed deputy chairman of the three Auckland district health boards and does he have confidence in him in those three roles? 
Hon ANNETTE KING (Minister of State Services) 
 on behalf of the 
 Minister of Health 
: Mr Ross Keenan was appointed by the previous Minister of Health because of his considerable experience in and knowledge of the Auckland health sector including his being a member of what was Counties-Manukau Health from 1999 and also being the chair of the Counties Manukau District Health Board until 2004. He was appointed to carry out the very important task of pulling the three boards together to work collaboratively for the good of the Auckland region. 
Hon Tony Ryall 
: I raise a point of order Madam Speaker. The Minister refused to answer the question about whether she has confidence in Mr Ross Keenan and I wonder whether she would like to complete her answer with your indulgence. 
Hon ANNETTE KING 
: In fact the member asked two questions and I have the right to answer one. But I am happy to say on behalf of the Minister of Health that he has confidence in the role of deputy chair of those three district health boards that Mr Keenan has carried out from 2004. In fact the National Party urged that there be closer cooperation between the boards and one of the reasons the previous Minister looked very carefully at having one experienced person in that role across the Auckland region was to help bring those boards together. 
Hon Tony Ryall 
: Does the Minister have confidence in Mr Ross Keenan? 
Hon ANNETTE KING 
: I have confidence in the work that Mr Ross Keenan has done as deputy chair. If the member is asking whether I have confidence in Mr Ross Keenan in relation to the contract that has been overturned then the answer is the same one I gave yesterday. I believe I will have confidence in the board when I see the services that are provided on 1 July. 
Hon Tony Ryall 
: Did Mr Keenan make any inquiries as to Dr Bierre’s conflicts of interest when Mr McKernan raised the matter with him in June 2005 or was Mr Keenan too eager to have Dr Bierre involved as the judgment says because Mr Keenan thought Dr Bierre’s presence as a board member would support a management view of dealing more aggressively with Diagnostic Medlab? 
Hon ANNETTE KING 
: I am unable to answer that question directly. I believe that the report indicates that Mr Keenan was aware of the conflict of interest which was raised in around June but he too believed that that conflict of interest had been handled. He obviously like Dr Hutchison had a lot of faith in Dr Bierre his reputation and his ability to serve as a board member. He too was no doubt influenced by the international and national reputation of Mr Bierre. 
Hon Tony Ryall 
: Would the Minister have expected his appointee Mr Keenan to express to board members his concern that Dr Bierre was involved in the Labtests Auckland bid in light of Mr Keenan’s ongoing correspondence and detailed discussions with Dr Bierre during the formative stages of the laboratory services contracting in Auckland? 
Hon ANNETTE KING 
: There is no doubt that Dr Bierre managed to hoodwink not only Mr Brown and the rest of the board members but also the deputy chair of the three district health boards because in July 2005 Dr Bierre said he had mothballed any proposals he had. He was taken to be a man of honour and integrity and as such his word was taken that he had mothballed such proposals. I believe that the chair and the deputy chair had the right to believe that a man’s word was his bond. In this case it was not. 
Hon Tony Ryall 
: Has the Minister received any advice on what action his predecessor Annette King took to prevent a situation where poor performance by her appointees has resulted in an unprecedented court judgment setting aside a contract worth half a billion dollars and highlighting the mismanagement performance of her appointees? 
Hon ANNETTE KING 
: It is interesting that the inappropriate behaviour in this case was not from an appointee of the previous or the current Minister of Health but from a member of a district health board who was elected on a Citizens and Ratepayers ticket—which is the National Party as everybody knows. I am amazed that Tony Ryall would be pointing the finger at a member who was elected from his own party. 
Sexual Violence—Government Response 
5.  
SUE MORONEY (Labour) 
 to the  
Minister of Women's Affairs 
: What is the Government doing to address sexual violence? 
Hon LIANNE DALZIEL (Minister of Women's Affairs) 
: 
 This week the Government agreed to establish a ministerial group to address the issue of sexual violence. This group will be supported by an expert task force comprising senior Government officials non-governmental organisations and the judiciary. The terms of reference for this group will include providing advice to the Government on how to reduce the incidence and impact of sexual violence. 
Sue Moroney 
: Has the Minister seen any responses to the announcement; if so what do they say? 
Hon LIANNE DALZIEL 
: I have seen reports in which groups who work with the victims of sexual violence say they are pleased that the Government is setting up the task force to deal with this issue and a number of them will be joining this weekend’s hui on sexual violence organised between the interagency Sexual Violence Project Team and the non-governmental organisation National Network Ending Sexual Violence Together. Progress will be made this weekend on a range of issues including looking at the provision of services to victims prevention initiatives and programmes to reduce offending criminal justice system responses to sexual offending and how victims are supported through the criminal justice system. 
Laboratory Services Auckland—Consultation 
6.  
Hon MURRAY McCULLY (National—East Coast Bays) 
 to the  
Minister of Health 
: Has he seen the finding of Justice Asher that the Auckland regional district health boards had a duty to provide “an informative and explicit outline” of proposed changes to diagnostic laboratory services in the region as a basis for consultation with affected parties and what explanation has he been given for their failure to do so? 
Hon ANNETTE KING (Minister of State Services) 
on behalf of the 
 Minister of Health 
: Yes I have seen paragraph 289 of Justice Asher’s judgment in which he concluded that the district health boards are not able to present self-imposed time problems as an excuse for a compromise consultation process. 
Hon Murray McCully 
: When did the Minister become aware that behind the district health boards’ public assertion that they could make $15 million in cost savings was a plan to in fact cut services—for example the plan to change the turn-round time for results of routine lab tests from 12 hours to 48 hours; and does he approve of the board’s contracting for changes of that sort without telling the public? 
Hon ANNETTE KING 
: It is important that district health boards or any Government agency undertake consultation in the manner that has been established. It goes right back to the loss of  
Air New Zealand v Wellington International Airport 
 which set out how consultation ought to be undertaken. Those principles are established in the New Zealand Public Health and Disability Act 2000 and the Crown Entities Act 2004 and it is the Minister’s expectation that consultation will be carried out in the manner that has been established. 
Hon Murray McCully 
: When did the Minister become aware that part of the $15 million in alleged savings under the lab test proposal involved a plan to shift 50 percent of tests to general practitioners and primary health organisations without compensation—a plan the primary health organisations were unaware of—and does he approve of boards embracing changes of that sort without telling either the public or the affected professionals? 
Hon ANNETTE KING 
: It is clear from the judgment that the board had an obligation to ensure that it consulted properly. However in terms of the member raising issues around cost cutting and so on it certainly has been one of the issues in terms of the price of services to the extent that his colleague Dr Hutchison said on  
Morning Report 
 that having two contracts would actually keep the price down. So price obviously is an issue for members of this House and taxpayers. 
Hon Murray McCully 
: How could directors appointed by the Minister have decided to change the turn-round times for results for a routine lab test from 12 hours to 48 hours and tell one of the bidders for a half-billion-dollar contract so that he could pitch his tender accordingly but not tell the other bidder? 
Hon ANNETTE KING 
: No I am not able to explain— 
Hon Dr Nick Smith 
: Why not? 
Hon ANNETTE KING 
: Well what a silly man! He sits right opposite me and we have this constantly. 
Madam SPEAKER 
: The member will please be seated. We will now hear the questions and the answers in silence. This chipping backwards and forwards across the Chamber means that the rest of us cannot hear. Would the Minister please address the question. 
Hon Trevor Mallard 
: I raise a point of order Madam Speaker. While you were on your feet giving that ruling Nick Smith interjected again. I would just ask how we can be expected to obey your rulings when he will not even listen to them in silence. 
Madam SPEAKER 
: If the questions and answers on this question are not heard in silence members will be leaving the Chamber. 
Hon ANNETTE KING 
: To continue—I said no I was not able to answer the question the member has raised at this point. But I am sure the Minister of Health would be happy to answer it next week the week after or whenever the member puts it down. 
Hon Murray McCully 
: Does the Minister accept that just as the High Court has found that the district health boards had an obligation to be honest and factual in telling the public about plans relating to their laboratory services the Minister too had an obligation to ensure that the public was treated honestly in those matters; and can the Minister explain how the Minister having had that information failed to share it with affected members of the public? 
Hon ANNETTE KING 
: I am not aware of any Minister of Health who may have information regarding a contract—whether it is a contract to build a hospital or a contract to provide services—who would go out and disclose information when it was not the Minister’s right to do so. The contracting of services is not done by the Minister of Health and I cannot think of any occasion when that member was a Minister of any sort where he went out and disclosed a contract that rightly belonged to an agency that should be disclosing it. 
Dr Jonathan Coleman 
: Does the Minister have confidence that the same Government appointees who have presided over this massive conflict of interest will suddenly be able to fix this mess and deliver a functioning laboratory service for 1.5 million Aucklanders by 1 July? 
Hon ANNETTE KING 
: I will be looking at what the three boards come up with and my confidence in those three boards will hinge on the ability to provide a reliable service by 1 July. 
Dr Jonathan Coleman 
: Does the Minister agree with his appointee Wayne Brown when he stated in the  
Dominion Post 
 today: “I’ve done nothing wrong. … I’ve had the most exceptionally successful career … I’m certainly the most experienced in the country.”; and was that the level of assurance that the Minister accepted to satisfy himself that the conflict of interest was being dealt with appropriately by the district health board? 
Hon ANNETTE KING 
: No it is quite obvious from the judgment that that is not what Mr Brown accepted. He accepted the word of an elected member of a district health board Dr Tony Bierre who— 
Madam SPEAKER 
: I said that this question and answer was to be heard in silence. All those members who were shouting out and making comment please rise and leave the Chamber. Thank you. 
Hon Trevor Mallard withdrew from the Chamber. 
Dr Jonathan Coleman withdrew from the Chamber. 
Ron Mark withdrew from the Chamber. 
Madam SPEAKER 
: I have asked members on all sides of the Chamber to identify themselves. Members have. I have to take their word for it otherwise I will be identifying them next time. Now can we please continue. 
Hon ANNETTE KING 
: I have answered it. 
Daylight Saving—Government Policy 
7.  
Hon PETER DUNNE (Leader—United Future) 
 to the  
Prime Minister 
: Does the Prime Minister’s statement that she supported extending daylight saving at the end of the summer represent Government policy? 
Hon Dr MICHAEL CULLEN (Acting Prime Minister) 
: 
 Not yet but in my experience a statement of prime ministerial preference is often a good indicator of likely policy. 
Hon Peter Dunne 
: What assurance can the Prime Minister give that when the Government returns from overseas the 42000 people who have signed this petition will have their wish for extended daylight summer hours honoured? 
Hon Dr MICHAEL CULLEN 
: My understanding is that the Prime Minister returns on Sunday afternoon. I do not expect the process of Government policy development or consultation to be complete within that space of time. 
Hon Peter Dunne 
: Is the Prime Minister working towards having New Zealanders enjoy longer daylight saving in the coming summer; if so notwithstanding the fact that she is overseas at the moment when can a decision be expected? 
Hon Dr MICHAEL CULLEN 
: Obviously there is a process to be gone through in terms of both internal consultations and external consultations. There are a range of issues to be considered but I would certainly hope that any decision could be made in time for the coming summer season. The main barrier I understand is the Deputy Prime Minister who is concerned about the impact of darkness at 6.30 in the morning in late March on his going out on the golf course. 
R Doug Woolerton 
: Will the Prime Minister assure the House that the engine room of our economy—namely the primary production sector—will be properly consulted before any extension to daylight saving is considered by the Government? 
Hon Dr MICHAEL CULLEN 
: Yes indeed. I think it is fair to say that this time round compared with some previous rounds the farming sector—including the dairy sector which is probably the sector most affected—has shown much less concern than has been the case in the past. 
National Certificate of Educational Achievement—Qualification Format 
8.  
KATHERINE RICH (National) 
 to the  
Minister of Education 
: Why is he “leaning towards” listing “Not Achieved” on National Certificate of Educational Achievement (NCEA) students’ qualifications? 
Hon Dr MICHAEL CULLEN (Leader of the House) 
 on behalf of the  
Minister of Education 
: Yesterday the Minister reported that 168 recommendations from the 2005 reviews of NCEA had already been addressed though he is still considering further changes to the design. One of these is reporting the standards that students have attempted and failed to achieve. The Minister is expecting a report on possible changes including in respect of this issue this weekend. 
Katherine Rich 
: When did the Minister have his road to Damascus experience that led him to lean towards reporting “Not Achieved” on a Record of Learning because in September 2006 he dismissed the idea saying: “There’s no place on such a list for the things that people have not yet attained or perhaps not even attempted.”? 
Hon Dr MICHAEL CULLEN 
: My understanding is that externally assessed standards already carry a “Not Achieved” on students’ results notices. The information now is that that should be extended to internal assessment. What has emerged in the interim is a concern that if there is not a clear listing of “Not Achieved” then employers in particular and others do not have any idea about what standards people actually are not capable of achieving as opposed to those that they have sat and achieved. 
Hon Brian Donnelly 
: Does the Minister believe that a school that offers the full range of NCEA subjects but also allows selected students to sit up to two Cambridge International Examinations papers at year 11 or one paper at year 12 is demonstrating a rejection of the NCEA system as suggested by a recent  
New Zealand Herald  
article? 
Hon Dr MICHAEL CULLEN 
: No clearly that is not necessarily a rejection at all of NCEA but merely an acknowledgment that there are other purposes for which one might want to sit a limited range of the Cambridge International Examinations. It is worth reminding ourselves that the name is somewhat misleading. This has nothing to do with the old entrance examinations for Cambridge University. The sort of elitism that is now being applied to this qualification is completely misplaced in terms of its standards and content. 
Katherine Rich 
: How credible was he when last September he said that failure had no place in the reporting of standards-based assessment or on the Record of Learning yet last night he said he was leaning towards deciding to put such failure on a student’s Record of Learning? 
Hon Dr MICHAEL CULLEN 
: Of course one of the elements of standards-based achievement is that sometimes one can resit and achieve the standard. 
Hon Brian Donnelly 
: Does the Minister believe that the decision to include unit standards in NCEA credits which was not in accordance with the original proposals has enhanced the credibility of NCEA assessments in the eyes of the public who are after all the ultimate users of NCEA? 
Hon Dr MICHAEL CULLEN 
: Yes and I am particularly aware of the contribution that member has made to a discussion on the development of the whole NCEA system which was of course begun—let us recognise—under the previous National Government and most of the changes introduced were in fact in response to concerns about a dumbing down of the system. 
Katherine Rich 
: What has made the Minister change his mind on the fundamental issue of reporting failure because it looks like he has crumbled in the face of political pressure? 
Hon Dr MICHAEL CULLEN 
: As I said before students’ results notices already carry a “Not Achieved” for an externally assessed standard. The question is whether it goes on the Record of Learning as the member rightly implies. I think what has happened is it is very clear that there is a degree of public concern if the “Not Achieved” element is able to be entered on the Record of Learning. Therefore the acceptability of the system which is a very good system and much better than the Cambridge International Examinations system for New Zealand purposes needs to be looked at. 
