Volume 674 Week 80 - Tuesday 2 August 2011 
Volume 674 Week 80 - Tuesday 2 August 2011 
[Volume:674;Page:20157] 
Tuesday 2 August 2011 
Mr Speaker 
 took the Chair at 2 p.m. 
Karakia 
. 
Resignations 
Hon John Carter Northland 
Mr SPEAKER 
: I wish to advise the House that I have received a letter from the Hon John McGregor Carter National resigning his seat in the House with effect at midnight on Sunday 17 July 2011. 
Members Sworn 
Hone Harawira was presented to the Speaker made the affirmation required by law and took his seat in the House. 
Obituaries 
Hon Tini Whetu Marama Tirikatene-Sullivan ONZ 
Mr SPEAKER 
: I regret to inform the House of the death on 20 July 2011 of the Hon Tini Whetu Marama Tirikatene-Sullivan ONZ who represented the electorate of Southern Maori from 1967 to 1996. She was Minister of Tourism from 1972 to 1975 Associate Minister of Social Welfare from 1972 to 1974 and Minister for the Environment from 1974 to 1975. I desire on behalf of this House to express our sense of the loss we have sustained and our sympathy with the relatives of the late former member. I now ask members to stand with me and observe a period of silence as a mark of respect for her memory. 
Honourable members stood as a mark of respect. 
Visitors 
Canada—2011 Prime Minister’s Fellow Minister of Citizenship Immigration and Multiculturalism House of Commons 
Mr SPEAKER 
: I now have much pleasure in informing the House that the 2011 Prime Minister’s Fellow from Canada the Hon Jason Kenney Minister of Citizenship Immigration and Multiculturalism from the House of Commons of Canada is present in the gallery. I am sure that members would wish that he be welcomed. 
Motions 
Norway—Bombing and Mass Shooting 
Rt Hon JOHN KEY (Prime Minister) 
: 
 I seek leave to move a motion without notice on the two tragic attacks in Norway that claimed the lives of 77 people. 
Mr SPEAKER 
: Is there any objection to that course being followed? There is no objection. 
Rt Hon JOHN KEY 
: I move  
That the House express its sympathy and condolences to the people of Norway following the recent attacks that claimed the lives of 77 people 
. On 22 July 2011 the people of Norway witnessed two deeply shocking events. The bombings in central Oslo and the shootings on Utøya Island left many innocent civilians killed and injured. They were an appalling attack against Norway’s democratic open and trusting society. Many of the victims were young people attending a summer camp. Tragically a New Zealand - born teenager was amongst those killed. 
The New Zealand Government extends its heartfelt condolences and thoughts to the people of Norway as they grieve. New Zealand strongly values the warm relationship and shared values between our two countries. We are thinking of the families and friends who lost loved ones in this tragedy and we hope those who were injured in the attacks recover quickly. I know that the people of New Zealand have shared in the horror of others around the world at hearing the news of this terrible event. Members of this House have been personally affected and I take this opportunity to extend my sympathies to them today. 
The twin attacks in Norway resonate with New Zealanders not just because a New Zealander was sadly amongst the victims who were killed but because New Zealand like Norway is a peaceful country of about 4.5 million people. It is hard to imagine events such as this occurring on our own shores. To acknowledge how deeply shocking these events have been for the people of Norway we stand alongside them at this most difficult time. We know that the people of Norway are strong and courageous and that they will get through this. As Prime Minister Jens Stoltenberg has said they will not be intimidated by these events. Norway will stand firm in defending itself as an open tolerant and inclusive society. This is an absolute tragedy. Our thoughts and heartfelt sympathy are with the people of Norway as they mourn the loss of so many lives. 
Hon PHIL GOFF (Leader of the Opposition) 
: 
 On behalf of the parliamentary Labour Party I support that resolution. Today as New Zealand parliamentarians we express our grief and our sympathy for the people and Government of Norway for the tragedy that they have suffered. We grieve for the victims and for their families. They were so young. Looking at their faces in the newspaper yesterday we saw that they were full of enthusiasm full of life and looking forward to the contribution that they might make to their country and their community. But that was stolen from them. 
Like New Zealand Norway is a small stable and peaceful country. This allows us perhaps to better understand the scale and the shock of the tragedy that has befallen that country with the loss of 77 of its citizens. Norway—again like New Zealand—is a largely tolerant multicultural country where people live alongside each other and get on with each other. We can see that from the diversity of the young people who were gathered on Utøya Island for the Norwegian Labour Party youth conference. 
We share with the Norwegians their abhorrence that someone could be so motivated by hatred of others on the basis of their ethnicity or their religion that they could commit an atrocity of this nature. At the funeral of the young woman who was the first to be buried Christians and Muslims walked side by side and embraced each other as an explicit and moving rejection of what had motivated the killer. As Eskil Pedersen the leader of the youth wing of the Norwegian Labour Party said: “The gunman took from his victims their lives. But he can’t take away what they believed in: tolerance and anti-racism.” 
Norway is a decent country. It is committed to a peaceful and more just world. It hosted peace talks between the Israelis and the Palestinians. It tried desperately to bring together the warring parties in Sri Lanka. The Norwegian Foreign Minister Jonas Støre and I worked closely together to pass the Convention on Cluster Munitions in Oslo. It makes it even more of a tragedy that something of this nature could have afflicted a country so committed to peace. 
We stand in solidarity alongside Norwegian Prime Minister Jens Stoltenberg when he says: “We’re a small country but a very proud country. No one can bomb us to be quiet. No one can shoot us to be quiet. No one can ever scare us from being Norway.” Today as a fraternal party of the Norwegian Labour Party we offer it our support and our sorrow at the loss of so many of its young people. We offer to the people and the Government of Norway our support our condolences and our sympathy. 
Dr KENNEDY GRAHAM (Green) 
: 
 This forty-ninth Parliament has I believe had more than the usual share of grief. We have stood in silence over tragedies in Haiti Afghanistan Chile Australia Tonga Poland and Japan. Here at home we have mourned Pike River and of course Christchurch. We know all of us in this House what it is to come together to unite in a moment of grief and pay tribute. Yet we have not encountered these past 2 years the depth of evil that characterised the massacre last week in Norway. Mr Breivik’s deed is in the category of major terrorism—a crime against humanity. It equates with Timothy McVeigh in the Oklahoma bombing Mohamed Atta with the twin towers and the bombings in the Bali nightclub on the Spanish train and in the London Underground. 
We know about mass sniper killings in recent times in the US the Netherlands Russia and Britain. But those were mindless acts of deranged individuals. Last week’s killing of 77 innocent young people was anything but mindless. This was a political act. So not only must we grieve for Norway we must respond publicly and with one voice to a political act of destruction with a political act of resolve. We must answer a paroxysm of death with an affirmation of life. The tribute we pay to the slain youth of Norway as they went about their engagement in a political party must be to reaffirm the very civic values they were expressing in their final moments here on Earth. If their lives are to have meaning above mortality a legacy beyond their short span it will be because we determine here as a nation to celebrate all that is uplifting with the human spirit. Let this nation now proclaim the human values these young Norwegians were living at their moment of death. 
I know from personal experience how close we in the Antipodes are to those in the most north-eastern tip of Europe. I lived and worked for 3 years in Sweden and I visited Norway often. I worked closely with one of Norway’s most prominent leaders Thorvald Stoltenberg former Foreign Minister and UN High Commissioner for Refugees UN representative on the Yugoslav crisis and father of the present Prime Minister. Mr Stoltenberg was a strong guiding light on the boards of my institute in Sweden and the UN Academy I directed in Jordan. It was in his house in Oslo that my wife and I met the Prime Minister Jens Stoltenberg some 6 or 7 years ago. 
On Saturday evening last I telephoned Thorvald to convey New Zealand’s concern over this event and our empathy for the Norwegian people. I said how much we admired the manner in which the Prime Minister was rallying his people demonstrating to the world the sanity stability and tolerance that characterises his nation. Thorvald responded with Nordic simplicity. They were he acknowledged going through tough times but they would emerge stronger for the experience simply because they would refuse to be intimidated. Yes he said on a personal note he and his wife were proud of their son. 
It was Thorvald who once told me that of all the countries in the world he thought Norway and New Zealand were the closest. We shared geographic isolation. We knew the sea. We were small in number yet large in spirit. Our people were rugged individualists yet we cared one for another. To this day I take his observation as one of the greatest compliments my country has been paid. 
The Norwegian massacre is not just a national tragedy; it is a global tragedy. All of humanity shares in this together. Norway is leading the world in its display of national commitment to global tolerance. Let us all support her in embracing the seven global values that have been identified by our Governments at the UN General Assembly: freedom equality solidarity tolerance human rights respect for nature and shared responsibility. By embracing all faiths by celebrating our common human values we shall convey the true response to the Norwegian massacre and validate those who fell. Let us incorporate that tolerance that wisdom and that understanding in our own parliamentary work here in this country today and hereafter. 
Hon JOHN BOSCAWEN (Leader—ACT) 
: 
 It was with disbelief and horror that New Zealand and the world learnt the devastating news of the bombing in downtown Oslo and the subsequent shootings on the island retreat of Utøya which claimed 77 lives. I along with my colleagues in the ACT Party and this House express our deepest sympathies to the people of Norway which with a population of 4.5 million is not much bigger than New Zealand. More specifically we send our thoughts and prayers to the families and friends of the 77 victims whose lives were cut so tragically short that day. We know that words will not ease the sorrow but we hope that you will find some small comfort in the knowledge that we here in New Zealand stand beside you in this time of tragedy. 
In the aftermath of this horrific event the people of Norway which is home to the Nobel Peace Prize and known for its peacefulness and liberalism have shown the world how to face adversity with courage. Norway’s Prime Minister addressed his country in the aftermath of this attack and was not intimidated. He has vowed that he and his countrymen will not bow to the will of a madman that his country will fight back with more democracy and that 22 July will be a very strong symbol of the Norwegian people’s wish to be united in the fight against violence and a symbol of how the nation can answer with love. 
It is a sad reality that tragedies such as this can strike even the most peaceful of societies. But what we can all learn from Norway is that the best way to honour the lives of those who die at the hands of such violent and repulsive people is to fight for and preserve the greatest aspects of humanity: peace tolerance and democracy. Thank you. 
Hon Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 Tena koe e Mr Speaker. Today marks another occasion in the life of this forty-ninth Parliament when we stand shoulder to shoulder to share the collective grief at the loss of life on such an immense scale. The massacre on the island in Oslo unfolded on 22 July exactly 5 months to the day since the Canterbury earthquake robbed our nation of so many lives. And so we feel that sense of tragic futility that comes in the wake of a disaster of such a scale. 
But we have another special connection to the events that played out in Norway which comes through our relationship to Sharidyn Meegan Ngahiwi Svebakk-Bohn a young woman described as beautiful caring and vigorous a young woman mourned by her grandfather Rex Matthews of Kahungunu who lives in Porirua. She was a mokopuna who is also sadly missed by the people of Tuhoe. 
Sharidyn known as Sissi was from all accounts thriving in the activities of the youth camp on Utøya Island. She had turned 14 just 5 days before being shot down at the camp by Anders Breivik who stands accused of killing 77 people in the bombing and shooting rampage. She was a young woman robbed of experiencing the fullness of life and someone described as a courageous young lady who took every challenge with ease. She was a child who had been nurtured by her family to care for others to be a proud tuakana to her sisters and to make an energetic and compassionate contribution to our society. Our sympathies are extended to her parents her two younger sisters and the wider whanau whether they are here at home or in Norway. Rest in peace Sissi and all those who lost their lives that fateful day. 
I have no desire to give further air time to the vile racism and murderous intent executed on that horrific day. The global condemnation of this massacre has an unfortunate consequence of drawing attention to the ideology the gunman sought to promote. I want to instead focus on the message that the Prime Minister of Norway expressed and that was a message of restraint. Jens Stoltenberg called on political leaders to show restraint as they react to the savage violence meted out on the 77 victims of the bombing and the youth camp attack. His words are very insightful and I will quote them. He told the Norwegian Parliament that the 22 July attacks gave reason to contemplate “whether we could have expressed ourselves differently. That goes for politicians for editors in the canteen and on the Net.” The judiciary and even the court of public opinion will make their respective judgments about the actions of the confessed killer and the appropriate sentence he should receive. What we have a responsibility to do is to focus on the families bereft of loved ones the community feeling as if their sense of peace and stability has been irreversibly threatened and the global nation as we respond to the profound grief and sorrow experienced in Norway just 10 days ago. 
The Maori Party joins with others in this House to express our utmost sympathy to the families associated with this dreadful day in the history of Norway. We acknowledge too the particular loss for the Labour Party which connects to its colleagues across the globe. We resolve to continue to promote the values that we have inherited that are found in tikanga and kaupapa Maori as a means of supporting us or finding a pathway forward during times of duress. These kaupapa remind us to place value on unity through diversity. 
Na reira Sissi koutou nga mate o tera parekura tae noa ki nga mate o tenei wa a Whetu Tirikatene nga wahine rangatira i mate mai i tenei wiki haere koutou i te mohio ka arohatia tonutia e matou nei nga morehu haere atu ra haere. 
[ 
So to you Sissi and the victims of that calamity including the deaths of the moment: namely Whetu Tirikatene and the noted women who died in recent weeks journey on in the knowledge that we the remnants will always love you. Farewell depart 
.]  
Hon JIM ANDERTON (Leader—Progressive) 
: 
 I join with colleagues in the House in expressing profound sympathies to the people of Norway. How moving and poignant this tragedy has been for those of us who have spent our lives encouraging young people to believe that politics can make a difference for the better and to believe in the politics of hope. Among the many tragedies and outrages of these killings towers a brutal truth: they died because of politics; they died because of hatred. They were at a summer camp conceived to nurture a new generation of young people and they were targeted because they symbolised the future. 
The attacker was of course deranged. Atrocities are always the work of a perverted mind. Therefore the atrocity is not a reflection on mainstream political ideas. Right-wing extremism is not the same as conservatism and it is unhelpful to confuse the two and offensive to collate the resulting possibilities. There are vital lessons for mainstream politics nevertheless: that we should challenge hate speech and the politics of hate wherever we see it. Those who set out to divide one group of people from another are always wrong. When hatred and racial divisiveness are seen as deeply abnormal the obsessions and ravings of extremists will stand out more obviously. The more abnormal their hatred becomes the more it is obvious that we need to intervene. 
Just because the attacker’s ideas were twisted we should not say that his actions were isolated. It is too complacent to just dismiss him as a madman. We do not make that claim about jihadist terror. If it is offensive that the murderer in Oslo used Christianity as a justification for his crimes we should use our feelings of offence to understand how offensive it is to Muslims when the extremist haters of al-Qaeda use their religion as a perverted justification for hate crimes too. In both cases a toxic mix of political and religious hatred results in people using a perverted interpretation of their religion as a justification to commit unspeakable crimes. 
However it is wrong to believe that this hatred is conceived in a vacuum and that it is just a case of one person gone crazy. Atrocities are brewed in a sewer of hatred. Many commentators have noticed the rise of an especially ugly form of racial divisiveness across Europe. It objects to the presence in Europe of large Muslim communities. Those promulgating these views cannot expect to promote an ideology of hatred call it Christianity and then pretend to be surprised when that ideology descends into criminality and mass murder. 
We have been fortunate in New Zealand to be spared the worse excesses of racial hate politics and the return of neo-Nazism but we are not immune from it and we need always to be vigilant. We should not be cowed from discussing sensitive issues just because they touch racial boundaries but we also have a responsibility to make sure we err on the side of love not hate on the side of welcoming not dividing and on the side of peace not violence. 
The ideas of love tolerance and peacefulness have always been the underlying values of progressive politics of all shades. Those are exactly the values the mass murderer hated and tried to destroy. That is why Labour parties progressive parties and social democrats around the world feel that a part of us was attacked on that summer’s day in Oslo. But we know this too: no haters can ever succeed because they cannot kill ideas. They cannot kill values. They cannot kill humanity. 
All of us are shocked by the horrifying violence in Norway. On behalf of the people of my electorate Wigram members of the Progressive party and my colleagues in this House I say that we stand with the people of Norway in our sympathy and in sending our deepest condolences. 
Hon PETER DUNNE (Leader—United Future) 
: 
 In a world that has perhaps seen just about everything there is an inevitable tendency to view tragedies as they emerge as being part and parcel of the world we live in today. We are all afflicted by that awful complacency. But this particular tragedy—the wholesale slaughter of vibrant innocent fresh-faced young people—stands out above many and cries out for a response. 
It is easy to say that this was the act of a lone crazed gunman in pursuit of a particular ideological dream. That may be so but the reality is deeper. The events that took place that particular day in and around Oslo are so unspeakably rare and unusual as to evoke within us all a sense of asking whether it could happen here. Our initial response is to say: “Of course not. We are a benign and tolerant society. We do not have those sorts of divisions.” yet the same thing could be said and was being said about Norway. So while we mourn the deaths of those who were so callously slaughtered and while we extend our sympathy to their country to their political colleagues and to their families on their inordinate loss and wonder how on earth that gulf in their lives will be filled in the short term we need to reflect upon the implications for so-called good and decent societies like ours and Norway’s around the world. 
Intolerance and prejudice wherever they fester have to be looked on as totally unacceptable and we have to redouble our efforts in the wake of this sort of tragedy to ensure that those elements do not come to prominence in our society and in kindred societies elsewhere. Just as the shock and the horror of what happened in Norway was because no one could have possibly contemplated such events occurring in that country we must be mindful lest a similar form of understandable complacency lead to our having similar misgivings in the future when events occur much closer to home. 
This is a wake-up call for all. It is not a call for witch-hunts or a call for meeting intolerance with more intolerance but it is a very strong call to all of us to do what we can to stamp out the root causes of intolerance and prejudice and of anger and hatred in our society. I believe that the greatest tribute we could pay those who fell so wantonly in Norway is to make that commitment: to ensure that their lives were not in vain and that their memories are spurs to us all in the free and democratic world to be tolerant to be just to be free and to be open in the future. That is what they thought they were about on that particular afternoon. Their lesson to all of us should not be in vain. Our sympathy for their country and their families is immense and profound. 
HONE HARAWIRA (Leader—Mana) 
: 
 Tena koe e te Kaiw’akawa. Tena tatou katoa e te Whare. Hoi no taku reo tuatahi i roto i te Whare i tera atu wiki he amene atu ki te Tiriti o Waitangi taku korero tuatahi hei rangatira mo te Ropu o Mana he mihi atu ki te hunga kua mate ratou kua w’eturangitia kua ngaro atu i a tatou hakoa kai tera taha o te ao. E tika ana kia mihi atu ki a ratou me wa ratou w’anau e tangi tonu ana i tenei wa. No reira e nga mate haere koutou haere koutou haere koutou. 
E mea ana te korero mate ana he tete kura ara mai ra he tete kura. I tenei wa ko nga putiputi kua mate. Ratou katahi ano kua puawai. Nga whakaaro rangatira nga wawata hou kei roto i a ratou kua mate i te ra nei. No reira he tangi nui tenei ki a tatou katoa roto o te ao me te mea ano hoki e tika ana kia mihi atu ki tera o wa tatou kotiro no Kahungunu. E Pita me mihi atu ki a koe i whakamarama mai i tera ki a matou kia mohio ai matou hakoa kua tawhiti atu kei tera taha o te ao he mate e pa ana ki a tatou o roto o Aotearoa. No reira me mihi atu ki a ratou kua ngaro atu me te mea ano hoki i te mea tu ana au e tika ana kia whakahokia mai taua mihi ki roto i a tatou te mihi ano hoki ki nga mate roto i a tatou o Aotearoa nei. Tera o nga wahine he pou o te reo Maori a Katerina Mataira i mate atu i ngaro atu ki roto o tona marae i Ohinewaiapu i tera atu wiki haere e te whaea. 
Tera noki te wahine rangatira o Te Ropu Wahine Maori Toko i te Ora a Meagan. Kua mate atu kua ngaro atu ki roto o Mohaka. Me tera o wa tatou nei kuia o te Whare a Tini Whetu Marama Tirikatene-Sullivan. E tika ana kia mihi atu ki a ia kia maumahara atu ki nga mahi e mahingia ana e ia me tona papa me ona kaupapa katoa mo te Tiriti o Waitangi. Mihi atu ki a ratou kua ngaro atu i a tatou i tenei ra. 
Hoki mai ki a tatou ano ra e te kanohi ora tena koutou tena koutou kia ora tatou katoa. 
[ 
Thank you Mr Speaker. Greetings to us all the House. My first words in the House the other week were to affirm the Treaty of Waitangi and my first address now as leader of the Mana Party is to pay a tribute to those who have died passed on and gone from us even though they are on the other side of the world. It is fitting at this time that they are acknowledged with their families who continue to mourn them. So to you the dead farewell depart journey on.  
There is a proverb that says that when a fern frond dies another rises up in its place. It is the flowers in this case that have died. They had only just blossomed. The revered thoughts and new aspirations inside them have died today. So this is a huge tragedy to all of us in the world. Further to that it is fitting as well that I pay a tribute to one of our young ones of Kahungunu descent. I acknowledge you Pita for explaining that to us and making us aware that despite the distance—and it is on the other side of the world—the tragedy affects us here in New Zealand. So we must pay our respects to those who have gone; and at the same time it is fitting as I stand here that I bring that tribute back here among us and acknowledge the deaths amongst us here in New Zealand. I refer to that one of our women Katerina Mataira pillar of the Maori language who died last week and is gone from her marae of Ohinewaiapu. Farewell aunt.  
To Meagan as well president of the Maori Women’s Welfare League: she passed away gone from Mohaka; and also Tini Whetu Marama Tirikatene-Sullivan one of our elder woman members of the House. It is fitting that I pay a tribute to her and recall the work that she and that her dad did including all her policies relating to the Treaty of Waitangi. Today I acknowledge those who are gone from us.  
So in coming back to us once again I say greetings to you greetings to you and 
greetings to us all 
.] 
Hon MARYAN STREET (Labour) 
: 
 Across this Parliament we share in Norway’s mourning today. Right now in Norway at 4.30 a.m. parents will be sitting by hospital beds. As the Prime Minister Jens Stoltenberg said: “Many are weeping. Hearts are bleeding.” 
Norway is famous for its peacemaking and its peacekeeping role around the world. It is known as a stable and compassionate society whose leadership on peace and disarmament is recognised and respected the world over. We are very alike in our size our geography and more important our values. I remember being welcomed to the Norwegian Parliament during the Speaker’s tour in 2007 with colleagues from a range of parties across this House. The overwhelming impression—again across a range of parties—was one of mutual respect. We had and have a lot in common. That such a destructive event should happen in Norway is almost beyond comprehension but comprehend it we must. 
In standing with the Government and the people of Norway at this time we pay a tribute to the responses of the leaders who are calling not for revenge or hatred but for more democracy more humanity and more compassion but not with naivety. An attempt to wipe out a generation of political leaders is profoundly shocking. We in the New Zealand Labour Party feel it deeply because of our close ties with the Norwegian Labour Party and its youth wing. Our MPs know their MPs; our youth leaders know their youth leaders. But this sentiment is shared across every political party in this House. As Ella Hardy president of Young Labour New Zealand said: “Through the last week we have shared our message of solidarity and empathy with our brothers and sisters in Norway. They died for their belief in social justice anti-racism and tolerance. They died trying to make the world a better place. Let racist ignorance be ended.” 
Dignity and democratic values have emerged through the intense grief of the Norwegian people but special words are needed for the young. Prime Minister Jens Stoltenberg said them: “I want to say this to all the young people here. The massacre on Utøya was an attack against young people’s dream of being able to help to make the world a better place. Your dreams have been brutally crushed. But your dreams can be fulfilled. … I have a simple request to make of you. Get involved. Care. Join an organisation. Take part in debates. Use your vote. Free elections are the jewel in the crown of democracy. By taking part you are saying a resounding yes to democracy.” That courage and that conviction can never be defeated. 
Motion agreed to. 
Voting 
Correction—Taxation (Tax Administration and Remedial Matters) Bill 
Mr SPEAKER 
: On 14 July when the House was considering the Taxation (Tax Administration and Remedial Matters) Bill the result of the vote on the question that the bill be read a second time was incorrectly announced as Ayes 67 Noes 53. The correct result is Ayes 65 Noes 53. 
Questions to Ministers 
Living Standards—Inequality 
1. 
Hon PHIL GOFF (Leader of the Opposition) 
 to the  
Prime Minister 
: Does he stand by his statement that “I think we all have to accept that there is a degree of inequality in New Zealand”; if so has he read any recent reports on the growing gap between rich and poor in New Zealand? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes I do stand by that statement and I have excellent news for the member: a very detailed scientific report on income equality actually went up on the Ministry of Social Development’s website at 2 o’clock today. It is titled  
Household Incomes in New Zealand 
. The report shows that income inequality in New Zealand under standard measures like the Gini coefficient or the 80:20 ratio has actually fallen in recent years. I go on to say that in fact the report shows that the distribution of income in New Zealand is more even now than it was at any time under the previous Labour Government. So I point out to the member that he is quite wrong to say the gap between the rich and the poor has been growing; in fact it has been reducing. I urge the member to read the report. 
Hon Phil Goff 
: Does today’s release from Statistics New Zealand which shows that wages and salaries have gone up by 1.9 percent over the last year—that is by well under half the rate of inflation—and the release a couple of days ago from the  
National Business Review 
 which shows that 150 people the richest New Zealanders increased their wealth by 20 percent actually suggest to him that the gap between wealthy and other New Zealanders is narrowing? 
Rt Hon JOHN KEY 
: Firstly let me take things in reverse order. In terms of the rich list let us understand what that is. It is a list from a bunch of journalists who are making up stuff on the best estimates they have. If we want to go to the facts let us go to the household income survey that was just put on the website at 2 o’clock. Secondly the member uses the Labour Cost Index which as he knows is not the best measure actually of the increase in wages in New Zealand. 
Hon Phil Goff 
: Oh! 
Rt Hon JOHN KEY 
: Well the member goes “Oh!” but for 9 years the Labour Government set New Zealand superannuation off the quarterly employment survey. In fact the Labour members believed in it so much that in 2001 they changed the law to ensure that the quarterly employment survey was used as the basis for superannuation in New Zealand. So if they want to go out and tell the pensioners of New Zealand they got it wrong they are welcome to do that. But the quarterly employment survey which also came out today shows this: average weekly earnings are up by 1 percent for the quarter by 4.2 percent for the year and by 7.4 percent in after-tax terms and in fact the average wage in New Zealand has now risen to $51123. 
Hon Phil Goff 
: If there was a skerrick of truth to anything that was in that report how does the Prime Minister explain that groups like the Salvation Army and the Auckland City Mission are reporting that more and more people are coming for assistance because the soaring cost of living particularly for food and other necessities is forcing them and their kids below the poverty line? 
Rt Hon JOHN KEY 
: Firstly we need to acknowledge there has been a global financial crisis and that it has dealt a very severe toll to a lot of New Zealanders. We accept that. The second thing we would say is that the Government has spent the last 3 years ensuring that it has done whatever it can to help the most vulnerable New Zealanders through. That is why we did not cut pensions. That is why we did not cut Working for Families payments. That is why we have preserved the income of those New Zealanders as best we can. We do know that we need to move more people off benefits and into work and the Minister and the Government are working very effectively on that matter. Lastly I look at the household income survey that came out today and I see that it shows that inequality between the rich and the poor has fallen. It is at the best level that it has ever been including the level under any other previous Labour Government and what a wonderful report that is. 
Hon Phil Goff 
: Does the Prime Minister not understand that notwithstanding a global financial crisis the 150 richest people in New Zealand in the last year increased their asset value by $7 billion—$7 billion for 150 people—and every one of those 150 got more than $1000 a week from him in tax cuts while somebody on the median wage got just $14 a week? 
Rt Hon JOHN KEY 
: I deal in facts and the facts are in the  
Household Incomes in New Zealand 
 survey which was put on the website at 2 o’clock today. As I said the rich list is a report made up by a bunch of journalists. But what I can note is this fascinating fact: I am amazed that the Leader of the Opposition has had time to read the NBR Rich List because apparently he did not have time to read the briefing report he got on so-called Mossad agents in New Zealand. 
Hon Phil Goff 
: Does the Prime Minister agree with the Children’s Commissioner Dr Russell Wills who said paediatricians—and he is one himself—are seeing kids who become ill develop behavioural problems fail at school and do not have their basic needs met because their parents are poor; and does he accept the  
New Zealand Herald  
assessment this week that those numbers are growing? 
Rt Hon JOHN KEY 
: I cannot comment on the last bit but I can comment on the first piece. I agree with Dr Wills—in fact I met with him this morning. I can also say that he is a very strong supporter of the green paper process that the Government is going through. I think we all need to recognise there is more we can do for the kids of New Zealand. 