Katherine Rich 
: Can the Minister confirm that the New Zealand Qualifications Authority is panicking and ringing up schools to ask what it will take to stop further defections; if not why are not his officials keeping him informed? 
Hon Dr MICHAEL CULLEN 
: No I cannot confirm that. Perhaps the member should note the New Zealand Qualifications Authority is not responsible for the design features of NCEA; it is a Ministry of Education responsibility. 
Katherine Rich 
: How credible is it to talk about increasing the reporting of failure when the Minister’s officials hand out information to principals asking the question whether they are avoiding predictable failure where possible which is code for avoiding kids sitting external exams? 
Hon Dr MICHAEL CULLEN 
: No it is not. 
Hon Dr Nick Smith 
: Yes it is. 
Hon Dr MICHAEL CULLEN 
: It is rather akin to suggesting there is not much point in Dr Smith sitting an examination on literacy because he is doomed to fail. 
Annual Leave—1 April 2007 Changes 
9.  
Hon MARK GOSCHE (Labour—Maungakiekie) 
 to the  
Minister of Labour 
: What changes are being made to annual leave on 1 April this year? 
Hon RUTH DYSON (Minister of Labour) 
: 
 I am very pleased that as of 1 April New Zealand workers will be entitled to a minimum of 4 weeks’ annual leave. This extra break will give New Zealanders more time to spend with their families and friends and to enjoy a well deserved rest. I am advised that 820000 workers will benefit from this Government policy—a policy that I note the National Party opposed. 
Hon Mark Gosche 
: Has the Minister seen any other proposed changes to New Zealanders’ annual leave? 
Hon RUTH DYSON 
: Yes actually I have. I have seen a report that states: “He’’—referring to the Hon Dr Michael Cullen—“should be reeling in talks of union-friendly changes to the Employment Relations Act and dumping the looming election bribe of an extra week’s paid holiday.” That statement was from John Key in 2004. But he now says that he will let workers keep their extra week of holiday. With yet another flip-flop from the current leader of the National Party it is hard to imagine how anyone could trust him. 
Corrections Department—Confidence 
10.  
SIMON POWER (National—Rangitikei) 
 to the  
Minister of Corrections 
: Does he have confidence in his department; if so why? 
Hon DAMIEN O'CONNOR (Minister of Corrections) 
: 
 Yes but there is always room for improvement. 
Simon Power 
: Why does the Minister continue to stand by his claim that corruption amongst prison staff is not widespread and is not rife when Barry Matthews said yesterday: “We’ve got a big problem … at Rimutaka but we’ve got some indications we could have it wider than Rimutaka” when he has asked managers to do some “sniffing around” and when he cannot “give any absolute guarantees that everywhere else is hunky dory”? 
Hon DAMIEN O'CONNOR 
: Any accusations of corruption are a big problem and we treat them very seriously. We have an investigation under way at Rimutaka Prison. We have stood down some prison officers. We will continue to take such action wherever we have indications of such inappropriate behaviour. 
Peter Brown 
: Noting the Minister’s answer to the principal question and in the light of recent events can the Minister advise the House whether the degree of improvement that is required is more than less than or about the same as when he first answered this question some weeks ago? 
Hon DAMIEN O'CONNOR 
: I think more improvement is always better. 
Simon Power 
: How can the Minister’s chief executive Barry Matthews reject claims that his department is a shambles when Mr Matthews admitted to the media yesterday that there have been instances where the first a probation officer knew that a prisoner was being released into the officer’s area was when the prisoner turned up at the officer’s door and said: “Hi I’ve just been released from prison.”; and what other word would the Minister use to describe a department that relies on the goodwill of prisoners for it to do its job? 
Hon DAMIEN O'CONNOR 
: The chief executive has advised me that no one on parole was in this position. He is aware of one situation more than 2 years ago when one low-risk offender released on conditions was not met by a parole officer. Since then we have tightened up considerably including having better liaison between the probation service and the prisons. 
Jill Pettis 
: What are the Minister and his department doing to investigate claims of corruption in New Zealand prisons? 
Hon DAMIEN O'CONNOR 
: We move immediately on any such claims. We have appointed a head office internal investigation team to chase down any allegations of suspected corrupt activities. We have eight new corrections intelligence-gathering units as part of a new crime prevention information capability. The Government is looking at possible amendments to legislation to strengthen the hand of the Department of Corrections in dealing with contraband. This may include greater penalties. We cannot afford to have our hard-working and dedicated staff tainted by the actions of a few. 
Simon Power 
: Why did Barry Matthews deceive his staff when he emailed them in May last year stating that the review of head office was “not about cutting costs or reducing staff numbers” in spite of an internal memo earlier that month stating that one of the aims was to outline where staff numbers could be reduced and when he confirmed yesterday through a press release that some staff will lose their jobs—and will he be first on the block? 
Hon DAMIEN O'CONNOR 
: Barry Matthews does not deceive staff. The review of head office is to better align the responsibilities between all the different areas of the Department of Corrections to ensure that there are no gaps and that we minimise any opportunity for mistakes. 
Simon Power 
: Can the Minister confirm that this is the third time in less than 2 months that he and Barry Matthews have disagreed publicly with disagreements including a public disagreement over whether there should be an investigation into corruption by guards at Rotorua District Court and another about whether the Burton fiasco required changes to the Parole Act? 
Hon DAMIEN O'CONNOR 
: Although Barry Matthews and I might disagree on occasions we are both very clear on the responsibilities we have in this area. 
Simon Power 
: Does the Minister stand by his statement to the House last week that consultation with Barry Matthews and his department regarding the Prime Minister’s changes to parole were “taking place at this moment” after Mr Matthews had previously stated he was not aware of any changes to the Parole Act; if so why was the department that manages parolees and the services of the Parole Board consulted so late in the piece if it were not for the fact that the Prime Minister has given up on the department and this Minister? 
Hon DAMIEN O'CONNOR 
: Decisions around parole are not the sole responsibility of the Department of Corrections. Those decisions have to be made following consultation. It is the department’s responsibility to carry out changes if and when they occur. 
Wellington Inner-city Bypass—Time Savings 
11.  
SUE KEDGLEY (Green) 
 to the  
Minister of Transport 
: Is she confident that Transit New Zealand’s projected 7 to 9-minute peak-hour time savings will be delivered to motorists when the Wellington inner-city bypass opens this weekend; if so why? 
Hon ANNETTE KING (Minister of Transport) 
: 
 Transit New Zealand has advised me that while the second phase of the inner-city bypass will be open this Sunday there is ancillary work to be done to complete the project and ensure delivery of its full benefits. 
Sue Kedgley 
: Is it not true that Transit used wildly inflated estimates of 7 to 9 minutes at peak time including in sworn testimony to the Environment Court to beef up the cost-benefit ratios and justify building the bypass but now that it is built it is frantically backtracking and refusing to say whether there will be any time savings at all; and will she therefore agree to an independent post-construction audit as to whether the projected time savings promised by Transit have materialised; if not why not? 
Hon ANNETTE KING 
: No I cannot confirm any of the things the member has said and I have no evidence that it has backtracked from anything. The point I have just made is that Transit has said that on Sunday when it is opened there will still be ancillary services to be completed. The member may be interested in some of those services. For example the provision of dedicated pedestrian and cyclist facilities is something the Greens wanted included in the bypass. Also dedicated bus routes are part of the bypass. All of those innovations are there to help the flow of traffic. They will not be completed until May. 
Sue Kedgley 
: I seek leave to table the evidence that the Minister did not seem to think she had where a Transit expert in traffic analysis said to the Environment Court that a journey across the city would save at least 6 minutes and up to 15 minutes in the busiest time and from the former of Minister of Transport Pete Hodgson— 
Document not tabled. 
Hon ANNETTE KING 
: I raise a point of order Madam Speaker. In my answer I was not talking about what was in the application. The member made accusations about what Transit had said subsequent to that. I said that no I could not confirm the accusations the member was making. 
Madam SPEAKER 
: That is not a point of order; it is a clarification. 
Sue Kedgley 
: I seek leave to table a statement by the Transit project engineer for the bypass in which she says: “I’m not going to say it will save x number of seconds or hours but it will make driving in New Zealand more efficient.” 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Darien Fenton 
: What recent decisions taken by the Government’s Land Transport funding agency benefit Wellington commuter rail? 
Hon ANNETTE KING 
: Land Transport New Zealand has approved funding for a considerable rail network in Wellington including 58 replacement electric multiple units. It made that decision in December and a further decision was made in February for another 12 units. There has been a lot of investment into the Wellington region in terms of building up passenger transport. This Government can be proud of the fact that there has been a 750 percent increase in funding into public transport since Labour became the Government. 
Hon Maurice Williamson 
: How can the Minister have even a shred of confidence left in Transit when her own advisory group said that additional costs for the project it evaluated were not fully justified that information provided does not demonstrate a robust process of evaluation for the additional expenditure that Transit was spending that decision making in relation to scope and project definition had not always had the robust scrutiny that one might have expected that value for money was not even identified as a key objective in any of the Ministry of Transport’s statements of intent and—my personal favourite—that the change in project evaluation criteria away from using a benefit-cost ratio means that Transit New Zealand now has less incentive to contain project costs? 
Hon ANNETTE KING 
: That was the view of the ministerial advisory group set up by the Ministry of Transport. It is one view. I think there are other members— 
Madam SPEAKER 
: I am sorry. When the member asked his question it was heard in silence. He is now interrupting constantly so we cannot hear the answer. Would he please just enable the Minister to address the question. 
Hon ANNETTE KING 
: The ministerial advisory group set up by the Ministry of Transport has provided one view. There are some very good points made in it. As the member is aware I have established a review of the Ministry of Transport Transit and Land Transport New Zealand. I think it is appropriate to look at the next steps because the Government is keen on getting value for money and the taxpayers are keen on value for money. It would be unfair to say that Transit has not in general done a good job—particularly in meeting the needs of local communities. Some of those local communities including members of this House have had some responsibility in terms of projects and how they have turned out. 
Darren Hughes 
: Can the Minister of Transport tell the House what she will be doing on the Kapiti Coast on Saturday in order to assist with peak-hour time savings for the region? 
Hon ANNETTE KING 
: First of all I acknowledge the efforts of the member for Otaki and my colleague Winne Laban in their advocacy for the opening we will have on Saturday which is Mackays Crossing. It will make traffic move more smoothly up the Kapiti Coast and it is welcomed by many people who live in that area. I also note however that there are members in the Opposition who criticised the project. 
Sue Kedgley 
: Does the Minister agree with the chair of the Wellington Regional Council transport committee Terry McDavitt that the bypass is causing and will continue to cause traffic chaos on Te Aro flat and that there is no way of fixing this because of inherent problems in the design of the bypass; if not why not? 
Hon ANNETTE KING 
: No I cannot agree with those comments and I will not be prepared to agree with them until I see the problems he has identified at this stage—when part of the project is open—continuing into the fully operational project. Then there would be an issue to be raised. But it is not fully operational and will not be fully operational until May. 
Sue Kedgley 
: I seek leave to table something from the Transit New Zealand website that states: “People travelling across the city will save 7 to 9 minutes during the busiest peak hours”— 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Sue Kedgley 
: I seek leave to table a document in which Terry McDavitt warns that the snarl-ups and problems on the route will not be able to be solved. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Housing New Zealand Corporation—Subletting of State Houses 
12.  
PHIL HEATLEY (National—Whangarei) 
 to the  
Minister of Housing 
: Does he stand by the statement made on his behalf yesterday that “the subletting of State houses is not tolerated … Where there are allegations of it they are investigated and appropriate action is taken.”? 
Hon CHRIS CARTER (Minister of Housing) 
: 
 Yes. 
Phil Heatley 
: Why does the Minister stand by that statement when the Housing New Zealand Corporation told the Social Services Committee that 42 cases of alleged subletting were reported to it in the first part of this financial year but only 25 cases were investigated; why were only 50 percent of the cases investigated? 
Hon CHRIS CARTER 
: First of all that has to be put into context. The Housing New Zealand Corporation participates in 66000 tenancies. The number that the member has referred to is in proportion to the total very tiny. None of the 48 cases he has just referred to are the same and they cannot be compared with each other. Some of them are cases where tenants have moved out others are cases where tenants have gone into prison and there are some other circumstances. It is not as simple as subletting. 
Lynne Pillay 
: What process does the corporation follow when it receives allegations of subletting? 
Hon CHRIS CARTER 
: Cases where Housing New Zealand Corporation staff have a reasonable suspicion that subletting may be occurring are referred to the corporation’s investigation team for a formal investigation to establish the facts. Between 1 July 2005 and 28 February 2007 nationally there were only 23 cases in which as a result of a formal investigation process the corporation concluded that subletting had occurred. I remind the House again that we have 66000 tenancies. 
Pita Paraone 
: Tena koe Madam Speaker. Further to the statement made on the Minister’s behalf yesterday that the Housing New Zealand Corporation allocation policy “should look after the needs of New Zealanders first” why is the principle of looking after New Zealanders first nowhere to be found in the Housing New Zealand Corporation principles pertaining to the allocation of housing? 
Hon CHRIS CARTER 
: Could I ask the member to expand a little bit more on his question? 
Madam SPEAKER 
: Would the member like to do that please? 
Pita Paraone 
: Yesterday my original question alluded to the fact that New Zealand First was not quite sure whether tenants of the Housing New Zealand Corporation were likely to be New Zealanders or non - New Zealanders; the question was whether in fact New Zealanders were given special preference. 
Hon CHRIS CARTER 
: No tenant of the Housing New Zealand Corporation can be a non - New Zealander. A tenant can be either a resident of New Zealand or a citizen. Our refugee intake each year is put into Housing New Zealand Corporation houses but of course those people get a residence stamp when they come to this country. 
Pita Paraone 
: I raise a point of order Madam Speaker. My question today was if that is the case why is reference to New Zealanders being housed first not included in the list of principles articulated by the ministry? 
Hon CHRIS CARTER 
: It is absolutely implicit because a person has to be a resident or a citizen of New Zealand to get a Housing New Zealand Corporation house. 
Bob Clarkson 
: How can the Minister have the confidence to say that subletting rorts are extremely rare when Housing New Zealand Corporation staff are not picking up such scams during routine inspections and are investigating only half of those that are dobbed in? 
Hon CHRIS CARTER 
: If the member can come up with any cases that we have not picked up I would be very grateful for that. 
Phil Heatley 
: Can the Minister give us the details—as he is keen to break his own privacy rules on the scam involving subletting for 4 years—of the South Auckland tenant who rented out a State house for 2 years and the Hutt Valley tenant who rented one out for 15 months both of whom were eventually evicted? How much money did they make and what other details are there around them? 
Hon CHRIS CARTER 
: I am delighted to hear the member acknowledge that the Housing New Zealand Corporation has removed the tenancies of the particular individuals he has just mentioned. Should he care to put a written question down to me I am sure that question can be answered. 
Phil Heatley 
: Does the Minister regret last year describing the pursuit of subletting scamsters as a wild-goose chase and a waste of his staff’s time in light of revelations that by the Housing New Zealand Corporation’s own admission dozens of State houses are being illegally sublet for cash for months and years at a time; if not why not? 
Hon CHRIS CARTER 
: The member seems to have a very strange view of quantities. I remind the House again that between 1 July 2005 and 28 February 2007 only 23 cases out of 66000 tenancies resulted in tenants losing their tenancies. 
Phil Heatley 
: Who is telling the truth: the Housing New Zealand Corporation which told the Social Services Committee that it has investigated only half the scams dobbed into the corporation; or the Minister who says that it investigates all the scams dobbed into it? 
Hon CHRIS CARTER 
: I remind the House again that this member has a record of distorting the words of officials. Again subletting has to be seen in context: some tenants just leave others go to jail and some die. We do not pursue in the courts people who have died. 
Phil Heatley 
: I seek leave to table Social Services Committee documents wherein the Housing New Zealand Corporation states it has investigated only 25 of the 42 cases of alleged subletting— 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Pita Paraone 
: I seek leave to table a copy of the Housing New Zealand Corporation principles pertaining to the allocation of housing wherein there is no reference to looking after New Zealanders first. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Student Loan Scheme Amendment Bill (No 2) 
Third Reading 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I move  
That the Student Loan Scheme Amendment Bill (No 2) be now read a third time 
. The purpose of this bill is to remove the barriers to borrowers who are overseas returning to New Zealand and to ensure that all borrowers receive their correct entitlements under the principal Act. 
To ensure greater compliance amongst borrowers who are overseas the bill introduces targeted measures to make it easier for this group to pay their student loans. In so doing the bill will help to remove a potential disincentive to skilled New Zealanders returning home. For this group the main changes include the introduction of a repayment holiday of 3 years for borrowers going overseas. This measure acknowledges the reality that it is not always easy for people to repay their loans while they are having their OE. For borrowers who are overseas and not taking a repayment holiday the bill introduces progressive repayment obligations based on the size of their loan balances. Interest-free loans for people studying overseas will be extended to undergraduates studying full-time at bachelor degree level. This will apply only to an existing loan they had before leaving New Zealand and it does not mean that people will be able to take out a loan for study that is undertaken overseas. 
 The amnesty on penalties declared last year for non-resident borrowers who are in arrears with their payments will be extended by 1 year to 31 March 2008. The purpose of that is to allow borrowers who are identified in the proposed data-matching between the Inland Revenue Department and the New Zealand Customs Service to come within the amnesty. 
The second group of changes contained in the bill apply to all borrowers whether in New Zealand or overseas. The purpose of these changes is to update the legislation so that it is consistent with the intent of the interest-free student loan provisions which came into effect from April last year. Data matching between the Inland Revenue Department and the New Zealand Customs Service will be introduced thus making it easier for the department to identify who is overseas and to ensure that only those entitled to interest-free loans actually receive them. The late payment penalty will reduce from 2 percent a month to 1.5 percent a month. The hardship provisions in the Student Loan Scheme Act are being amended to give the Inland Revenue Department greater flexibility in administering them. 
For overseas borrowers to qualify for an interest-free loan on the basis that they are working overseas as volunteers or for token payment as the employee of a charitable organisation this bill provides that the borrowers must establish that the organisation applies its funds to one or more specified charitable purposes. 
Finally to protect the integrity of the tax system an administrative amendment to the Tax Administration Act is being made to ensure that care and management provisions apply to the Student Loan Scheme Act in relation to interest as well as to repayment obligations. As a package these changes will make it easier for borrowers to comply with their loan obligations and for the Inland Revenue Department to administer the student loan scheme fairly. 
In bringing this bill to the House for its third reading I acknowledge those who have contributed to its successful passage thus far. They include the policy officials and the drafters who have worked on the detail of the legislation; the members of the public and the tertiary education organisations that made submissions on the proposed legislation; and finally the Education and Science Committee for its consideration of the bill and for the recommendations it has made for improvement of the finer points of detail. I now have great pleasure in commending the Student Loan Scheme Amendment Bill (No 2) to the House. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 Thank you for the opportunity to speak on the Student Loan Scheme Amendment Bill (No 2). National is supporting the bill because we feel it is very important to help student loan borrowers living overseas to return to New Zealand wherever possible. But this is a very complex bill and that point was outlined by the Law Society in its submission. 
The Labour Government made the bill even more complex when it brought in its $1.5 billion-a-year interest-free student loan scheme. That gave students a clear incentive not to let the Inland Revenue Department know when they were out of the country. This is the sort of thing that Dr Cullen and Labour just did not think about when they brought in that legislation—or maybe they did think about it but just did not care. In fact one would suggest that Dr Cullen and the Labour Government would have been prepared to sell their souls to win the last election. Certainly they were prepared to show extraordinary largesse with New Zealand taxpayers’ money. 
It is absolutely correct that the Education and Science Committee worked very well on this bill—although I was not there for very much of it—and I certainly heard about the excellent chairmanship of Brian Donnelly. The bill was unusual in that it was the first-ever Inland Revenue Department bill to be brought before that select committee. 
It is important to reiterate some of the aims of this bill fairly carefully. The first is to introduce an affordable repayment regime for overseas-based borrowers. The emphasis should be on an affordable repayment regime because we certainly have heard about some students who have mounted up huge debts and some of those students have slipped off overseas and had a wonderful old time. I look at the tan on Moana Mackey and wonder whether that is the residue of her trips to Colorado and other places like that and whether she is still paying off her loan. 
Darren Hughes 
: She always looks as good as that. 
Dr PAUL HUTCHISON 
: She does indeed. One must try to make sure that there is a sense of reality about the affordability of this scheme and that again is one of the reasons why National is supporting the bill. 
The second aim of the bill is to give overseas borrowers who have not been meeting their repayment obligations the chance of a fresh start by extending the current amnesty to 31 March 2008. It is very important once again to stress the basic philosophy that the people of New Zealand are our most valuable resource and we do want to do everything possible to encourage our brightest and best to return here to work in New Zealand to live in New Zealand and to increase the productivity of this country—which is so sadly lacking under this Labour Government. It will take bright well-trained educated young New Zealanders coming back with a huge amount of enthusiasm and energy to overcome the decreases in productivity caused by this Labour Government. 
We often hear stories from parents that all of their children have left New Zealand. I was talking to one of my constituents just last weekend. Four of that person’s children are now living in Western Australia and that person is pretty sad about this. I think we all realise what a wonderful country this is and what wonderful opportunities we have yet we have seen this huge exodus over the last 6 to 7 years to the extent that 10 times more New Zealand graduates live overseas than do Australian graduates. That has to be an indictment on the basic policy settings of this Labour Government. 
The other issue about the aims of this bill is that although the new repayment rules have been designed to cover the situation of the majority of borrowers—those who return to New Zealand after a short OE—they do mean there will be lengthy repayment periods for some long-term absentees. We are told that the Inland Revenue Department will continue to recommend to borrowers that they make voluntary payments so that they save themselves interest and retire their debt earlier. 
I think it is very important that the students who take out these loans understand the conditions of the loan and the consequences of it. The Inland Revenue Department stated that it will look at ways to make it easier for borrowers to make repayments from overseas such as by establishing bank accounts in foreign countries and by offering different repayment choices such as a table mortgage type of arrangement. 
The department went on to state that many repayment options are not possible due to the department’s current information technology system constraints. It was quite a revelation when one of the department’s commentators pointed out that the information technology system that that department uses is the one it had in 1992. That system is starting to reel and croak under the tremendous pressure it is getting from the various machinations of the Labour Government the latest ones being the KiwiSaver scheme the international tax regulations that it has just whipped in—much to the fury of many New Zealanders who are serious investors—and of course the Working for Families package. One does indeed wonder whether the department is saying that its information technology systems are constrained. Surely it should be thinking about that and surely the Labour Government after 7 years should be thinking about something as fundamental as the department’s information technology systems. 
It is important to point out that everyone agrees that data matching is reasonable. Even the Law Society said that in its view data matching was quite appropriate that civil liberties issues were not encroached on because of it and that it was purely a way to recognise the fact that something like 40000 New Zealanders who had taken up loans were overseas and the department was not aware of them. It was pointed out that a sample data match with the Customs Service suggested that once this scheme was going nearly 90 percent of student loan borrowers crossing the border would be identified. Well 10 percent will still get away with it. That is a substantial number. Ten percent of 40000 is about 4000 a year. That leads one to worry as to how well the Labour Government organises such very important departments as the Inland Revenue Department. The department itself is breaking into a cold sweat over the constraints of its information technology machines and here it is admitting that it will not be able to track down at all something like 4000 students a year even after this bill is passed. 
It is important to reiterate what the student loans scheme itself has done. In essence it has ensured that the number of people accessing tertiary education in New Zealand has pretty well doubled if not come close to trebled over the last 15 years. That has made a very significant contribution. 
I thought it was interesting yesterday when Brian Donnelly said he was a little concerned that some of those 40000 students might have just forgotten as they slipped across the border that they had obligations to the Inland Revenue Department. As I pointed out technically that is known as denial. It is clear-cut denial. It is very important that students realise that there are reciprocal responsibilities associated with the great privilege it is to embark on tertiary education. National supports this bill but is concerned about the complexities of it. 
MOANA MACKEY (Labour) 
: 
 I am very happy to stand up and support the third reading of the Student Loan Scheme Amendment Bill (No 2) that is before us today. I thank the Minister of Revenue the Hon Peter Dunne who brought this bill to the House; the Education and Science Committee of which I am a member which worked on this bill; its chairperson the Hon Brian Donnelly; and also of course the officials who helped us with the questions raised by submitters. 
In terms of student loan bills I think this bill is relatively straightforward. As we can see there seems to be quite wide consensus in the House that it is a good step forward. In particular I support the amnesty period being extended. I personally know a lot of people for whom it took a while to find out about the amnesty to hear about it. Often disseminating that information to people who are living overseas even through their family members can take some time. It is a good idea to extend the amnesty so that those who are overseas and who have not been making the payments they are legally required to make can come back to the Inland Revenue Department in New Zealand put those arrangements in place and not suffer huge penalties because of it. 
We certainly know that when people go overseas and start to accrue a large number of penalties that becomes a very good reason for making the decision not to come back to New Zealand. They have to pay off not only their student loans but the interest on those loans plus large amounts in penalties. This step will make a big difference to what I believe we all want to achieve in this House—that is to assist graduates for whom the taxpayers of New Zealand have paid a large amount of money to educate to come back to New Zealand. 
As we go through this debate it is important for members in this House not to get too caught up in the fact that people will leave New Zealand from time to time to work overseas. We actually want that. We want people to be able to go overseas and get a broad range of experience. In some areas such as medicine and scientific research it is incredibly useful for New Zealand scientists New Zealand doctors and nurses—in fact any health professionals—to go overseas and learn from what is being done in other countries and then bring that knowledge back to New Zealand. We are well aware that other countries use New Zealand in that regard as well. Of course the Education and Science Committee also has the privilege of looking at many of the scientific organisations in New Zealand and we certainly find that our Crown research institutes are held in very high regard internationally. Many of them get a large continual flow of overseas scientists coming in to study all the great things we are doing in New Zealand particularly in terms of nuclear and geological sciences and agricultural sciences. So I think it is very easy to get caught up with the fact that people leave; what we need to be concerned with in this House is how we can make it as easy as possible for those graduates in whom we have put an awful lot of investment to come back to New Zealand and to use their knowledge for the benefit of the New Zealand economy and all New Zealanders. 
I am also incredibly supportive of making it easier for students overseas to repay their loans because when students are paying off loans in New Zealand payment is based on the students’ incomes—it is a percentage of their incomes. Well that can be quite difficult to manage when they are overseas making sporadic payments and trying to work out how much they have to repay according to the interest and the exchange rate. It might take a bit longer if they are trying to send cheques home. Something might happen and the exchange rate might change and we can see how some people might just simply think that they will take the risk of not repaying the money. 
I take on board the point that Dr Paul Hutchison made. People might know that they have to make these repayments but I certainly do not think that they necessarily know the process the consequences or the level of penalties if they do not make them. That is not necessarily the information they are given when they head overseas. So moving to a system where a student’s repayment for a year is based on the size of the student’s loan is I think very sensible. One of my friends who has a student loan and who lives in the UK came back for a wedding recently. She said that this system would make it a lot easier for her to plan the repayment of her loan. She has already taken advantage of the amnesty. She said that now she can see a clear path to returning to New Zealand—which I think is really the purpose of this bill. 
A number of other changes have been made in this bill. The data matching between the Inland Revenue Department and the Customs Service I think is very sensible. The committee had some concerns about what that data could be used for and about making sure that once student loans had been paid off those details were no longer used. We were certainly satisfied in that respect—that all use of that data was going to be appropriate. 
Whenever student loan legislation comes into the House I always find the attitude towards students very very interesting. There tends to be a kind of attitude that students and young people in general cannot be trusted and if they are given anything well they are just going to rort it. Certainly that was the attitude we experienced towards Labour’s policy of interest-free student loans which is a policy that many of us in the Labour Party particularly those of us who came through the youth section had been lobbying for for a very very long time. Having a large number of people in the Labour Party and in the Labour Party caucus who have had student loans we knew that it was the interest on those loans that made repayment most difficult. There were a whole lot of other issues as well around student support and student loans in general but really the one factor that made it difficult was the interest. 
For those of us who were charged interest while we were studying it certainly was difficult. We really were not in a position to go out and work—not without compromising the quality of the study we were paying for. We then came out of university with a much bigger loan than we went in with and of course the interest was compounding daily. Then if we went into a job—as I did as a laboratory technician which does not pay an awful lot of money—often the interest was higher than our 10 percent repayments were. So to be repaying our loans but to be consistently seeing them get bigger and bigger was very disheartening. 
What we want is for these loans to be paid back. We want to make sure that the loans are not a reason that people use for staying overseas once they have gone on their OEs or overseas for work. At the end of the day any policy that provides an incentive for young people to pay their loans back is going to be good not only for young people and for their families but for all taxpayers. As I have said before student loans have had an enormous impact on some of the things that we take for granted in this country. 
In terms of superannuation we may see a generation of young people who have come out of university with large student loans and who have put off buying a house—and of course the increase in value of the housing market has not made that any easier. If these people get to retirement and do not own freehold homes then it will be very very difficult for them to survive on the level of superannuation provided. That is something that will be an issue for Governments in the future if it is not addressed now. 
I am very pleased that this Labour-led Government has taken the initiative to address the student loan issue. Obviously it was a very large policy promise of the Labour-led Government during the last election campaign. I have no doubt that it made a huge difference and I am very proud of it. It is a policy that I have been advocating for a very long time and of course as with all our election promises it is a policy that has been delivered to the students and to the families of New Zealand. It is another promise kept. In that regard I am sure that many many people out there in New Zealand are extraordinarily grateful for Labour’s policy. 