Hon Phil Goff 
: Did the Prime Minister fail accidentally to tell the House that the report that he quoted in answer to my first question did not include the tax cuts of October 2010 which gave a huge amount of money $2.5 billion a year to the top 10 percent and practically nothing to the bottom 20 percent who got 3 percent of those cuts? 
Rt Hon JOHN KEY 
: No. What is quite clear is that the report covers from 1982 to 2010. It is the most accurate information we have. As we have said on numerous occasions even if it does not suit the Leader of the Opposition’s case in fact two-thirds of all the tax cuts delivered by the National Government were delivered to the bottom two codes in New Zealand. 
Hon Phil Goff 
: Did he include those tax cuts in his answer? 
Rt Hon JOHN KEY 
: The tax cuts are not the issue. The issue is more— 
Hon Members 
: Oh! 
Rt Hon JOHN KEY 
: Well they are not the issue. The issue is what the report actually shows. 
Hon Trevor Mallard 
: Own goal. Own goal. What an idiot. 
Rt Hon JOHN KEY 
: The own goal was the thing Trevor Mallard read out about 3 weeks ago I say to him because it is not going very well. If we look at the report we see it quite clearly shows that income distribution in New Zealand is narrowing not widening as it did under a Labour Government. 
Hon John Boscawen 
: Given that the Government has made such good progress in helping the most vulnerable in society what progress has been made in reducing the income inequality between those living in New Zealand and those living in Australia? 
Rt Hon JOHN KEY 
: If we have a look at after-tax wages we see that the gap between New Zealand and Australia is narrowing. In fact it is narrowing slowly and we accept that but we are making progress. There is a lot more work to be done. That is why this country needs another 3 years of a National-led Government. 
Mr SPEAKER 
: Just before I call the honourable Leader of the Opposition the Hon John Boscawen asked a perfectly fair question and had a right to hear the answer. I just ask members to be a little more reasonable about the interjection level. 
Hon Phil Goff 
: If as the Prime Minister just claimed the gap is narrowing how does he explain the fact that Australia which had a higher rate of unemployment than New Zealand at the time that the last Labour Government left office now has a one-third lower rate of unemployment than New Zealand and the fact that wages are one-third higher in Australia than in New Zealand which perhaps explains why in the last 2 months the highest number of New Zealanders ever in the history of this country left permanently for Australia? 
Rt Hon JOHN KEY 
: Minerals. 
Hon Phil Goff 
: I raise a point of order Mr Speaker. I am sorry but the Prime Minister garbled something very quickly. I could not hear it and I was listening. 
Mr SPEAKER 
: Well—[ 
Interruption 
] I am on my feet I say to the Hon Pete Hodgson. I do not think the House heard the answer. I ask the Prime Minister to repeat his answer. 
Rt Hon JOHN KEY 
: Minerals. 
Hon Phil Goff 
: Why are wage and salary earners taxed on every dollar that they earn while high income earners can earn enormous sums of money through capital gains and pay no tax at all on them; and is that one of the reasons why we are becoming a less equal society? 
Rt Hon JOHN KEY 
: Firstly we are not becoming a less equal society. It may not suit the Leader of the Opposition but he should wander off and read the Ministry of Social Development report. That is the first flaw. Secondly it is not true that New Zealanders are not taxed on capital gains that they might incur. In fact the member should go and ask many many thousands of New Zealanders who pay a capital gains tax all the time in New Zealand. The truth is that this Government has put more money into making sure that those who might avoid that capital gains tax are found out and pay it. One only needs to look at the changes that took place in Budget 2010 to see the enormous amount of money that was taken out of the property sector as a result of those changes. 
Hon Phil Goff 
: Is Sam Morgan wrong then in saying that when he sold TradeMe they made $700 million that they did not pay a cent in tax on and was he wrong in saying it is simply not right that he paid no tax on that when every other New Zealander who is a wage and salary earner pays tax on every dollar they earn? 
Rt Hon JOHN KEY 
: No but he pays tax on every dollar he earns off that money now. 
Hon John Boscawen 
: If the Prime Minister believes that minerals are the main cause of the disparity in income and equality between New Zealand and Australia what steps is his Government taking to develop New Zealand’s not inconsiderable mineral wealth? 
Rt Hon JOHN KEY 
: This Government has actually been taking quite considerable steps. If one looks at oil and gas exploration for instance one sees that we have been not only looking at new areas where we can prospect but also looking at new legislation for the economic zone looking at where it might be possible to increase New Zealand’s coal activities looking at where it might be possible to look at lignite activities in New Zealand and working on greater prospecting for ironsand in New Zealand. What is true is that the Government rejected the option of going into schedule 4 land. The reason we did that was that in the end the opportunities presented relative to the environmental concerns that New Zealanders had did not make that proposition worthwhile. 
Economies International—Effect on New Zealand Economy 
2. 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
 to the  
Minister of Finance 
: How is the New Zealand economy placed to deal with global uncertainty created by debt problems in the United States and Europe? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The Government has taken several steps to ensure that New Zealand can deal with what is likely to be ongoing fall-out from very large debt problems in the US and Europe. Our financial system and our economy are both in better shape to manage these uncertainties than they were a few years ago. Our main focus has been on getting on top of the growth of Government debt by keeping it below 30 percent of GDP. We will be back in surplus by 2014-15. We have pursued policies that have discouraged the taking on of more household debt and households are responding positively to those. We have also taken important measures to strengthen our financial system. 
Peseta Sam Lotu-Iiga 
: What are some of the steps the Government has taken to ensure that New Zealand can minimise any impact from global debt problems? 
Hon BILL ENGLISH 
: It is becoming increasingly apparent that foreign lenders have reduced appetites for lending to countries that want to run up more debt. Since 2008 the Government has turned back 2008 forecasts of never-ending deficits and soaring debt by setting a path back to surplus in 2014-15. This will keep net Crown debt below 30 percent. We front-loaded the Government’s borrowing programme when market conditions were favourable last year and earlier this year. We have introduced the biggest tax reform in 25 years which rewards work and savings discourages excessive borrowing and consumption and significantly tightens the tax rules on property speculation. We have also overhauled capital market regulations and established the Financial Markets Authority to give confidence to investors and thereby encourage more saving. 
Peseta Sam Lotu-Iiga 
: What extra measures has the Reserve Bank taken to improve the resilience of New Zealand’s financial system? 
Hon BILL ENGLISH 
: The Reserve Bank has followed up on changes given the unprecedented steps it had to take around 2008 with the global financial crisis. Non-bank deposit takers—that is finance companies—are now under Reserve Bank supervision and the Reserve Bank is applying minimum capital adequacy and credit rating requirements to finance companies which lost $8.5 billion over the last 4 years. In addition the Reserve Bank has introduced new core funding requirements for our banks which require 70 percent of their funding to come from sources such as retail deposits and long-term wholesale funding. This makes them less reliant on volatile short-term international markets. The Reserve Bank has ensured that in another financial crisis it could supply temporary liquidity to sound institutions. 
Hon David Cunliffe 
: Given that the uncertainty created by the United States debt crisis has been in part caused by the refusal of the Republican Party to compromise on sensible revenue measures why should New Zealanders view his National Government as any different when it refused to enter into bipartisan discussion on a capital gains tax despite authorities such as the International Monetary Fund and the OECD saying that it is an obvious requirement for New Zealand? 
Hon BILL ENGLISH 
: Because as I think is now becoming increasingly clear internationally this country has a stable and sensible Government making sound and considered decisions which means that we are one of the few developed countries now with positive economic prospects and financial stability. That is a considerable achievement in the circumstances. 
Peseta Sam Lotu-Iiga 
: In the current uncertain global environment why is it important that New Zealand continue with sound economic policies that get on top of the debt? 
Hon BILL ENGLISH 
: It is pretty important because as the months tick by and financial markets realise the long-term impact of extremely high debt levels in Europe the UK and the US those lenders have become more nervous about Governments that are running up debt. In fact some Governments are being forced into slashing public services putting up taxes and reducing welfare benefits to the elderly and the vulnerable. This Government has taken a series of balanced and considered measures to keep a lid on spending to get on top of growing debt and to build a faster-growing economy. We certainly will not be advocating policies that mean significant new borrowings over and above those that are budgeted. 
Question No. 3 to Minister 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Speaker. It relates to question No. 3 which was originally addressed to the Prime Minister. I refer you in particular to the interplay between Speakers’ rulings 145/1 145/2 and 145/4 at least. This question was originally addressed to the Prime Minister and asked about the Prime Minister’s views and effectively whether he was satisfied with some statistics that related to a view he had expressed. 
I am not challenging the ability—and it has been well established under Speaker’s ruling 145/1—for a question to be transferred but when that happens there is still a requirement under Speaker’s ruling 145/4 that there is ministerial responsibility for the question as it is changed. Under Speaker’s ruling 145/2 there is a right to make textual changes provided they are entirely consequential. 
This question was addressed to the Prime Minister and asked about his view. It has been transferred to the Minister for Social Development and Employment and now asks about her view. My submission to you is that the second change was not one that was necessary in the context of the transfer. In fact it was not the area on which an opinion was sought. Frankly we are not so interested in the view of that Minister on this; we are interested in and asked the question about the Prime Minister’s view on his statement and what has happened since that time. 
The problem with the transfer would be of course that the Minister for Social Development and Employment does not have ministerial responsibility for the Prime Minister’s views; she has responsibility for her own views. My submission to you is that the transfer of this question has resulted in the so-called consequential textual changes changing the meaning of the question to such an extent. Obviously the Prime Minister did not want to answer it but my view is that when it is in that form— 
Mr SPEAKER 
: The member was doing fine until that point. I think I have heard sufficient on the point of order. He cannot make allegations about whether a Minister wanted to answer questions. The point the member raises is a perfectly legitimate point of order but my ruling on the matter though would be this. The Government is perfectly entitled to transfer questions from one Minister to another or from the Prime Minister to another Minister except were the transfer to be anathema to the obtaining of information. If the Minister or Prime Minister being questioned could be the only person who had particular information and the question was transferred to make it not possible to obtain that information then I would have real concerns. In fact I suggest we would start debating and negotiating whether the question could be transferred. 
But where an opinion is being sought about the Government’s position on things that is not in my view the same as where information—real information about Government policy or what has happened or where money is being spent—is being sought and only one Minister can have that knowledge; it would be wrong for that question to be transferred. But where an opinion is being sought I do not see that it is contrary to the bracket of Speakers’ rulings that the member mentions if the question is directed to another Minister and to make sense of the question it asks whether that Minister is satisfied with the most recent statistics on child health. 
Were the question not to have been changed textually it would have left the question meaningless. I do not believe that this particular question is the kind of question that makes it wrong for it to be transferred or one where the Prime Minister could be the only person who had serious information that was important to this House. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Speaker. I am going to respectfully disagree with your views. My view is that the Prime Minister is accountable in this House for opinions he has expressed. He is the only person who can be accountable for opinions he has expressed. I accept that the question is not asking for information; it is effectively asking him whether he is satisfied with his Government’s delivery on his priorities. My view is that no other Minister can answer those questions. It removes accountability in this House if the Prime Minister is allowed to duck those questions. 
Mr SPEAKER 
: I will not tolerate that kind of language being used for a point of order. The member knows that a few years ago questions that sought opinions could not even be asked in this House. In the overall hierarchy of seriousness of questions the member has been around long enough to know that when opinions are being sought the Speaker cannot even determine whether an answer is addressing the question. And to argue that when opinions are sought questions cannot be transferred is I believe not consistent at all with the Standing Orders of this House. 
As I said if a question is seeking information where only one Minister or the Prime Minister is the only person who has that information then it would be impeding the processes of this House were such a question to be transferred. But where opinions are sought —forgive me; the member is certainly entitled to disagree with me I have no problem with that—my ruling on this matter is that that is not the kind of question that cannot be transferred. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Speaker. 
Mr SPEAKER 
: I will hear the member further as long as he does not make any comment that is derogatory of any other member under a point of order. 
Hon TREVOR MALLARD 
: In light of your decision and the Prime Minister’s decision not to answer the question we will not proceed with it. 
Question withdrawn. 
Question No. 1 to Minister 
Hon PHIL GOFF (Leader of the Opposition) 
: 
 I seek leave of the House to table an extract from  
Household incomes in New Zealand: Trends in indicators of inequality and hardship 1982 to 2010 
. It shows that from 2004 inequality fell because of the work of the Working for Families policy introduced by Labour. 
Mr SPEAKER 
: The source of this document is? 
Hon PHIL GOFF 
: It is the Ministry of Social Development Wellington July 2011. 
Mr SPEAKER 
: Leave is sought for this document to be tabled. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Pay Equity—Gender Gap 
CATHERINE DELAHUNTY (Green) 
: 
 Tena koe Mr Speaker. 
Mr SPEAKER 
: I have called Catherine Delahunty. I just ask some of the front-bench members to show some courtesy to a member sitting at the back of the House. It is totally unreasonable to carry on those interjections. 
4. 
CATHERINE DELAHUNTY (Green) 
 to the  
Minister of Women’s Affairs 
: Does she consider she is doing enough to close the gender pay gap given the Herald DigiPoll today that showed 65 percent of women believed they were paid less because of their gender? 
Hon HEKIA PARATA (Minister of Women’s Affairs) 
: 
 Tena koe Mr Speaker. While the gender pay gap is the lowest it has ever been at 10.6 percent there is always more that can be done. 
Catherine Delahunty 
: Does she agree with 65 percent of women polled by the  
New Zealand Herald 
 who consider they get paid less than men because of their gender? 
Hon HEKIA PARATA 
: As the member knows because we have had a very detailed meeting about this matter there are numerous causes of the gender pay gap and therefore there are a range of solutions. I cannot be responsible for the  
Herald 
-DigiPoll’s views as they are reported. 
Catherine Delahunty 
: Does she support allowing women to learn how much their equivalent male colleagues earn by requiring employers to report on gender pay in the workplace? 
Hon HEKIA PARATA 
: Again as the member well knows because of the detailed discussion I have had with her there are already mechanisms under the Equal Pay Act 1972 that provide for an employee who believes they are being discriminated against on the grounds of gender or other things to make a complaint to the Department of Labour whereupon that complaint can be investigated including requiring the provision of documents by their employer. 
Catherine Delahunty 
: Does she consider that the current system whereby women have to take a case against their employer under the Human Rights Act or the Equal Pay Act 1972 is actually working; if so why? 
Hon HEKIA PARATA 
: As the member knows we are concerned that given the underuse of this mechanism it may not be as well promoted as it could be and we are working on how we can promote that opportunity to women who may feel they are being discriminated against. 
Catherine Delahunty 
: How can her suggested solution of career guidance for women deal with the “unconscious bias” of employers against equal pay and pay equity for women? 
Hon HEKIA PARATA 
: Sorry Mr Speaker can I ask that the question be repeated? 
Mr SPEAKER 
: Most certainly the Minister can. Could Catherine Delahunty please repeat her question. 
Catherine Delahunty 
: How can her suggested solution of career guidance for women deal with the “unconscious bias”—a comment of the Minister—of employers against equal pay and pay equity for women? 
Hon HEKIA PARATA 
: In fact my comment relates to the point I made earlier and that is there are a number of causes of the gender pay gap. They include occupational segregation whereby half of all men and women are employed in occupations where 70 percent or more of those employed are of the same gender. There is a requirement for greater flexibility in workplaces. We know that the career guidance that is offered to students often results in girls choosing more lower-paid trade options than boys do so we are working with the Minister of Education to address that. We are focusing on— 
Catherine Delahunty 
: I raise a point of order Mr Speaker. I am sorry but I asked the Minister about dealing with the unconscious bias of employers and we have not heard anything relating to that at all. 
Mr SPEAKER 
: If I recollect the—[ 
Interruption 
] A point of order has been called. If I recollect the member’s question she started the question by asking something about guidance for women and I think the Minister is answering that part of the question. 
Catherine Delahunty 
: Can I repeat the question Mr Speaker because the question was about how her solution would deal with the bias of employers? 
Mr SPEAKER 
: The member cannot expect the Minister to answer the question in exactly the way she might want her to. I think the Minister has answered that question. 
Catherine Delahunty 
: I raise a point of order Mr Speaker. I asked a question about career guidance dealing with the unconscious bias of the employer. I have not heard an answer on that question. 
Mr SPEAKER 
: Well I am sorry because I have. 
Catherine Delahunty 
: Perhaps this is the issue. Why is the Government putting the burden on individual women to search for pay information and take action against their employers to solve the system-wide discrimination against women? 
Hon HEKIA PARATA 
: I am not sure that the member has any evidence for system-wide discrimination. What we have in New Zealand is three pieces of legislation that together provide the opportunity for men and women alike who feel they are subject to some kind of discrimination to be able as has been traditional in this constitutional democracy to pursue their rights. 
Carol Beaumont 
: What decision has the Minister made on my request that the Government pick up the Pay Equality Bill drafted by the Human Rights Commission which would provide real mechanisms to address pay inequality? 
Hon HEKIA PARATA 
: I am continuing to read the report provided by the human rights commissioner. My officials are studying what the proposal is. The proposal is distinctly different conceptually from the current approach that New Zealand has used for discrimination. It takes some time to consider it. 
Capital Gains Tax—Minister’s Statement 
5. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
 to the  
Minister of Finance 
: Does he stand by his statement that “theoretically the right thing to do would be to have a comprehensive capital gains tax”? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Yes I stand by the statement that tax theorists do support a comprehensive capital gains tax—that is on all capital gains including the family home. However the Government certainly does not support a complicated new tax that is part of a big-spending and increasing-debt package which is advocated by that member. 
Hon David Cunliffe 
: Is the Minister aware of the overwhelming importance of tax theorists in the 31 of 34 OECD countries that in fact have a capital gains tax and who of course reside in the OECD the IMF the New Zealand Treasury and the New Zealand Reserve Bank which have all recommended that one be adopted here? 
Hon BILL ENGLISH 
: The experts the member quotes all favour a comprehensive capital gains tax. I note the member does not because his would reduce the capital gains tax on property traders and provide a number of exemptions which will mean that not much revenue will be raised. The total effect of the package he has produced is that it would require borrowing of about $18 billion extra over the next 10 years. 
Hon David Cunliffe 
: If his criticism of Labour’s capital gains tax policy is that it is not comprehensive enough is he aware that of the 31 of the 34 OECD countries that have capital gains taxes only Japan includes the family home; therefore can he confirm that he would support a capital gains tax that did include the family home? 
Hon BILL ENGLISH 
: I can confirm that we do not support a big-tax big-spending package that would leave the country with a large legacy of extra debt. 
Hon David Cunliffe 
: If the Minister is alleging that Labour’s package is big-spending is he aware that it reduces net Crown debt to zero before the plans outlined in his own 2011 Budget; if so does he agree with himself that the tax system relies too heavily on those taxes most harmful to growth such as corporate and personal income taxes and that sectors with low effective tax rates notably property have expanded at the expense of the rest of the economy; if so will he now endorse Labour’s policy that reduces income tax by $1000 for every household and replaces it with a capital gains tax that closes the largest tax loophole? 
Hon BILL ENGLISH 
: In that case the member should have supported the Government’s Budget and tax package last year which this year is taking $1 billion of extra tax out of the property sector. But our main objection to the member’s package is it represents big tax big spending and big debt when this economy needs exactly the opposite if it is to grow. 
Hon David Cunliffe 
: Which is better for the economy: his Government’s plan to sell profitable publicly owned assets that bring in a bit of cash upfront but sees billions of dollars of dividends flow offshore forever or Labour’s fair tax plan that gives every Kiwi a tax cut on the first $5000 that they earn closes the capital income tax loophole and keeps Kiwi assets and dividends in Kiwi hands? 
Hon BILL ENGLISH 
: Our plan is much better because it incentivises work exporting savings and investment and it disincentivises excesses borrowing and consumption. His plan is worse because it means a big new tax big Government spending and a lot more debt for New Zealanders just at the time when debt is toxic. 
Amy Adams 
: What reports has he seen about how a capital gains tax might apply to KiwiSaver and other retirement savings? 
Hon BILL ENGLISH 
: Among the many dodgy assumptions and rubbery numbers in a package announced recently I have seen a report from the New Zealand Shareholders Association that was very concerned at the impact of the capital gains tax proposed on 1.6 million KiwiSaver accounts. The association asked whether the proposed tax would apply to KiwiSaver. Labour’s finance spokesperson said that the 15 percent capital gains tax would apply to those savings. The Shareholders Association noted that the compounding effect of this new tax on KiwiSaver savings would be very negative for the balances in New Zealanders’ KiwiSaver accounts. 
Hon John Boscawen 
: If big spending big tax and big debt are harmful to the economy why is his Government running a deficit this year of $16.8 billion? 
Hon BILL ENGLISH 
: That is a very good question. The main reason the deficit is so big is that we have allocated in the last financial year most of the Government cost of dealing with the Christchurch earthquake. But we share the member’s concern about the size of that deficit and that is why in the last Budget we put in a plan that will get us back to surplus by 2014-15 which I think will make us one of I think only three developed countries in the world that will have that degree of financial security. And it is why we will argue vigorously this year against other plans to significantly increase New Zealand’s debt at a time when that is a dangerous thing to do. 
Hon David Parker 
: Is the Minister aware of whether KiwiSaver accounts currently pay tax on their profits from share trading; if he is not aware of the answer to that why did he answer the question from Amy Adams in the way that he did? 
Hon BILL ENGLISH 
: It is not my package. The more important question is whether the Opposition spokespeople— 
Mr SPEAKER 
: Order! 
Hon BILL ENGLISH 
: —are aware— 
Mr SPEAKER 
: Order! 
Hon BILL ENGLISH 
: —of the impact of their own policies— 
Mr SPEAKER 
: What is wrong with the Minister’s ears? I was calling for order for quite some time before the Minister responded. Ministers know that when they start commenting on other parties’ policies they are at risk. The questions to the Minister invited that earlier on. The question of his own colleague went on to attack the Opposition’s policies which was starting to tread on thin ice. But the question from the Hon David Parker asked whether in the Minister’s answer to a previous question he had considered whether what I presume he was claiming to be capital gains in profits from KiwiSaver were taxed. I believe it was a serious question that deserved to be treated seriously but instead there was an attack on the questioner. I invite the Hon David Parker to repeat his question. 
Hon David Parker 
: Is the Minister aware of whether KiwiSaver accounts already pay tax on their profits from trading in shares; if he is not aware of whether that is true why did he answer the question from Amy Adams in the way that he did? 
Hon BILL ENGLISH 
: I am aware of the current rules and I am also aware that a recent package was proposed that would extend the application of a capital gains tax to all capital gains in KiwiSaver accounts which will make 1.6 million KiwiSavers worse off under Labour. 
Leaky Homes Financial Assistance Package—Reports 
6. 
NICKY WAGNER (National) 
 to the  
Minister for Building and Construction 
: What reports has he received on the interest in the Government’s Financial Assistance Package from owners of leaky homes? 
Hon MAURICE WILLIAMSON (Minister for Building and Construction) 
: 
 Since the financial assistance package became law just last Friday the Department of Building and Housing has recorded a high level of inquiries from owners of leaky homes who are interested in taking up the package. Not only have we had a considerable number of inquiries from people who already have existing claims but also we received 43 calls on Friday from brand new claimants. The department’s leaky home package website www.leakyhomes.govt.nz has so far had a total of 1210 hits resulting in the download of 892 financial assistance information packs. Just yesterday the website received 422 hits and 345 financial assistance packs were downloaded. This is a positive sign that the Government’s package is being viewed by the public in a very positive way. 
Nicky Wagner 
: What benefits will the financial assistance package provide to the owners of leaky homes? 
Hon MAURICE WILLIAMSON 
: First the package will suit both apartment owners and homeowners who want to avoid lengthy and costly legal battles in the courts and want to move on with their lives. Second it will help owners of leaky homes get their homes fixed a lot faster. The financial assistance package is but one more option for owners of leaky homes. It will be in addition to the current disputes process. Homeowners who choose to take the financial assistance package will still have the right to pursue other liable parties such as builders developers and the manufacturers of defective products. This package sees a contribution of 25 percent from the Government and 25 percent from the local authority with the remaining 50 percent being funded by the homeowner. 
Capital Gains Tax—Gareth Morgan’s Views 
7. 
Hon DAVID PARKER (Labour) 
 to the  
Minister of Finance 
: Does he agree with economist Gareth Morgan that the lack of a capital gains tax is “the biggest tax rort in the country and one that has cost us all dearly in terms of efficient allocation of capital economic growth and employment”? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 I think if Mr Mallard had seen what Dr Morgan has said on this he would have prevented this question too from being asked. In respect of capital gains Dr Morgan has said: “There should be no exemptions— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I reflected on the beginning of that answer. It would of course be a breach of privilege for a member to prevent another member asking a question and members are not allowed to make that allegation in this way. 
Mr SPEAKER 
: The member makes a perfectly reasonable— 
Hon BILL ENGLISH 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: I will hear the Hon Bill English on the point of order. 
Hon BILL ENGLISH 
: I was simply observing what occurred in the House. I am not trying to say whether it was procedurally correct but quite clearly that member overruled the asking of a question. That may be against the Standing Orders; we did not draw attention to that. 
Mr SPEAKER 
: I do not think we need to pursue this further. I think when answering questions it is not helpful to make that kind of comment. 
Hon BILL ENGLISH 
: Dr Morgan has said: “There should be no exemptions certainly not on the family home which is the biggest tax shelter” of all. I understand that his comment after the recent package was announced was that if we exempt the family home from our tax we are sort of knocking ourselves over the head before we start running which I think was a very good description of Labour’s whole package. 
Hon David Parker 
: Does the Minister of Finance agree with Westpac Chief Economist Dominick Stephens that “New Zealanders are incentivised to borrow money to buy land rather than invest in productive assets. If we introduced a capital gains tax that incentive would be diminished and there would be a greater incentive for people to save via bank deposits or productive business ownership.”? 
Hon BILL ENGLISH 
: That economist should get himself up to date with the measures the Government took in last year’s Budget which mean that this year we will take about $1 billion extra tax—or a bit under actually; about $850 million extra tax—from the property sector which is a much larger amount of tax revenue than that member’s package would take out of that sector for probably about 10 years. 
Hon David Parker 
: Does the Minister’s Budget forecast under current economic and tax settings show an increasing current account deficit rising to around 6 percent of GDP funded by more overseas debt each and every year to the end of his projections and does that not suggest to him that significant structural changes like a capital gains tax are needed to cure New Zealand’s structural problems? 
Hon BILL ENGLISH 
: The Government is applying itself to New Zealand’s structural problems. I can tell that member that both we and the public believe that packages that include significant increases in taxes increases in Government spending and increases in Government debt will make those problems worse not better. In fact I warn that member that a predecessor of his—Dr Cullen—campaigned on the current account deficit and managed to double it in the time he was Minister of Finance under the previous Government. 
Hon David Parker 
: Was the Government embarrassed when Pattrick Smellie reported that “Finance Minister and Facebook page-owner Bill English didn’t get the presumably intended answer when he asked visitors to the page whether they supported the Labour Party’s proposal for a capital gains tax. When BusinessDesk last looked at 4.15 p.m. 314 people had voted 88% in favour of a capital gains tax.”? 
Hon BILL ENGLISH 
: No and I was not aware that the Labour Party research unit was as big as that. 
Hon David Parker 
: Was the Government—[ 
Interruption 
] 
Mr SPEAKER 
: I want to hear the question. 
Hon David Parker 
: Was the Government embarrassed to read the  
Herald on Sunday 
 state: “Apart from borrowing money and talking up a questionable programme of asset sales National is showing no signs of a plan to get us out of the mess we’re in.”; if he is not embarrassed is he at least very concerned that he might be on the wrong side of this issue given that so many senior economists and commentators believe that New Zealand’s structural problems need a structural cure that the Government has not delivered? 
Hon BILL ENGLISH 
: No but I was embarrassed for the Labour Party to see people whom it would expect to vote for it quoted in the media in the last week supporting the Government’s plan. In fact most New Zealanders understand what needs to happen in this economy and they have confidence in the John Key - led National Government to find our way through the recession in a considered way and to build a platform for strong economic growth over the next 5 years. 
Drugs Control—Classification Notices 
8. 
JONATHAN YOUNG (National—New Plymouth) 
 to the  
Associate Minister of Health 
: What measures has the Government taken to control new psychoactive substances? 
Hon PETER DUNNE (Associate Minister of Health) 
: 
 The Government has decided to amend the Misuse of Drugs Act to enable the issue of temporary class drug notices for currently unregulated substances of concern. This new mechanism will place a temporary ban on such substances for up to 12 months while their risk is assessed and will enable us to deal with synthetic cannabinoids like Kronic. I expect that once this amendment is passed temporary class drug notices for these substances will be gazetted and the substances will be off the shelves a week later. 