Other comments have been made about some of the reasons why people go overseas and stay there. Of course wage differentials between countries do make a big difference. But they make a big difference because people often go overseas when they want to pay off their student loans—they want to get rid of them. They are more likely to think: “If I go and work in the UK or if I go and work in Australia where I could potentially get paid more for doing the same job that will allow me to pay off my student loan.” So simply to say that people do not consider that a student loan is a major issue when people go overseas is slightly disingenuous. If one questions why any young person is going off on his or her OE to a country that has higher wages I bet that if that person has a student loan the first answer to the question will be to pay off his or her student loan. Of course when people get there and have differing demands on their money and when it might be a bit difficult to make the arrangements to pay the loan back things change. 
But this bill will make that a lot easier. This bill provides a particular amount for people to pay back. It makes the system of paying the loan back easier. The amnesty means that those who go overseas and who already have a number of penalties can now wipe the slate clean with the Inland Revenue Department and start to make arrangements to pay those back. There is also an incentive for letting the department know when a student is going so that he or she can get the 3-year repayment holiday. Again I need to reiterate to those people who said that the 3-year repayment holiday should also be given to students in New Zealand and that it was unfairly advantaging those who left that the interest that accrues on those loans whilst people are overseas is still in place for overseas students whilst students who remain in New Zealand or return to New Zealand benefit from Labour’s policy of interest-free student loans. 
 In conclusion I commend this bill to the House. I am very pleased to see it going through today and to know that we have been able to get it through in a timely fashion so that it can come into force from 1 April 2007. This is an important bill as are all student loan amendment bills. I look forward to more of them in the future to make it even easier for those graduates who have student loans to repay them faster so that the loans are not so much of an onus on students’ lives and on the decisions they make. 
ALLAN PEACHEY (National—Tamaki) 
: 
 The National Party is supporting the Student Loan Scheme Amendment Bill (No 2) because we desperately need to send the message that we want our best and our brightest back in New Zealand. However that does not mean that we have not and will not continue to debate this bill vigorously. Let us be very very clear about what we are dealing with here. This was not—is not—carefully thought out logically worked through planned policy. It was policy made on the run announced 8 or 10 days before an election for the sole purpose of gaining an advantage in what was a very tight closely fought race. Let us never ever forget that. The people of New Zealand have not had the opportunity to sit back and reflect in order to determine whether this is really what they wanted to do and the House in passing this legislation needs to be respectful of that. 
During the debate we had quite an interesting little exchange about the nature of parliamentary representation and the role of taxation. I want to come back to that for a moment because I used the example—and it is important that this House is respectful of the people I am about to talk about—of a group of mums and dads whom I met in the Glen Innes part of my electorate the other day who wanted to talk to me about their circumstances. All of them have children in schools. All the mums and dads between them were doing three or four jobs—often meaning they did not spend enough time with their children—just to make ends meet. It is the taxation of those sorts of people as well as other New Zealanders that is going to pay for what some call an election bribe. 
At the moment when one talks to these people and looks into their eyes—and I will come to tax cuts in a moment Mr Assistant Speaker—one sees tears; soon we will see anger. It is important that when this House legislates to spend taxpayers’ money it respects the taxpayers who are putting up that money. Many of the children in those families will not have the opportunity to benefit from this legislation. They will not miss that opportunity because they are unintelligent for these children are intelligent nor because of the fact that their parents live in State homes—although they do live in State homes. Neither will they miss this opportunity because their parents are victims of a low-wage high taxation economy. They are missing this opportunity—and this is what their parents have difficulty understanding—because too many of them are trapped in schools in which they are not learning. Too often the children in schools that have the protection of teacher unions will not reach a level of achievement that will enable them even to think about university. 
Before anybody mocks and laughs at what I have just said I will give a practical example of what I am dealing with at the moment. In 2005 76 percent of year 11 Maori students at a secondary school in my electorate of Tamaki failed to achieve level 1 National Certificate of Educational Achievement. Most of the parents of those young men and women pay taxes. It is those children’s misfortune to be in a school where the academic performance is well below what it is reasonable to expect. Those youngsters do not have the opportunity to aspire to a university education. So when this House— 
Darren Hughes 
: Point of order— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I know what the member is going to say. I was about to bring the member to order. He has to address the bill. He cannot go too wide of it. I ask the member to desist and to come back to the bill. 
ALLAN PEACHEY 
: Thank you Mr Assistant Speaker. I bow to the superior wisdom of the junior Government whip. 
Darren Hughes 
: Get used to it! 
ALLAN PEACHEY 
: “Get used to it!” he says. I say in coming back to the bill that we are spending taxpayers’ money. It is very important that those young men and women who will benefit from for example the 3-year holiday are duly respectful of the taxpayer and the money that will contribute to that. 
This bill comes out of the principal Act the Student Loan Scheme Act of 1992. In the debate when we canvassed the evolution of the student loan scheme and that sort of thing it was necessary to deliver a bit of a history lesson to members on the other side just to point out to them that the student loan scheme was born in a time of major economic crisis for New Zealand—a crisis that resulted from the behaviour of the 1987-90 Cabinet. We should never ever lose sight of that. When listening to young members in this House talk about how people like themselves will benefit from this legislation—and they will—let us not lose sight of the fact that we are spending taxpayers’ money. 
I issue a challenge. When I spoke in the second reading debate the speaker for the Greens got up and responded to my speech with haughty indignance. I invite the Green Party to take a call and tell this House that when I talk about respect for taxpayers I am not wrong—that I am not wrong about the young New Zealanders who will not have the opportunity to benefit from getting a tertiary education travelling overseas and taking a 3-year holiday on their loan. Yet their parents are contributing to make this bill policy. I invite that party to take a call and tell this House and the people of New Zealand that I am wrong. In fact I issue a wider invitation to any apologists for the present Government whatever party they may come from to get on their feet in this House and tell members I am wrong. 
The passage of this bill will ease the administration of the student loan scheme and that is good; it is most unusual that things coming from a Labour Government are made easier. It was very very complex legislation for the Education and Science Committee to deal with. The committee was very very well led by Mr Donnelly who was ably assisted by officials from the Inland Revenue Department and I would like to believe that members on this side of the House actually played a significant if largely unacknowledged role in helping to unravel what we all know is a little bit of a mess and at least made it tidy. 
This bill sends a very clear message to graduates with loans. We want them back in New Zealand. We need them back in New Zealand. We understand that they want to travel. We actually want them to travel. We encourage them to broaden their experience but we also want the young graduates with loans to understand that they have a responsibility: if you borrow the money then you pay it back. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The member is referring to the Speaker. 
ALLAN PEACHEY 
: Sorry Mr Assistant Speaker; it is my inexperience as you will understand. It is important that borrowers understand that there is an obligation and an expectation on the part of their fellow New Zealanders that they pay the money back. That is why the select committee has agreed to include in the bill the ability for the Inland Revenue Department to match information with the Customs Service so that a better clearer and fairer record can be kept. 
But in conclusion let this House be very very clear about what it is doing today. It is legislating to fulfil a bribe given by a Government to buy a closely fought election. 
Hon BRIAN DONNELLY (NZ First) 
: 
 In rising to speak to the Student Loan Scheme Amendment Bill (No 2) I just want to reflect upon a couple of the comments made by previous speakers. The first is a comment that was made by Dr Paul Hutchison in response to some comments that I had made in the Committee stage and in fact in the second reading stage. I had made the statement that many of our students went off overseas unaware of their obligations to the Inland Revenue Department to pay back part of their student loans. Dr Paul Hutchison suggested that it was not so much ignorance as in fact selective denial which I guess goes to show that Dr Paul Hutchison and the National Opposition has somewhat of a less generous view of young New Zealanders than I do and than New Zealand First does. I believe that many of our young people who are getting themselves into the situation that this bill is aimed at go overseas not fully cognisant of their obligations. 
I refer to Mr Peachey’s comments about the fact that the young people do have an obligation to pay back those loans and with regard to those people who try to get around that obligation I think of them as being nothing less than thieves. They have taken money from the taxpayers of New Zealand to get themselves an education and if they deliberately flout their obligations they are no better than people who are just stealing from the taxpayers of New Zealand. Mr Peachey made I thought a quite heartfelt picture of the scenario of low-income workers in multiple jobs and it is absolutely true that their taxes are helping to pay for the education of these young people and that their taxes are supporting the interest-free system that is in place for students. However the question the member did not answer was how much those families would have in their pockets per week with the tax cuts that National was offering at the last election. I suggest that it would be zilch. Therefore I believe he was going along a very unseemly track in suggesting that those people would have gained enormously out of it. 
The details of this particular legislation have been traversed quite a number of times both at the second reading and last evening through the Committee stage. They have been articulated by the Hon Peter Dunne who put this legislation together. It is probably a waste of the House’s time to go through and detail all the bits and pieces. So I think we need to look at the purpose of the legislation—what this legislation is trying to do and whether it will achieve it. I say once again that New Zealand First has long believed in a policy that the best immigrant is a New Zealander returning home. 
Opposition members have gone on and on about the this legislation being only about the interest-free loans; in fact this is not about interest-free loans at all. This legislation comes from circumstances that would still be in place even if there were no interest-free loans. I will just refer to one or two of the things that Mr Peachey talked about. He talked about a history lesson. The loan scheme was put in place in 1992 but back in 1996 when New Zealand First came into coalition with National and I became Associate Minister of Education with Wyatt Creech there were some real problems with the exercise of the student loan scheme. One of the problems was of course that 16 and 17-year-olds could go off and do courses at polytech. They could then take out a $10000 lump sum and take off to England. Their parents—and no one else in fact—could not prevent them from doing it and because of the contracts legislation they had no obligation to pay those loans back. It was something that New Zealand First and National worked on at the time. 
One of the silliest things of the lot that was occurring at that time which we had to try to apply a fix to was this sort of situation. Someone might write to the Inland Revenue Department and ask how much he or she owed. The Inland Revenue Department would write back and say that $1052.36 was owed. So the person gets the letter in the mail writes up a cheque and sends it off to the department. Well it takes 5 days to get there. Within 1 month that person gets a reply from the Inland Revenue Department that says that he or she owes 53c on the loan. That was the interest that had accrued in the interim period from the time the person had written to the department it had written back and the person had sent the cheque. That was how silly the system was. 
Therefore progressively administrations have picked up and fixed up bits and pieces of the legislation. The difficulties that people who go off overseas are facing particularly in terms of the penalties occur whether or not there is an interest-free loan situation. The interest-free loan policy has exacerbated the situation and it has done so in this particular way. It applies only to people who are in New Zealand or who are offshore doing charitable work. It applies only to those people. Many people have gone off overseas believing that they are carrying interest-free loans. It does not apply to them; those people go off overseas and there is an obligation under the current law for them to continue to make repayments. If they do not make those repayments then their penalties accrue. So after 3 years when they decide to come back to New Zealand and start paying off their student loan the student loan will have grown massively and people look at that as being a huge disincentive for them to come back. As I say the situation is not created directly by the interest-free loan policy but the interest-free loan policy has exacerbated it. So any suggestion that there is a direct flow-on is not correct. 
However the objective of this legislation is to encourage and provide incentives and to remove disincentives for our people who go off overseas to come back to New Zealand and to engage constructively in New Zealand society and in the New Zealand economy enriched by their experiences overseas. So that is what the 3-year holiday is about. People need to understand that that is all it is: a 3-year repayment holiday. They go off overseas but they still have to pay the interest that is accruing which will be building up on their loan. So when they look at their loan sheet at the end of 3 years it will be bigger than when they left. However no penalties will be accruing to them during that time. After 3 years they will have to start making continuous repayments back to the Inland Revenue Department; otherwise penalties will come. We think 3 years is a very sensible amount of time. It is about the time that somebody can go across and have that overseas experience and possibly do some postgraduate studies but then return. 
I just want mention that in the last 10 months I have had the good fortune of having my first two grandchildren born to me. One is very fair even though she is a registered member of NgaiTahu and the other one happens to be Niuean - Cook Island - Samoan who has a skin colouration that is very similar to that of Nanaia Mahuta. I refer to them as ebony and ivory. They are just gorgeous. I consider myself so lucky to have these two grandchildren living in Auckland and to be able to regularly see them and see them growing up. I feel so sorry for those people whose kids and grandkids are growing up across the other side of the world. From that particular point of view I have to say that there is some really good fortune in the objectives of this particular legislation and New Zealand First of course is very supportive of it. 
Mention has been made of the Education and Science Committee and the work it did. I have to acknowledge the work of Opposition members on that committee as well as Government members. It was really the select committee process rather than the select committee itself that led to some of those constructive changes—and we believe positive changes—to the legislation. That demonstrates how important select committee work is. That is where we get participatory democracy actually taking place within our Parliament. The rest of our Parliament is really representative democracy but at the select committee and through the select committee process we can refine our legislation and listen to the people and hear what they are saying. 
Once again I take the opportunity to congratulate the Hon Peter Dunne because I believe he has produced very good legislation. I congratulate the Inland Revenue Department officials. They were really really good to work with. I have mentioned the situation where they went back to a group of presenters who had got it wrong and they went out of their way to make sure that they understood the bill completely. That was going beyond the call of duty but it was representative of the way they approached the whole legislation. From this I hope—and I believe and New Zealand First believes—that the objectives will be met and there will be more incentives for our young people to return back home and participate constructively in our society. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
Tena koe Mr Assistant Speaker tenatatou katoa i te Whare. First of all I would like to say I am quite amazed at how the public talk has changed. A few years ago when people were jumping up and down about how all our kids were disappearing overseas people first of all tried to make out that that was not happening and that it was not the reality. Then as the statistics started coming out the brutal reality kicked in that yep our kids were doing a runner. Now all of a sudden the Government is talking as if it recognised that our kids needed to get away for a few years and that it will try to encourage them to come back home. 
Let us not con ourselves here folks—our kids are running away overseas because they have had a gutsful of being driven into the ground by this massive student debt. They get out of college and in their first adult years they are trying to get a degree so they can do something with it but we are making them build up a debt as big as a house mortgage. They are getting on the plane and running away; they are not playing society’s game about going overseas to get a bit of this and a little bit of that then coming back and bringing back all this worldly experience. 
So we should stop conning ourselves. Our kids are doing a runner on the massive student debt that has been imposed upon them by this Government and by the previous Government. We should at least be honest with ourselves about what is going on around here. We should stop conning ourselves and stop lying to our kids. 
Just about a year ago Professor RodolphoStavenhagen was here and he presented his report on human rights and indigenous issues in Aotearoa to the Economic and Social Council of the United Nations. Paragraph 62 of that report pretty much sums up the Student Loan Scheme Amendment Bill (No 2) from the Maori Party perspective: “The Maori Students in Tertiary Education of Aotearoa complained to the Special Rapporteur that a limitation to their progress to higher programmes in tertiary education is the high burden of student debt and decreasing public funding to support Maori students.” 
That is what the United Nations was told and that is what the world now knows about the situation facing Maori students. Mind you that is what Maori have known ever since this crippling student loan facility was first created—student debt will overburden those who already carry the burden of high expectation from their whanau limit their future options and lead to years of continued debt repayment. 
When I spoke during the second reading of this bill I mentioned comments I had received from an old Pakeha guy. This is a lovely statement. He asked: “If education is the transfer of knowledge from one generation to the next then who are we to charge our children for something that we”—those of us in this House anyway—“got for free?”. When I went to varsity it cost $120. I did not get anything but that was all it cost. 
This bill aims to amend the student loan scheme in order to encourage students with loans to come home. But the $9 billion—and ever rising—student debt will not change a heck of a lot when many of our students will not come back because they are now getting way more than they could ever get here. When students commit to improving their knowledge and the Government commits to supporting their endeavours everybody benefits. But when our students’ commitment is matched by a Government driving them into debt we should not be surprised when we lose them. The way to get our kids to come home is to slash the debt. We would then maximise our return from the productivity of those who would come back tomorrow in a flash if the Government had the courage to slash the debt. 
Maori of course are finally figuring higher in student debt because of their higher participation over the last few years in tertiary study. Maori are finally beginning to turn back decades of educational disconnection. I believe the recent increase in Maori tertiary study is very much the result of wananga enrolments and I take this opportunity to record the Maori Party’s heartfelt thanks to the wananga pioneers: people like emeritus Professor Whatarangi Winiata Dr RongoWetere and Professor HiriniMoku Mead and to those who have taken on the mantle on their behalf. Yesterday’s statistics are a clear reminder of the very very impressive results that the three wananga in particular have achieved in improving Maori tertiary qualifications noting a massive jump of 10000 Maori who have achieved bachelor degrees or higher over the past 5 years. That is not to undermine the excellent work our whanaunga are doing in universities polytechnics colleges of education and other tertiary institutions as well but it is more of a recognition of the genuine relevance of wananga to Maori learning. 
So Maori are there in bigger numbers than ever before but I ask whether it will make a difference. Will there be jobs for our kids when they graduate or will their first choice still be Auckland International Airport? Ministry of Education data tells us that for Maori their getting a degree does not actually lead to them getting a job but it does lead to a big student debt. That brings us back to the whole matter of the debts that Maori accrue under the student loan scheme—currently $1.5 billion and climbing—which the Government dismisses as just a consequence of higher participation by Maori in tertiary education. But its implications for the financial well-being and future prosperity of those Maori students and their whanau simply cannot be ignored. 
When high schools fail Maori—and 50 percent of Maori go into tertiary study with no formal school qualifications—it is not hard to see why so few choose tertiary study as an option. And when they do choose tertiary study before they can enrol in it they get into debt right away in just getting the high school equivalent qualifications that their high schools failed them at. 
When Maori do not like to apply for student loans because they are worried about debt levels it is not hard to see why Maori struggle to get through tertiary study. When Maori do get loans and end up with bigger debts than non-Maori it is not hard to see why getting into debt is such a big issue for them. When the average Kiwi earns $24500 but Maori get only $21000 it is not hard to see why the debt repayment issue is such a big deal for them as well. 
So when all those factors combine it is not hard to see why it takes Maori a whole lot longer than non-Maori to repay their student debt. When that is the experience on which they base their future then the cost of an airfare to Aussie becomes a positive choice for far too many of our young people. 
Finally although we will support this bill to try to get our kids to come back home I have to speak against the snooping culture that has surfaced in this bill too. This bill introduces data matching between the Inland Revenue Department and the Customs Service to determine which repayment rules the students leaving the country will be subject to. But it also leaves out there the distinct possibility that that information might be put to a whole lot of other less positive uses. 
I will leave it there but I wanted to raise the Maori Party’s concern about the Government’s continued invasive use of computer-generated data in order to keep tabs on our own citizens. Using information to develop our strengths as a nation is good but using it to snoop on our kids who are trying to get ahead in life is quite simply unacceptable. Tena koe Mr Assistant Speaker. Tenatatou katoa. 
DIANNE YATES (Labour) 
: 
 I rise to speak in the third reading of the Student Loan Scheme Amendment Bill (No 2) and note that most of it comes into effect on 1 April 2008. I thank the previous speakers for their support for this bill and I thank members for the unanimous support for this bill throughout the Parliament. I feel somewhat concerned about some of the content of the speech of Mr Allan Peachey. I think perhaps he feels somewhat frustrated and maybe wants to get his previous job back because he tended to speak more about schools and his previous job than he did about this bill which is about the student loan scheme. I suspect Mr Peachey is not the only person in the National Party who feels frustrated at the moment. He talked about taxes and about schools but not about the tertiary student loan scheme. This bill is about a 3-year repayment holiday for students who go overseas and it is about non-penalty clauses; it is not about relief from interest. 
I notice that the previous speaker Hone Harawira also talked about people running away overseas yet the commentary on the bill talks about the tradition of young New Zealanders going overseas once they have finished their tertiary education. It used to be called OE. People would say: “Have you done your OE yet?”. So this is not something that has come about since the establishment of the student loan scheme; it has gone on from before the student loan scheme. It is not new but is a tradition and for people to want to go overseas and get that experience has very little to do with the student loan scheme. 
The people who come back with overseas experience contribute greatly to New Zealand. In some cases they have to go overseas. I think of people like eye surgeons and so on. In order to become registered as an eye surgeon in New Zealand someone has to have had some experience and qualifications from overseas. For some people it is a requirement of their job. It is not something that is new. What is new and is in this policy is that young people are to be enabled to have that overseas experience without being penalised. 
Mr Peachey talked about an election bribe. I do not think that Mr Peachey understands what policy is because his party does not have any. I say to him that policy is what one goes to voters with before an election and it says what one is going to do. It is extremely cynical on the part of someone like Mr Peachey to think of policy as a bribe but no doubt if he is here in the House for long enough and if the National Party is creative at some particular stage it may come up with something called policy and he may then understand what it is. If he is around long enough he may understand that policy is important and that if one is going to stand for election one has to have policy to put before electors. Mr Peachey talked a great deal about tax cuts but I notice that National’s deputy leader Bill English has said that a National Government could not afford tax cuts. So that is another flip-flop by National. 
When we talk about this bill it is important to note that Mr Peachey said that people would not be going to university. For someone of his age he needs his memory to be jogged a little. Maybe I am a bit older than he is but when I was younger—if one can talk about the old days—only 2 percent of people went to university. I remind Mr Peachey that a large number of people now go to university or into tertiary education. In 2005 around 76000 young people went to universities in New Zealand—that is New Zealand - born New Zealanders—nearly 50000 went to polytechs and institutes of tertiary education 2000 went into teachers’ colleges and 6500 went into wananga without including other forms of tertiary education. That is an amazing improvement and I am proud to be part of a Labour Government that puts a great deal of emphasis on education and the fact that large numbers of people are now accessing tertiary education. 
What has enabled so many people to access tertiary education is the student loan scheme. Children from working-class families who many many years ago gave away the whole idea of going to university especially if they lived in country areas are now able to go to university because of the student loan scheme that we are amending. That is a tremendous improvement. I think the member opposite is so involved with his own little foibles and his own little hobby horse about schools that he may be better employed if he goes back to a school and makes some of the improvements he thinks should be done within his own school and if he also encourages people to access the scheme that is there. 
As we have said with regard to this bill the loan scheme enables people to have a holiday from repayments. It also has some aspects that allow those who hold loans to be exempted while they are studying at an undergraduate level overseas as well as at a graduate level so that is a change. 
Another point that I think is very very important has not been mentioned. Some young people do not want to go overseas to take on employment but they want to work for a charity. Many young people do that. They want to work in another country—to volunteer their services through Volunteer Service Abroad or whatever other organisation they choose. There is a clause in the bill that allows young people to have interest-free loans while working overseas for a charitable organisation. The bill puts in the conditions that need to be met by those who do that. I remind people that if they are going overseas and working for a charity as a young person proof has to be provided that the work done as a volunteer for or for token payment from a charitable organisation was for one or more of the following purposes: to relieve poverty hunger sickness or the ravages of war or natural disaster—so that would include people wanting to work in tsunami relief—or to improve the economy or raise the educational standards of a country that is recognised by the United Nations as a developing country. People who wish to do that need to provide the commissioner with the information prescribed in the bill. 
I think that provision is very very important. We have talked a lot about young people going overseas to make money yet we have forgotten that many young people are much more altruistic than we give them credit for. Many of them do want to go overseas while they are young to work for a charitable organisation. That opportunity is a very very important part of the bill and I know that many young people will be relieved to be able to take it up. 
I hear a lot of people talk too about young people going overseas and say what a great advantage that is etc. As we know most young people go overseas for a period of 3 years. They go for experience and that is not new. It happened before the student loan scheme was established and it has happened since then. It is not a new thing. Those people do come back to New Zealand. They want to live here they want to settle here they want to have their children here and they bring back with them valuable information and experience. 
I thank the chair of the Education and Science Committee Brian Donnelly for his good work in chairing the committee. I thank the submitters particularly the young students who came to submit. I think it is very important that young people make submissions to select committees so I thank the student organisations the teacher organisations and all those who made submissions. I thank the select committee staff for the good work they did and I thank my colleagues on the select committee. We all worked together and there was unanimous support for the bill. Some of the people who made submissions made them on a number of things that were not to do with the bill but they used the opportunity provided by the bill to raise them. Generally those who made submissions focused on the content of the loan scheme. I think all the submitters were in favour of the bill. The select committee is in favour of the bill and we look forward to its final reading and adoption into law. 
COLIN KING (National—Kaikoura) 
: 
 That was the former member for Hamilton East Dianne Yates. She made a far greater contribution in the Education and Science Committee than she did in her third reading speech on the Student Loan Scheme Amendment Bill (No 2). 
I speak from the point of view that National supports this bill in its third reading. The bill’s gestation has been very short. It would be naive of us to ignore the fact that it is absolutely necessary and that the Inland Revenue Department basically had no way of managing a policy that was thought of for the purposes of its vote-catching capacity. In actual fact when we looked at the details of it in the select committee we saw in the highlights section of the annual report on the student loan scheme that the number of borrowers living overseas was 27000. With further research we found that the figure is 40000–odd. 
We got down to the task very quickly under the fine and admirable chairmanship of the Hon Brian Donnelly. Dealing with this bill was a very interesting experience. It has given me an insight into the process around select committees because it is one of the first bills I have worked on that has come right through and that we could wrestle with before it becomes law. On that basis I acknowledge the appropriateness of the submitters and the fact that we sat during recess one time to make sure it all worked. The way the Inland Revenue Department officials were able to bring clarification to the complex subjects being dealt with was also refreshing. The process was interesting from my point of view because it was not clouded with that warm fuzzy thinking that comes from the left when the Labour Party is totally bereft of any real straightforward thinking. From that point of view it is appropriate that we should bring into line the runaway abuse of a system. 
However I am incredibly sympathetic towards the overloaded and overburdened Inland Revenue Department with the workload it has to carry. We are asking an enormous amount of the department. We might be showing a degree of blind faith to believe that with a couple of amendments here and there under the name of the Student Loan Scheme Amendment Bill (No 2) we will block all the abuse of the system. 
I go back to what the very valuable member for Tamaki Allan Peachey alluded to which was the 2 million - odd taxpayers in New Zealand who fund the student loan scheme. We do not want to take them for granted; we want to see a lot of responsibility being taken by those people who have taken up student funding and gone on to get tertiary education. 
A lot of people have paid back their loans. We see in the highlights section of the annual report on the student loan scheme that 665900 people have taken loans and 193393 have paid them back. However at this point in time—or at the time of the report on the 2006 student loan scheme—470507 people still had a student loan. Some interesting fiscal figures around the student loan scheme going forward are that by 2015 borrowings will be in the region of $12.7 billion and it will not be until 2034 that repayments exceed borrowings. Over the next 15 years there will be some fiscal implications and we just have to note those. The total amount of borrowing is forecast to increase by 4.7 percent a year which is $66 million. On average the balance will increase by 5 percent. That is the really large figure because that 5 percent is actually going to be $526 million each year. It is a serious matter we are talking about here. Again it just emphasises the implications of the $1.5 billion election bribe that was handed out. 
From the time the interest-free loan scheme was signalled until today the number of people who have gone overseas and whom the Inland Revenue Department did not know about has cost the taxpayer another $143 million. Again it just emphasises the huge fiscal implications upon the economy. I want to emphasise that we are not begrudging that; we just want to see an enormous growth in the level of responsibility of those people who have taken other options like going on to tertiary education learning a trade or skill or working with an industry training organisation or training provider where they can earn while they learn and get very very valuable skills. As previous speakers have said we have high expectations for our young people. We want them to aim for the stars and to excel. We do expect them to make educational choices around the tertiary scene that will add value and make our economy resilient into the future. 
Another statement I want to make is that there is a significant level of private benefit around the tertiary education side of things. I do not think we are focusing enough on that. The fundamental thinking around the student loan scheme is that it is for the private good of the individual. The State still pays an enormous amount of the tertiary education bill. There needs to be an incentive around the choices we make so that that value is realised. When we stop to think about it we realise that with any investment there is a short-term sacrifice and that to get the long-term benefit we have to be able to cope with that short-term sacrifice. To quote what Benjamin Franklin said—and I fully endorse the statement—“If a man empties his purse into his head no man can take it away.” That applies to women as well I say to Dianne Yates. 
Any investment in knowledge always pays the best returns. Certainly tertiary education is hugely important. The student loan scheme has been the foundation for it and on that basis I recognise that this bill is the best attempt of a number that will come before us to try to ensure that those people who take on the obligation of a student loan either stay in New Zealand and deliver the value back to the taxpayer that we know they will or if they go overseas stick to their repayment obligations. It was interesting to get the figures from the Inland Revenue Department that show that this scheme in itself will actually start to improve the level of payment—$9 million in the first year and something like $24 million in the second year. 
Just on a finishing note I draw everybody’s attention to the noble submission made by intern doctors. It talked about their need to stay in New Zealand for another 3 years. When we look globally at the moment at the issue of getting employment as a doctor we see that in the UK for example the number of doctors is being reduced by some 20000-odd and we are very mindful that it looks as though the worm may turn. We will get back a lot of our wonderful people and that would be absolutely outstanding. 
It gives me great pleasure to stand here and speak on behalf of the National Party. I am proud of the fact that we have largely tidied up an area that was a shambles after the interest-free student loan policy was brought in. Thank you. 
Dr ASHRAF CHOUDHARY (Labour) 
: 
Alaikum salaam. What brought me to politics was the excesses of the National Party in the 1990s. What hit me was the class system that was brought to New Zealand politics particularly in the area of education. Some people could afford to go to the universities but those who could not afford to had to get loans and they had to pay interest on that while they were studying or after their graduation. 
So I am delighted that Labour has since 1999 started to reverse some of those policies particularly in this area of education where we pretty much started a campaign to rectify the excesses that were brought to us in the 1990s. First of course we got interest-free loans while students were studying. This is the second stage of that campaign to have interest taken off altogether when students have graduated and while they are working in New Zealand. I am delighted to rise and support this bill because it is designed to bring a fair and just society particularly in the area of education so that our young people can afford to go to universities polytechnics and other tertiary education institutions. 