Jonathan Young 
: What does he say to the industry claims that it will devise new products to get around the law? 
Hon PETER DUNNE 
: We will certainly be monitoring the industry’s activities very closely but I say to the industry that the moment it attempts to bring a new product on to the market we will invoke the powers of this legislation gazette the product and have it off the shelves within 7 days. 
Iain Lees-Galloway 
: Does he still claim that taking action on drugs such as P and Kronic is a priority for his Government given that the Misuse of Drugs Amendment Bill has been buried on the Order Paper since November last year? 
Hon PETER DUNNE 
: Absolutely. In fact we have been making sure that the measures the bill contains when put in place will work effectively. If the member looks at what has happened overseas he will see a number of jurisdictions that have imposed short-term bans that have not worked. We have done the job comprehensively and properly. These restrictions will work. 
Freshwater Management National Policy Statement—Cawthron Institute Report 
9. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Minister for the Environment 
: Does he agree with the Cawthron Institute that despite his Government’s National Policy Statement for Freshwater Management “the condition of New Zealand’s lakes rivers and wetlands is likely to continue to decline for several more years and possibly much longer”’ if not why not? 
Hon Dr WAYNE MAPP (Minister of Defence) 
 on behalf of the Minister for the Environment: No. The report makes the incorrect assumption that regional councils will be too slow in acting on the new national policy statement to improve water quality. The experience last month since the national policy statement took effect is that regional councils are taking the requirement to step up their management of fresh water very seriously. There has previously been no national direction for regional councils to improve water quality. Although some have criticised the policy as being too tough and others as being too soft all of them have welcomed at least some clear direction from the Government on water quality. 
Dr Russel Norman 
: Is the Cawthron Institute wrong when it says his Government’s own irrigation subsidies—the possibly $400 million of irrigation subsidies the Government has talked about—are likely to result in further intensification of land use and further decline in our lakes rivers and wetlands? 
Hon Dr WAYNE MAPP 
: The Cawthron Institute report is one of opinion; it is not actually a scientific survey. In fact no irrigation schemes will be eligible for Government funding unless environmental planning conditions are met which include in fact the national policy statement as well. The Government has in fact increased its spending on waterways by 500 percent over the last 3 years. For instance in the 5-year period commencing in 2009 $94 million will be spent compared with $16 million in the previous 5 years. 
Dr Russel Norman 
: Does the Minister think it is a paradox that on the one hand his Government is increasing spending dramatically to clean up the mess created by earlier intensive agriculture projects and on the other hand it plans to subsidise hundreds of thousands of hectares of new intensive irrigation projects that will increase water pollution? On the one hand the Government is spending money to clean it up and on the other hand it is spending money to create it. 
Hon Dr WAYNE MAPP 
: I think the member may not have heard the previous answer. No new irrigation schemes will be eligible for a Government subsidy unless they have a plan to deal with the potential increased runoff. That is one of the conditions of such a subsidy. 
Dr Russel Norman 
: Will the Minister therefore provide a guarantee that not a single dollar will be paid in irrigation subsidies without a guarantee that there will be no negative downstream environmental effects on water quality? 
Hon Dr WAYNE MAPP 
: Obviously in any such application all the factors of the risks will be properly assessed on a scientific basis—unlike this particular report which is in essence a matter of opinion. 
Dr Russel Norman 
: I seek leave to table the Cawthron Institute report  
Implications of the National Policy Statement on Freshwater Management  
which was released in June 2011. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Dr Russel Norman 
: I seek leave to table a statement by Professor David Hamilton debunking the Yale report on water quality which has repeatedly been used by the Minister from this year. 
Mr SPEAKER 
: Is this a personal letter or is it a— 
Dr Russel Norman 
: It is a media statement by Professor David Hamilton. It is not otherwise publicly available. 
Mr SPEAKER 
: It has not been published in the New Zealand media? 
Dr Russel Norman 
: No. That is correct. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Dr Russel Norman 
: I seek leave to table four documents so I will do them as one block. These are from water scientists in New Zealand all of which raise concerns about the National Policy Statement on Freshwater Management. They are published by the Science Media Centre. They are from Professor David Hamilton Dr Mike Joy Professor Jenny Webster-Brown and Angus McIntosh a professor at the University of Canterbury. 
Mr SPEAKER 
: Leave is sought to table those documents. Is there any objection? There is no objection. 
Documents by leave laid on the Table of the House. 
Brendon Burns 
: Will the Minister confirm that whereas the Land and Water Forum he established to consider the National Policy Statement on Freshwater Management made just four modest changes to the board of inquiry’s version he allowed Cabinet to insert 19 more changes none of them protecting the environment for which he holds the ministerial warrant? 
Hon Dr WAYNE MAPP 
: Cabinet took a balanced approach to this. It balanced obviously the need to improve water quality with the need to improve growth. 
Children Protection— 
Green Paper for Vulnerable Children 
10. 
KATRINA SHANKS (National) 
 to the  
Minister for Social Development and Employment 
: What is the Government doing to ensure New Zealand better cares for and protects our most vulnerable children? 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 We have released a green paper on vulnerable children. Too many of our children are being hurt abused and neglected but I believe we can change this. Some of the complex issues the paper raises include whether vulnerable children should be prioritised for services over others how the Government can encourage communities to take more responsibility for the well-being of their children and how much monitoring of vulnerable children there should be amongst Government and non-governmental organisations. Submissions on the green paper are now open and I certainly encourage people to get involved. 
Katrina Shanks 
: What response has she received on the release of the  
Green Paper for Vulnerable Children 
? 
Hon PAULA BENNETT 
: There has been a lot of response to the  
Green Paper for Vulnerable Children 
 and it has come in a number of ways and from a number of sources including via Facebook and the green paper’s website. I have also seen reports welcoming the green paper from places like Plunket the New Zealand Medical Association Save the Children Barnardos the Male Survivors of Sexual Abuse Trust the New Zealand Educational Institute the National Council of Women Te Kahui Mana Ririki and the Children’s Commissioner. It seems that the paper has certainly been well received and I look forward to receiving submissions on it. 
Hon Annette King 
: In light of her comment that “Too many children are being hurt abused neglected and badly let down but we can change this and now is the time to act.” what is her definition of “now”? 
Hon PAULA BENNETT 
: It would be fair to say that in the last 2½ years I have been working continuously on changes both within Child Youth and Family and across government about what we can do for our vulnerable children—for example the Never Ever Shake a Baby campaign and having Child Youth and Family social workers in hospitals. We have put more into teen parents than any other Government has previously in terms of supported housing. We have also done more to support teen fathers and we have introduced Home for Life which has made a big difference in the protection of and permanency for those children. There was $44 million more in the last Budget for kids in care to make sure that we get the right sorts of services from those who care for them. So a lot has been done but there is a lot more to do as I am sure the member would agree. 
Women’s Refuges—Funding Cuts 
11. 
CAROL BEAUMONT (Labour) 
 to the  
Associate Minister for Social Development and Employment 
: Is she concerned about the warning of Heather Henare that waiting lists for places in Women’s Refuges may have to be contemplated as a result of cuts in Government funding? 
Hon TARIANA TURIA (Associate Minister for Social Development and Employment) 
: 
 No. I would be concerned if that statement was true but the fact is that since the 2007-08 financial year the Government has increased core funding to the National Collective of Independent Women’s Refuges by 25 percent. In addition overall funding to refuges both part of and separate to the collective has increased by 43 percent. 
Carol Beaumont 
: Why did she cut $382000 of funding to the National Collective of Independent Women’s Refuges which was used to fund the baseline activities of most of the women’s refuges around New Zealand including providing short-term safe shelter to women and children escaping violent relationships? 
Hon TARIANA TURIA 
: The $382000 was in fact money that was given to the refuges for educational purposes not for the housing of women in those situations. The refuges have had considerably increased funding. The issue the member has raised is that they have had funding cut. 
Rahui Katene 
: How much funding did members of the National Collective of Independent Women’s Refuges receive from the newly established Family-centred Services Fund? 
Hon TARIANA TURIA 
: There were 24 applications from members of the collective of which 20 were successful. I consider that a very good strike rate. Those 20 refuges received something like $1.683 million and I am happy to inform the House that this is an increase in funding of 94 percent for affiliated refuges. The other two refuges that received money which are not affiliated received—[ 
Interruption 
] Do members opposite want to hear the answer or do they want to rabbit on? The other two refuges received $1.1 million. 
Carol Beaumont 
: How would the Minister describe the provision of short-term safe shelter to women and children escaping violent relationships: as a front-line service or a back-office function? 
Hon TARIANA TURIA 
: I think I have made it very clear that a 94 percent increase in money to the refuges hardly equates to preventing women from getting safety when they need it. I also want to point out that there has been a huge investment in front-line services to other family violence service providers right throughout the country. 
Carol Beaumont 
: I raise a point of order Mr Speaker. [ 
Interruption 
] 
Mr SPEAKER 
: A point of order has been called. 
Carol Beaumont 
: I asked a clear question which was how would she describe the provision of short-term safe shelter to women and children escaping violent relationships and whether she would describe that as a front-line service or a back-office function. I do not think she answered that question. 
Mr SPEAKER 
: My interpretation of the Minister’s answer was that she confirmed that it was a front-line service but if the Minister wishes to clarify that then I would be grateful. 
Hon TARIANA TURIA 
: Of course it is a front-line service. They get 94 percent extra money to do it. 
Mr SPEAKER 
: I thank the Minister. [ 
Interruption 
] I want to hear Carol Beaumont’s question. 
Carol Beaumont 
: What analysis was or will be undertaken of the impact of cutting funding that pays for short-term safe shelter for women and children escaping violent relationships at a time when family violence continues to rise? 
Hon TARIANA TURIA 
: I have answered that question continually this afternoon. There has been no cut to Women’s Refuge funding. 
Hamilton—Services for Cancer Patients 
12. 
TIM MACINDOE (National—Hamilton West) 
 to the  
Minister of Health 
: What reports has he received regarding improved services for cancer patients in Hamilton? 
Hon PETER DUNNE (Associate Minister of Health) 
on behalf of the Minister of Health: I am advised that more cancer patients receiving treatment at Waikato Hospital will now be able to stay free of charge in Hamilton during their care. Patients who live more than 30 kilometres away from the city can now stay during the week at the new Lions Lodge which is run by the Waikato Bay of Plenty division of the Cancer Society. Until now they have had to live more than 100 kilometres away and patients who live closer to Hamilton can stay there if there are vacancies along with a family support member. In a New Zealand first the Waikato District Health Board the Bay of Plenty District Health Board and the Lakes District Health Board are together putting more than $900000 into the lodge which will result in improved access and make a big difference to around 50 extra families a year. 
Tim Macindoe 
: What other cancer services have been improved for patients in Hamilton? 
Hon PETER DUNNE 
: A new centre providing PET and CT scans in Hamilton means that patients from New Plymouth through to the Waikato will no longer have to travel to Wellington or even Australia for these important tests. These scans are a valuable tool in diagnosing and monitoring the progression of cancer and allow clinicians to plan and adjust to a patient’s treatment accordingly at earlier stages of the disease. The Government is providing an extra million dollars every year for district health boards to purchase more PET scans and this is supporting at least 550 additional patients each year. 
Misuse of Drugs Amendment Bill 
In Committee 
Part 1 Amendments to principal Act and consequential amendments to other enactments 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 It is a pleasure to speak on Part 1 of the Misuse of Drugs Amendment Bill. I say at the outset that Labour will be supporting Part 1 and will also be supporting the amendments in the name of Minister Peter Dunne the Minister in the chair as set out on his Supplementary Order Paper. Labour will also seek support for an amendment in my name which is set out on a separate Supplementary Order Paper. 
Firstly I will address the amendments in the Minister’s name which of course have received plenty of attention in the media over the last few weeks. This is I suppose the Government’s response to the issue of synthetic cannabis products—products that go by the name of Kronic Dream Spice and that sort of thing. The issue that has been plaguing Parliament for some time is that these products can come on to the market be perfectly legal and escape the purview of the Misuse of Drugs Act as it is currently written. They also escape the purview of all sorts of other Acts; they do not come under the same regulations as would a food and they do not come under the Medicines Act. They have been sneaking in through a loophole formed because no legislation has been able to deal with such new substances. 
What the Minister is proposing we see as only a stopgap and I think the Minister would see it in the same way as well. It is a stopgap measure in order to give Parliament more time to consider a more permanent solution to the issue of new substances coming on to the market. The Minister’s amendments will give the Government the opportunity to create a temporary class drug notice which means that we will be able to temporarily classify a new substance and by doing so ensure that it is not sold in dairies liquor stores or the places where we have seen it being sold and marketed clearly visible to young people and to anybody who goes into places where we would go to buy what we would think of as normal household items or goods. 
So we support the measure to create what is essentially a 12-month ban in order to give the Government and the Minister the opportunity to consider the harm that may be caused by these new substances. It is fair though to note that as some people have been saying in the media this morning this legislation does not allow the Government to block new substances from arriving and coming on to the market. It simply gives us an ability to respond in a much faster way so that we can get substances off the shelf quickly if we believe they are harmful to users. That is not ideal and it is fair to say I think that the process around that is not ideal. The amendments have been tacked on to a bill that was already proceeding through Parliament. These amendments have been proposed well after the select committee process so we have not had an opportunity to consider them properly through the normal parliamentary processes. 
However I do not think that such niceties will be given much truck by the public who want to see action—and have wanted to see action for some time it is fair to say. Indeed the Misuse of Drugs Amendment Bill was reported back to the House by the Health Committee in November last year and it has sat on the Order Paper for all the months since then when action really could have been taken by the Government. This issue could have been progressed. The question of Kronic has been around for some time. I think that most electorate MPs will have heard from their constituents about this issue and this is the appropriate legislation to deal with the issue rather than some others such as the Smoke-free Environments Act another area in which the issue had been considered somewhat as well. 
The legislation has been a long time coming but I accept what the Minister has been saying about the need to get it right. In the end though it is not the solution to new psychoactive substances. The public is really looking for a solution that ensures that these substances can be properly tested before they come to market rather than our having what is still the case—the need to respond once we realise they may be causing some harm. We want to be sure that the harm they cause is insignificant enough that they can come to the market safely. 
I think this legislation also gives us an opportunity given that we are buying a little time to get this matter right to consider the other 44 recommendations in the Law Commission’s review of the Misuse of Drugs Act. We have picked on one and we have focused very closely on that one but a number of suggestions and recommendations in that review could very well be taken up by Parliament. In my view what we actually need is new legislation to replace the Misuse of Drugs Act. That Act came into force in the mid-1970s and it was a response to the drug environment of the mid-1970s. It was a response to what at the time was a whole raft of relatively new substances. Some were naturally occurring; some were created synthetically. But things have moved on in the 30-odd years since then. Indeed new substances are being developed all the time but our response to drug use and drug abuse has changed. 
The concept of harm minimisation is much more to the fore these days. I believe that given the opportunity we have through the amendments the Minister has put forward in relation to Part 1 to take the time to consider ways in which we can deal with new substances we should also take the time to consider how we should really tackle drug abuse and the supply and use of drugs in New Zealand in the 21st century with a much more modern more evidence-based approach. I think of things like the way we classify different substances the role of the health system and the role of the justice system. All those matters need to be taken into consideration in creating the legislation we need to replace the Misuse of Drugs Act. Having said that I say that we do need an interim measure and this is the interim measure to tackle that. 
I would like to hear more from the Minister about how he proposes to use those temporary class notices how quickly they can be brought into action and how he intends to respond to the claim from the industry that it will be able to constantly bring in new substances. The idea that the industry might have one substance that would be on the shelves for a week before being pulled and replaced by a new substance is a concern. I would like to see that teased out a little bit more by the Minister and hear his explanation of that. 
I would also like to hear exactly how the different temporary classes will be defined and how a substance will be defined as being temporarily a class A class B or class C drug a precursor substance or a restricted substance. Those will have quite an impact on the way in which this legislation will actually work in practice. I also say that for people who have a small amount in their possession it is excellent that that amount will not be illegal. In fact I would like to hear a little bit more about how the presumption of possession to supply might assist in dealing with the stockpiling issue that we could see as people try to evade this legislation and these amendments before they come into force. So there are a few questions there for the Minister and I would be very keen to hear his thoughts on them. I look forward to coming back to this in a moment. 
Hon PETER DUNNE (Associate Minister of Health) 
: 
 I am happy to respond to the points the member Iain Lees-Galloway has raised. He is absolutely right; these amendments to the Misuse of Drugs Amendment Bill are a temporary measure because the 45 recommendations from the Law Commission require a lot of work to be done on them. There is not just one recommendation in isolation; a whole comprehensive package needs to be assessed. 
The member will appreciate that the commission’s recommendations are essentially at a very high level. They are not in a form that could be picked up and simply implemented as some have argued. Quite a lot of ongoing work on the recommendations is occurring at the present time. The Government’s intention is that that work will be completed next year and I imagine that what will emerge will be a new bill—a replacement for the current Misuse of Drugs Act—that will incorporate all of those changes. That is for another day. 
In terms of the immediate problem we face with synthetic cannabinoids and other new psychoactive substances we needed to act in an important and immediate interim way. I make the point that this is not just about synthetic cannabinoids. Claims I have heard from the industry that it can now divert its activities into other areas will be caught by these amendments because any new psychoactive substance that causes the Minister of Health concern can be the subject of one of these new temporary class drug notices. To a large extent that gives some comfort when manufacturers claim that they will simply bring in new and different substances. They can be dealt with under this mechanism. 
The member raised a question about timing. My assumption is as follows: this legislation will pass through all its remaining stages in Parliament this week. It will receive the Royal assent at His Excellency’s convenience. I imagine that will be first thing next week. Immediately that happens I will issue a  
Gazette 
 notice giving the range of products that is on the market at the moment—some 43 in all—7 days to be off the shelves. The timing is very quick and we are already preparing the  
Gazette 
 notice as I speak. 
As new products arise and as they are detected by a combination of the police the New Zealand Customs Service and the Ministry of Health or individually provided the products meet the test I referred to earlier they will immediately be gazetted in exactly the same way. 
The issue of concern to New Zealanders about the apparent proliferation of these synthetic cannabinoids and other psychoactive substances is being addressed through this mechanism. In the longer term something along the lines of the Law Commission’s recommendations that nothing gets to even base one before it is proven to be safe is the correct course to follow. But a whole lot of issues around the definition of “safety” and the process by which it is determined have yet to be resolved. 
Iain Lees-Galloway raised a question about personal possession. I draw the Committee’s attention to this particular aspect because it is very important and again gives the lie to some of the claims being made by the industry that there will be a bonanza fire sale and that people will be able to stock up to their heart’s content to get around the forthcoming bans. 
The definition of “personal possession” for the presumption of supply has been changed. At the moment in the Misuse of Drugs Act we talk about 56 grams of the item concerned. These synthetic cannabinoids are sprayed over the Kronic products so 56 grams actually covers a fair range of product. We have changed that and in this instance it will be 56 grams of complete product. It will not be just the synthetic cannabinoid; it will be the Kronic. Kronic is sold as I understand it in 1.5 gram packets. By my calculation about 37 packets will be the maximum a person will be allowed before they are presumed to be supplying or potentially capable of supplying. So that is a very tight restriction. I hasten to say to the industry that there will not be a very big bonanza at all over the next week or so. 
These measures have arisen in response to understandable public concern and as I said in response to a question in the House earlier today I have been determined right the way through to make sure we put in place a viable interim mechanism pending the development of the long-term solution. I have had thrown at me—not by the member opposite but by various other commentators and critics—questions of why I do not do what they did in Australia and other countries and just ban these things outright. The reality has been that without the sort of mechanism we have put in place now the industry does exactly what the member Iain Lees-Galloway is concerned about: it thinks it can reformulate the banned product as something else which is back on the shelves the following week and we start all over again. 
We have a comprehensive suite of measures before the Committee in Supplementary Order Paper 258 and I am grateful for the support of that member’s party. I think it is very important that Parliament sends a strong signal on this issue. As a consequence the capacity that we have now to put in place something that will be comprehensive for that 12-month period is strong. 
I make one other point before I conclude. The 12-month period is not absolute. It is 12 months in respect of every product that is gazetted. Although I expect that the Government will have resolved its work on the Misuse of Drugs Act by around the middle of next year there may well be products being gazetted in February or March that will have that 12-month cycle attached to them. Within that time they have to be assessed and tested and some conclusion made as to their particular classification. 
I appreciate the member’s support. I do not want to prolong the debate unnecessarily but I hope I have answered his questions in the way he was seeking. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 Thank you Mr Chair for the opportunity to speak on this important amendment to the Misuse of Drugs Act. The Hon Peter Dunne certainly deserves congratulations on bringing in his Supplementary Order Paper that will effectively ban something like 43 synthetic cannabinoids that are known on the New Zealand market at present. I have no doubt that the mums and dads of New Zealand will breathe a significant sigh of relief when they hear of this legislation. 
There is no question that the availability of these synthetic cannabinoids has become more and more apparent as the year has gone on and particularly in the last few months. I have been absolutely surprised at what I would view as the irresponsibility of many retailers in the way they sell these products flagrantly in areas where there are a lot of children present close to schools etc. In my view the manufacturers of these synthetic cannabinoids are on the whole very cunning and ruthless and will stop at nothing to make money out of this range of products let alone stopping at nothing to entrap young New Zealanders into becoming dependent on them. So this interim measure is indeed an extremely important one. 
I well remember Matt Bowden whom we have seen on TV recently appearing before the Health Committee some years ago and saying how he felt that good manufacturing practice was so important to him yet we have seen these products come into New Zealand and be manufactured with additives of prescription medicines within them. Now that is clearly not a case of having good manufacturing practice. I do not believe that we cannot trust this spectrum of manufacturers who are so high and mighty in terms of their views on this issue in New Zealand. In fact I think they need to be absolutely sidelined. 
The Hon Peter Dunne’s Supplementary Order Paper will allow time to implement the Law Commission’s recommendations to legislate that the manufacturers of these psychoactive drugs will have to prove that they are safe. I must add that if they are psychoactive substances that are smoked we learnt during the submissions from the Ministry of Health that just about every product that is smoked or inhaled has a carcinogenic effect. It will be very very hard to prove safety. So there is no doubt that this has to be done very carefully and as the Minister pointed out the manufacturers will use every mechanism available to them to dream up some new way of presenting these drugs to the New Zealand public. 
Several years ago there was an amendment that introduced a rapid mechanism to try to combat the fact that they would always be trying to be one step ahead of the legislators. I think that that is almost impossible to combat and it proved impossible for that legislation. Consequently the suggestion that the Law Commission has come up with is entirely relevant and I am sure that the Minister will pursue those recommendations relentlessly so that hopefully we not only reduce the input of these drugs but also do everything possible to minimise harm. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 I rise as other speakers have done to support the direction in which the Misuse of Drugs Amendment Bill is going and in particular to discuss the Supplementary Order Paper put forward by the Minister in the chair the Hon Peter Dunne. I pick up the point that both Iain Lees-Galloway and Paul Hutchison have made because I too have been approached as have other MPs by members of the public deeply concerned about the easy availability of products such as Kronic and other similar cannabinoids— 
Dr Paul Hutchison 
: Beautifully said. 
GRANT ROBERTSON 
: —Dr Hutchison approves of that; excellent—and other synthetic products which clearly have been sold and marketed in a way that is inappropriate and that most New Zealanders would deem to be not something they want to see in the corner dairy or in a place where their children would be going. The intervention that is now coming from the Minister is another stage in managing this process. 
The Minister answered the questions that my colleague Iain Lees-Galloway put forward and I understand that everybody acknowledges that this is a stopgap measure and not in fact the long-term answer to the problem. With any stopgap measure there will be some issues. The Minister has outlined the process that would allow us to get products off the shelf quickly if they reappear. I guess the question we have to ask ourselves is whether there is sufficient room in what is proposed to deal with a situation where a product is put on the shelves the  
Gazette 
 notice goes in once it is found and the product then goes but the new product is already pre-prepared and emerges and we go through the same process every 7 days. That is the weakness that we have. 
I am not overly criticising the Minister for that. I am just saying that the gap in this process in the absence of a full regime is that theoretically the producers of these products could now be preparing a series of slightly different products that will be drip-fed into the market every 7 days or however long it is from when the  
Gazette 
 notice is put out to when it is enforced. I do not think there is an answer to that question for the Minister really but that is still the gap that we have because we have a stopgap measure such as this one before us. 
I do not know what that means for the stockpiling issue. I think that that again creates a situation whereby some people potentially will be stockpiling different products of a similar nature. Although I think this amendment is something that we obviously support because it is an issue that we have to deal with and because these are products that have had demonstrably negative effects on people the measures that the Minister is proposing today have gaps and they are gaps that will be exploited by the producers of these products. Obviously we then simply have to hope that the regime is surely only temporary and that we move as quickly as possible to the recommendations in the Law Commission’s report. 
There has been criticism from this side of the Chamber—and it is worth noting—that we do not feel that things have moved as quickly as they might have in response to that. 
Hon Tau Henare 
: That’s nothing new. 
GRANT ROBERTSON 
: That is right. Well there is so much to criticise; that is the thing. In this case we congratulate the Minister on bringing this measure forward but we believe that the response to the Law Commission’s report needs to move as quickly as possible. It is as my colleague has said time to think about a new regime when it comes to the Misuse of Drugs Act. That is obviously what is contemplated in the Law Commission’s report. 
Essentially when we look at the Law Commission’s report we see that it wants to move to a situation where we have an Act that is administered by the Ministry of Health and is in fact a health-based Act. All the things I have heard as a member of the Health Committee and more broadly would point to that being the best basis for us to develop a drug regime—to base it on health effects. It is still extraordinary to most people whom I have interacted with about this situation that there is not a testing regime in place before the products reach the market. That is the fundamental thing that people simply cannot understand. At the risk of going slightly off-topic I say that it was interesting to note the comments of one user of these synthetic cannabis products who is quoted on the Stuff website today. His name is written here; it is Phil Stephens. He has given it to the newspaper so I am sure he will not mind me making him famous in Parliament. He stated: “I’ve tried most of the different brands over the past year or so. If you know the difference between the real stuff and the synthetic version you can tell they’re not the same thing but a layman probably couldn’t.” Mr Stephens then went on to say that he thought the 12-month ban on the substances was a good idea so I say to the Minister in the chair that he has a fan in one of the users. But he then went on to say and this is the point I want to make that the 12-month ban was “probably the best thing they can do. At least that way someone is doing some research and testing into this stuff.” 
That is a user of the product noting that there has not been proper testing of these products. From my point of view the priority has to be to get in place a regime that tests products such as these before they make it on to the shelves. It seems to me to be an extraordinary situation where that process is not in place and one at which members of the public look and wonder how we could have allowed that to be. So we must move quickly to address that particular gap and create a regime that is robust and applies the principles the Law Commission has suggested which are about reducing harm—instead of the “instant criminal” approach making sure there is a graduated response overall in terms of drugs and making sure we have an Act that is based on the important role of the health system in managing it. Drugs are not just a criminal issue. They become a criminal issue but they are a health issue primarily and we must deal with them that way round. 
From our point of view the Supplementary Order Paper introduced by the Minister is something that we can support. We support the amendments on the basis that we need to do something now but I do not want our support to be interpreted as believing that this stopgap measure is the be-all and end-all. I think it has gaps which will be exploited but I also believe that we need to move as quickly as possible to take on board the other recommendations of the committee. 
I am concerned about the stockpiling issue alongside the likely drip-feeding of new products and if the Minister had anything he wanted to say about that I would be grateful. The Labour Party will support this Supplementary Order Paper and the wider bill as well but we do so knowing that there is much much more to do. 
Hon HEATHER ROY (ACT) 
: 
 I rise in the Committee stage to speak on Part 1 of the Misuse of Drugs Amendment Bill. Primarily I wish to speak to the Minister’s Supplementary Order Paper but first I signal my disappointment in the speakers around the Chamber—not so much disappointment in the content of their speeches but in the way they intend to vote on particularly the Minister’s Supplementary Order Paper. 
There has been a lot of talk about stopgap measures and about how the gazetting will cause a delay of 7 days before products need to be removed from shelves. In effect what we are doing through this Supplementary Order Paper is banning a substance that at the moment is legally available. I do not think there is any disagreement about the fact that children should not have access to substances of these kinds; they certainly should not. But if we are looking to find real solutions we first need to look to completely rewrite the Misuse of Drugs Act more quickly than is being done but also find a solution that is workable. We all know—and I have heard each of the members who have spoken so far say this on other occasions—that prohibition does not work. 
My Supplementary Order Paper looks at this issue in a different way. It acknowledges the fact that adults in this country—those who are over 18 years of age—actually can make decisions for themselves. But it also puts in place pretty hefty measures to protect our young people. My Supplementary Order Paper proposes that “An age-restricted drug can only be sold to people over the age of 18.” Secondly it puts in place the following penalties for breaching such an age restriction: retailers or distributers that breach the age restriction would face after their first offence a fine of $10000; following a second offence they would face a fine of $25000; and following a third and subsequent offences they would face a fine of $50000. This is not chicken feed and it sends a very strong signal to sellers and suppliers of Kronic-like substances—or any psychoactive substance for that matter—that this is unacceptable behaviour. 
There would also be compulsory closure of premises of retailers or distributors for 7 days following a third and subsequent offences. It acknowledges the fact that those who are deemed adults in this country—they can vote they can get married and they can be sent to war—are in fact the owners of their own lives and their own bodies. 
There is a sense of déjà vu with this whole debate. I myself sat on the Health Committee when on a number of occasions we have looked at Misuse of Drugs Amendment bills—there have been a variety of them. I think particularly of the benzylpiperazine (BZP) debate. There was no regulation at first with BZP; it was freely available. We then decided that it should in fact have an R18 classification—it should be available only to those people who are 18 years of age and over. Then a bit further down the track we banned the substance completely. When it was banned there was of course as others have highlighted in the Committee a raft or a wave of other similar substances that did not have the BZP active ingredient in them that quickly came to the fore. I see Mr Iain Lees-Galloway shaking his head. I am disappointed that he will not support my Supplementary Order Paper because I have also heard him speak about how prohibition does not work. 
The real point here is that when we ban or prohibit substances it does not mean that people stop using them. What it means is that their use goes underground and a black market builds—usually a thriving black market which then heavily inflates prices—and becomes prevalent in our society. It actually removes the ability for proper enforcement of the laws we already have. Those very people whom we seek to protect—the under-18-year-olds; the children in our society—also have the ability if they can find the money which they very often can to buy these substances on the black market themselves. Quite how National or Labour—they are the speakers we have heard from so far but I suspect the other parties in this Chamber believe this too—believe this helps our young people and the dearth that drugs are in our society I do not know. It is much better to have these things above board. How this helps them is beyond me. 
I agree with the points that have been made by all speakers about a complete rewrite of the Misuse of Drugs Act. That is well overdue and should be attended to very quickly. I do not agree with all of the provisions in the Law Commission’s report; I think the basic principles of adults being adults and being responsible for their own actions and the consequences that come with those actions should be much more prevalent but protection of our young people is crucial. I think all psychoactive substances should be covered by new legislation. The same rules and regulations should apply to all. I put in this category—as we also have on our Order Paper in this Chamber—the alcohol reform debate. Alcohol and drugs—in my view and in the ACT Party’s view—should be looked at in the same way. 
Grant Robertson also raised the very pertinent issue of this being a health issue versus a crime issue. I agree entirely with the comments he made. I myself have talked a lot about the medicalisation versus the criminalisation of drug issues. Following a United Nations instigation over the past 40 years we have dealt with this as a crime issue when in fact in our society it is primarily a health one. I hope that when it comes to the rewrite of the Misuse of Drugs Act that is taken into consideration and decision making and policy making are centred on that. 
Mr Robertson also mentioned research and testing and of course he is absolutely right. Although we have provisions in the Minister’s Supplementary Order Paper before us on the Table now when we have gazetting that allows 7 days it will become a 7-day race make no bones about that—a 7-day race to get things on the Table before they are gazetted and another 7 days to get them off the Table. Research and testing will never happen as it should. Therefore the products that people will continue to buy whether they are legally on shelves or bought on the black market will never occur. So the problems our clinicians face at accident and emergency departments far too often particularly on Friday and Saturday nights will continue when they are trying to deal with drugs and they have in many cases no idea what the drug is or which active substances it contains. 
Despite the fact that my Supplementary Order Paper has come to the Table very late in the day I ask every party to carefully consider the provisions in it before they vote. They make sense; they allow for over 18-year-olds—adults who are responsible for themselves—to not be criminalised for buying these substances. It is much better to have them in the open rather than underground in the black market scenario yet it would still provide for the safety and security of our young people. The law would be enforceable and would be enforced in a pretty hefty way with a $10000 fine for the first offence $25000 for the second offence and $50000 for the third and subsequent offence. Retailers or distributors that breach the age restriction would face compulsory closure of their premises for 7 days following the third and subsequent offences. 
The ACT Party will oppose the Minister’s Supplementary Order Paper but I implore parties to think very carefully about the realities of the situations that exist. People know that the black market and driving this sort of activity underground are completely counter-productive in society. I implore them to think carefully about putting in place sensible measures that are enforceable and that get the incentives in the right place. Thank you. 
Hon DAMIEN O’CONNOR (Labour) 
: 
 Once again we find ourselves in the Chamber trying to deal with a very very difficult issue—an issue that most of us probably feel somewhat compromised on. We continually contradict ourselves I suggest when it comes to the issue of drugs—well if we are talking about mind-altering substances I guess. How could any party oppose the Associate Minister of Health’s initiative? It is a very good one; it is a move to try to reduce the harm from a new substance on the market that has been identified. 
Our young people in this country are somewhat confused as well. If we make an assumption that it is mainly young people we are trying to protect from themselves and that they are the main buyers of these new products in particular then we have to ask whether we are giving them consistent messages through Parliament. We have numerous laws that state that young people cannot do this or should not do that but then we tell them to be innovative and creative and to get on with their lives. No matter what we do in this Committee in terms of banning substances tomorrow people will be working on and creating new substances because they are innovative and smart and they want something new. 
It is important that whatever legislation we pass here is flexible enough and I think the Associate Minister’s attempt here is reasonable. At the Minister of Health’s discretion he can intervene and declare a new substance as something that can be investigated and a temporary ban can be put on it. I think it is a good attempt but if we are going to be consistent then the only way that we will beat this over time is through decent education so that people be they young or old know what they are consuming by smoking sucking drinking or whatever. They need to know what the substance is and there needs to be some resilience so that around them there is positive peer pressure to resist the consumer campaigns or whatever that will develop around new products that will come on to the market month upon month following the passage of this legislation. 
I have heard that the Government is currently waiting to consider the Law Commission’s report and that there are a number of recommendations in the report—a reasonable number 45 or something— 
Hon Peter Dunne 
: Just on this area. 
Hon DAMIEN O’CONNOR 
: Yes that is right. I thank the Associate Minister. There is another Law Commission report hanging around as well—one on alcohol. If the Associate Minister and the Government were to be consistent here and if we were to have a look at the harm caused by the substances we are trying to address in this particular legislation compared with the harm we know occurs every single weekend of every single year which has been clearly documented identified and connected to alcohol then the Opposition members would welcome a return to the House of a bill on alcohol. The Government refuses to do that. Although I appreciate the Associate Minister’s efforts and the Government’s efforts to move very quickly in this area of drugs which everyone will applaud the reality is that the Government is refusing to move on an issue that is of far greater harm every single day and every weekend in every week of this year. The Associate Minister knows that. 
The question is what the young people and the people out there are going to think. Are we a bunch of hypocrites? Should we be consistent? Should we send a consistent message to people that we will put in place laws that accurately identify those who produce a substance force them to identify what is in the substance and then let people make the call on whether they consume it? 
I am not an advocate of decriminalisation and of saying that just because people are over 18 they should be able to consume what they like. This Parliament has to make the tough calls and provide guidance in order to reduce self-harm and harm to others. Do not for a moment think we are addressing just the issue of self-harm here. Every area of drug consumption and abuse has flow-on effects that are serious and that run right through families and communities. We have an obligation in this Committee when we are addressing legislation like this—and Labour supports it because it is an attempt to address the issue—but we should not for a moment think that this eases our conscience in any way about the real issues of drug utilisation and abuse in this country. 
The same officials who have given advice on this legislation are probably giving advice on the Law Commission’s report on alcohol. We should ask them to move along quickly. I ask the Associate Minister and the Government to move along quickly and to show us what they are going to do about the acute harm caused by alcohol. 
It is difficult for the Opposition members to applaud too loudly on the moves in this legislation given the reality that we will probably have to come back to the House to address other innovations by manufacturers in the area of drugs and to try to keep ahead of them. We will be back in the House in the near future addressing we hope the serious issues. 
We can identify the deaths child abuse road accidents and other harms directly connected to alcohol. I am no wowser but if I am going to get up to speak on this legislation then I have to acknowledge that a far greater harm is currently being ignored by the Government. We would like to see some progress on that. 
Although we are working through this legislation in a sensible way—we are not banning these substances; we know that will drive them underground—we want to check and control the manufacture of all of these things. Let us honestly admit that there will be new innovations and new products. We need to think ahead and through either education or knowledge give to the young people the older people and all those people who consume these substances the tools to know what they might be doing to themselves. Only then will we start to get ahead of the serious issue of drug abuse across this country and the consequences of that. 
People have made a song and dance about child abuse which is one of the most horrific things occurring in this country. Many of those issues about child abuse unfortunately relate back to drug abuse. We have to acknowledge that and we have to get on and do something about it. 
In supporting this legislation I cannot clap too loudly because there is still a bigger issue that the Government refuses to bring back to the House which is alcohol and the Law Commission’s recommendations on that. 
Dr JACKIE BLUE (National) 
: 
 I am pleased to speak in the Committee stage of the Misuse of Drugs Amendment Bill and I certainly want to congratulate the Associate Minister of Health the Hon Peter Dunne on bringing in the Supplementary Order Papers on Part 1 that make provision for the temporary class drug orders which are for these untested psychoactive drugs that have caused so much harm in our society—and the drug Kronic is the one that most people relate to. The legislation will effectively bring in a 12-month ban of these substances while they are assessed and tested. 
I am pleased the Minister has moved swiftly; there has been growing concern mounting in the media and in our community about these untested products. They are not benign—that is for sure. We have certainly had a lot of reports of health problems: youth presenting to accident and emergency departments with difficulties with their health. Also drugs such as Kronic have been found in the wreckages of cars in road accidents. So there definitely has been concern. It has been growing it has been mounting and I am pleased that the Minister has moved swiftly. 
This law is expected to be in place by 5 August which means that all 43 current products that are in this category will be off the shelves within the week. It means that they will be tested looked at and assessed over the following year. It is an interim measure. It is not meant to be a long-term solution but we had to have an interim measure that was viable and workable and this certainly is all of that. I am pleased that the Minister has made a comment that there will a more durable law in place sometime next year but this will certainly be a stopgap measure and I applaud him for that. 
It is important that we do get the eventual enduring law—one that will endure into the future—and it is important that we get it right hence the 12-month pause to assess the situation assess the drugs on the market and take it from there. It would be too easy to have a knee-jerk reaction and bring in legislation that was not going to work as has happened in other countries. I must admit I have been quite surprised—probably I should not have been too surprised—by the defiant attitude of the sellers and manufacturers of these substances. In the newspapers they are saying that they will just bring in new substances that will replace the ones that are banned. But I am also equally pleased that the Minister has been equally defiant saying that if that happens those substances will be gazetted just as quickly and put under temporary drug order bans. 
This bill complements a suite of actions the Government has introduced to combat the effects of P—methamphetamine. This is just one part of the whole suite of actions. There is no doubt that P methamphetamine has had a devastating effect on our community and on individuals. It has wrecked lives basically. Specifically ephedrine and pseudoephedrine will now become class B drugs which means they will be available on prescription and people can no longer buy them across the counter as has been the case. We know that there are other alternatives to treat flu and colds. I am speaking of phenylephrine which will be able to be bought across the counter. Of course pseudoephedrine can still be a prescription medicine. 
The Supplementary Order Papers the Minister has brought in send a very strong message to our community that we do not want our young people to be harmed by these untested psychoactive drugs and that they have no place whatsoever in our society. We want to reduce harm from these untested psychoactive drugs and I applaud the Supplementary Order Papers that the Minister has brought in in a very timely way. Thank you. 
KEVIN HAGUE (Green) 
: 
 I will begin with some comment about clauses 4 and 6 of the Misuse of Drugs Amendment Bill. I reiterate the Green Party’s opposition to those clauses which relate to utensils. We will be supporting Iain Lees-Galloway’s Supplementary Order Paper 260 to remove clause 4 from the bill. In respect of clause 6 which relates to pseudoephedrine the evidence really points to the fact that the measure that is proposed in the bill will have little effect on its desired outcome but there will be considerable cost and inconvenience to many. 
The debate in this Committee stage has focused largely on the Minister’s Supplementary Order Paper and I want to make some comments about that. The Green Party will be opposing the Supplementary Order Paper but I will begin my comments about the Supplementary Order Paper by saying that we believe that it is ridiculous that psychoactive compounds without any kind of safety testing can reach retail shelves without any kind of control except for the provision that already exists in law for smokeable compounds to be restricted to people over the age of 18. That is absurd. I would think that probably everybody in the Chamber would agree with that. Therefore something does need to be done about this problem in our law. 
I also accept the point that Jackie Blue has just made that some of the synthetic cannabinoids in particular clearly do have harmful effects. There is an acceptance that there is some real harm. However I make the point that these compounds have in fact been on our retail shelves not just over the past few weeks but for years. So the urgency that the Minister is being praised for in this situation seems to be misplaced. 
There seems to me to be an opportunity to take a more considered approach which is what the Green Party favours. I accept the point that I think Iain Lees-Galloway probably made most strongly in this debate that the public has reached the point of wanting to see something done. I suspect that that is what lies behind the urgency here. Although it is important that we are responsive to public mood I am not sure that that is actually the most appropriate driver for this Parliament’s behaviour and decision making. 
The point that I made in the second reading debate about the Minister’s Supplementary Order Paper I think still holds true. Members may recall that at that time I challenged the Minister to table his Supplementary Order Paper then before the 2-week adjournment that this Parliament has just had. That would at least have enabled some form of truncated public process in order to enable members of the public to have a say about the Minister’s proposed approach to this issue. 
The reality here is that all of those who made submissions on this bill or perhaps chose not to make submissions could not possibly have had the expectation that this Supplementary Order Paper would now be included in it. Here we are about to make a very serious decision on the basis of public concern without giving the public and other interested parties the opportunity to have a say about it. That is poor process and it is one of the reasons why the Green Party will oppose the Supplementary Order Paper. 
The Minister is right that it is important to get this right. He is right about that. But we think also that the formulation of this Supplementary Order Paper is wrong. This is not the right way to go about that task. The Green Party may have supported an approach that enabled these substances to be classified as restricted substances according to the 2005 amendment to the Misuse of Drugs Act. However this approach is wrong in several aspects and I want to mention a couple of those. First of all in the Associate Minister’s comments in this debate he spoke about psychoactive substances and we have all approached this debate on the assumption that that is what we are talking about. That is not what the Supplementary Order Paper states. The Supplementary Order Paper talks about any substance; it is not restricted to psychoactive substances at all. For example there is the substance sodium chloride. That is a substance. It meets the definition in the Supplementary Order Paper. I think most scientists would agree that it causes harm. This Supplementary Order Paper enables the Minister of Health to gazette a notice to actually prohibit that from sale. Is that what we want? I guess we would say that sodium chloride is not psychoactive. There is a psychoactive substance called C2H5OH which is ethanol. Is it intended that the Supplementary Order Paper will be used for that? It certainly could be. Possibly it should be. 
I think there are some very real issues about the definition of “substance”. There are some issues around how the Minister will go about the task of drawing the line and of determining the risk or possible risk to individuals or society. This Supplementary Order Paper places an awful lot of discretionary power with the Minister with a political appointee rather than with say the expert advisory committee. Is that the appropriate approach? The Supplementary Order Paper also has no sunset clause. We think those are three fundamental problems with the Supplementary Order Paper. 
We do like the exemption that the Supplementary Order Paper contains for possession of small amounts. We believe that is a good start. 
I want to conclude by referring to the Law Commission’s report as others have done. I say that it is right that we take the appropriate amount of time to respond with all due haste to this. It may well not have been possible to fully respond to the report in the time available but it surely would have been possible in the time available to enact the commission’s recommendations about this particular problem and to place the onus on manufacturers importers and suppliers to establish safety before a product can be made available for sale in New Zealand. That is what should have happened in this case. 
NICKY WAGNER (National) 
: 
 I rise to support the Misuse of Drugs Amendment Bill in its Committee stage. I want to look at Part 1 and at some of the things that we have not really talked about too much today. Obviously this bill is designed to amend the existing legislation and to improve the effectiveness of drug control. But the main purpose of the bill notwithstanding the Supplementary Order Paper is to reclassify ephedrine and pseudoephedrine as a class B2 controlled drug. It also removes thalidomide as a class A controlled drug. It allows a hazardous substance to be scheduled also as a restricted substance. It extends the definition of amphetamine analogues and it extends the controls over drug paraphernalia. 
The reason we are reclassifying ephedrine and pseudoephedrine is designed to close off the local source of supply of precursor substance for the illegal manufacture of methamphetamine in the country. It is just another line of attack to support the Government’s determination to clamp down on P and to clamp down on the damage that it causes to New Zealand’s communities. At the same time as this bill being passed the Government is also taking steps to break drug supply chains and to improve the availability of and access to drug treatments for addicts. 
It was interesting that most of the submissions to the Health Committee considering this bill were about the drug utensils provision. Most were concerned that prohibiting drug utensils would not work because users would make their own implements—for example they would use light bulbs for taking P and bits of plumbing hardware to make pipes for smoking. However the majority of that select committee felt that the display of specifically redesigned drug-taking utensils in stores glamorised drug taking and attracted more users. It was interesting that this was a similar argument that was used about the display of cigarettes and tobacco products which was banned by this House just a few weeks ago. Making it an offence to sell supply and import utensils will assist the anti-drug effort by ensuring the public receives a consistent message about the unacceptability of illegal drugs. I think a comment made in the Chamber tonight is that we want some consistency in this area. 
There was also concern from submitters that if cold and flu preparations containing pseudoephedrine were available only by prescription it would be unnecessarily expensive and inconvenient for patients to visit their doctor to get a prescription. However the committee was reassured by Professor Sir Peter Gluckman that there are plenty of effective alternatives available and I think we agreed with him that the risk of the diversion of pseudoephedrine-based products into the manufacture of methamphetamines outweighed the benefits of their over-the-counter availability. A more limited choice of cold and flu remedies was acceptable in the interests of the public good. 
I would like to move to the discussion on Supplementary Order Paper 258 and to support these amendments which are in the name of the Hon Peter Dunne. The key to this is that it introduces temporary class drug notices. They can provide a temporary ban for unregulated psychoactive substances such as Kronic and other synthetic cannabis products taking them off the market for 12 months. Although the risks of Kronic and other similar substances are unknown there are real fears of potential long-term effects. It is unacceptable to the Government that a product that causes potentially lethal risks is available freely to young people. 
Over the past few months there has been increasing evidence of the dangerous effects of these drugs and just like many members in the Chamber today I have been approached by concerned parents one of whom had had a near-death experience with their son who had taken Kronic. It is very frightening for parents but also for the community. Recently we have also seen contamination of these products with prescription medicines. 
I think that these temporary class drug notices are a good interim measure and a precautionary approach that will get these products off the shelves now and for at least 12 months. But as we have heard the Government’s long-term aim is to implement the Law Commission’s recommendations to reverse the onus of proof and to require the industry to prove that its products are safe before they can be sold to the public. The current situation is that manufacturers can come up with a product like Kronic and as long as it fits within the category and does not include illegal substances it can be sold as of right. The Government believes that this needs to be changed and it expects to introduce legislation to do this by the middle of next year. In the meantime this Supplementary Order Paper 258 will be a well-received stopgap measure and I thank the Minister for that. 
KRIS FAAFOI (Labour—Mana) 
: 
 Thank you very much Mr Chairperson for allowing me to have this opportunity to speak to Part 1 of the Misuse of Drugs Amendment Bill. Although the Labour caucus is supportive of both this bill and Supplementary Order Paper 258 which has been put forward by the Minister in the chair the Hon Peter Dunne one cannot help but think that the level of hype that has been afforded to this bill and the Supplementary Order Paper is a little above their station. 
In relation to the Supplementary Order Paper that the Minister has put in front of us on the banning of synthetic cannabis what mums and dads out there in New Zealand wanted to have was a consistent message from the Minister about what he was going to do about the likes of Kronic but we have not had that. Although I congratulate the Minister on coming to a position we have not had a consistent position for the last 4 months. Around 4 months ago when the Minister was asked about the limited sale and advertisement of synthetic cannabis what did we get from him? It was not the position that we see in the Supplementary Order Paper today; it was: “I have instructed the Ministry of Health to begin the process of putting the necessary controls in place. I expect these changes to come into effect next year.” There was not much urgency in that. 
Just as mums and dads may have got a whiff of Kronic from their sons’ or daughters’ bedrooms or the garage I think the Minister may have got a whiff of public sentiment and the public mood and he decided that things had to move a little bit quicker than he had first anticipated. There was some movement on 3 June when he was asked why he had not banned synthetic cannabis. The response then was that the evidence was not strong enough to go as far as doing that and that he did not want to go down that path. But we have taken a step closer to that in the Supplementary Order Paper that is before the Committee now and I think the mums and dads out there who are looking for a consistent message will be happy with that. 
Just a month and a half ago another question was asked about the Law Commission’s recommendations. The response from the Minister on that occasion was that the Government was “under certain statutory requirements and we have the complications of a general election occurring …”. I am glad that those complications have been sorted out since 17 June. Late yesterday afternoon as this announcement was made the message from the Minister finally was: “I felt we couldn’t wait. I wanted to make sure we had a mechanism that simply removes these items from our shelves completely.” So it took 4 months but we got a result in the end. There has been inconsistent messaging regarding that but we support the fact that this Supplementary Order Paper has been introduced to the Committee so that we finally have some form of action on the banning of synthetic cannabis. We support it but how we got here leaves a few questions to be answered. 
In terms of Part 1 of the bill at the moment we believe that it will do no harm but we think it could have gone further. Again this is another instance where the hype might not exactly marry up with what is included in the bill. This bill looks to control ephedrine and pseudoephedrine in the Government’s war on P but as I said in a previous contribution on this bill I think there is more of a fracas over P. It is not really a war on P. The Government is making huge capital out of it as it sends out its pamphlets about the war on P but this bill itself does not take serious action. I think it is more about politics than taking serious action against P. I understand clause 4 includes— 
Iain Lees-Galloway 
: Pipes utensils. 
KRIS FAAFOI 
: —pipes and utensils. My colleague sitting next to me Iain Lees-Galloway has put up Supplementary Order Paper 260 because we believe there is no scientific evidence that this clause will make much difference. Actually in some cases it could cause more harm to people who may not be using these kinds of utensils so we believe as the member’s Supplementary Order Paper proposes that this clause should be removed from the bill. 
There is also another cost of living issue here. Now that those people who have serious colds or the flu have to go to the doctor to get hold of the good stuff in terms of ephedrine and pseudoephedrine— 
Hon Ruth Dyson 
: How much will it cost? 
KRIS FAAFOI 
: —how much will it cost? Exactly. The Ministry of Health has not done sufficient work on the cost implications that will have for families who are struggling to make ends meet and also on the kind of impact it will have on the workload of general practitioners who may now have a flood of people during the winter months who come to them to ask for medicine that was readily available through pharmacies before this law came into effect. 
So we are also concerned about some cost of living issues around this measure and those have not been addressed in this bill. We still have some serious concerns about what may happen in terms of the effect on families who are struggling to make ends meet. 
We also have other concerns about Part 1 and I go back to the placing of further restrictions on drug utensils which Mr Lees-Galloway’s Supplementary Order Paper referred to and the negative health effects that that may have on people who are still using cannabis to date. If I recall correctly there is a filter in some of the utensils used to smoke cannabis that may ensure the filtration of some of the harmful toxins so the utensils were having some positive effects on some of the people who use the pipes. The fact that this bill looks to ban the use of utensils or the importation of utensils is of serious concern. 
I go back to the overriding theme that I touched on before and that is the politicisation around this bill and the fact that it does not really achieve what the Government has set out to do in its multi-pronged attack in the war on P. We believe that this bill does not really address the issue of ensuring that we cut down on the production and use of P in our communities. There is absolutely no debate about the fact that P is a massive problem in our communities—it certainly is in the electorate that I represent—but if we are to take some real action on it we need to ensure that this legislation has the detail in it to ensure that we can control the importation of ephedrine and pseudoephedrine. We do not believe it does. It is my understanding that 80-plus percent of the pseudoephedrine that comes into New Zealand for the manufacture of P does not come through the corner pharmacy—not at all. It is being brought in illegally through our borders. 
To give credit where credit is due there have been a lot of high-profile cases recently where large consignments of ephedrine and pseudoephedrine have been stopped at our border but if we are to have a real crackdown on the ingredients for P I ask why we are bringing in this measure which will affect only the mums dads and families at home who rely on some decent medicine in our pharmacies in order to ensure that every winter they have a decent cold and flu remedy. This bill does not really take us in the direction that we need to go in the war on P. It is off target in a way because as I say the main factor in the war on P should be making sure that we crack down on the supply and importation of ephedrine and pseudoephedrine at our borders. 
Just to finish I say this bill does not address the real issue around the production of P. It is purely window dressing. Although we do support the Supplementary Order Paper that the Minister has introduced and we are very happy that we have got here the way that we have got here leaves a lot to be considered. 
MICHAEL WOODHOUSE (National) 
: 
 I am very happy to take a call on the Misuse of Drugs Amendment Bill a bill that was considered by the Health Committee when I was a member of it although I am not a member now. 
Grant Robertson 
: It’s gone downhill really. 
MICHAEL WOODHOUSE 
: I appreciate the sentiment but I am sure my colleagues are holding the fort extremely well. I am not sure whether there is any business. 
This bill was a really interesting one for the committee. We first heard about herbal tobaccos or herbal highs when we were deliberating the Smoke-free Environments (Controls and Enforcement) Amendment Bill and there was consideration of whether herbal tobacco should be included in the display bans. The amount of media coverage on and the committee’s awareness of this very harmful set of substances grew quite considerably. 
I was at a conference in Christchurch in May when a young man of about 21 talked to me about his experience with the Accident Compensation Corporation following a serious head injury. I have to say his experience with the Timaru branch was very good. The conversation turned on to the use of herbal highs and he described his experience of using Kronic Pineapple Express I think it was called. 
At that point I thought it might be worth trying. It is legal—even then it was only just classified R18—and I had contemplated giving it a go to see what the reaction might be. After the conversation with this fellow I did not. He described an extraordinary experience where he was hallucinating and where his peripheral limbs virtually went numb. He said to me that he was legally able to drive but he could hardly walk. There is a case in New Zealand where the police are investigating a fatal accident where Kronic may have been a contributing factor to a young person dying on our roads. 
This is a very important issue. Yes it is emotive. We may not have the science but I congratulate the Associate Minister of Health Peter Dunne and I encourage strength to the arm of the development of the regulatory framework that will avoid the cat-and-mouse situation that we run the risk of having over the next 12 months as Mr Grant Robertson described. I think that risk is low but real and I think we need to be extremely nimble in order to identify these products as they come on the market and to ensure that they are removed with all haste. I regret that we are not able to create that temporary regulatory framework but I understand that the definitional issues could be very challenging. I do encourage the Minister of Health and the ministry in that area. 
I will touch on the comments of ACT MP Heather Roy because I think there is a liberal streak in all of us on this side of the House that says there is an element of live and let live to this issue. I have to say that I would accept that to a point with two exceptions. One is the number of people who challenge me to ensure that our health services are accessible to the widest number of New Zealanders. I think we have done an extremely good job of providing a lot more with a little more resources but it really is not acceptable for me to stand by as a member of this House and not create a climate that prevents our young people from harming themselves to the point where they may be admitted to emergency departments around the country. I cannot then look other constituents in the eye and say that we are doing our best in the health sector. I simply cannot do it. I accept the liberal view of live and let live but these substances clearly have a very negative effect particularly on our young. To put it into our dairies and not even have an R18 classification on it—even though the manufacturers claim they encourage that—is quite a challenging situation that I am pleased we have resolved. It is about denormalising this thing. 
The Hon Damien O’Connor made some interesting comparisons with alcohol that I strongly disagree with. We could put motor vehicles or fatty foods into the same category. A lot of things will cause us harm if we use them in the wrong dosage. That is not the case with these herbal highs. None of it will do us any good. As Dr Hutchison said ingesting this stuff into our lungs has to be terribly harmful regardless of the psychoactive substances that will turn our neurons into scrambled eggs. 
In summary I really strongly support this measure. I am sorry that some members are not going to support it although I understand why. I do think this is progress and I think our children will certainly thank us for it in the long run. 