I would like to make some comments on the speech made by my colleague over there Hone Harawira about Maori education and how students of Maori extraction are having difficulty in studying. Unfortunately I have to say that I think that speech was very cynical. I know the Maori Party supports this bill but that speech was very cynical in a way. I will tell the member why I say that. It is because education is fundamental to human development. Education is what makes us understand what is around us. It makes us understand the nature of things and makes us better at decision making. I will tell members about education and Asian people. Why do so many Asian people come to New Zealand? One of the major attractions is to get their children educated in New Zealand because we have one of the world’s best education systems here. They come here to get their children educated so that they can do well in life. 
I am surprised that the member of the Maori Party Hone Harawira has been very cynical about the loan scheme. Today of those students graduating from our high schools 50 percent more Asian students than Pakeha students obtain university entrance. That is because Asian students and their parents value education. I think the message there is that the parents have to make sure their children go to high school and to universities or other tertiary education. It is important for the State to make sure that these students have the opportunity to go to higher education. It is important that every family has the opportunity to send their sons and daughters to tertiary education. Among the ethnic communities nowadays we see a whole lot of young people who have more opportunity to go to university now with this scheme where students can have access to loans and do not have to pay interest. The ethnic community including the Asian community and particularly the new arrivals is usually at the bottom of the heap in economic terms. So this scheme allows them to make sure their children go to universities and get higher education. 
 Now with the interest-free student loan scheme we have more students in tertiary education than ever before. That allows for these students not only to study here but also to go overseas. Previously postgraduate students alone were registered but under this bill undergraduate students are also able to go overseas and enhance their study. I think of some areas in this country like science technology and engineering—and sometimes other areas like health for example which was highlighted earlier in terms of eye surgeons and other surgeons—where some of our universities do not have all the facilities available. I am delighted that this scheme allows students to go overseas for up to 3 years and enhance their education particularly in the postgraduate area and in the areas of technology engineering and medicine. For example my own young son is becoming a vascular surgeon and he is planning to go overseas because some of his education is probably not fully available here. I am sure he will be coming back to help us here in this country. 
Labour’s policy is to make sure that we have quality and relevance in our education because previously in the 1990s it was all about “bums on seats”. Now we are working towards improving our tertiary education so we can have a funding allocation for our institutions that allows better quality and relevance for students in education. 
This bill I must say is very important particularly in relation to the amnesty of 1 year on student loans. This will also allow non-resident borrowers in arrears the chance of a fresh start. That is very important because some of the students who have gone overseas cannot afford to repay their loans while they are working. As has already been highlighted some graduates go overseas to do not only postgraduate work but also some kind of community work—for example in the United Nations—or in similar organisations or non-profit institutions in developing countries. 
It is important to realise that this bill allows for data to be matched between the Inland Revenue Department and the Customs Service so they can make sure they have information available about the graduates who go overseas so that on their return they can be assessed for repaying their loan. It is very important that these steps carry on for our young students so that we can give opportunity to our future generations to get educated. 
I particularly come back to the point I raised earlier in relation to Maori education. In the Education and Science Committee right now we are doing an inquiry into making every child successful. I know that the member from the Maori Party is making a very good contribution in terms of understanding why some children are failing. We all know that at the moment at the bottom of the heap a quarter of the students who are failing are more likely to be either Maori or Pacific Island students and it is important for the parents to make sure our children are getting education. Schemes like the interest-free student loan scheme are enhancing the opportunities for study. 
Finally I say the select committee has done a marvellous job under the chairmanship of Brian Donnelly who is a very good chairman. The Opposition members in the committee have been working very well and have been contributing hugely. I am delighted that we are working very cooperatively and well. Thank you very much. 
TIM BARNETT (Labour—Christchurch Central) 
: 
 I begin by commending what I thought were some very helpful comments made by my colleague Dr Ashraf Choudhary who having worked for some time in the academic sector certainly knows what he is talking about from the teaching side of the system. 
In this third reading debate on the Student Loan Scheme Amendment Bill (No 2) what I would like to do as well as initially commending the legislation is to take a bit of a snapshot of this issue. Firstly I will go back and speak for a moment from my personal history as the first person in my family to achieve tertiary education—in spite of my heavy Kiwi accent—in the United Kingdom. That takes me back to 1978— 
Hon Mark Burton 
: Warwickshire. 
TIM BARNETT 
:—to the Warwickshire County Council with a proud local education authority which in those wonderful days paralleled absolutely the tertiary system in New Zealand. The local education authority gave me not only full tuition fees not only full accommodation costs not only enough money to feed myself but also everything else besides. I had to work only in order to earn a bit of pocket money to do those extra things. That was an extraordinary period when I was absolutely supported to complete my tertiary education from point A to point Z. That was an extraordinary situation to be in and I know that many people in this House including I am sure a majority of our National Party opponents who oppose this legislation enjoyed a similar privilege. Those were the golden years in terms of tertiary education. 
Secondly I would like to flash forward to 1996 when I was elected as an electorate member of Parliament for Christchurch Central which is an area with a high number of students. What I found in that first flood of casework coming to my office was a story repeated again and again. That was a story of students—and in some cases graduates because by then the real student loan scheme had come in and some people had gone through the scheme—who had generated a very large debt. As a result they were in a situation whereby they had a massive debt—very often equivalent to the size of a mortgage—hanging around their neck. They were in that desperate state and naturally they came to their local member of Parliament to tell the story. At that sad stage Labour was in Opposition. We were not in the position to be able to do an awful lot to help their situation. But what we could do was to learn from their stories and develop policy in response to that. 
The harsh edge of that savage loan policy was the debt—which Hone Harawira spoke very powerfully of—which is now at a very high level. Those were the years when that debt started low at a national level and started to shoot up and up. It was an utterly unreal situation. I can remember for example a medical student who had a $120000 loan debt. She was a young woman who had developed a number of emotional illnesses while she was studying so she had a real lack of confidence that she could ever actually practice as a doctor. So she was faced not only with a massive debt without any scholarships to balance it against but also the real possibility that she could never do the job that would earn her the real money to pay back that debt. She worked out that she was spending about a quarter of her real income just to service the debt before actually starting to eat into it. 
That was in 1996. Now I will flash forward to 1999. I still remember being the first member of Parliament to turn up at the University of Canterbury during the election campaign. Obviously events in Christchurch often lead the nation. The students at the University of Canterbury occupied the Registry because their anger at the student loan debt was so great. I was the first lucky member of Parliament as an Opposition MP to arrive into that situation and to address the angry crowd. I was then taken into the boardroom where there was a midnight meeting for the students to try to present to me what the problems were all about. At the heart of the dispute then was the issue of student loans—obviously other issues were there besides. 
That occupation of the University of Canterbury really set the tenor for that election because Max Bradford who was then the Minister for Tertiary Education for the National Government had all sorts of extraordinary objects thrown at him as he visited one campus after another. He was chased off campuses. He really had to repeat endlessly the famous action of Lockwood Smith in climbing through what was it a storeroom window or a toilet window— 
Jill Pettis 
: The Joe Cocker of the National caucus. 
TIM BARNETT 
:—exactly the Joe Cocker of the National caucus—in order to escape angry students. Max Bradford in campus after campus was performing extraordinary escape acts to try to get away from the venom of an extraordinarily angry bunch of New Zealand citizens. 
That was in 1999. By then Labour had developed the policies to address this area. I see this legislation now as in a sense ending that legislative journey. What we did after getting into power in 1999—and again after intense debate after getting into power again in 2005—was to look at the situation see that debt continuing to rise and most important of all see the personal situations of extraordinary suffering that were causing our students not to look forward to the next stage of their lives but to fear what was going to happen. Of course in 1999 interest was accruing even as they were studying. The first thing we did on getting into power with a whole lot of other calls on our first Budget was to freeze the interest on loans while students were studying. After 2005 we froze all interest on loans so that any repayment was actually repayment off the interest. But there are some exceptions to that situation and that is really what the Student Loan Scheme Amendment Bill (No 2) is heavily focused on. That is what this third reading debate is all about today. 
This bill continues Labour’s effort to make that loan scheme fairer. The particular matter it focuses on is the fact that many graduates for a whole heap of reasons want an opportunity to go overseas. As has been mentioned earlier by Colin King some graduates want the chance to become missionaries or to follow their interest in overseas development work or overseas volunteer work for a while. The last thing they want while being overseas which would normally mean that interest would continue to be added on to their loan is to lose out financially through giving of their time freely to the wider world. Instead we want this legislation to be effective so as to allow those graduates to enjoy their overseas experience but we also do not want any disincentive for them to come home to use their skills in New Zealand. So first of all we need the information. Therefore this legislation introduces data matching between the Inland Revenue Department and the Customs Service to help ensure that the department knows about those with loans who are heading overseas. That information base was not readily available or accessible before. 
Secondly the legislation extends the amnesty on student loan penalties by just 1 year. That allows non-resident borrowers who are in arrears the chance of a fresh start. It is absolutely essential that incentives are built into this kind of system. It is all very well to tell graduates who come home to New Zealand after a number of years that they have a $150000 debt hanging around their neck. That will not be much of an encouragement to come back here even with the skills they have. So this bill extends the amnesty by 1 year. This enables New Zealand graduates with a debt who are overseas and who are paying a bit off or maybe not paying enough off an opportunity to play a bit of catch-up. 
The bill also makes the scheme fairer by introducing a 3-year repayment holiday for those borrowers living overseas. That is fundamental. It recognises that many of those borrowers who go overseas for their OE are not going to a secure salaried position with a certain income. It means we have recognition now in law that borrowers may not be in a position while on their OE because they have an uncertain income to make repayments while travelling. 
The last two points I make about this legislation are that it allows the Inland Revenue Department to give interest-free loans to undergraduate students who are studying overseas and that it also introduces a penalty rate when borrowers fall behind in repayments. It is with great pride in this legislation that I commend its third reading to the House. 
JILL PETTIS (Labour) 
: 
 It is with real pleasure that I rise to speak to the bill because the whole student loan scheme is an issue that I feel very passionate about. Like most parents around this House who are roughly my age we have children who have been students. And we have been students ourselves so many of us know personally what the former loan scheme used to be like for students in the very early 1990s before Labour came into Government and was able to institute a much fairer loan policy. 
I could regale the House with the many many stories that my children’s friends used to tell me about the impact the former loan scheme introduced by the former National Government meant for them personally. One of the huge differences I noticed when Labour came into Government was how the constituency work and the topics which were some of the major issues that came through our offices changed. One of the issues that did change dramatically was the amount of work that my office was doing around issues connected with student loans. Once Labour’s policy came into force the amount of work we were doing on student loan issues dropped away markedly. In fact I cannot remember the last time I did a case concerning student loans. That is great for students and it is good for New Zealand. 
This bill really is a continuation of Labour’s policies to make the student loan scheme fairer. Basically that is all that the people who came to see me and my children’s friends who were talking to me were asking for. They were not asking for a free ride. They knew that tertiary education was expensive and they were just asking for a fair deal. That is one of the reasons why I have always felt so strongly about our student loan policy and it could not have come in quickly enough as far as I was concerned because New Zealanders and young New Zealanders were really just asking for a fair go. This further extension covered in the bill—this continuation of making the student loan scheme fairer—is all that people were asking for. 
Part of the improvement in tertiary education that I am proud that our Labour Government has been able to deliver is the funding of institutions on the basis of quality and relevance. I well remember when we were in Opposition how the old market-driven model that National applied was basically about “bums on seats” as we say. Our tertiary education institutions were forced by the previous National Government’s onerous and draconian tertiary education policy to concentrate on numbers rather than on quality and relevance. I am delighted that the improvement in our tertiary education policy has enabled tertiary institutions to refocus on quality and relevance. 
It is not easy for those who deliver tertiary education services. We always know that demand exceeds supply. One of the things we can say about education in general in New Zealand is that all of those who are involved in delivering education in New Zealand want to do only their very best. They want to deliver only the best for their students from early childhood education right through to tertiary education degrees and the doctorate level. If one wants to get rich one should not work in the education sector. People who work in this sector do so because they are passionate they are driven and they are committed. They want to improve New Zealand and they want to leave this country a better place. The way they are able to do that is by being in front of a lecture theatre or classroom or leading young people and imparting to and sharing with them the knowledge they have gained over the years regardless of what stage of the education process those students may be at. 
I am grateful for the altruism shown by the people who work in the education sector because it is a huge commitment; it is not an easy task. I want again and I have done this many times to take this opportunity to extend my personal thanks to those who are involved in educating our society. 
Colin King 
: You are starting to repeat yourself! 
JILL PETTIS 
: It is worth repeating. It is worth saying thank you to those people who are sharing their knowledge with young New Zealanders. That member who is generally regarded as being fair has just had I am sure a momentary slip in his normally pretty good attitude. I am happy to say thank you as many times as it is required. One of the things about our culture in New Zealand is that sometimes we are great at criticising but we are not as flash at saying thank you. They are two very simple words and I am happy to say thank you as many times as possible. So just in case that member missed it I say thank you to all the people who are sharing their knowledge with young people in New Zealand and improving the lot of our society. 
 It is a pity that member interjected because I did not intend to dwell on the National Party as there is really not much to say about it. But I accept that one is forced to respond to a careless and out of character interjection. What cannot go without being asked is the question: “What’s National’s policy?”. Can those members opposite give us a policy? Do they have a policy? There is silence—not a dicky-bird! The only message I can hear from National on its tertiary education policy is—listen—ratatat-tat! That is Mr Key’s flip-flops. That is Mr Key flip-flopping all over the show on yet another lack of policy and that is National’s position on tertiary education. 
Mr Key has several views. I ask members to bear with me for just a moment. In one of his statements he said: “Labour’s no-interest loan scheme is rushed and reckless thrown together in desperation before the election.” Then ratatat-tat! Further down the track as he was flip-flopping Mr Key said—perhaps to a different audience because I understand that he changes his response depending on the audience he is standing in front of—“We’d have a look at it. Let’s just see what conditions they put on it and what impact it has.” Well I wonder what audience he was standing in front of when he said that. 
Let us see what sort of a direction that is coming from somebody who thinks he will be a leader of this country. It is kind of like those hats with two peaks we see some people wearing—“Take me to your leader.”—because he’s never quite sure which way he’s going. We are talking about education which is one of the most important sectors in our society and today we are talking about tertiary education. Fancy the main Opposition party not having a clear policy on tertiary education! Have members ever heard anything so vacuous? Have they ever heard anything that is so—oh we are not allowed to say that word? Have they ever heard of such lack of direction about a policy area that is so critically important to New Zealand’s future? The main Opposition Party—well the party that purports to be the main Opposition party—does not have a clear unequivocal policy on tertiary education. I tell the National Party that it should get up to speed and get a policy. I ask it to give us a policy—on anything! 