Hon RUTH DYSON (Labour—Port Hills) 
: 
 That was a pretty half-hearted speech from Michael Woodhouse and I completely understand why. I absolutely understand why. It is because that member was a member of the Health Committee he thinks about the issues and he knows that the Misuse of Drugs Amendment Bill does very very little to progress the issues that everyone in this Chamber cares passionately about. If this is the war on P I do not think we have even got the pistol let alone anything to truly deal with the drug problem in New Zealand. That member knows because he sat on the select committee and listened to people saying: “You seriously want to ban the import of pipes and you think that will do something? You seriously want to take flu tablets off the pharmacy shelves and you think that will fix anything?”. People were laughing at Associate Minister of Health Peter Dunne during the select committee process because this really does not meet the standard that we should be debating. 
I do not understand why this has gone backwards and forwards in the Hon Peter Dunne’s mind until suddenly he had a complete change of heart—for the fourth time—and said we had to do something urgently dramatically and immediately and he introduced this bill. It will not do any harm at all. It is taking up some of Parliament’s time and that is all right; it is a valid part of democracy. But it certainly will not take the sort of action we need to deal with issues like P and Kronic. I am just disappointed. I thought the Minister had a bit more innovation within his portfolio mandate but he does not seem to. 
I read the Attorney-General’s comments with some concern. I am surprised that Minister Finlayson is not here to take a call and explain why he is now silent on the issue of concern he raised in relation to this bill. He said that by the Government taking cold and flu tablets off pharmacy shelves and making them prescription only we are looking at a presumption of supply when purchasing those previously non-prescription medications. That presumption of supply I think is unfair on the overwhelming majority of New Zealanders who go into the chemist to buy their cold and flu tablets—guess why? It is because they have a bad cold or the flu and they want something immediate to deal with it. Why are those people now being required to buy something that may or may not be as effective as what they had been using or to go to the doctor? That does not make a lot of sense. 
Dr Paul Hutchison 
: It’s 20 percent of new pseudoephedrine. 
Hon RUTH DYSON 
: Dr Paul Hutchison was also at the select committee. He would have been paying attention I know because that is how he is wont to behave at the select committee. He would have listened to the submitters laughing at the fact that the problem we have with P manufacturing in New Zealand does not come from our chemist shops; it comes overwhelmingly from the illegal importing of ingredients—it is over 80 percent. So we are scratching a little bit. At the same time National members are parading up and down the country saying they have declared a war on drugs. That is just laughable. It is just laughable. 
The second point I will raise is much more serious because it does something I think is wrong. It is in relation to clause 4 of this bill. I spoke to a man recently who was moving to New Zealand. He brought with him a huge container of goods. When he went to collect it from Lyttelton Port he was told he had some questions to answer because some of the contents of the container had been confiscated. One of those items was a hookah a pipe. The customs people had referred it to the police who took it all to pieces and investigated it. The police said it was clearly an item that had been purchased as a souvenir and that it had never been used for smoking anything legal or illegal. But it was confiscated from him. He had to go through a big investigation. 
I want the Minister to comment on the most interesting point in relation to the fairness or unfairness of it. He may have the opportunity over the dinner break to get some advice on whether this was the correct procedure or whether my constituent has fallen foul of incompetence. Despite the fact that the police said there was nothing legal or illegal on this pipe and there was no reason for charges to be considered—clearly the man had bought this pipe as a souvenir and brought it along with all his other goods—they refused to return it to him. The question I pose to the Minister is whether he thinks that that is fair. It would be different if there were something illegal on that pipe but this was clearly a souvenir. My constituent has never got his blessed hookah back. I think he should have it; he did not do anything wrong. It is legal to buy it is legal to import and it did not have anything illegal on it. Will the same thing happen if my colleague Iain Lees-Galloway’s Supplementary Order Paper is not supported now that we are going to clamp down on all of these other drug utensils and identifiable parts as they are described in the bill? 
I think that that provision of the bill is just a nonsense. It is a totally interfering way of approaching people who may be doing no harm like my constituent. They may end up being caused a lot of anxiety and grief for no good reason. This will not help the drug problem we have in New Zealand. This will not go any way towards that. It is just an absolute nonsense and I am surprised that the Minister who has so often referred to solutions as being common sense would allow his name to be attached to this ridiculous clause. There is a great opportunity this evening and tomorrow as we debate the Committee stage for the Minister to quietly support Iain Lees-Galloway’s Supplementary Order Paper and we can get rid of this nonsensical provision. 
The final point I will make is about the inconsistency of us dealing with this piece of the overall drug abuse requirements outside of the Law Commission report. It is very unusual and it is an inconsistent way of this Government dealing with issues. I do not know whether it was because the other issues were too hard and are therefore being put off because this Government does not like dealing with tough issues or whether the Government needed some sort of declaration of action and picked up this little thing rather than waiting for the comprehensive response from the Law Commission but either way for whatever reason it is inconsistent with how this Government has previously dealt with issues. It has approached matters alongside the Law Commission’s reports. I do not understand why it is not doing it in this regard. We should be looking at the recommendations from the Law Commission. 
The Misuse of Drugs Act is clearly outdated. It was written in the mid-1970s. Drugs were different then the use of them was different then and the way we respond as a society should be different and should keep up with the changing use and abuse of drugs. The only thing that has not kept pace with the change is the law itself so we need a comprehensive look at the misuse of drugs and at how we can ensure that the focus of our legislation is about reducing harm to individuals and to our communities. That should be the centre not this ad hoc bitsy punitive approach that as the Attorney-General said assumes people buy their cold and flu tablets at the chemist because they are going to supply some illegal purpose. That is just a nonsense. It is a very shallow way of dealing with what I think New Zealanders have overwhelmingly accepted is a problem that we should all work constructively together to solve. 
The Minister would have been better off ensuring that we had a total cross-party agreed response to this so that we would have an enduring solution that had been well considered and well debated at least amongst the various parties in Parliament. That is the way the Minister often says in public is a good way of operating—less of this confrontational arguing party versus party and more along the way of agreeing that we have a problem looking at all the options and overseas experience looking at evidence in terms of responding to that problem and then trying to get as much political support across parties as possible. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 Thank you for the opportunity to speak on the Misuse of Drugs Amendment Bill. There are clearly two parts to the debate with Supplementary Order Paper 258 in the name of the Associate Minister of Health the Hon Peter Dunne but I will go back and address the major thrust of Part 1 which the Hon Ruth Dyson spoke about just recently. 
I find it quite astounding that she discounts the domestic supply of amphetamine precursors. The Chief Science Advisor to the Prime Minister Sir Peter Gluckman pointed out in a very very well-considered paper that the amphetamine market in New Zealand is worth about $1 billion and that at least—at least—10 percent of that is due to the domestic market. The police recognise that it is probably in the area of 30 percent of the $1 billion so it is worth somewhere between $100 million and $300 million. So when someone like the Hon Ruth Dyson discounts the importance of the domestic supply it should be of great concern to any New Zealander. 
There is no doubt that amphetamine and its precursors affect every stratum of New Zealand society. I made the point in debate on the second reading of this bill that in my electorate in Pukekohe there was a well-respected chemist in his 60s. He was an elder of the Presbyterian Church and a member of the Rotary club and he did all sorts of very worthy things in our area. He was recently arrested for selling precursors to gangs over a long period of time. We do not know how he got involved but I just illustrate that as one of the points that absolutely rebuts what Ruth Dyson is saying. The sale of precursors in New Zealand is deeply embedded in every stratum of New Zealand life. It is not just the importation of precursors from countries like China but also involves unfortunately a roaring trade within New Zealand. 
She also made the point of asking what about those poor New Zealanders with coughs and colds who want ready remedies. I am sympathetic to that; I do believe that the pseudoephedrine medication is perhaps slightly more effective than those containing phenylephrine. But there is no doubt that on prospective controlled trials little difference is shown in terms of the way those medications relieve normal coughs colds and cases of the flu. Under this legislation pseudoephedrine medication is actually available under prescription. Yes it will cost a little more—there is no question about that—but there is no doubt that very effective substitutes are available. 
I will make some other comments relating to what Iain Lees-Galloway and Damien O’Connor were saying in relation to the synthetic cannabinoids. There is no doubt that one of the major problems about them is that the manufacturers will be continually thinking up new recipes to get around this sort of legislation. That has happened in the past and it will happen in the future. I think we have all agreed that the Law Commission’s proposal is right and proper. However there is absolutely no doubt in my mind that this Supplementary Order Paper is appropriate. 
When Kevin Hague suggested that this was just a parliamentary knee-jerk reaction I thought that was again absolutely inappropriate. We have seen right around the country corner dairies selling these synthetic cannabinoids in all sorts of different forms right in the faces of young New Zealanders. This has started to normalise these psychoactive drugs in the ethos of young New Zealanders let alone New Zealanders right across the board. 
Heather Roy claims that the Supplementary Order Paper will only drive the psychoactive drugs underground. That may be correct to a certain extent but we now have a situation in New Zealand that certainly was not here 10 to 20 years ago. Those drugs are being sold all over the place apparently legitimately. Mixed with a culture of alcohol and of binge drinking that we know prevails in New Zealand they make quite a terrifying public health challenge that we just have to face. 
It would be nice to be liberal if indeed a liberal approach worked. There is no doubt that the Law Commission’s suggestions about education harm minimisation and making sure that we have appropriate rehabilitation facilities are very important but this Government wants to give absolutely clear messages about the harm of these substances to young New Zealanders. The great worry is that they may well become entrapped by the ruthless marketing that we have seen from these manufacturers. 
I absolutely reject the views of the Hon Ruth Dyson and I am very concerned about the views of Heather Roy when we have a situation of normalising many of these drugs for our young people in New Zealand. 
Hon STEVE CHADWICK (Labour) 
: 
 I really am not very pleased to take a call on the Misuse of Drugs Amendment Bill. We have been waiting for Supplementary Order Paper 258 from Minister Dunne since we last spoke on this in the House. I like the Greens’ Kevin Hague am pretty appalled to see a Supplementary Order Paper of this substance come before the Committee and not go out to the public of New Zealand for consultation. We hoped for better from the Minister responsible for drug use issues in New Zealand. This is too complex and it has implications. The industry is already saying that it can see some loopholes in it and that it will fill those loopholes very quickly. We are up against a very intelligent domestic industry here—and international industry—which will look at what is proposed will move and will find a way through this. 
I think the classification of these substances as a temporary class drug is a bit of a delay mechanism until the Minister can really get his head around an effective approach to banning these substances. I can see one temporary class drug being classified and sitting on a shelf for a year. The industry will quickly morph to change the product’s ingredients to another substance and we will have another temporary class drug that is banned for another year. Officials will be chasing their tails to actually classify these temporary class drugs. They will be put on the shelf then they will pull them out 1 year later to see how they will deal with them. 
The whole process I think is a shambles. It is a shambles because the Minister who usually rails about having a common-sense approach to everything had the perfect mechanism before him. It was not the Misuse of Drugs Amendment Bill; it was the Law Commission’s report. I do not blame the officials in the Chamber here today. They are under instruction from Cabinet of which Mr Dunne is a member to fulfil the directions of Cabinet. I think this Government under John Key’s leadership has shown a pathetic crusade on drugs in this country. It is almost a light bulb issue actually. It will be laughed at by the industry and it will be laughed at ultimately by the manufacturers suppliers and importers of substances into this country. It will become a bit of a bête noire for this Government in the long term. 
I cannot for the life of me understand why when the ministry and the Minister had the Law Commission report the Minister did not breathe through his nose take the common-sense approach and get drafted a proper comprehensive approach to drug minimisation and drug harm in this country. He chose to ignore it. We now have this Misuse of Drugs Amendment Bill which I think actually penalises the public. 
We looked at the effect of ephedrine and pseudoephedrine when we were in Government and Minister Dunne knows that. He was in Cabinet when we discussed for goodness’ sake the project of pharmacists in Rotorua who said they would remove from the shelves those precursors and put them at the back of the chemist shop. That was a wonderful project. They let people know who came in to buy more than two packets that they would fax around other pharmacies to see whether that same person had been in to get substances from their chemist shops. If they had they refused to sell them to that person. That was a sensible approach; it was a sensible approach that was supported by the Medical Association the primary health organisations the pharmacists and the district health boards. That project would have worked if this Government had backed it up with a comprehensive new law in respect of the misuse of drugs. However we got this legislation and then we got this long-awaited Supplementary Order Paper from the Minister which I think will not work because simply it still does not put the right onus of proof on the manufacturers of these drugs. 
I see that one of the members opposite has had to leave; she may be lucky enough to go and get her supply of medication without having to go to a pharmacist and without having to go to a doctor for a prescription. 
I absolutely agree with my colleagues who say that this will add another cost of living burden. National members may laugh at that. They fail to see that we are developing a society that is grossly inequality driven. For people to have to go to a doctor to get a prescription to then take to a pharmacist is a ridiculous cost to have—both a cost burden on general practitioners and a cost burden on pharmacists. I think that is crazy. I do not think it is a practical approach at all. 
This approach is from National which railed against Labour’s cannabis inquiry. National said that it would do something comprehensive when it got into Government—absolutely comprehensive—and with Minister Dunne it would also be sensible. Well this legislation is not sensible and it is not comprehensive. It is a half-hearted attempt to look good about drugs. 
We in this Committee all agree that we have to do something about the industry suppliers who are very very clever—very very clever. It is interesting to see today that they have already said there are loopholes in this Minister’s Supplementary Order Paper. The legislation gives them some wriggle room and they will find the loopholes. How silly it is to be reactive in drug law and drug legislation! We will suffer for this until we enact all of the recommendations of the Law Commission report—not just one. 
I will speak very briefly on Iain Lees-Galloway’s Supplementary Order Paper 260 which I totally support. I think that clause 4 about the restriction of drug utensils is absolutely ridiculous. If the Minister really knew how this industry worked he would know that the people who use drugs will make their own utensils. They do not have to go and buy them. They know how to make something out of nothing. These people use teaspoons bits of wire and anything they have at hand. So we absolutely support the Supplementary Order Paper of Iain Lees-Galloway. The Minister’s provision will do nothing to stop the impact of pseudoephedrine and ephedrine use in this country. 
We all loathe the drug P. Every member in this Committee loathes the drug but we were sincerely looking forward to this Government coming up with a solution that would not bring us back to the House. I swear that when there is a change of Government we will be back and we will fix this as Labour is always being asked to do—to fix up the messes of a National Government. We will do it properly and we will do it comprehensively. We would never bring a Supplementary Order Paper of such substance to the Committee without first taking it out for consultation with the wider public of New Zealand. 
I also agree with what Ruth Dyson was saying about this legislation. The Bill of Rights issue that Chris Finlayson commented on makes a bit of a nonsense again of the Government and its approach to presumption of supply. I would have thought that around the Cabinet table Ministers would listen to the Attorney-General on the Bill of Rights issues. Thank you. 
Hon PETER DUNNE (Associate Minister of Health) 
: 
 A certain naivety is creeping into some of the speeches we are hearing from members opposite. On the one hand they are saying to us not to rush but to take this sensibly—to take a deliberative approach. On the other hand they are saying that because these people are very cunning and will find every loophole imaginable we should go out there and consult widely. There is an inconsistency of monumental proportions in that position. To suggest that because the people in the synthetic drug industry are cunning and will find loopholes wherever they can find them we should have gone out and consulted them about how we developed this legislation is clearly absurd. I signalled at the second reading stage of this bill that an amendment would be coming. It would have been simply daft of me to go out there at that stage trail it around the country and get every synthetic drug manufacturer in the country to work out the way to get around it. How can Opposition members be so naive? That is the reality of the situation. 
We do face a serious problem and I concur with them on that point. But we have to have solutions that work. To some extent Mr Grant Robertson was right when he said at the beginning that this would be a cat and mouse game. I said that yesterday myself because that is the reality. But we have to have the tools to do the job and this amendment will give us that capacity. It was interesting to watch the reaction of industry members because they clearly were not expecting an amendment of this type. It will curtail their activities very very strongly indeed which is in line with the public sentiment and in line with what we have been seeking to do right from the outset. 
Let me turn to the issue of the methamphetamine campaign. Again the same naivety applies. We know that a substantial amount of the pseudoephedrine that comes into New Zealand to be used as a methamphetamine precursor comes in illegally across the border through a whole range of subterfuges. We also know that a certain amount was being made available in the way that will now be made illegal by this bill: through pharmacies. It was logical to do two things. Firstly it was logical to cut off that obvious chain of supply and that is what this bill will do by bringing in the ban. Secondly at the same time my colleagues the Minister of Customs and the Minister of Police have dramatically increased the resources available to their departments and we are starting to see significant increases being made in the seizures of illegal product. The change in terms of the outlawing of pseudoephedrine in pharmacies allows us to concentrate more resource on the much more difficult area of targeting the illegal importations. That is entirely as it should be in terms of the campaign against this particular item. 
It is worth reporting to the Committee that I went to the United Nations convention on drugs meeting in Vienna in March and New Zealand was asked to give a presentation there on our methamphetamine campaign because it is seen as world leading. Over 200 delegates from a range of nations including President Obama’s self-named drug tsar and other leading officials like the president of the European Commission came to our session to learn what New Zealand is doing in that area and to congratulate us on the initiatives we were taking. So on the one hand we are seen by the international community as having a cutting edge policy but on the other hand we come back to this Chamber and are seen by the Opposition as being too slow doing too little and being too ineffectual. We cannot have it both ways. I would far rather take the view of the international experts—the people who are seeking New Zealand’s advice on how to deal with this issue—than the view of the Opposition members who are here carping today. This bill makes substantive progress in both orders. 
Let me make one other point before I sit down. Steve Chadwick the member who just resumed her seat said we should have enacted the Law Commission report. The Law Commission’s report came out at the end of May. There are about 170 recommendations in it altogether some of— 
Grant Robertson 
: Excuses excuses. 
Hon PETER DUNNE 
: “Excuses” says the member—“Action Man” from the Opposition—“excuses.” I must say that having taken action is never a charge that would have been laid against the honourable member. There are 170 recommendations with 45 in this particular area and all of them are at a very high level that needs to be translated into practical decisions in the areas that the Government chooses to proceed with. In some areas it will not choose to proceed with the Law Commission’s recommendations; that is fairly obvious. But the recommendations need to be worked through. We need to get the structures in place we need to get the legislation drafted and we need to be in a position to put a comprehensive package in place. I have said that from the day the report was tabled. But we cannot sit here and say in the interim we should therefore just do nothing—that we should sit on our hands and wait until that more detailed work is completed and we have a coherent regime to bring to the House. 
This amendment will put in place a regime that the more sane members of the Opposition acknowledge is sensible. They welcome it I heard Mr Lees-Galloway say in terms of curbing the incidence of synthetic cannabinoids on the market at the moment and that is as it should be. The Committee faces a couple of choices. It can continue the game of “We will be tougher than you.” or vice versa. It could even take the line that Mr Hague and—curiously—Mrs Roy take which is do nothing and simply let things go. I guess both members have never found a drug that they do not like. But the Committee has the opportunity tonight to put in place a very strong regime and send a clear signal to an industry—which everyone has described as disreputable—that we disapprove of its activities. This amendment is comprehensive and deliberately so. It would have been simply naive to go out there and wave it around to the contentment of the industry long before putting it into the House. When this amendment is in place it will give mechanisms and powers that will enable speedy action to be taken and if the cat and mouse game is what we are to play then we are ready for it. Just as the industry players bring a new product on to the market we will be there to gazette it and take it off. We will go for as long as it takes to get that pattern established and then we will have the long-term legislation in place and a coherent long-term solution to this issue. 
JACINDA ARDERN (Labour) 
: 
 After all that anticipation it is my pleasure to respond I guess straight after the contribution from the Minister in the chair Associate Minister of Health Peter Dunne although I thought he was slightly overzealous in his rebuttal of the Opposition’s argument. We acknowledge the need to take action on the issue of synthetic drugs in particular but our concern—and I tell the Minister that it is fair for us to express that concern—is whether the Misuse of Drugs Amendment Bill is the most appropriate way to deal with this particular industry. 
We have some questions that I hope the Minister will address in his next response. First as some of the members have already raised was the possibility of reversing the onus feasible? I would be interested to hear via the Minister and via officials whether waiting for products to enter the market and then gazetting them and taking them off the shelves was the most efficient and best way to minimise harm that we could have opted for. Is there any scope or international precedent for reversing the onus before a product goes to market in this area? I think that is a legitimate question. It is unfair that the Minister has labelled some of our questions as naive rather than addressing them directly so I would be interested in his response. 
I have just been reading through the Minister’s Supplementary Order Paper 258 and I think it is legitimate for the Opposition to ask whether there could have been more time for analysis of such a hefty Supplementary Order Paper. I am interested in whether the Minister could share with us based on that Supplementary Order Paper the kind of time frame. From the moment a new product goes to market what kind of time frame might it take for a Minister by notice in the  
Gazette 
 to specify a substance preparation mixture or article as a temporary class drug? How long would a synthetic product be available on the market before we are able to get through that process? Have officials looked at the kind of harm that possibly would be done in the intervening period and how much of that synthetic product could be purchased? 
Finally I wonder whether the Minister could talk us through some of the criteria—which could be deemed to be subjective; I am sure some more in-depth analysis probably has been done around the issue—of whether a product poses a risk of harm to individuals or to society. What kinds of criteria are used here? Is it broad enough to ensure that we are picking up all of the products that Parliament intends we pick up? 
I say to the Minister that this is a genuine concern for us. I walk through the area in which I live and there are a small handful of retailers who sell Kronic. I make a point every time I see it of going in and asking them why they sell it and whether they perceive that it is beneficial to the community—which they operate in which they live in and in which they do their business—for them to be peddling such a product. I have to acknowledge I get a very coy response every time. One shop owner promised me: “Ma’am I will take the product off by next week.” before I said I would come in and do my own spot check again. But this is the extent to which we are going as individuals who have concerns about these products in lieu of being able to react quickly. I acknowledge that the Minister is trying to do that. I question only whether there is another way that we could have responded. 
The Minister also mentioned the fact that New Zealand is held in high regard internationally for the way in which we deal with these issues. I would still say though that in comparison more broadly with the drug debate very few countries are currently in step with what the UN Global Commission on Drug Policy has recommended. I have to say that the commission’s paper really broached some subjects that the New Zealand Law Commission has broached as well. To date many countries have stood back from and have been very reluctant to adopt a full harm-minimisation approach. I would be really interested to hear the Minister’s view on some of that international discussion that has gone on at a UN level because from my perspective New Zealand is quite out of step with what that commission has recommended. 
In my first contribution on this bill I told the House that many years ago I sat in on a presentation given by a Hawaiian expert on the issue of methamphetamine—the drug that has become a scourge in New Zealand. It was clear at that point that this was a very different drug we were dealing with primarily because of the ability for it to be manufactured domestically. So often in New Zealand we perhaps have been saved by our borders but not in the case of methamphetamine. We are suffering as a consequence. Of course the public looks to Parliament to respond to that scourge and our question has to be whether we have done all that we could do. 
One thing that the Labour Opposition has been asking for is some of the evidence around the various measures around tools in particular but also evidence on whether requesting that people get a general practitioner prescription in order to get drugs with pseudoephedrine from a pharmacist will have the full impact on this industry that Parliament would intend. It seems clear from the Health Committee report which I read with some interest that the Ministry of Health in particular was not able to quantify the knock-on effect of this policy. We were not able to financially estimate what kind of cost it would have for consumers. 
I acknowledge that of course we want to do all we can around methamphetamine but also we must take it upon ourselves to take an evidence-based approach. Surely that is the expectation of the public as well: not only that we do as much as we can but that we base it all on evidence. I am yet to be convinced from what I have seen come out of the select committee that enough work was done on this particular area. 
Let us not underestimate the impact that it will have on consumers. I appreciate the remarks that were made by Dr Paul Hutchison on the alternatives that exist. Of course I unfortunately am able only to rely on my own anecdotal evidence of having found some of the replacements for pseudoephedrine to be mere placebos in my mind. I do not think there is anything that quite does the job of a pseudoephedrine. My concern is that when we are trying to take a preventative approach and at the same time trying to ensure that as many people as possible do not have to go through the cost of visiting a general practitioner for something that is usually easily manageable we have not weighed up the burden of cost in that regard and that is most unfortunate. 
Looking at the issue of evidence but also coupling that with the new modern notion—when it comes to drug law—of harm minimisation I would have been incredibly interested to see that Parliament probably would say that in terms of harm to society the cost of methamphetamine of course is high and the cost of alcohol is high. But let us look in terms of the relative spend in society on police time and on police resources at how much is spent on methamphetamine versus say cannabis. How many people are imprisoned in our country for minor cannabis offences versus methamphetamine offences? What resource are we spending on the drugs that do the most harm to our communities relative to others? I just throw that up as something that we should be having more debate over. Parliament probably spends a relatively larger amount of time on the issues that cause the greatest harm—alcohol and methamphetamine—but is that reflected in the way that we are operating on a day-to-day basis via our law enforcement and via our imprisonment regimes? 
I think it is a legitimate question to ask and that ultimately is why the UN Global Commission on Drug Policy has started questioning whether our emphasis is in the right areas. If we are going to look at international evidence I think we should start with those trends. If we are going to be world leading that is the kind of response we need to be giving. It is bold and the community will need reassurance that we are still doing all of this in the best interest of our communities but at the moment we have to acknowledge that we are failing and we are failing abysmally. That is not to say that we cannot continue to use the tools that we have and do as much as we can. But again it needs to be evidence-based and on this particular area on these two issues contained in Part 1—the issue of tools and utensils and requiring a prescription in order to purchase pseudoephedrine—I am not convinced these are the big hitters that we need in order to crack the methamphetamine issue in New Zealand which ultimately must be the aim of this Parliament. 
JO GOODHEW (Junior Whip—National) 
: 
 I move  
That the question be now put 
. 
Hon RICK BARKER (Labour) 
: 
 I have two questions that I would like to put to the Minister in the chair Associate Minister of Health the Hon Peter Dunne—if the Minister has finished his texting. 
Hon Members 
: Oh! 
Hon RICK BARKER 
: That is all right. The first is a very serious question. There was a case that went to the Supreme Court concerning the presumption in the law as it stands which is that if a person has a certain amount of cannabis or any particular drug they are deemed to be dealing not just consuming. The Supreme Court looked at this issue and in the end chose not to strike down the legislation but gave very careful consideration to it. The court’s fault with the legislation was that there was a presumption in it of someone being guilty of a charge and not a presumption of innocence. 
This is I think a very serious issue. As I understand the legislation that is being put forward here if people have a certain amount of material that will be presumed to be for personal supply but if it is over a certain amount there will be a presumption of dealing and that is the charge that people will get. I want to know whether the Minister and the people who drafted this legislation have taken into account that Supreme Court decision which was a split decision and whether they have fixed what the Supreme Court saw as the deficiencies in the legislation passed by this Parliament. I would like the Minister to give me an explanation about that. 
The second issue is a question about Supplementary Order Paper 258. I have just picked up a copy of the Supplementary Order Paper and I see that it amends new section 4D(4) to state: “Possession by a person of 56 grams or more in total of any products (including cigarettes) or any drug forms (including flakes tablets or capsules)”. The general rule of legal interpretation is that if a number of items are specified the list is deemed by the law to be complete. That is what has been interpreted. I see one of the officials shaking their head but I would ask the Minister whether it is possible that if someone had a powder or liquid form they would be able to say they were exempted from the scope of this legislation. By any definition a powder is different from a flake and a liquid is different from a solid form. The Minister may not know this but a number of drugs such as methamphetamines and pseudoephedrines are usually in a crystal form but the drug can be used and transported in a liquid form. 
I am just concerned that the legislation we have here is very narrow in its definition of “flakes tablets or capsules” and does not cover powder and liquids. I would like to be assured that the matters that I have raised have been considered by the officials and I would like the Minister to advise me that the issues contained in them have been dealt with so that if a person is caught in possession of a liquid that will not defeat the purposes of the legislation because the Minister has not specified that it covers liquids. I would also think that a powder is different from a flake. A flake is a chip or a chunk and a powder is quite differently defined in the dictionary—I have taken time to check that. I would like the Minister to respond to that issue and say yes or no to the question of whether the recent Supreme Court decision has been taken into account and yes or no to the question of whether the drug comes in the form of a liquid or powder has been taken into account. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 I wondered whether the Minister in the chair the Associate Minister of Health Peter Dunne would respond to the Hon Rick Barker’s questions but maybe he needs a little time and I am prepared to help him take that time. 
I come to my own Supplementary Order Paper 260 on clause 4 but before I do that I will respond to Heather Roy and briefly set out why Labour will oppose her Supplementary Order Paper 261. Although to be fair she is absolutely right in saying that I have expressed the view in this Chamber that prohibition has its limitations I think what Heather Roy is proposing will first of all not change the status quo very much. Secondly it will allow for the continued commercialisation I suppose of these products. Even if one has concerns about the effectiveness of prohibition as a mechanism of controlling drugs it is also true that the over-commercialisation of substances is of equal concern. 