NATHAN GUY (National) 
: 
 What we heard from that member over there Jill Pettis—“rat-tat!”—was the drum roll when Chester Borrows rolled her out of the electorate of Whanganui by a handsome majority. “Rat-tat!” was the sound of people in that electorate applauding when Chester Borrows replaced that member. That member over there the previous member for Whanganui spent a good portion of her speech saying thank you. Well that is what the people of the Whanganui electorate said to Chester Borrows when he won that seat so handsomely. 
I wish to take a call on the Student Loan Scheme Amendment Bill (No 2). The main points I wish to raise are that we have a million people overseas and some of our youngest and brightest are leaving our shores to work and further their education overseas. That is of real concern to the National Party. A lot of our youngest and brightest—the brain drain—are heading overseas. But National is supporting this bill for the reason that it is pretty much tidy-up legislation. In particular it will actually allow the New Zealand Customs Service and the Inland Revenue Department to do further data-matching which I think is very very important. 
This is just a short call from the National Party to say that although we have some concerns we support this bill because it is really a tidy-up of legislation that has been a little bit messy and not well-thought-through. 
Bill read a third time. 
Criminal Procedure Bill 
In Committee 
Debate resumed from 21 March. 
Part 2 Criminal Disclosure ( 
continued 
)  
KATE WILKINSON (National) 
: 
 I continue my call on Part 2 of the Criminal Procedure Bill. I have already outlined the two-page diagram and the four-stage disclosure requirement which do seem somewhat convoluted and complex. I was halfway through relating the situation of the Institute of Environmental Science and Research which in its submission advised that it provides forensic services and that it has major concerns over the potential implications of the time frames as a result of these disclosure requirements. In fact it stated in its submission that it was “bemused by the apparent lack of consultation” with the institute. There are times when the findings of the Institute of Environmental Science and Research are pivotal to the charge and summary of the facts yet under the regime proposed by this bill the current turn-round times are incompatible with the time frames envisaged. The institute admitted that part of this was due to its capacity actually to do the work but more important it is a matter of the inherent time it takes actually to process certain types of forensic work. If there is not enough time in which to undertake the proper forensic processes and they are going to be affected and jeopardised by this disclosure regime which is complicated then I would like the Minister in the chair Mark Burton to take a call and explain firstly what consultation he had with such forensic experts as the Institute of Environmental and Scientific Research and secondly how he thinks the process time frames will be able to meet the convoluted time frames that have been prescribed in Part 2. 
The commentary on the bill states that the recommended changes to this fourfold disclosure regime aim to “clarify or augment the obligations on the prosecution to reflect current practice and reaffirm an accused person’s right to fair process and to make the legislation more workable.” It specifically states that the objective is to make the legislation more workable but it cannot be workable if the institute does not have time to process its forensic projects. The legislation cannot be more workable if it so convoluted and complicated that an overview diagram of the disclosure provisions is actually included in the bill. The use of diagrams in legislation is not a common practice and I would have thought that the drafting of this bill could be simplified so as not to need to describe the provisions by way of a diagram. 
I do not believe that this legislation is very conducive to maximising the efficiency of the criminal justice system. I fear that rather than making access to justice quicker and more efficient it appears to do the exact opposite by complicating the process especially in relation to these disclosure requirements. If something is not broken then we should not be attempting to fix it. It has been suggested that the current system works well. The New Zealand Law Society says that it works well and those within the industry say that it works well. So we have to ask ourselves—and I would like the Minister to answer this one as well—why we are trying to fix something that works well with a complicated fourfold disclosure requirement that then needs a diagram to explain what is intended. On that note I seek the Minister’s response to those queries and I certainly look forward to hearing from him. 
Hon MARK BURTON (Minister of Justice) 
: 
 I am happy to begin to engage with the member Kate Wilkinson and she raises a number of important points. Firstly I have heard a number of references to the use of a diagram as though somehow by its very existence it suggests that the Criminal Procedure Bill is too complicated to understand in any other way. In fact it was provided simply to assist with clarity. I thought it was a useful and practical tool and was the sort of sensible inclusion that I think we should make use of more often. But the fact remains as the member noted in referring to the commentary that the bill actually proposes a new fourfold disclosure regime in order to consolidate what is already a very complex body of common law in legislation. That is the fact of the matter. 
Members listening to Kate Wilkinson would be forgiven for thinking that what we were doing was moving from a very simple straightforward current procedure to a very complex one. In fact the reverse is true. The situation as it stands is complex. It has evolved over time. This procedure will clearly set out rules in one place rather than in more than one place and not as the mixture of statute and case law that currently exists. It will mean that all parties can be more aware of what they are entitled to what their responsibilities are and what the required procedures and time frames are. I cannot see how moving from the complexity that has evolved over time—which is the case now—to a more systematic consolidated approach does anything but assist in the execution of the law. 
The member referred to the Institute of Environmental and Scientific Research and to our discussions with it. I can happily inform the member that there have been subsequent discussions with both the institute and the police. Ministry officials have engaged with them. I think it is fair to say that they report that for the main part the institute can meet within the time frames provided for in the vast majority of cases and that in the few cases that it may be unable to meet the requirements it can get an extension. That is provided for in the bill. 
Therefore I think in effect the concerns the member raises have all been responded to. So I am confident that with those responses the member will now be fully satisfied and will happily embrace Part 2. 
Hon CLAYTON COSGROVE (Associate Minister of Justice) 
: 
 I am not a lawyer. Before Mr Finlayson in his own inimitable charitable and humble way gets in to have a dig at those members who stand up and who are not lawyers I will get in first to say that I am not a lawyer. I am sure that he is far more— 
Christopher Finlayson 
: I’ve said nothing! 
Hon CLAYTON COSGROVE 
: I am just getting in first because Mr Finlayson who is one of the most charitable and humble members of the House normally does that. 
As a person who is a layperson and not a lawyer I say that this Criminal Procedure Bill provides a decent disclosure regime and brings the law into this century. A lot has been made of the fact that preliminary hearings and if you like committal hearings will go and therefore that defendants will be somehow stripped of their rights. It is worth noting that since 1977—so the Law Commission in its papers and others tell us—committal hearings or decisions on the papers in terms of committal to a trial have been made in around 47 percent of cases. 
The bill also allows some flexibility which is something not evident under the present circumstances in that if a committal is made on the papers by a judge there is still the ability for counsel to make an application so that a preliminary hearing can come about. But that is a matter for the judge. 
Kate Wilkinson 
: I raise a point of order Mr Chairperson. This debate is on Part 2 which is specifically about disclosure requirements; it is not about depositions or pre-trial hearings. It is very specifically about disclosure and I do not believe that the member is talking about disclosure. 
Hon Mark Burton 
: I think it is fair to say that when the Committee is conducting its business members are generally given a little bit of leeway to explore the issues around the particular focus of the part. That is something that members have commonly done—on both sides of the Chamber. As long as the member moves reasonably quickly to the appropriate part of the bill that is generally seen as allowing for a certain amount of touching on related issues that members want during these debates. 
The CHAIRPERSON (Hon Clem Simich) 
: I thank Kate Wilkinson for raising the issue. The Minister has proposed a way through it and I intend to follow that. 
Hon CLAYTON COSGROVE 
: I bow to your learned judgment Mr Chairperson. 
In essence when enacted Part 2 of the Criminal Procedure Bill will become a separate statute referred to as the Criminal Disclosures Act. In essence two major reports on reforming criminal disclosure have been written both of which call for the implementation of a statutory regime for disclosure. These are actually learned reports—the first being of course  
Report on Discovery in Criminal Cases 
 from the Criminal Law Reform Committee in 1986 and the second being  
Criminal Procedure: Part One Disclosure and Committal 
 Report 14 from the Law Commission 1990. 
I have to say not being a lawyer but being one who observes legal practice through being a member of Parliament that when law commissioners eminent as they are propose reforms they should be listened to. There are various views within Law Society branches around the country in respect of this disclosure regime but I would have thought that when law commissioners suggest changes like this—which do bring a practical effect and a more speedy and efficient court system—those of us who observe the law and are part of the legislative decision-making process should listen. 
The member who took a point of order on me has been very vocal of course in trying to manufacture the proposal that we do not have such justice. Her favourite saying which she quotes from history is “Justice delayed is justice denied.” Well this proposal effectively to codify disclosure regimes provides a more efficient court system. I would have thought that people would agree with that basic proposition. I see Mr Borrows over there an ex-policeman who was involved no doubt in aiding the Crown in prosecution of many criminal cases. He would agree with the proposition that a more efficient court system provides a greater degree of justice to both defendant and victim. That is what these proposals in Part 2 are all about. 
Chester Borrows 
: That’s right. I agree with what it’s about. 
Hon CLAYTON COSGROVE 
: The member says he agrees with that but of course his Supplementary Order Paper does not provide the back-up for that comment. 
CHESTER BORROWS (National—Whanganui) 
: 
 Thank you for the opportunity to speak on Part 2. I agree funnily enough with Mr Cosgrove who talked about the desirability of a more efficient court system and we will see that as we go on to debate further parts in respect of this bill. 
Part 2 codifies a disclosure regime that exists currently and that is a good thing. So we will be voting for this part. It allows for limited disclosure by accused people but in actual fact it really only underlines two principles of the disclosure regime at the moment. One of those principles is alibi which is already part of the law and that accused people must disclose alibis at certain periods. Also that there is no property in expert witnesses; they are supposed to be independent and generally are. 
What is excellent is that the provisions of Part 2 allow for judges to set time frames on disclosure. A lot of good judges who allow cases to rattle through the court system which brings justice to a speedy resolution lead by example through force of personality and that is exactly what they do now. Judges themselves are divided in respect of a point that Mr Cosgrove raised on depositions. Those who wish to set those time frames tend to have speedy resolutions and go through the court system. I must say that it is a shame that there is not a clause in here that amends the Evidence Act in relation to requiring the police to speak to material witnesses who are readily available and ascertain evidence from them because sometimes they choose not to interview the obviously available witness. 
I also point out to the Minister that the provisions of Part 2 actually achieve what he wants the provisions of Part 5 as they are written now to achieve and that is to bring about speedier jury trials. So I look forward to supporting Part 2. 
CHARLES CHAUVEL (Labour) 
: 
 I am pleased to rise to speak in the Committee stage concerning Part 2. As previous speakers have indicated this part will create a codification of the existing disclosure regime in criminal cases. It is important in my view to undertake this exercise. The current law is loosely based on the regime that came into force with the Official Information Act. That legislation of course was never intended by its framers as a full statute relating to disclosure in criminal matters; it is legislation that the judges have had to fashion into that sort of disclosure regime. So rather than relying on legislation that was not really intended for the purpose and on judge-made law created under the legislation—somewhat imaginatively it might be said—we have the opportunity to fashion a custom-made disclosure regime in criminal cases. It is appropriate to take that opportunity. 
As the Minister indicated a fourfold disclosure regime is intended: initial disclosure on the part of the prosecution followed by full disclosure. It is pleasing to note that the legislation indicates that the continuing disclosure obligation on the part of the Crown and the prosecution in these matters is preserved and that it persists from the time of the commencement of a criminal proceeding right through the prosecution of the matter and through to the exhaustion of any appeals. It is appropriate that the State should bear that burden on a continuing basis at all times. 
 The legislation as has been said also sets out a regime regulating disclosure by the defence—a novel matter but a matter that ought to be dealt with by statute—and where as will be seen a number of competing interests are balanced. The disclosure regime relating to third parties is very significant because obviously in criminal matters third parties will often have access to important information that will potentially be of assistance to either the prosecution or the defence. It ought to be the case that the court has an orderly way in which to be able to bring that information before it following a hearing relating to its relevance and the court’s satisfying itself that the party intended or named in the application actually has possession of it. 
Mention was made of the diagram appearing after clause 18(2). In my view that diagram is a very helpful overview of the regime that applies. It will be of enormous assistance particularly to lay people trying to understand just how disclosure obligations operate in District Court trials. I think it is perhaps a somewhat novel way to describe and set out obligations in a statute but I think the Law and Order Committee is to be praised for having set it out in such clear terms. Clearly the diagram does not purport to create the obligations but simply to describe them and it does so in a helpful way. 
I point to another couple of provisions in Part 2 that I think are worthy of mention. Clause 25 relating to service of applications for disclosure clearly contemplates that such applications might be served by electronic means which is clearly appropriate in the modern era. Facsimile transmission is also mentioned and it is good to have that recognised explicitly in the statute. 
Clause 27 describes in detail the disclosure obligations on the prosecution which are to operate within 21 days. In my view clause 27 sets out a very comprehensive and appropriate code for initial disclosure. Clause 28 goes on to then describe the full disclosure obligations. Again there is a very full and fair description in the code that will apply to prosecution obligations. It is a far more satisfactory state of affairs than exists under the current attempt to fashion a judge-made code largely based on the Official Information Act. 
Clause 29 provides for additional disclosure. It indicates that the defendant can if he or she is dissatisfied with any aspect of the disclosure request additional disclosure from the prosecution. This clause provides for the additional disclosure that may be requested from the prosecution. Where a request that has been made is declined the prosecutor must give reasons for declining. 
Clause 30 makes it clear that there is no requirement to invent or come up with new information simply because of a disclosure request. Clause 31 sets out a very comprehensive code under which the reasons for withholding information are set out. They are more comprehensive than those set out in the Official Information Act. They are very clear and that will help parties to criminal litigation understand just why disclosure is declined in any particular case. 
Clauses 32 and 33 go on to provide for further restrictions. Addresses of witnesses and informants can be protected—clearly that is an appropriate balancing exercise on the part of the House and Parliament should go that way. Trade secrets are also protected in certain cases and the committee has clarified the definition there in a helpful way. 
Clause 35 deals with the disclosure obligations upon defendants. Again a comprehensive code is set out that will make it clear what obligations exist. If alibi defences are to be brought up then proper notice under clause 37 will need to be given allowing for preparation in advance of any such defence being advanced. Expert witnesses are subject to a similar notice requirement by clause 38. If expert evidence is to be relied upon then the prosecution is to have a chance to digest either the brief of evidence in advance or a fair summary of it so that again the interests of justice are preserved and there is not defence by ambush in these cases. 
Clause 39 and those clauses that follow in Part 2 deal with disclosure by non-parties. As I said it is a novel part of the regime. Clearly there will be situations where information that is vital to either the prosecution or the defence in criminal proceedings exists and that information is held by third parties. The legislation would set out a clear way for making an application for a party to disclose such material. 
Clause 40 sets out the tests on which the court must base its decision as to whether to grant a hearing for the disclosure of third-party material. It is a low threshold and it seems appropriate. The consequences and the procedures by which third-party disclosure should be dealt with are also set out in the relevant clauses. 
One other point I would make is that the legislation sets out a sensible test for admissibility in the event that information exists it is not disclosed and it is then sought to be relied upon at the hearing. This is not a rigid test. Clause 47 sets out an interest of justice test so that the court may determine whether in all fairness to admit the evidence grant an adjournment or to do anything else that does not prejudice the rights of the parties and the fairness of the procedure. It is unlike the inflexible test that operates for example in the US. There is not a “fruit of the poison tree” test. The court has all the powers it requires in the interests of justice to decide whether to admit the information to grant an adjournment or to allow other things to be done in fairness to the parties. 