Heather Roy has proposed that these drugs can be sold only to people over the age of 18. In fact the status quo is that most of these substances already have an R18 restriction on them. That does not come about because they are psychoactive substances; it comes about because the vast majority of them can be smoked and therefore they fall under the purview of the Smoke-free Environments Act and have an R18 restriction on them. For the overwhelming bulk—and probably just about all the substances that we are really focusing on here—the notion of introducing an R18 restriction makes no difference to the current situation. 
What it does not do of course is get these products out of dairies and out of sight. A concern for everyone I suppose in this Chamber—except for the ACT Party perhaps—is that substances such as Kronic are heavily marketed at the point of sale. When we go into a dairy or some liquor stores these days we see a lot of that advertising. There is a tobacconist in my electorate in Palmerston North whose outside wall now seems to be completely covered in Kronic advertising so it is still well and truly on display. We know for a fact that even though these substances are already R18 young people under the age of 18 are able to get their hands on them. There is no real effect of that proposal and still there is the issue of the advertising and commercialisation of the substance. As a number of us have said although we do not think that what the Minister is suggesting is ideal or that the process is ideal it is a useful stopgap measure in the interim whilst we get this issue sorted out and come up with something more permanent and sustainable. 
On the issue of pipes and other utensils and the amendment that I have put up to have clause 4 removed this is a matter of harm minimisation. We are supporting the measures in this bill that support the minimisation of harm. Some of them we argue will do very little to minimise harm but they will do something; others we support because we think they will do more to minimise harm. But further restricting access to drug utensils will do absolutely nothing to minimise harm. 
I refer to the comments made by Nicky Wagner who compared this measure to the recent ban on point-of-sale tobacco advertising. Of course what we did not do when we got rid of tobacco advertising was get rid of the ability to display tobacco smoking pipes for instance. In fact when I put up my own bill to deal with the tobacco display issue the Attorney-General said that getting rid of tobacco smoking utensils was too great a contravention of the New Zealand Bill of Rights Act to be allowed. So the consistent approach—and Nicky Wagner sought a consistent approach—is not to get rid of the ability to display these drug utensils. Nicky Wagner made the argument that it somehow glamorises drug use. But actually these utensils offer a mechanism by which the harm— 
DAVID BENNETT (National—Hamilton East) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 62 
New Zealand National 57; Maori Party 4; United Future 1. 
Noes 57 
New Zealand Labour 42; Green Party 9; ACT New Zealand 4; Progressive 1; Independent: Carter C. 
Motion agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 261 in the name of the Hon Heather Roy be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 4 
ACT New Zealand 4. 
Noes 115 
New Zealand National 57; New Zealand Labour 42; Green Party 9; Maori Party 4; Progressive 1; United Future 1; Independent: Carter C. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 260 in the name of Iain Lees-Galloway be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 53 
New Zealand Labour 42; Green Party 9; Progressive 1; Independent: Carter C. 
Noes 66 
New Zealand National 57; ACT New Zealand 4; Maori Party 4; United Future 1. 
Amendment not agreed to. 
The result corrected after originally being announced as Ayes 43 Noes 76. 
The question was put that the amendment set out on Supplementary Order Paper 258 in the name of the Hon Peter Dunne be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 105 
New Zealand National 57; New Zealand Labour 42; Maori Party 4; Progressive 1; United Future 1. 
Noes 14 
Green Party 9; ACT New Zealand 4; Independent: Carter C. 
Amendment agreed to. 
DAVID CLENDON (Deputy Musterer—Green) 
: 
 I seek leave to change the Green Party vote in respect of Mr Lees-Galloway’s amendment on Supplementary Order Paper 260 to nine votes in favour and the Hon Chris Carter’s vote to one vote in favour. 
The CHAIRPERSON (Lindsay Tisch) 
: Leave is sought for that purpose. Is there any objection? There is no objection. The corrected vote on Iain Lees-Galloway’s amendment is Ayes 53 and Noes 66. The amendment is not agreed to. 
A party vote was called for on the question  
That Part 1 as amended be agreed to. 
Ayes 105 
New Zealand National 57; New Zealand Labour 42; Maori Party 4; Progressive 1; United Future 1. 
Noes 14 
Green Party 9; ACT New Zealand 4; Independent: Carter C. 
Part 1 as amended agreed to. 
Part 2 Amendment to Misuse of Drugs Amendment Act 2005 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 Part 2 of the Misuse of Drugs Amendment Bill contains clauses 12 and 13. These clauses deal with amendments to the 2005 amendment to the Misuse of Drugs Act. Essentially clauses 12 and 13 amend section 31 of the Misuse of Drugs Amendment Act 2005 by repealing “Paragraph (b)(v) of the definition of substance” so that hazardous substances as defined in section 2(1) of the Hazardous Substances and New Organisms Act 1996 are no longer excluded from the definition of “substance” for the purposes of the 2005 amendment Act. That essentially means that at the current time a substance cannot fall under both the Misuse of Drugs Act and the Hazardous Substances and New Organisms Act but this change allows substances to be able to come under the purview of both Acts. 
I suppose to be honest this was not a part of the bill that attracted an awful lot of attention from submitters to the Health Committee. In fact only three of the submitters at the select committee referred to clause 13 and nobody referred to clause 12. One was in favour of clause 13 and two were opposed. Those who were opposed to clause 13 were concerned that this provision would give the Environmental Risk Management Authority the ability to regulate substances listed in the schedules of the Misuse of Drugs Act. Submitters were I suppose concerned that the Environmental Risk Management Authority lacks expertise in this area and would apply unduly strict criteria with high barriers to entry which would mean that no legal products would meet the requirements to be approved as being safe. 
I suppose that is very much part of the debate we have been having about how to actually determine that a product is safe and how new substances are to be determined to be safe. However that is not actually what this change does. Clause 13 does not propose to give the Environmental Risk Management Authority the ability to regulate psychoactive substances. Rather the clause seeks to remove the exclusion that a hazardous substance cannot also be a restricted substance under the Misuse of Drugs Act. I suppose given that that is the case in fact what is actually occurring is probably in line with what the submitters would have liked to see. Essentially the provision just smoothes the path for substances to be able to come under the purview of both of these Acts. 
Under the Hazardous Substances and New Organisms Act a substance is “any element defined mixture of elements compounds or defined mixture of compounds either naturally occurring or produced synthetically or any mixtures thereof:” and I suppose that is exactly what Kronic Dream Spice and the other synthetic cannabis products are. They are products that are made up of both synthetic and naturally occurring substances. From that point of view that is the sort of thing that some submitters were concerned about: that in trying to establish whether something like Kronic is actually safe to come to market if it had fallen under the Hazardous Substances and New Organisms Act then that might not have been the most appropriate way to determine the safety of such a substance. Of course that is not what clause 13 does. The submitters can rest assured that that is not actually how the system will work. In fact we do not know exactly how the system will work at the moment but that is for the Minister to work on hopefully with some speed to come up with a solution to that question. 
Hon PETER DUNNE (Associate Minister of Health) 
: 
 I acknowledge the member who has just resumed his seat Iain Lees-Galloway. I am tempted to say his explanation of what has actually happened is far too charitable. He tried to imply a degree of rationality in the processes that led to this change. In fact what we are doing is correcting a cock-up; let us put it as bluntly as that. 
When the Hazardous Substances and New Organisms Act was passed a change was made that meant that in effect a substance designated as a hazardous substance under the hazardous substances and new organisms legislation could thenceforth not be designated as a restricted substance under the Misuse of Drugs Act. Some arguments were advanced at the time that things should be dealt with under their own particular bits of legislation. I have been back to have a look at the Health Committee’s report from 2005. It had in mind keeping things like ordinary commercial or household products that are also psychoactive such as butane gas from being further brought under the control of the restricted substances framework. It overlooked of course that the consequence of being very specific in that area effectively made the restricted substances regime unworkable. So we had a situation in which we have had the capacity to designate substances as restricted substances for some time but until this amendment is passed it has actually not been possible to do so given the almost countervailing provisions of the Hazardous Substances and New Organisms Act. 
Although I appreciate the very lucid explanation given by the member who spoke earlier and his charity in trying to apply some logic to the position that had developed I think it is fair to say this is a technical amendment to clear up a mistake that was made way back in 2005. The mistake was not actually seen at that time as significant because the rationale was actually about a different category of products. It was only when we started to look at a range of substances like the Kronics of this world for instance that we realised there was actually a problem and that needs to be corrected. That is what this amendment does. It is very straightforward and as I say I do not think it need delay the Committee for any great period of time. I appreciate and acknowledge the member’s very kind summary of the situation when he could have been far more vicious. 
KRIS FAAFOI (Labour—Mana) 
: 
 Taloha ni Mr Chair. I thank the Minister in the chair the Hon Peter Dunne very much for being so frank about the motivation behind this part. I do not want to take up a hell of a lot of time in terms of speaking to Part 2 of the Misuse of Drugs Amendment Bill but for those who are tuning in—and I think there actually will be quite a few people interested in this bill given the relevance of the announcement made yesterday—there are some clarifications we want to seek. 
While they are being sought we thought it might be useful just to reinforce what my colleague Iain Lees-Galloway has said and just to lay out exactly what Part 2 pertains to. It amends the Misuse of Drugs Amendment Act 2005 in just two technical clauses. Clause 13 repeals the definition of “substance” in section 31 of the 2005 Act which claims that a substance “(a) means any mixture preparation or article that is manufactured for the primary purpose of being administered ingested inhaled or injected in order to induce a psychoactive response; but (b) does not include any … (v) hazardous substance (as defined in section 2(1) of the Hazardous Substances and New Organisms Act 1996):”. Referring to that Act under section 2(1) a hazardous substance means “unless expressly provided otherwise by regulations any substance—(a) with 1 or more of the following intrinsic properties: (i) explosiveness: (ii) flammability: (iii) a capacity to oxidise: (iv) corrosiveness: (v) toxicity (including chronic toxicity): (vi) ecotoxicity”. I am no scientist as I have pointed out before in the debate on the Royal Society of New Zealand but I know that that is definitely one of the clauses in the Act. 
I guess when we are talking about substances that have those properties and we want to correct “a cock-up”—a direct quote from the Minister— 
Michael Woodhouse 
: A very technical term! 
KRIS FAAFOI 
: It is a very technical term and maybe we will come back to it tomorrow when we debate the Royal Society of New Zealand Amendment Bill again. But in looking at Part 2 and at the Minister correcting this legislation I guess that when we are dealing with those properties this is a positive move—which we will support as we are supporting this bill in its entirety and the Supplementary Order Paper the Minister has put forward. 
STUART NASH (Labour) 
: 
 I would just like to make a comment. I have mentioned this before in the Chamber but I would like to reiterate it. I was speaking to an old member of Parliament—sorry a member of Parliament who had been here a while ago—who is older than Mr Chair Robertson of course and we were talking about the Committee stage. I bemoaned the fact that during the Committee stage what was happening was that Labour members were putting a lot of questions out there. I felt that the vast majority were relevant to the Minister in the chair and the Minister in the chair at the time was just sitting there reading and not even taking any notice whatsoever. 
But do I note that whenever Associate Minister of Health the Hon Peter Dunne—and I would like to commend him on this—is sitting in the chair whether it is on a tax bill or this sort of health bill if Labour members ask questions or make comments he always stands up and addresses the questions or comments. Some of them are rather banal I must admit but he always addresses them and I think that is in the true spirit of the parliamentary process. It just shows that the Minister has been around for a while. He respects the House even if sometimes we are in major disagreement with regard to some of the policies that he advocates. I would like to thank the Minister for doing that because I think it is in the true spirit of what the Committee stage is about—absolutely. 
As everyone said in rather unparliamentary terms—I am surprised Mr Chair being the stickler that you are for process that you have not pulled up members for the use of the word “cock-up”— 
Hon Member 
: Be careful! 
STUART NASH 
: The Minister used it and as the Minister said the clause seeks to remove the exclusion that a hazardous substance cannot also be a restricted substance. When we get to bills a lot of these issues are about semantics and when we go through the Committee stage on a lot of bills I suspect that those who are listening or the person who is listening must sit there and go: “Goodness me! This really is semantics.” But when it comes to law it really has to be quite tight and these sorts of bills and these sorts of amendments are required just to make sure the law gets it right because it has to provide direction first to the public second to the judiciary and third to the industry or business that is dealing in this sort of carry-on. 
As the Minister mentioned—and it has been very topical recently; I think Iain Lees-Galloway has talked about this at great length as has Kris Faafoi—we are faced with numerous toxic substances these days and people will do whatever they can to alter their mind— 
Kris Faafoi 
: Ecotoxic. 
STUART NASH 
: That is a good word—“ecotoxic”. I think it is important that we do send a very clear message to the people of New Zealand to the youth of New Zealand but also to the industry that Parliament will not tolerate this sort of behaviour. We need to send the message that it will not tolerate this sort of industry and I suppose this bill is a step in closing a lot of it down. Am I right I ask Mr Lees-Galloway? This bill is just a first step. There is much more work to be done; of that there is no doubt. It is a shame that it was not done a little earlier and it is a shame that the Minister did not act a little faster. That is a conversation for another day so maybe it will be in a third reading speech—or it might have already been had. 
We are supporting this bill but I would like to thank the Minister very much for getting up and clarifying a lot of this stuff. We support this bill. As I said it does not go far enough but it is a start. Thank you very much. 
The question was put that the amendment set out on Supplementary Order Paper 259 in the name of the Hon Peter Dunne to clause 13 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 105 
New Zealand National 57; New Zealand Labour 42; Maori Party 4; Progressive 1; United Future 1. 
Noes 13 
Green Party 9; ACT New Zealand 3; Independent: Carter C. 
Amendment agreed to. 
Part 2 as amended agreed to. 
Schedule agreed to.  
Clause 1 agreed to.  
Clause 2 Commencement 
The question was put that the amendment set out on Supplementary Order Paper 259 in the name of the Hon Peter Dunne to clause 2 be agreed to. 
Amendment agreed to. 
Clause 2 as amended agreed to. 
Clause 3 agreed to.  
Bill to be reported with amendment presently. 
Estimates Debate 
In Committee 
The CHAIRPERSON (H V Ross Robertson) 
: We now move to the Appropriation (2011/12 Estimates) Bill. The Standing Orders provide for 8 hours of debate on the estimates. Each member may have no more than two speeches of 5 minutes on each vote. The estimates debate should be relevant to the Government’s current spending plans as contained in the Estimates of Appropriations. As each vote is reached a question will be put that the vote stand part. Should it be the wish of the Committee a question may be proposed on two or more related votes for the purpose of debating them together. At the conclusion of the 8 hours of debate any remaining votes and the remaining provisions of the bill will be put as one question. The Government indicates which votes are available for debate. I understand all votes are available and will be called in order of seniority of Ministers commencing with the Speaker’s votes. A compendium of the reports of select committees on the votes is available on the Table. 
Vote Audit 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I am grateful for the opportunity to open this section of the debate in the Committee stage of the Appropriations (2011/12 Estimates) Bill. 
It is very important at this juncture that this Committee and our country understand the crossroads presented to us by the estimates that are in this debate. 
The CHAIRPERSON (H V Ross Robertson) 
: I am sorry to interrupt the member. There may be a misunderstanding. The question is Vote Audit. This is Vote Audit. Is the member speaking to Vote Audit? 
Hon DAVID CUNLIFFE 
: No. 
Vote agreed to. 
Vote Office of the Clerk agreed to.  
Vote Ombudsmen agreed to.  
Vote Parliamentary Commissioner for the Environment agreed to.  
Vote Parliamentary Service agreed to.  
Vote Communications Security and Intelligence agreed to.  
Vote Ministerial Services agreed to.  
Vote Prime Minister and Cabinet agreed to.  
Vote Security Intelligence agreed to.  
Vote Tourism 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I thank the Chair Mr Ross Robertson for that kind invitation to speak. I take a call on Vote Tourism because one of the developments of this Government was that the Prime Minister chose to take on the portfolio of tourism. There were a lot of other options he could have had. He could have chosen science and technology or whatever but he chose tourism. Of course one of the reasons that he chose tourism is that it is such an important export industry for our country. In fact over the last decade it was our biggest export earner ahead of even dairy even though year on year now dairy has got ahead of tourism. 
The reason why tourism is such a big export earner of course is built on our “clean green” brand. The brand has been “100 % Pure New Zealand”; the latest version is “100 % Pure You” and the brand is built on the fact that New Zealand has a fantastic natural environment. In fact if we look at the advertisements that are running currently whether they are online or elsewhere they show amazing pictures of New Zealand’s natural environment. In particular they show amazing pictures of New Zealand rivers. 
The truth is that this Government has not been looking after our rivers. Our rivers deteriorated very significantly under the course of the last Government due to dairying intensification—completely out of control dairying intensification. When this new Government came in it made a commitment to do something about that. Unfortunately it has not done anything about it. In fact the board of inquiry that was set up by the previous Government to consider the National Policy Statement for Freshwater Management came back with a very strong proposal that would have begun the process of cleaning up our rivers. This current Government decided to water down that proposal. The National Policy Statement for Freshwater Management that this Government finally adopted had its teeth pulled out of it so that it could not begin to clean up our rivers and lakes. This is a major problem. 
At the time the Green Party made this argument very strongly and since then just recently the Cawthron Institute—a very reputable independent institute of which the Minister for the Environment is apparently a director—came out with a report that stated that the very same Minister for the Environment’s national policy statement would not clean up our rivers in the foreseeable future. The report stated that the national policy statement as it had been weakened by the Minister for the Environment and this Government would not clean up our rivers and would not protect the foundation of our tourism industry which is our “clean green” reputation which is built on the “clean green” reality. 
Unfortunately the majority of our lowland rivers are now polluted. Depending on which report one reads some reports state that in the order of 90 percent of our lowland pastoral streams are polluted. Some of the reports from the Ministry for the Environment suggest about half of our rivers that are monitored at various times are unsafe for swimming because of the amount of faeces in them. This has created a fundamental challenge to one of our most important export industries. It is a challenge that the Minister of Tourism the Prime Minister should have taken on and championed. Instead the Prime Minister has stood back while our rivers have got worse and while one of the best tools we have the National Policy Statement for Freshwater Management got watered down. 
In fact the Minister of Tourism the Prime Minister is actively promoting $400 million worth of new subsidies to the irrigation industry in order to lead to hundreds of thousands of new hectares of intensive dairying. If we read every science report about this issue we see that they are all absolutely clear that it is intensive agriculture and particularly dairying that has led to the degradation of our river systems. Yet this is a Minister of Tourism who is not acting to protect these rivers which are the foundation of the tourism industry in our country one of our most important export sectors. Although we have what I thought would be a hope for tourism when the Prime Minister took on the tourism portfolio in practice the Minister of Tourism the Prime Minister has not done his job to protect the industry which is fundamentally reliant on the natural environment. 
In fact we have a Minister of Tourism who is actively promoting the destruction of our natural environment by a dramatic expansion of the very industry that every scientific report tells us is leading to a degradation of our rivers. There will be those people who say that we can mitigate the effects. Actually we cannot mitigate the effect of another million cows on New Zealand. If we read the science which has to be the foundation of how we make decisions about this we see that it is very clear: another million cows and more intensive agriculture in our country will lead to further degradation of our river systems. It was very disappointing for me to read the Minister’s statement on science. 
A party vote was called for on the question  
That Vote Tourism be agreed to. 
Ayes 66 
New Zealand National 57; ACT New Zealand 4; Maori Party 4; United Future 1. 
Noes 53 
New Zealand Labour 42; Green Party 9; Progressive 1; Independent: Carter C. 
Vote Tourism agreed to. 
Vote Finance 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 Thank you once again for the opportunity to speak in the Committee stage of the Appropriation (2011/12 Estimates) Bill. 
Hon Craig Foss 
: Give us the Audit speech David. 
Hon DAVID CUNLIFFE 
: Thank you Mr Foss. It is an important debate and I want to raise for the Committee and with the public the issue of the finance estimates. Encapsulated in those estimates is the fiscal strategy that this Government has embarked upon—one that will lead the country down a dead-end street. 
The crossroads that the country faces are neatly summarised by the choice that has been put before us: on the one hand to sell down New Zealand’s precious State assets and on the other hand to rebalance the tax system in favour of taxing capital broadening the tax base filling in an amazing loophole and giving 98 percent of New Zealanders a net cut in income tax. We can do that under Labour’s plan while fully paying to keep New Zealand’s precious assets in public hands paying fiscal debt down to zero earlier than under the Government’s Budget and running a fiscal surplus in the same year as the Government. 
This election is a choice between Labour’s fair tax policy which will give every New Zealand family a tax cut of $1000 a year and will close the gaping hole in our tax system or National’s plan to sell off our profitable assets to foreigners. Labour has a credible responsible and bold plan for the economy and that is in stark contrast with National’s agenda of privatisation and stagnation. 
It is a wonder to me that the Minister in the chair the Minister of Finance after 9 years in Opposition when faced with one of the most serious financial crises since the Second World War in his first Budget managed to achieve precisely nothing other than to give a tax cut to the highest-income earners and to forestall contributions to New Zealand superannuation. In the second Budget equally lacking in imagination the lightning strike was to give an even bigger tax cut to upper-income earners put up GST on everybody else and do precisely nothing to address the underlying structural problems in the economy. 
In this 2011-12 Budget we have the third opportunity for the Minister of Finance to actually show New Zealanders where the economic strategy lies—and what did we get? Again we got a vacuum of ideas other than the tried and failed recipe of selling down New Zealand’s State assets as a short-term panacea to put some cash flow in the bank while they mortgage future generations. I say mortgage future generations because the numbers do not add up. The dividend yield on the energy assets is over 7 percent. The Crown cost of capital is only 6 percent. The total shareholder return on the package is 17 percent. Yet this Government proposes to sell them transferring the future value of those dividend streams to what will inevitably be major foreign corporate buyers. 
Some people will benefit—yes some people do benefit. The investment bankers the accountants and the lawyers who put the deals together stand to pocket more than a year’s worth of dividends from the assets that are being sold down. Over $350 million according to Treasury estimates could be lost in terms of ticket clipping and middlemen as the birthright of mums and dads is sold down the river. You know it is not just bad because it is bad policy; it is bad because it apparently represents the sum total of National’s thinking about how to guide this economy out of the difficult situation we find ourselves in because of the global financial crisis. 
Debt is a problem. All New Zealanders understand that. Most understand that it is not just fiscal debt but private debt as well. But they want to see fiscal debt—Government debt—responsibly managed. That is one reason why Labour’s plan for a capital gains tax has been so widely hailed by the commentators—because it achieves simultaneously a number of important objectives. It pays down our fiscal debt to zero faster than under the estimates being debated today. It allows us to fully pay for the assets to replace the dividends— 
Hon Bill English 
: That’s rubbish. 
Hon DAVID CUNLIFFE 
: Yes it does. I do not think that Mr English has yet seen a copy of the underlying spreadsheet so he is in no position to tell us what is in it. I give the Committee my undertaking as an honourable member of this House that our Budget plan fully replaces the capital that will be drawn down by this Government from State-owned enterprise sales. 
It does that while giving 98 percent of New Zealanders a tax cut on their income tax. Ninety-eight percent earn below $150000 the inflation-indexed threshold for the new top tax rate of 39c and 98 percent of New Zealanders will be net beneficiaries from the plan to make the first $5000 of all earned income tax-free. The first $5000 of all income will be tax-free. That is a very important measure at a time when New Zealand families are suffering when food prices are rocketing up 7.1 percent I think across general food prices the last time I looked and when wages are up 1.9 percent. But of course the rich list is up 20 percent in the last year. Does that not say it all? 
Today in the House Mr Key leapt to his feet and wielded a social development report that said that inequality was getting smaller. What he forgot to mention was the conclusion that it was Labour’s policies of Working for Families that had started to turn that boat round. It was very nice of the Prime Minister to hail the success of Labour’s policies when last in Government. It was very kind of him but it would have been a trifle more honest if he had said that in fact our policies not the current Government’s had led to that result. 
So here we have it. On the one hand there is a Government that is devoid of vision and devoid of strategy. It has fallen back on the old mantra of cutting one’s way out of a hole and selling the future of our children down the river to realise some cash and to pay the piper for the next 6 months or year. New Zealanders are not that stupid. They know that selling the family silver is a recipe for disaster and that is why the polls show that an overwhelming majority prefer Labour’s capital gains tax plan to asset sales as a means of getting through these tough times. 
Hon Members 
: Oh! 
Hon DAVID CUNLIFFE 
: They may not like it but that is the truth—that is the truth. Present New Zealanders with a choice between asset sales and tax reform and they will choose tax reform. They want to fill in the loophole that lets the rich list get a 20 percent income increase while the poor get a 1.9 percent increase. They do not think that is fair and we do not think that is fair. We know the Government has no recipe for lifting this economy out of the doldrums. 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Usually the member David Cunliffe says something I can agree with because it is correct but in almost 10 minutes he actually did not say anything that was correct. The reason we know Labour’s numbers do not add up is that we have looked at Labour’s numbers. Actually there is no such thing as a choice between capital gains and the proceeds of asset sales because when we look at Labour’s published table which it put together by itself we see that all the capital gains revenue—if we were to believe it would collect any—is used up to pay for its other extravagant promises. That is not because we say so but because the table that Labour has published says so. 
When we go through the booklet we see that it does not show an offset to asset sales at all. It leaves a $7 billion hole. So Labour has to explain how it will pay for new schools because a capital gains tax is not there. It is being used—if it raises any revenue and that is a different argument altogether—as part of a silly little tax package that achieves not much in spite of a lot of pain and effort. That is what it does. There is a $7 billion hole at least. If Labour claims that it will reduce debt at the speed these estimates show then where will it get the money from to do that? It will not get the money from the capital gains tax; it will have to borrow more. I do not know if that is what Huey and Dewey have told Labour’s caucus but that is the case. If there is a secret spreadsheet then we had better see it because it is not in the published numbers. The published numbers simply do not add up because the capital gains tax revenue would be used to pay for the other extravagant promises. 
But of course none of that matters because no one is taking any notice. Most New Zealanders know what we know: if we want to grow this economy we need controlled Government spending and sensible taxes that incentivise investment and exports and we need less debt. The other package is higher Government spending more new taxes and a lot more debt. Well that will grow something; it will grow the Government. That is what it will do—it will grow the Government. That is what Labour always does. That is what Labour did the whole time it was in Government. But you see the New Zealand public knows that that was the problem not the solution. The solution to our economy is not a bigger Government taxing more spending more and borrowing more for the kind of useless projects that Labour specialised in. The solution is about the Government taxing less spending less borrowing less and helping the rest of the country to grow the economy rather than using the rest of the country to grow the Government. Until Labour members get up and apologise to the public for those policies and until they agree that the public was right to throw them out no one will listen. 
Peseta Sam Lotu-Iiga 
: Shane agrees. 
Hon BILL ENGLISH 
: Shane agrees—of course he agrees! He is just waiting until the Labour front bench fails yet again to grasp the basic political truths that until Labour apologises and until it figures out how to reconnect with the new aspirational New Zealand and not an old dependent New Zealand then Labour will not get anywhere. 
That is what is so sensible about these estimates. The Opposition might not understand what they are about but New Zealand does. Rob Muldoon once said that New Zealanders would not understand a deficit if they tripped over it. He was wrong—and not just on that I might say. He was wrong because New Zealanders do understand what is needed in this economy and they will get an opportunity in a few months to make a choice about whether to vote for the fact that they are right or that they are wrong and the Opposition is right. I am picking that they will probably back themselves. 
Hon DAVID PARKER (Labour) 
: 
 The Hon Bill English’s problem is that he has painted himself into a corner. He has ruled out a land tax and he has ruled out a capital gains tax yet he has written a Budget that by his own projections has New Zealand returning to a current account deficit of over 6 percent a current account deficit that grows every year from here on and a current account deficit being funded by increasing foreign debt for New Zealand every year. 
Mr English’s own Budget projection shows that if he and his allies in the National Party are re-elected for another term then at the end of 6 years of their Government New Zealand gets poorer then the next year New Zealand gets poorer and then the next year after that New Zealanders get poorer still because the structural problems that bedevil the New Zealand economy have not been solved by the Government’s tinkering. It has done nothing substantial. It has not pulled the levers that need to be pulled to redirect into the productive sector the precious investment capital that is currently going into the speculative sector at the expense of the productive export sector. 
Craig Elliffe is a former partner of Chapman Tripp a former tax partner of KPMG and now an academic and a successful businessman in his own right. He says that we need a capital gains tax because “To the extent to which you have tax policies that are distortionary on the economic levers and contributors to society” it is wrong. He asks “how sensible is it to have property investment four or five times the size of the sharemarket producing no tax revenue.” That is one of the comments. 