JILL PETTIS (Labour) 
: 
 I am not a lawyer but I am most certainly interested in the fair application of the law and that is why it was interesting to sit on the Law and Order Committee when this bill was considered. 
The Criminal Procedure Bill is significant in the fact that it is proposing new criminal disclosure legislation. It will establish a fourfold disclosure regime requiring initial then full disclosure. One of the other interesting aspects of this is that the proposed Act consolidates a complex body of common law and legislation that we were advised led to inconsistent disclosure practices. The committee emphasised that disclosure is a continuing obligation on the prosecution under the new Act applicable both before and during a trial until all appeals are exhausted. 
Consistency is a good thing in life and it most certainly is a good thing in the practice of the law. It is also the view that the changes recommended aim primarily to clarify or augment the obligations on the prosecution. Clarity in the application of the law is also critically important. The public perception is that justice needs to be fair and to be seen to be fair to all because fairness in the application and execution of the law is in everyone’s interests. 
Part of the aim of Part 2 is to make legislation that is more workable. We are all familiar with comments and representations made to us from the public about their confusion in regard to the application of the law as they come into contact with it whether they are on the side of the accused or the victim in the whole legal argument. Anything that makes legislation more workable and more easily understood by the general public can be perceived and seen only to be a good thing. 
Reference was also made to notice and plea in Youth Court proceedings. In New Zealand the Youth Court is a bit more under the spotlight these days. It receives more attention from the public then as a consequence from the media. I am pleased to say that not all the publicity—the public and media comment—about the Youth Court is negative. This bill will certainly work to some degree to assist proceedings in the Youth Court. In the case of young persons in Youth Court proceedings they are not required to plead but disclosure is triggered only when a not guilty plea is entered. Amendments in relation to the Youth Court are intended to accommodate Youth Court proceedings when no plea is entered. 
Part 2 is about improving the efficiency of preliminary hearings and adding clarity to part of the court proceedings. I look forward to hearing further debate on this bill as the Committee stage ensues. 
Hon MARK BURTON (Minister of Justice) 
: 
 It appears that members have raised the questions and issues that they wanted to raise. I will just round off this part of the debate. 
Chester Borrows 
: We have a great many issues. 
Hon MARK BURTON 
: The member should pay attention to his own colleague. I paid careful attention to Kate Wilkinson who raised a number of— 
Kate Wilkinson 
: I’m here. 
Hon MARK BURTON 
: There she is. She raised a number of sensible and reasonable questions that I think I can provide a reasonable answer to. 
It is worth reminding ourselves that under the current law prosecution disclosure before trial is a mixture of case law and statutory rules under the Official Information Act 1982 and the Privacy Act 1993. It is a complex mix and I think this point goes to the matters that Kate Wilkinson raised in her questions. It also explains the purpose of simplifying and putting into one place provision that indeed does assist all those issues around disclosure requirements in a more transparent and straightforward way. The key principle in criminal proceedings is that all of those matters that should be and are required to be disclosed to the defence are disclosed in a good and timely manner. These provisions will assist in that process and I commend this part of the bill to members. 
The question was put that the amendments set out on Supplementary Order Paper 97 in the name of the Hon Mark Burton to Part 2 and the following amendments in his name to clause 56 be agreed to. 
Subclause (1): to omit “ 2 4 5 and 6” and substitute “and 2”. 
Subclause (2): to omit “ 2 4 5 and 6 (or” and substitute “and 2 (as”.  
Amendments agreed to. 
Part 2 as amended agreed to. 
Part 3 District Courts Act 1947 
The CHAIRPERSON (Hon Clem Simich) 
: We now come to Part 3 clauses 58 to 64 which includes debate on schedule 3. 
CHARLES CHAUVEL (Labour) 
: 
 I am pleased to rise to speak in the Committee stage on Part 3 of the Criminal Procedure Bill which will make amendments to the District Courts Act 1947. The interesting aspect of this part of the bill is that it will deal with the jurisdiction of District Courts over a number of offences. 
Under section 28A(1) in clause 60(1) these offences are: “(a) any offence for which the accused elects under section 66 of the Summary Proceedings Act 1957 to be tried by a jury: (b) all indictable offences under any enactment (other than the offences referred to in Parts 1 and 2 of Schedule 1A): (c) the indictable offences referred to in Part 1 of Schedule 1A in any case where— (i) the proceedings are transferred to the Court under section 168AA of the Summary Proceedings Act 1957; or (ii) a person pleads guilty under section 153A or section 168 of the Summary Proceedings Act 1957 before he or she is committed for trial or sentence to any such offence: (d) conspiring to commit an indictable offence to which paragraph (b) or paragraph (c) applies—” 
Kate Wilkinson 
: What does that mean? 
CHARLES CHAUVEL 
: I am sure the member will be able to ask the Minister Mark Burton for a full explanation. Clause 60(1) continues: “(e) attempting to commit an indictable offence to which paragraph (b) or paragraph (c) applies or inciting or counselling or attempting to procure any person to commit any such offence which is not committed: (f) being an accessory after the fact to any indictable offence to which paragraph (b) or paragraph (c) applies.” The bill also goes on in clause 61 to deal with maximum sentences in clause 62 to deal with appeal against sentence and in clause 62A to deal with regulations. 
It is clause 62A that I would like to speak on. Clearly under the legislation offences will be able to be added or removed from Parts 1 and 2 of schedule 1A and transitional arrangements will be able to be made for the trial and sentencing of persons charged with those offences. This will be able to be effected by regulation. So middle banding will be able to be dealt with by way of Order in Council rather than by primary legislation. Although that is in one way offensive to the general principle that primary legislation ought to be amended only by further primary legislation it does seem to be a sensible move. 
I note that in the report of the Law and Order Committee the move is one that would be supported by the Chief Justice and would prevent officials from encountering the position they have told the committee—according to its report—they currently encounter which is that the schedule relating to middle banding and indictable offences rapidly falls into inaccuracy because of the frequency with which it is amended. It is much better to be able to do it by regulation to have the scrutiny of the Regulations Review Committee and the other safeguards that exist and to be able to get on with it as the jurisdiction of the District Courts evolves. 
I note in that regard—with great respect to the District Court bench—it does seem to me to be sensible to be expanding the jurisdiction of that court by reference to the numbers of different types of more serious offence that that the court can hear and try. After all the ranks of the District Court bench in recent years have been swelled by former Crown counsel former partners in Crown solicitor firms and former employees of those firms. They clearly represent a very very strong level of expertise in criminal matters. It is appropriate to continue to expand the jurisdiction of the court in criminal matters in light of the expertise that the court has. 
We also know that the High Court prefers that that should be the case—that more criminal matters should be dealt with in the District Courts than in the High Court. It is better to leave the High Court for serious civil matters and appeals on decisions of registrars and what have you and to have most matters of crime in principle dealt with in the District Courts. That is the direction that this legislation will take and the schedule will be able to be updated—as I mentioned—by regulation. Thus middle banded offences can more easily be kept up to date as society determines and as the House decides is appropriate. 
TIM BARNETT (Labour—Christchurch Central) 
: 
 I will take a very brief call on one particular part of the Law and Order Committee report in relation to Part 3 of the Criminal Procedure Bill; that is the item referring to the Regulations Review Committee. 
I am thinking of my experience for 6 years as chair of the Justice and Electoral Committee. That was thank goodness prior to Mr Finlayson’s arrival in this Parliament—if he had been here he would have made my life quite unbearable. Anyway it was a very functional committee because the National MPs were particularly cooperative. We had occasion to I guess one could say clash horns or have debate with the Regulations Review Committee. 
I note that when considering Part 3 of this bill the Law and Order Committee sought advice from the Regulations Review Committee and received advice that at least one clause—62A which the committee was mindful to introduce into the legislation—“raised a fundamental issue of principle in respect of the delegation of lawmaking powers by Parliament.” I have to say that clause 62A does not seem to be as shocking as that at least on the face of it. It covers an amendment to section 123(1) of the principal Act and it adds a couple of paragraphs (bf) and (bg) amending schedule 1A—adding offences and so forth. 
I guess the issue behind the concern of the Regulations Review Committee is about the flexibility of legislation. The Law and Order Committee had a look at the situation and noted in the commentary that “the decision as to where a case is committed for trial will have no bearing on the rights of the person charged or the sentence that may be imposed.” Obviously the committee took outside advice notably from the Chief Justice who supported the amendment. Since this legislation is really around making the court system work more effectively the advice of the Chief Justice is important. 
The select committee also took account of the fact that any regulations made would have to go back to the Regulations Review Committee. This is really an example of the Regulations Review Committee giving advice that was considered and then rejected on particularly good grounds. The Regulations Review Committee has the power to call in any regulation for scrutiny and it will continue to try to guard the rights of the citizen that could potentially be under threat. 
That is really why the question was raised in the first place. I think it is worthy of note by members that this is quite a good example of the role that the Regulations Review Committee plays in both advising committees and guarding fundamental rights. 
Hon MARK BURTON (Minister of Justice) 
: 
 I have just a couple of points. Firstly clause 60 of the bill importantly clarifies the extended jurisdiction of the District Court and that is effectively a tidying-up provision that is quite important. 
I want to comment briefly on the contributions from Tim Barnett and also from Charles Chauvel. [ 
Interruption 
] It was an offering of high standard I have to say. MMP has thrown up some interesting challenges to Governments but it has also offered up—and here we see a good example of it—some of the benefit that can accrue from the interaction between various parts of this institution. I have to say I was very encouraged by the interaction between the Regulations Review Committee and the Law and Order Committee and by the manner in which that interchange scrutinised and examined what is an important question of jurisdiction in looking at the regulation-making powers that are contained in clause 62A. 
If we look at the commentary on the bill we see an exchange and a working through of the issues. I believe that this has in the end produced a very strong and conclusive result and one as has been mentioned that also enjoys the support of the Chief Justice. This is a smaller part of the bill but it reflects some of the benefits that can come from the changes that have happened within this institution and in terms of the interaction between—in this case—the select committee and the Regulations Review Committee. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Kia ora Mr Chairperson. I am concerned about the note about changing unanimous verdicts to majority verdicts. Is that in Part 3? 
Hon Mark Burton 
: That’s Part 4 Hone. 
HONE HARAWIRA 
: Is that Part 4? I will save it for Part 4. On Part 3 I will just let it slide there Mr Chairman. 
The CHAIRPERSON (Hon Clem Simich) 
: I call the Hon Clayton Cosgrove. 
Hon CLAYTON COSGROVE (Associate Minister of Justice) 
: 
 I raise a point of order Mr Chairperson. Forgive me but in the din my colleague pointed out that Mr Clarkson may have wanted to take the call. I am happy to yield and take the following call. Unlike Mr Finlayson I am a humble and charitable member so I am happy to yield to Mr Clarkson if he would like to take a call. I am happy to follow him because I do not think he has had the opportunity to take a call in this debate; I have so I am in your hands Mr Chairperson. 
The CHAIRPERSON (Hon Clem Simich) 
: Thank you for your generous thoughts but I made the call and I called the Hon Clayton Cosgrove. 
Hon CLAYTON COSGROVE 
: I am indebted to you Mr Chair. Part 3 is an exceptionally small part of the Criminal Procedure Bill. As other of my colleagues have said essentially the bill widens the jurisdiction of the District Court in criminal matters. There is the interesting term “middle banding” which I am sure Mr Finlayson as a learned barrister could elucidate for me as a non-lawyer. I invite him to take a call. The middle-band offences as set out in the schedule can be tried either in the High Court or in the District Court. 
The other aspect to Part 3 of course is that from now on changes in middle banding will be made by regulation rather than legislation. What that does is to make a far more efficient process both in the courts and in this House because if changes to middle banding have to be made we do not have to go through the exhaustive procedure of passing legislation. They can be made through regulation with the safeguard of course of the Regulations Review Committee scrutinising those aspects and keeping all parties honest. 
I would again say that this measure modernises our court system. It provides a more efficient regime for our court system and far more flexibility. Some people on the other side of the House have in earlier calls I believe argued against middle banding and expressed concern in respect of it. But changes as I said can be made through regulation. What is wrong with that? I would have thought that is far better than going right through a new consultation process with the public and trotting back to the House with legislation. I would think it is better than going through first second and third readings and a select committee process etc. and then trying to do it. 
If there are good ideas that come from learned judges the Law Commission or learned barristers and lawyers across the other side of the Chamber—and I see one has just come in; no I was looking at the wrong person—those can be assessed in a relatively swift manner. [ 
Interruption 
] I was looking at Mr Henare and thinking he was a barrister— 
Pita Paraone 
: A bush lawyer. 
Hon CLAYTON COSGROVE 
: My colleague says Mr Henare is a bush lawyer. I do not think it is fair to say that Mr Henare is a bush lawyer at all. He is certainly not a lawyer. 
Hon Tau Henare 
: What would you know about the law? 
Hon CLAYTON COSGROVE 
: I probably know as much as Mr Henare although most people would know a tad more. Regulations can be used in a flexible fashion so that we can make our court system more efficient. [ 
Interruption 
] Mr Henare seems to be arguing against— 
Tim Barnett 
: I raise a point of order Mr Chairperson. A member opposite is heckling while standing in the aisle. I am not sure whether that is allowed. 
The CHAIRPERSON (Hon Clem Simich) 
: You are absolutely right Mr Barnett. Members are not to speak or call out unless they are sitting on their benches. 
Hon CLAYTON COSGROVE 
: Thank you Mr Chair. That is all right; I do not mind Mr Henare having a go. It adds to the colour and entertainment in this Chamber. I think Mr Henare is more akin to being a Porirua public bar bouncer. His profession should be as a doorman or doorkeeper or whatever one calls it rather than as a member of this Parliament. I can imagine Mr Henare standing in a public bar and head-butting the punters as they come in. He is more akin to that than to the style and honourable nature of this Parliament. We cannot get the thug out of some people obviously. 
I fail to see how the Opposition could argue against provisions that— 
Hon Member 
: We’re not arguing! 
Hon CLAYTON COSGROVE 
: Well we have convinced Opposition members obviously. Obviously the power of the Minister of Justice’s arguments has convinced the Opposition because now I am being heckled by members who say that they agree with the bill! So I commend the Minister of Justice for the persuasiveness of his arguments for the depth of his logic and for his progressive and innovative ideas which have obviously swung this debate round. [ 
Interruption 
] Mr Borrows interjects. I acknowledge his interjection that he agrees with the bill and that he supports the bill. I think Mr Borrows has exhibited—at least with this legislation but not with some other bills—a degree of progressiveness that sadly is lacking in some of his colleagues in the National Party. So I commend Mr Borrows for that. He is obviously a leader or potential leader of the National Party because he has been persuaded by this bill. 
Progress reported. 
Report adopted. 
The House adjourned at 5.55 p.m.