We have had another comment from the  
Herald on Sunday 
 criticising National at the same time as saying that we were right to be looking at a capital gains tax. The editorial states: “apart from borrowing money and talking up a questionable programme of asset sales National is showing no signs of a plan to get us out of the mess we’re in.” It is right. The  
Dominion Post 
 has said something similar. The  
National Business Review 
 has said that there is a need to have a tax on capital. 
The Manufacturers and Exporters Association says “the eradication of the capital gains tax harbour will help to lift productive investment. A more balanced tax system will see investment flow to the most intrinsically profitable areas of the economy rather than those that are tax advantaged.” The Productive Economy Council says something similar: “A Capital Gains Tax sends the right signals for investors and means those choosing to take the path of unproductive property investment will have to pay their fair share of tax. While fairness in tax is good the real long term benefit is the chance to get more of our limited capital invested in making New Zealand more not less competitive.”  
We have heard others like Gareth Morgan say something similar. National is on the wrong side of this argument and it should admit it. The Government has $48 million in these estimates going towards policy advice from Treasury. What did Treasury say after the last time the Government spent $48 million? It said introduce a capital gains tax to make the economy stronger as well as to make the tax system fairer. 
I will deal with Mr English’s assertion of tax and spend. We always knew National members would come back to their original mantra. Tax and spend is the accusation they make against us. The problem is that they are wrong. It is not true. They say that our revenue projections are wrong. Well our revenue projections are all out there and the only one that has taken a flick at them other than Mr English is his colleague Mr Joyce and it has not cut through because the biggest line item is the revenue from the capital gains tax. 
Treasury’s estimate of the long-term revenue from a capital gains tax excluding the family home was $4.8 billion per annum. We remodelled that through our consultants Business and Economic Research Ltd and they cut that back by $2 billion per annum at the maturity of the scheme. So it is raising $2.8 billion per annum once it is a mature scheme rather than $4.8 billion. The sensitivities in the Business and Economic Research Ltd analysis show that it could be $1 billion per annum more than that but we have taken the conservative course and assumed the lower figure. 
The new progressive top tax rate raises money; so does the loss ring-fencing; so do other anti-avoidance measures; so does a moderate amount of revenue from the agricultural sector from emission trading scheme revenues. This allows us to fund the tax-free zone that David Cunliffe has already indicated—the first $5000 of income will be tax-free for every person. That is whether one is on a low income or a high income and whether one is a superannuitant or someone in paid work. In addition GST comes off fresh fruit and vegetables and there is a research and development tax credit that is funded. 
These measures are all properly costed. The Government’s claims to the contrary are not credible. They are not credible. Over the period shown in our table—which has been publicly released despite Mr English’s comments intended to misrepresent it—our package will reduce debt by $7.7 billion more than the Government would. In other words our debt track is better than the Government’s debt track. Are people surprised by that? Well they should not be. They should not be because when we were last in Government we reduced Government debt. 
When Labour was in Government we reduced net Government debt to zero. We reduced gross Government debt to 17 percent. We did it every time with the National Opposition at the time opposing the Budget surpluses that did it. National members said: “Give tax cuts.” Well we are now in a $16.7 billion deficit this year as a consequence in part of Mr English’s inability to properly cost his income tax package. 
Mr English’s prior income tax cuts resulted in an increase of the New Zealand deficit of over $1 billion. Over $1 billion over that period was paid out over 4 years of tax cuts in addition to the revenue that was collected from the switch. So he has created a fiscal hole. He has also done nothing to cure the underlying imbalances in our economy which are caused in part by the signal that people get. They make additional returns from their rental investment because of the tax bias in favour of residential property. There is $200 billion of investment and very little tax is paid from that area. That is why Treasury favours this change that is why the IMF favours it that is why the OECD favours it and that is why Australia has it. 
The Prime Minister has said that a capital gains tax would put a dagger through the heart of the economy. Since the Australian economy has had a capital gains tax the value of its sharemarket has increased seventeen-fold. Over the same period New Zealand’s sharemarket has increased in value three-fold. 
Far from it putting a dagger through the heart of the economy it is one of the things that we need in order to get that precious investment capital going into the right sectors of the economy so that we can grow our exports. Instead of the parlous future that the National Government has planned for us—where our net investment position goes to negative 85 percent of GDP by about 2015 right down there towards Greece Portugal Hungary and Iceland—New Zealand would go in the opposite direction because we would have investment in jobs and investment in the productive export sector. We would start earning our way in the world. That is why the Government is on the wrong side of this debate. 
Mr English should just accept that his Treasury officials are right and that his Reserve Bank officials are right. One of the reasons that they like it is that over time it leads to lower interest rates to the benefit of not just the export sector but everyone in New Zealand who has a mortgage. They get lower interest rates if there is a capital gains tax. The Savings Working Group which the Government set up told it that half of the last property bubble would have been avoided if we had had a capital gains tax. It would have meant that the Reserve Bank did not have to pull as hard on the interest rate lever to curb inflation. We would have lower rates of inflation there would be less pressure on the exchange rate and therefore again our exporters would benefit as would the people who work in those industries. 
Instead we have Mr Foss and the other Neanderthals on the economic front in National saying that Labour is on the wrong side of this debate when we are with every OECD country other than Turkey and Switzerland—Switzerland being a tax haven. 
AMY ADAMS (National—Selwyn) 
: 
 It is a great pleasure to take a call tonight on Vote Finance in this year’s estimates debate. I reflect on the fact that for the last couple of weeks now the world has been absolutely gripped watching what can happen when a country’s debt gets out of control. For the first time the big-spending economy of the US has started to realise that if it just keeps spending and spending and having its cake and eating it too eventually it has to pay the piper—eventually it has to pay the piper. The most important thing New Zealand has to do to guarantee our prosperity is to get our debt and our spending under control. We cannot afford to have the biggest chunk of hard-working New Zealand taxpayers’ money funding debt servicing to international money lenders. That would be the single biggest threat to the prosperity of every family in New Zealand. That is why this Government has spent the past 3 years getting rid of the economic chaos that the Labour Government left us. 
Let us look at it. When Michael Cullen opened the books in 2008 he announced that his legacy to the people of New Zealand was never-ending deficits—never-ending deficits. The Labour Government put this country into effective recession 4 years before the rest of the world. It presided over the all but death of the manufacturing and export sector. The fact that that Government drove the real New Zealand economy to the brink of collapse means we are now in the position we are. They bloated the Public Service. The only thing they know how to do is to take money out of people’s pockets and spend it on growing Government increasing handouts and increasing welfare. Borrowing spending; borrowing spending—that is all they know. They have gone back to core principles. 
But this Government understands that the best thing we can do is to get a handle on Government spending and support the real productive tradable sector to lead New Zealand out of this mire. We are seeing that—we are seeing that. Over the last 3 years we have seen the plan of Minister English and Prime Minister Key lead this country back into growth. The economy in the worst of times is now showing real signs of recovery. We have growth forecasts of 3 percent per annum for the next 4 years and 170000 new jobs thanks to the economic management of this Government. We are seeing that in the worst of economic times and amidst having to pay for the Christchurch earthquake—we are paying $8.8 billion for Christchurch; that money is in the bank it is funded. We are growing the economy we are getting better services out of our public sector we are providing better outcomes for New Zealand we are letting New Zealanders keep their money and we are incentivising hard work. We are not incentivising people to sit with their hands out and we are not incentivising the Government sector to grow. We are saying to people that if they are working we are behind them; if they are aspirational for their future we are backing them. We will encourage savings we will encourage business we will encourage growth and we will get debt under control. 
We have turned the never-ending deficits of Michael Cullen and the Labour Government into a return to surplus in 3 years—even after paying for Christchurch and even after the worst economic conditions that the world has ever seen. Our tax changes were a significant part of that. We changed the incentive away from the debt-fuelled consumption orgy that Labour presided over and returned it to incentivising production savings and investment. In a very simple sense that is why New Zealanders know that National is the party to manage the economy that is why they are backing John Key and that is why they do not want to hear a bar from Messrs Cunliffe Parker and Goff. They know that National is the party that will provide them with growth and prosperity and that will build them a brighter future. They know that all they can expect from Labour is tax borrow and spend. I think Labour must be the only political party in the world that can come up with a whole new tax that puts us further in debt. How does one do that? How does one have a new tax that puts us more in debt? It is unbelievable. 
The CHAIRPERSON (H V Ross Robertson) 
: I am sorry to interrupt the honourable member. I say to members on my left that I refer to Speakers’ ruling 61/5 of Speaker Barnard and Speaker Statham. I say that Ms Adams is making a hard-hitting speech and some interjections can be expected but not so many as to drown out a speaker. The Chairman will not allow that. 
AMY ADAMS 
: Thank you Mr Chairman. Of course the facts speak for themselves. The New Zealand public knows it has a choice between sensible prudent economic management that will grow the productive sector provide jobs raise incomes and give them the brighter future they deserve and the tax and spend policies of Labour. 
Hon SHANE JONES (Labour) 
: 
 If there was ever an example of a situation where volume and mock rage were inversely related to content we have seen it from that member from the South Island Amy Adams. We had a contribution from someone who chaired the Finance and Expenditure Committee prior to joining the racing industry where he has been gelded and is devoid now of intellectual content. I think that he ought to come back to the Finance and Expenditure Committee and improve the current quality of its chairperson’s skills as revealed by what was a very tawdry speech. 
What we are talking about here is an ideological tract. Come the end of the year Kiwis have a very clear choice: more poverty more unemployment ongoing suffering wretched lifestyles the urban poor and the rural poor and a tidy very handsome caste of economic beneficiaries otherwise known as the confrères from overseas the merchant banking community who will be the primary beneficiaries of the asset privatisation exercise. The vast bulk of young New Zealand families are trying to go to Australia because their circumstances are worsening day after day—ask the schoolteachers. Let National members ask Fonterra why it has to provide more and more food for free breakfasts in decile 1 schools and then come back and tell this Committee and tell Kiwis that we are on the upward slope. No that is not what the major corporates are saying. They are digging into their own pockets and so they should; after all they have been handsomely rewarded by the disproportionately unfair polices of the current Government to the vast majority of Kiwis. I tell Mr English to ask those Kiwis. 
At the end of the year the asset sales give-away is a brilliant public policy debate for us to have. I accept that on the other side the National members genuinely believe that by privatising part of these assets we will open up a new array of investment opportunities. But I ask who the beneficiaries of these investment opportunities will be. Those members are trying every trick in the book. Of course Treasury has unravelled their key argument. Treasury has said there cannot be a successful privatisation unless there is substantial investment from overseas. Yet those members are going back into their own communities and quietly telling Kiwis that this is a good idea and that they will enjoy some sort of Thatcher-like psychic experience—that we will suddenly become a prosperous shareholding democracy. The tiny number of Kiwis who will have that opportunity—once again the disproportionate beneficiaries of the wretched tax give-away that Mr English introduced several years ago—just shows that Kiwis as a consequence of the paucity of our own savings do not want to acquiesce. They do not want to see the current Government preside over the dilution of the slender wealth that we still have left in our country. That is why that is a brilliant issue to fight this election on. 
There is the predictable misinformation as to our tax reform policy. The key point is that the average Kiwi will be $100 better off per week as a consequence of these policies. Kiwis will respond to that type of incentive. They will not respond to the puffery. They will not respond to the rhetoric from the Prime Minister and his friends in their increasingly expensive cars when they drive past and see the bleak broken windows in the tangata whenua part of town and in the Pasifika part of town and see the vast majority of Kiwis who are heading towards “Strugglers’ Gully”. Somehow that statement of accuracy is regarded as non-aspirational and non-patriotic. There are members who are in charge of their offices and are close to the communities they purport to represent but that does not unfortunately include Mr Bennett. He is where he belongs but that is another matter. We knew at the beginning of this debate that we would come under some fairly significant attacks but the facts are clear: as a consequence of this tax reform package $100 per week and a host of other initiatives would go into the pockets of Kiwis. I desire to ensure that there is money available in the kitty for families to deal with the issues regarding their children. 
But families are telling us that this Budget has failed the thousands of—and indeed in my case 16000—young Maori. Thirty percent of Maori between the ages of 15 and 25 are unemployed with no opportunity to go on with any meaningful training. Those are the issues that will motivate Kiwis at the end of the year not all the hollow empty promises that will benefit a narrow caste of economic beneficiaries. 
DAVID BENNETT (National—Hamilton East) 
: 
 It is good to speak on Vote Finance. For those listening that was Shane Jones. Shane is the Labour Party— 
The CHAIRPERSON (H V Ross Robertson) 
: The member will refer to the member by his full name or his title. 
DAVID BENNETT 
: Mr Jones is the Labour spokesperson on finance at this point in time. When he gets into trouble he always goes on about the vulnerable people—that is Labour Party rhetoric. It tries to build fear into people. It will not actually give them inspiration or give them aspiration; it tries to put people down and to create fear tactics. That is Labour Party policy that is how it has always been and that is how it always will be. The public have moved on from that; the public have moved on. They want aspiration and they want to know what the future is. They do not want to be put down by the Labour Party they do not want to be seen as being vulnerable and the last thing they need is people like Shane Jones telling them what should be done for their lives going forward. 
Let us look at what Labour did for this economy when it was in Government. Labour created a recession before the rest of the world; it put New Zealand into recession at that time. It put the wrong incentives into our economy. The tradable sector was not growing and the economy was going downhill big time. What did Labour also do? It made a variety of promises just to win votes promises that were for policies that now New Zealanders are paying for—policies that did not deliver economic results and did not deliver the social cohesion and delivery of services that New Zealanders would have wanted. All Labour did was to create a situation of more debt more Government and less economic growth. 
Let us compare that with what has happened under the National Government in just 2½ years. In the most difficult of times in a recession in a time when we have had to rebuild Christchurch what have we delivered for this country? We have delivered low interest rates. Interest rates have been some of the lowest so that people can go out there and make investment decisions grow businesses buy houses and do what they need to do to have a home for their families. There are good growth rates coming through this year—growth rates in the first quarter are beyond expectation—and we are looking at good growth rates over the next few quarters going into next year. That is a very very strong position for an economy in these most difficult of times. 
We have balanced the need to have major infrastructural investment. We can see that in the broadband investment the roading investment and the Transpower investment. We are building the infrastructure of New Zealand so that we can grow the economy. We have rebuilt Christchurch with a plan that will go out there and deliver a stronger more successful city going forward. We have changed the tax incentives so people know that they need to get a good education and work hard and that they will get some rewards for that—and then they will invest that money through their savings in the economy further grow the economy and produce even more economic growth. 
That is the game plan and it is a game plan that has worked in 2½ years of the toughest economic times. It is a game plan that is ready to deliver New Zealanders strong economic growth going forward and the future prosperity that they all deserve and seek. The public understand that game plan and they support it. They want that game plan and they will get it at the coming election. If we compare that with Labour’s game plan we see that Labour’s game plan is to borrow more money and put the country in more debt. Labour is not worried about repaying debt within a short period of time. It is not worried about getting the New Zealand economy in a position where it can grow and deliver things. It wants to borrow more and more and more. That is what the Labour Party wants to do. What does the Labour Party also want to do? Tax you more tax you more and tax you more. 
The CHAIRPERSON (H V Ross Robertson) 
: Order! 
DAVID BENNETT 
: Labour wants to borrow more and tax more. That is its plan. It is a great plan is it not? One can see how it will work. What will it do? Interest rates will go up. What will that do to economic growth? It will kill economic growth. What happens if we tax our people more through higher tax rates which is what Labour is looking at with the capital gains tax? It will kill economic growth. There is no incentive for New Zealanders to go out there and build a stronger economy. 
Labour’s plan is to borrow more. That will lead to higher interest rates and less economic growth. Labour’s plan is to tax more and that will lead to less growth and less potential for the New Zealand economy. What else does Labour want to do? It wants to have a bigger Government—a bigger Government that knows more and can spend more and do it in a way that it agrees with. 
STUART NASH (Labour) 
: 
 We have just been lectured on debt and taxation by two South Island farmers and one Waikato dairy farmer. The farming sector of the National Party is running economic policy—the farming sector of the National Party is running economic policy—and boy do these guys know about debt. The farming sector has $40 billion worth of debt. The farming sector has about one-third of New Zealand’s total debt and those members are lecturing us about debt. How rich is that? 
Let us not talk about taxes; let us not talk about taxes. I say to Mr English I say to Mrs Adams and I say to Mr Bennett: get off the farm and go and talk to some real people. I tell them to go and talk to some real New Zealanders who do not have a farm that they can go back to. Mr English talked about numbers that did not add up. That is pretty rich from this finance Minister. When the Inland Revenue Department the Government’s tax collecting agency came in with figures that were $4 billion less than Treasury’s figures—$4 billion less in revenue than Treasury’s figures—who did he go with? He went with Treasury’s figures. But then again he did not go with Treasury advice when it wanted a capital gains tax—and he has the nerve to criticise. 
This year the people of New Zealand have a very clear choice: they can sell State assets—assets built over generations of sweat toil tears and taxpayer money—or they can have a reform of the tax system and keep our State assets. Mr Bennett Mrs Adams and Mr English are all farmers and do not want a reform of our tax system. They would rather sell State assets and keep a tax system that is unfair. All and sundry agree that tax reform is necessary; a tax reform that will bring us into alignment with 90 percent of countries in the OECD. This is tax reform for the sake of fairness to reduce inequality. 
I quote from an article by Anthony Hubbard in the  
Sunday Star-Times.  
He said: “The National-led government finds no great problem with inequality. If it did its policies would be different.” A far better approach is that of Warren Buffett the richest of them all. He asked to pay more taxes not less. This is partly just a question of fairness—that word fairness. Warren Buffett the second-richest man in the world says “If you’re in the luckiest 1 per cent of humanity you owe it to the rest of humanity to think about the other 99 per cent.” It is also a matter of enlightened self-interest. He knew that in the long run he and his class would benefit from living in a fairer society. The rich do better when everyone does better. 
There is no doubt that borrowing $380 million a week is not sustainable. A $17 billion Government deficit is not sustainable but selling State assets is not a plan. Selling State assets is not the way forward. It will not allow us to own our own future. The only way forward is to have fair tax reform where everyone pays their fair share and where all New Zealanders get to keep their State assets. 
This tax will affect only about 8 percent of New Zealanders so 92 percent of New Zealanders who are currently paying their fair share will not be affected. They will not be affected so why are there cries of inequality? Only 8 percent will be affected. This tax will be paid only on income—not on the family home not on personal assets but only on income. That is fair. Let me give an example. If someone earns a salary of $50000 that person pays $8000 in tax. But if the person has a capital gain of $50000 they pay no tax. 
Vote agreed to. 
Vote Canterbury Earthquake Recovery 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 We acknowledge in these estimates of course that the department Mr Brownlee heads as Minister the Canterbury Earthquake Recovery Authority is only some months old. Therefore it presents some difficulties for us in attempting if you will to measure its performance. 
Just for a moment and given that we are almost at the 12-month anniversary of the September quake I will review some of the issues that have arisen. I shall be generous to the Government from the kick-off and say that I think most Cantabrians would acknowledge that the initial Government response following the September quake was pretty good. We have to acknowledge that. Resources were put into play and the volunteer community and the Government agencies to a large extent I think exceeded expectations in many cases. 
Indeed if we come forward directly to the Canterbury Earthquake Recovery Authority I know that my colleagues in Canterbury and all my colleagues on this side of the Chamber supported the Minister’s appointment of Roger Sutton as the chief executive. Indeed I think it is fair to say that had we been in the seats across the aisle we probably would have looked to appoint Mr Sutton too. I have not seen certainly in my days here universal support for a Government or even a local government appointment in the way there was and is for Mr Sutton. We all wish him well. I do not think that any commentator politician or anyone else criticised the appointment. 
That being said the acid test is about the performance of the Canterbury Earthquake Recovery Authority given firstly that its Minister Mr Brownlee has wartime powers. He has more extensive powers probably than any Minister has had in the history of our Parliament in terms of legislative capacity. Secondly there is a $5.5 billion budget that this Parliament has provided that Minister and thirdly that Minister has the Canterbury Earthquake Recovery Authority his own dedicated department. So to quote the Minister’s words and as he is fond of saying we look forward to him “getting on with it” because some critical issues are now facing our community. 
There have been questions raised about home heating but I will leave it to my colleague Brendon Burns to touch on that. There have been delays as we have moved through winter—it has been a pretty cold winter especially last week. 
There are some substantive issues of basic human relations in terms of the quality of communication that people have received. I have to say that leaks had come out before the big announcement was made when the sort of Nuremburg-type rally was held as the zoning was announced some months ago. The media had that information days before and a sort of uncontrolled leak materialised out of nowhere that shocked people. They were shocked even in my patch where the council was days away from breaking ground and where morale was high. Spirits were high but 2 days before Mr Brownlee’s announcement many of the people of Kairaki Beach were literally sitting with their insurers with new plans confirming them for their new houses. They assumed there may well have been a delay but they had not had any advice—and that included the Mayor of Waimakariri and the chief executive of the Waimakariri District Council—apart from an hour or so beforehand that their community would effectively be toast. Those are basic things I think on which the Minister needs to shape up. I am sure his department with Roger Sutton at the helm a person who has demonstrated openness and transparency will shape up and that may well change. 
The difficulty and concern we have is that now Mr Sutton is under the thumb the constraints of the Public Service and that was evident when he came to Kairaki Beach. He was asked whether he would provide the geotechnical information to those local people who were distraught. He answered that yes he would and that he saw no reason why he should not. But over subsequent weeks and days that has been wound back. Now we know of course that that information will not be provided until all the other zoning in Canterbury is confirmed in approximately—I do not know—6 months whenever the never-never. 
So the acid test for the performance of this department and the acid test by which the people of Canterbury will judge Mr Brownlee his Government and the department is on two promises that were made and were made repeatedly. The first was made after the September quake and I commend the Prime Minister for it. He said that he would put a stake in the ground and he said that no one in Canterbury would be worse off as a result of that quake. Mr Brownlee confirmed that before the select committee some weeks ago. He confirmed that. It is Mr Brownlee who including up until I think 15 June has repeatedly said that his priority is that equity will be preserved by those property owners. Those are the two acid tests as we move forward to unravelling and getting the details about the offer document that the Government is yet to provide to those people in the red zone. People have quoted them back to me time and time again even at those public meetings where Ms Wilkinson— 
Hon RUTH DYSON (Labour—Port Hills) 
: 
 It is a pleasure to take a call on Vote Canterbury Earthquake Recovery but it was a bit of a tragedy to have to curtail my colleague the Hon Clayton Cosgrove who was just warming up to the subject. 
I will begin by acknowledging the three significant days of quakes we have had in Canterbury over the last 12 months in September February and June. I particularly acknowledge the tragic loss that so many of our citizens have endured: loss of lives loss of limbs loss of homes and loss of jobs and sometimes all four within one family. We have a strength and resilience in Canterbury that we are very proud of but I think that some people have had to endure a lot more than other people really understand. So I pay tribute to the people who have gone through that and who have started rebuilding their lives again. We have had horrendously hard times behind us and I think we will have hard times ahead of us as well. But our communities are strong our communities are passionate and they are certainly committed to a recovery. 
I think it is important to put on the record that the key to a successful recovery—and I suppose this could be taken as advice to the Minister for Canterbury Earthquake Recovery or as general comment but I am sure he will understand it and not need reminding about it—is harnessing the strength and the passion of our communities and turning that into a genuine contribution to what our region our city and our suburbs will look and feel like and what we will do in them in the future. If people see the devastation but feel that they have had their voices heard during the recovery of our city particularly on what happens in our communities they will have had an opportunity to say “We might have lost that but actually it wasn’t as good as we would have liked it anyway. We want to do something better and here are the sparks that will set us alight again.” Those people will remain committed to our region. 
I am concerned that at the moment the only thing that is holding many people in our city is the lack of a payout from the Earthquake Commission or their insurance company. Once they get that payout they might just say “Thanks very much. I am out of here.” We do not want to lose our skilled people from our region. We need them now more than ever so ensuring they are part of the recovery is also a very important part of keeping them there. 
The critical part to harnessing that passion and strength and turning it into a contribution is to give people information. Sometimes it is really hard—I have heard the Minister explain the dilemma and I agree with him—to pick the right time for sharing information. Often we will feel and of course it may be true that as soon as we tell the people what information we know they will want to know the answer to a question for which we do not have the answer. Well it is my strongly held view that we should do that anyway. We should tell people what we know as we know it. If they ask a question that we do not have the answer to we should say that we do not know the answer to that yet. They may get a little frustrated but they will not feel as disempowered as many currently do. 
Many people do not have information about what happened to their land. They do not understand the process that caused the liquefaction and the silt to destroy their suburb. They do not understand the land movement. They do not understand the rockfall risk or what happened to our cliffs. There are a whole lot of questions that are unanswered for people. We could provide that information in my view in a much clearer way than we have to date. 
There will be questions that the Minister does not have answers for yet. I think that is entirely acceptable. We cannot tell people what we do not know. I really urge the Minister to share as much as possible with everyone in our shared community of Canterbury the information that he does have. People feel stronger for knowing what is happening in their area. Information is empowering but knowing that somebody else has information that is not shared with everyone is very frustrating and disempowering. We have the opportunity now to share that information with people to give them the power that information provides. We have the opportunity to harness that passion and that commitment to our communities which is so evident in things week in week out. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I believe that the Government had a laudable aim when it committed to preserving homeowners’ equity in our badly damaged suburbs but given that that has not been possible with the offer the Government has made I really want the Minister in the chair the Minister for Canterbury Earthquake Recovery to say that that is the case—that the Government tried to preserve equity but has not been able to do so for a large number of people. 
The reason it is important for the Government to actually say that is that opinion polls have been run on the status of the Government’s offer. I know that Government members are all circulating little questionnaires in our Christchurch electorates at the moment to see what people think of the Government’s offer. I am worried about that because of course the constituents that I am dealing with who are in the red zone and who are having to face up to the reality of what that offer may mean for them are concerned that people are commenting on an offer believing it to be one thing when in fact they know it to be something quite different. 
The majority of homeowners certainly the ones whom I have spoken to in the red zone and who will be receiving the offer do not believe that this preserves equity for them at all. The ones who have expressed anxiety about what they will do in the face of the offer that they are soon to receive are virtually being told by the Government that they are ungrateful for feeling the way they do about what is generally perceived to be a fair balanced and reasonable offer—which is the language the Government members have used in the House. 
For some people that is the case. Members on this side absolutely accept that on average property prices fell by 5 percent from 2007 to 2010 and that therefore the property valuations as established in 2007 as a general rule should be more than people could have sold their property for on 3 September 2010. But unfortunately when one talks about averages across a country that does not always produce a very good result for individuals. 
Let me just talk about the four groups of people who are in this category. The first group are people who bought their homes when the market value exceeded the 2007 rating valuation. We have a number of constituents I know in our electorates who now will end up in a situation if they accept the Government offer of negative equity. They will owe the bank more than they will get from the Government offer. 
The second group are homeowners who cannot buy property without borrowing and who cannot afford to service a mortgage or who do not meet lending criteria. I could buy another house with the Government offer and I am probably in a position to accept the whole of the Government offer. Obviously I will wait till I see it in writing but I will probably do that. I have put on record my conflict of interest in that regard. I do fit within this category. But imagine if I were an 85-year-old widow in a freehold home that I had lived in all my life and raised my kids in and the property is worth only $250000. What can I buy for $250000? Not much I am afraid. That person will not be able to get a mortgage. So that is the second group. 
The third group are homeowners whose land component of their 2007 rating valuation does not represent the market value of an unimproved section and/or is insufficient to buy an equivalent-sized section in the current market. I think that in some suburbs more than others—and Bexley is obviously one of those—the land values are very low even though the overall 2007 capital value may be better than the 2010 market value would have been for the home. I think that is because the land value calculation is not an exact science. It is worked out in the context of the capital value—the capital value of course looking at that general market value—but the land had a property built on it at the time. I think it is very hard to identify it. 
I have had put to me wildly different land values within my electorate. There was a $60000 difference between three properties that front on to the River Avon in the Avondale suburb. They have quite different valuations; $60000 is the difference in the three properties across that range. 
The fourth category are homeowners whose properties have not been so damaged as to warrant a rebuild and whose insurers are willing to fund only the cost of repairs. Those people are left in a situation where they will find themselves out of a home at the end of this arrangement and not in a position to restore anything like the equity that they had in their property before. 
AARON GILMORE (National) 
: 
 Vote Canterbury Earthquake Recovery has been put forward by this Government in response to the worst-ever natural disaster this country has seen in our history and I hope in all of the history of this House. The Minister in the chair the Minister for Canterbury Earthquake Recovery has done a wonderful job in the work done to date. We have heard from members on the other side of the Chamber some of the compliments that have been given to Mr Brownlee as the Minister in charge of the Canterbury earthquake recovery; I will reiterate some of those. If there has been a time for a wonderful man to step forward it is now and if we wanted a person to stand in front of the people of Canterbury and deliver as a Canterbury son then it is Mr Brownlee. He is a former builder and someone who understands the issues that the people of Canterbury are dealing with. One of the wonderful things we have seen after the three major disasters that we have experienced—not just one but three—is that Mr Brownlee has stood steadfast on every single one of them. 
We have seen the Prime Minister come down to Christchurch and stand shoulder to shoulder with the people of Canterbury including Mayor Bob Parker and outline to them that the Government will step in behind them and that we will rebuild our great wonderful city in the South Island. I think that is a wonderful thing. We have a fund that has been put aside in this estimates debate that talks about $5.5 billion. That is a drop in the bucket but we need a lot of support and help from the good people of New Zealand to rebuild our city. The Minister in the chair has steadfastly stood up for the people of Canterbury whether they come from the eastern suburbs or the western suburbs from the rich houses or the poor houses. That man has stood behind them and put forward many many options for them. 
We saw just today how some of this money will be spent. Today we have had to put in place a situation where half of people’s legal fees will be paid for and that is worth up to $750 for those people in the affected red zone. That is a good step forward. We have seen the issue put forward of allowing upfront deposits for those people who take up the option of the Government offer they will see in a few weeks. Those are the sorts of things when we go out and talk to the community that we hear that people want. This Government listens to what the people want and it is using some of that $5.5 billion wisely to deliver some of the things that people really want and think are important. This is not about side issues. It is not about media hype and the rubbish that some Opposition members have put forward. It is about someone who is solid and reliable like the Minister Mr Brownlee putting forward those measures that people need to get back on their feet and get our city into recovery again. 
The people of Canterbury are showing that themselves: 76 percent of people in a recent Christchurch  
Press 
 poll stated that the Government was doing a good job. 
Hon Clayton Cosgrove 
: How many are in the red zone? 
AARON GILMORE 
: I say to Mr Cosgrove over there that the Opposition would love to have those sorts of numbers supporting their party because 76 percent of the public are happy with what the Government is doing. We think that is a good step forward. 
I will talk in terms of what is actually happening in Canterbury. There was a comment from the Opposition that 20000 30000 or even 50000 people in Christchurch would be unemployed. What have we seen? Nothing like that! We heard from the Opposition that something like 50000 to 100000 people would leave our city. What have we seen? Nothing like that because we have leaders in John Key and Gerry Brownlee who are willing to put forward options for those people to move ahead and commit to their lives in Canterbury for the next 1 2 10 or 20 years. Christchurch has had more jobs in the last 3 months than have Auckland and Wellington combined. Members opposite sat there and told people in this Chamber that Canterbury would have a massive increase in unemployment. We have seen absolutely the reverse. In the Christchurch  
Press 
 in the weekend there were 17 pages of job advertisements. The member opposite who is smirking might be looking at some of those pages because he might need a job in a couple of months’ time. I think that on the latest polling about half a dozen of the people on the other side of the Chamber might need a job in Christchurch. We will give it to them: there are 17 pages of jobs in the Christchurch  
Press 
 and plenty of work. I say to Mr Cosgrove that he might have to work a bit harder. He might not be used to hard work and getting his hands a bit dirty but who knows? There are plenty of things he can do. Mr Brownlee needs a lot of help in the Canterbury Earthquake Recovery Authority and so does Roger Sutton who is doing a good job. Mr Cosgrove might be gainfully employed in some way. 
This Parliament has put forward its confidence in Mr Brownlee and the Prime Minister in this vote to rebuild our fair city—the city that I was born in as were many generations of my family. I think that one day in 10 or 20 years’ time when those members opposite probably will not be here we will stand back and say what a great job Gerry Brownlee and Prime Minister John Key did at the time of the worst natural disaster in New Zealand’s history. They will build statues to this man recognising how great and wonderful it is to have the heritage grandeur and greatness of Canterbury restored. We will sit back and say what a wonderful time that was. Thank you. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I raise a point of order Mr Chairperson. I know this is an unusual situation and I know that Mr Brownlee is too modest to do it himself but I seek leave for an extension of time of that speech. 
The CHAIRPERSON (Lindsay Tisch) 
: The member can take a call if he wishes. 
Hon CLAYTON COSGROVE 
: It is a point of order Mr Chairperson. I have sought leave. 
The CHAIRPERSON (Lindsay Tisch) 
: You cannot seek leave for somebody else. 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I caution the member opposite Aaron Gilmore about talking up the benefits of recovery too much because the experience internationally is that we should take a little time to see just how things do pan out. One example of that came yesterday with the Electoral Commission figures for my seat of Christchurch Central which suggested—and we are still trying to absolutely verify these figures—that 11800 people had left Christchurch Central and relocated and re-enrolled in other seats. Although 9700 people have come into the electorate we can see the enormous impact that the earthquakes which started about 11 months ago this week have had on life in our city. When we talk about jobs in our city let us not forget that as of 3 September last year 56000 people were employed within the four avenues of Christchurch; I would be surprised if we have as many as half that number at this point. 
We of course want the rebuild to happen we want the jobs to come back and we know that the Canterbury Earthquake Recovery Authority is the entity that is charged with that work. We unanimously supported the appointment of Roger Sutton as the chief executive. It is pretty unusual for anybody to take a $200000 salary cut to take on a job in New Zealand—or anywhere in the world I suspect—but we believe that he is the best man for the job. I think it is perhaps the hardest job in New Zealand at the moment and probably in a long long time. 
I will comment on a few things that are still popping up for me as an electorate MP and one of them comes back to heating as my colleague Clayton Cosgrove mentioned. I would like to ask the Minister to give us some reassurance about the heating programme continuing because there have been signals that there was a first phase to get heating installed prior to the real onset of winter in May but that things may have been buttoning back since. As recently as Sunday I was doorknocking in the Avonside area and I came across a man who had lost two chimneys and was still waiting for a heater. I would like some assurance from the Minister that in fact the heating programme is continuing at the speed scale and pace that it was before because many thousands of people in Christchurch are still in the grip of what is still a pretty severe winter and they do not have proper appropriate heating. 
I also ask the Minister the Hon Gerry Brownlee to comment on the temporary accommodation assistance that is available to people in the red zone. We need some clarity here. I was approached by a constituent Sue Skeet who is now living in Timaru. Her accommodation as provided by her insurance policy runs out this Friday I say to the Minister and she has been anxiously emailing the Canterbury Earthquake Recovery Authority and trying to get some assurance. The indications are that there may be an interim measure for her but I think that many other people in the red zone would like to know whether they are eligible for temporary accommodation. Support seems to be precluded by the initial wording of what was stated when the package was announced on 18 February because it was then envisaged that it would be for people who were returning to their homes. Of course people in the red zone are not returning to their homes and they need some clarity as to what accommodation support will be available to them. 
I also raise with the Minister the issue about the future of any remaining heritage buildings in the central business district of Christchurch. The Minister’s initial comments back in February that we might end up with only four heritage sites in Christchurch Central’s central city area sparked me and some others to form a group called Interests in Conserving the Identity of Christchurch or ICONIC which put together a list of 40 “must keep” heritage buildings the crème de la crème of the heritage sites across the central business district. The Minister acknowledged that it was a reasonable list when it was put to him in April but it would appear that now just about 12 of the crème de la crème the very best of the heritage buildings are still standing. I would like the Minister to indicate what can be done—what support and what signal the Government can provide to building owners—to say that we must keep some of these buildings for the future. The generations that follow us will look back and judge us on this issue and if the Christchurch of the latter 21st century is reduced to four heritage sites I think we will be judged to have failed the generations who follow us. There is not a case to retain very many buildings; most of them have already gone and many of them had to go. Buildings that were truly unsafe had to come down but I think we need some signal to say that some will be retained as a reminder of the Christchurch that proudly stood before the quakes. 
Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery) 
: 
 I will make a few brief comments in response to those who have spoken already. Occasionally in this Chamber we hear outstanding speeches delivered by members and I congratulate Aaron Gilmore on his contribution this evening. I note that it will be something that is referred to in  
Hansard 
 for years to come. It was very very insightful and incredibly accurate. 
The difficulties that Canterbury has experienced over the last 12 months have been considerable; there is no doubt about that. I do not know any people living in the greater Christchurch area at the moment who are not making some change or concession in their lives towards getting the communities they live in back in operation whether it is in the way they travel around the city conduct their work activities in the city or have to make alternative arrangements for their children to get to sport and other things; we could go on and on. An enormous amount of extra effort is being made by many many people to get things going. 
Earlier this year after the 22 February event we established the Canterbury Earthquake Recovery Authority. It was a follow-on from the Canterbury Earthquake Recovery Commission which had much lesser powers and which was set up after the September event. In setting up the new Government department the Public Service in New Zealand was very much to the fore and was showing itself to be the best that it is. I congratulate John Ombler on his initial work in setting up the authority and reaffirm the comments made in this Chamber about the delight we have in Roger Sutton taking on the chief executive role for that organisation. I should mention the names of other people—there are many of them—who are working very very hard in a very very focused and collaborative way with all of the districts—Selwyn Waimakariri and Christchurch—to get a good result in the long term. 
I will also mention the Order in Council process and the wartime powers that Mr Cosgrove regularly suggests that I hold. Those powers are very very muted by the processes that we have in place not the least of which are those relating to Orders in Council. I acknowledge the work that the Opposition parties are doing in collaboration with Government parties to make sure that that process works well. 
There are a couple of things I will cover in the brief few minutes I have left. Firstly we think the offer made to the 5000 households so far which would see them being given the option of leaving those properties at their 2007 valuation is a fair one. There is no question about that. If we look at all of the valuation data for real estate sales etc. over a period we see that that offer stacks up very very well. 
On the issue of temporary accommodation an announcement is imminent which is of an addition effectively to the arrangements that have been put in place so far. I need to make it clear that only about 80 families so far have accessed that additional accommodation support because the private insurers have stepped up in the first instance to make sure that people get those entitlements. 
On the issue of emergency heating I can tell members that under the winter heating programme there has so far been over 9000 installations of heat devices in houses in the greater Christchurch areas of Selwyn Waimakariri and Christchurch—over 9000. The bulk of that has been of heat pumps with a smaller number of pellet fires and wood burners. The programme continues but when we have put that much heating in and it is on an emergency basis there will naturally be a time when it starts to slow down. 
I think there are good things we can look forward to in Canterbury because there has been no significant depopulation and no outright collapse of our local economy. Our Paymark data and electricity usage confirm both of those things which I think points to a community that wants to recover and that has a very strong will to get things back to being as good as they can be and better. 
When it comes to those heritage buildings all I can say is that if there is an ongoing economic value in those buildings as well as heritage value the owners of those buildings are bound to recognise that and find a solution for their continued survival. One of the things we must make sure of in the future is that both our residences and our places of work are safe and that our commercial and industrial activities are conducted in safe buildings. 
Vote agreed to. 
Vote Commerce 
JONATHAN YOUNG (National—New Plymouth) 
: 
 The Government’s overall economic goal is to build the foundations for a stronger economy that will provide New Zealanders with jobs higher incomes and improved living standards. Work under Vote Commerce directly contributes to this priority by helping to create dynamic and trusted markets increase the ease of doing business improve international linkages and develop enterprising and innovative businesses. It does this by ensuring that effective policy and regulatory frameworks are in place to promote competition support efficient business transactions lower compliance costs improve business confidence to make investments and give firms access to other markets. 
Improving confidence in capital markets is essential. Priority under Vote Commerce has been given to several areas of work designed to improve investors’ confidence and participation in New Zealand’s capital markets following the global financial crisis and the collapse of many financial companies here in New Zealand. 
Today in the House the Minister of Finance reported to us that New Zealanders have lost approximately $8.5 billion in collapsed finance companies. That is why investing in a minority shareholding in an energy company must look attractive sensible and sustainable for many New Zealanders who want a return but are gun-shy about taking a risk. 
We often refer to the “mum and dad investor”. This is essentially the investor who has a bit of spare cash being saved for retirement and who does not see investment as something that they are highly specialised in. Of course of equal importance has been the work of improving international linkages so that investment and financial activity can easily flow to and fro across the Tasman. 
The total appropriation for Vote Commerce has increased by 12 percent—$15.5 million—to a total of $141.43 million in 2011-12. The main change in the appropriation was due to the establishment of the Financial Markets Authority on 1 May 2011. I know that the Minister of Commerce is particularly pleased about the creation and the work of the Financial Markets Authority. It is clear that New Zealand needs a single market regulator with a visible proactive culture of timely enforcement. On too many occasions in finance company collapses we heard of investors’ money falling to the floor through gaps between regulators. 
The Financial Markets Authority—the FMA—is an independent Crown entity funded by Vote Commerce. It was established in 2011 replacing the Securities Commission. It commenced on 1 May. The Financial Markets Authority enforces securities financial reporting and company law as they apply to financial services and securities markets. The Financial Markets Authority also regulates securities exchanges financial advisers and brokers trustees and issuers including issuers of KiwiSaver and superannuation schemes. 
The Financial Markets Authority is playing a more proactive monitoring role than its forerunner the Securities Commission. The Financial Markets Authority is larger than the Securities Commission with more staff and resources in a new office in Auckland. The Financial Markets Authority is able to publicly enforce duties of issuers directors auditors trustees and others involved in financial markets when it is in the public interest to do so. This is a significant new provision that the Securities Commission did not have. The new powers were specifically requested by the Financial Markets Authority establishment board because of the gap it saw in the Financial Markets Authority’s ability to effectively enforce and supervise our financial markets. 
Coming out of the global financial crisis having improved protection for such investors it is imperative for such investors to have confidence investing in New Plymouth—sorry New Zealand as well as New Plymouth of course! We certainly need investment with many great opportunities there. Investment in New Zealand is very important and it is an incredibly important component to our financial recovery and growth. A substantial incentive for people to shift from a borrowing-based way of thinking to an investment-based way of thinking is that they have confidence in a regulatory framework that ensures professional effective ethical and accountable oversight to protect the interests of the investor. Thank you. 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 It is my privilege to speak on the Vote Commerce estimates for this 2011 year. The Vote Commerce estimates were increased by 12 percent this financial year and one of the key reasons for that increase as my colleague Jonathan Young pointed out is the establishment of the Financial Markets Authority. 
That authority will in its first year have tabbed for it $31.7 million for its establishment and also its functioning. It replaces the Securities Commission. We are informed that it will provide for a more active more well-resourced and more streamlined regulator of financial markets. The purpose of it is again as Mr Young pointed out to improve investors’ confidence and participation in our capital markets particularly after the recent spate of finance company failures that occurred in the last 3 to 5 years. 
One of the key provisions of the Financial Markets Authority’s statute which we put in place was to give it the right of action on behalf of either a company or an individual to take on rogue companies particularly finance companies. That will provide for those people who cannot take on the action themselves and for the Financial Markets Authority to at least enforce that statute. It will create a new market intelligence unit which issuers will be able to consult as they develop new products in order to avoid the need for corrective measures later on in the process. That is about working with the industry to provide for more effective and more efficient markets. We have seen recently with the spate of low-ball offers that the Financial Markets Authority will be able to take on such inequitable low-ball offers provided by those people who prey on vulnerable investors. So we can see that the Financial Markets Authority will be an all-powerful regulator unlike the Securities Commission which was its predecessor. 
The commerce portfolio has been a busy one under the current Minister of Commerce. He departs Parliament in the next few months so we salute his work in the portfolio. The Commerce Committee has been a rather industrious committee. We have pushed through legislation on financial service providers and financial advisers auditors and insolvency practitioners and securities trustees. We have also dealt with patents and copyright law which was quite difficult. But the mother of all financial markets legislation is still to be done and that is the reform of the Securities Act which is well overdue. We expect a draft exposure paper to be out in the next few weeks. 
In terms of the financial advisers legislation the financial advisers I speak to particularly in my own electorate of Maungakiekie say it adds compliance and it adds regulation. But compliance and regulation also allow for the industry to be more credible and for the people who practise financial advisory services in the markets to have more integrity. The practitioners have said that that is OK. To date to 1 July 1300 authorised financial advisers have been registered with 700 still to complete that process. 
I will just touch on another piece of legislation that the Minister has signalled should be reformed which is in the area of moneylenders. The Minister has signalled there will be a financial summit next week on 11 August where stakeholders in the whole moneylender industry will come together to share ideas and to exchange their thoughts on the way forward in terms of regulation. We should see some response on that from the Minister and from this Government in the coming months. It is an area I encounter every day in my electorate office and it is one that needs reform. I see people who have been affected by loan sharks or moneylenders. 
Hon SIMON POWER (Minister of Commerce) 
: 
 I thought I might take just a quick call on the estimates for commerce. It was a spectacularly constructive estimates hearing that we had with the Commerce Committee this year and one I was happy to make a small contribution to. We—or the committee I should say—were interested in a range of issues with some of them traversed in Vote Commerce and others traversed in Vote Consumer Affairs. We kind of married the votes together to some extent over about an hour and a half from memory. 
One of the things covered off to some degree was how well the Financial Markets Authority had begun its functions since it came into effect on 1 May. Interestingly I think that the culture that has taken root at the Financial Markets Authority is a very strong one. A proactive sense of enforcement and supervision has become part of that organisation’s ethos. In particular—literally from memory—within about 48 hours of the Financial Markets Authority being formed it took a view on low-ball share offers being made by one individual and a warning notice from memory a new power under the Financial Markets Authority legislation was exercised very early in the piece. I think it is fair to say that the Financial Markets Authority has come out of the box pretty quickly with a fair degree of focus. 
Colleague Sam Lotu-Iiga talked a little bit about what was happening in the financial markets. As I have said many times one thing we cannot do is regulate for certainty; nor can we regulate for risk. I have said it many times but I will say it again now: nor should we try to regulate for risk. That is the nature of getting a return on an investment. But of course what we know about the type of product that was offered in the financial markets is that the Financial Markets Authority desperately needed a power to be able to deem a particular product to be a security for the purposes of security legislation—in particular for the Financial Markets Authority to be able to do that in order to avoid a situation where product was being specifically designed to fall outside of securities legislation. Fundamentally this type of product came about as a result of a property syndication - type product that was put on the market. Of course over the last 5 or 6 years we have seen about $8.3 billion worth of investors’ money lost or as they say put at risk. About $6 billion of that was prior to 2008 and about $2 billion - odd since 2008. 
One of the things about this story—it is not a story actually; it is a fact—is something that all members who are constituency MPs have experienced and even the odd list MP might have experienced it as well. An elderly gentleman came to my office in Feilding many months ago now. He was explaining to me that he had left school at about 15 years old and had managed to save the equivalent of between $75 and $100 a week from all of his wages over the period of his life. At about 73 or 74 years old he had managed to collect about $250000 in cash—I am pretty sure that is what he told me—and at that point he decided it was a reasonably substantial amount of cash for an elderly gentleman to have just sitting in a bank account so he went and saw a so-called financial adviser to find out how best to invest that money. 
The advice he got was to diversify the investments which on the face of it seemed reasonable in order to spread risk. That is indeed what he was told to do except that that risk was spread across four finance companies so he ended up losing the whole lot. It was clear to me at that point—and I know that the Hon Lianne Dalziel shares this view—that a product designed to avoid securities legislation is always going to be in the proximity of clever issuers lawyers and the like which is why the new powers attached to the Financial Markets Authority relating to the capacity to deem those products to be securities for the purpose of securities legislation are so important. 
I regret I seem to have run out of time to address patents and other matters but I am sure Ms Curran will raise those matters. 
Vote agreed to. 
Vote Consumer Affairs agreed to.  
Vote Justice 
CHESTER BORROWS (National—Whanganui) 
: 
 As chair of the Justice and Electoral Committee I say that the committee was pleased to review the estimates in this sector and engage with the Minister of Justice. 
I note that the work programme covers four specific areas: improving the function and the efficiency of courts addressing the drivers of crime across a number of portfolios in a wide spectrum following on from the very successful Drivers of Crime seminar at the beginning of this term and achieving electoral and constitutional reform. It was noted that there had been some movement in amalgamating the various electoral agencies since the beginning of this term with the last piece of legislation in respect of that having been completed recently. Also I note the preparation for electoral reform after cross-party negotiations in terms of the electoral finance legislation. Finally the fourth area of the work programme was to improve the response of the sector to the victims of crime. 
It was interesting to note a number of gains that the Government has had over this term which it hopes to complete within the next year. We were pleased to note for instance that the offender levy programme had collected $3.4 million since it was introduced in July 2010. That has launched 13 new support initiatives for victims. Many of those initiatives are for victims of sexual violence. The Minister told us that the new police safety order initiative was working well with 3600 police safety orders issued since March 2011 and only 244 breaches. That puts a lie to criticisms that these safety orders would not be abided by and would result in many more appearances before the court. 
We are interested to note too the changes to legal aid. We note that the change in folding legal aid into the Ministry of Justice is already effected but there are also legal aid initiatives within the Criminal Procedure (Reform and Modernisation) Bill which the committee recently processed. We note the changes that bill will have to legal aid in respect of some things that are contentious but are widely approved across the broader sector of legal aid providers—albeit there are some who are complaining about it. We note the expansion of the Public Defence Service which is allowing high-quality lawyers to be made available to people appearing before the court in major centres around New Zealand. We look forward to the further expansion of that. 
The committee was very pleased to hear of work that was being done in respect of child victims or witnesses. We note with some concern that there is on average a 15-month gap between an incident occurring and a child having to testify before the court. The Minister is taking initiatives to lessen that time. Some new ground is being covered in terms of the way that that evidence is taken to lessen the stress on a young child who has to give evidence before the court. Thank you. 
Hon SIMON POWER (Minister of Justice) 
: 
 I am happy to take a call on the law and order debate and the justice system if no one else from the Opposition has a view on that. I am certainly happy to take a call and just outline how the estimates process before the Justice and Electoral Committee went. I know this is not strictly within the Standing Orders but I remember this vote being a very volatile debate under the last Government during the estimates debate. Obviously the Opposition is reasonably happy with where we are heading so perhaps I could just highlight some of the matters that have gone OK up until now. 
Actually one of the most interesting things that we will be heading into at the general election this year is the MMP referendum. Recently I was asked to appear at a public meeting in Auckland to explain the referendum and the various systems available for the public of New Zealand to choose from at the time of this year’s general election. I decided that the only thing I could do was to use the information the Electoral Commission was using to explain the different systems in order to avoid any perception that I might somehow be influencing or leading the debate in a particular direction at that meeting. As I said the other day I am probably the only member of Parliament who really should not have a view about which electoral system we should have in New Zealand because I have to make sure that the process is as untainted as possible. I tell members that the information provided by the Electoral Commission and the way that its television ads explained the four systems and MMP was actually really good. It was a really good piece of work. 
Sue Moroney 
: You have to say so yourself. 
Hon SIMON POWER 
: Well no. It was the Electoral Commission I just said that did it not me. That was the whole point of the speech. I was talking about the fact that I was using information from the Electoral Commission because otherwise I would be seen to be tainting the process. 
Sue Moroney 
: You’ve run out of things to say now. 
Hon SIMON POWER 
: Well I just got offended actually that the member Grant Robertson turned his back on me contrary to the Standing Orders. But anyway as I was saying the point of this particular yarn was that members of the public at the end said to me that the systems as explained by the Electoral Commission were not as complex as many of them had thought. We ended up in a reasonably lengthy discussion about which system did what to Parliament. The only advice I really gave the public meeting was to think about what shape voters would like to see Parliament and work backwards from there. In other words they should not pick a system and then try to determine what Parliament would look like. Voters should perhaps decide what they would like Parliament to look like and then pick a system that would deliver that type of Parliament. It was quite an interesting process to work through. 
One of the figures on police safety orders that we used at the estimates hearings was in the late 3000s. I am happy to update the member on that number now that we are in the Chamber. As I understand it from numbers that were put in front of me prior to appearing on  
The Nation 
 in the weekend the number of police safety orders is now 4660 which is a remarkable thing for two reasons. The first is not so good; the second is quite good. The first reason which is not so good is that it tells us we still have much work to do in the area of domestic violence. In other words the fact that these orders are being so well used is problematic. But the second point is that they are available. The police safety order is a mechanism for the police to de-stress an environment without having to bring charges. It allows women and children in particular to carry on in the home they are in in a reasonably safe environment having had the alleged perpetrator removed without arrests being made. It avoids the hassles of the court process and allows a cooling-off period for the alleged perpetrator. Actually I think the process has worked extremely well. 
One of the things that interest me continues to be the issue of how the court system interacts with the people in it—in particular with children. We talked at the select committee about an inquisitorial model in this part of our justice system; in Austria it is called an accusatorial model. On that basis I think that Parliament could expect some announcements in this area relatively shortly meaning that more decision-making on legislation is likely to make its way to this House prior to a date that is creeping up pretty quickly. 
Vote agreed to. 
Vote Health 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 It is a pleasure to rise and take a call on the estimates for Vote Health. The estimates for Vote Health did not get off to a great start for the Minister of Health. The Minister’s press statement from 19 May after the Budget came out told us that Budget 2011 was delivering an extra $2.2 billion to public health services over the next 4 years including an additional $585 million in initiatives in 2011-12. Well that turned out to not be true. In this House—over a period of days admittedly—we were able to draw out from the Minister that in actual fact the $585 million additional in this Budget was not so; it was $420 million additional and $165 million worth of money that has been cut from elsewhere in the health sector. Sadly this is typical of this particular Minister’s approach—the smoke and mirrors and the manufactured targets. No the reality is that $165 million of the so-called $585 million additional is in fact money taken from other parts of the health sector. It was a bad start for the Minister when it came to these estimates. 
When the Minister arrived at the Health Committee to go through the estimates we had to ask him to give us a little bit more information on where some of these cuts were coming from. In fact in particular there was the question of the $61 million of unspecified cuts to the public health budget. The Minister was asked to provide some information on that and in the transcript from the hearing the Minister was peculiarly unable to tell us what those $61 million worth of cuts were. He could not actually define them. He had a bit of paper in front of him but he really did not know what it meant. Basically he had no idea of what he was cutting. There was $61 million going from public health and he had no idea what he was cutting. 
Hon Member 
: He thinks it’s funny. 
GRANT ROBERTSON 
: He thinks it is hilarious. Well that is good because the other thing that the Minister said in the exchange that we had with him was that he would provide us with the detail and the explanation behind each of those cuts. Well here is a question for the Minister in the chair the Minister of Health: why has he not provided that information? He told the select committee he would provide the information. He has not done that. The select committee was forced to write to the Minister last week to ask him to do what he said he would do at the select committee which was to tell the committee where $61 million worth of funding cuts have been taken from in public health. 
It is simply not on for a Minister of the Crown to not know where $61 million worth of funding cuts are coming from and then compound that by refusing to tell the select committee where the cuts are coming from and not providing the information. Now the select committee has written to the Minister and as of today we still do not have a reply. That is how little this Minister cares about the accountability in this portfolio to say where this money is coming from. 
To take that much money out of public health has an impact. The Minister gets up at conferences around New Zealand and tells people that he believes in prevention and he thinks we need to take a preventive approach and we must invest in making sure that people do not get sick. Yet his budget and these estimates take money out of public health. The Minister was at the same seminar I was at when Sir Michael Marmot came from the UK and we sat there all day—well some of us stayed for the whole day. We listened to and heard from all the experts within New Zealand in this area and from Sir Michael himself about the importance of investing in early intervention in prevention and in making sure people stay healthy. But that is not what this Government is doing. 
What this Government is doing is focusing on the Minister’s manufactured targets within things like elective services. This Minister is saying— 
Dr Paul Hutchison 
: Immunisation. 
GRANT ROBERTSON 
: The member on the other side of the Chamber says “Immunisation”. That is absolutely great. That is excellent. That is carrying on the good work that was started under the last Labour Government and we can all be pleased about that. But district health boards focusing more and more on trying to meet the Minister’s manufactured elective services targets means that funding disappears from other areas. The Minister might say “Oh well these are the nanny State health promotion ideas”. Well that is not true. Not only are they the preventive measures that keep people healthy but also the services that are being cut on this Minister’s watch are front-line services. 
Dr JACKIE BLUE (National) 
: 
 I am very pleased to be taking part in this estimates debate on Vote Health and I would like to congratulate the Minister of Health on his leadership in this portfolio. Vote Health was the biggest recipient of Budget 2011. It was one of the few areas to receive a modest funding increase which will be paid for by making efficiencies in other Government departments. This continues the Government’s election pledge to continue the growth of funding to the public health system. Budget 2011 is delivering an extra $2.2 billion to public health services over the next 4 years including an additional $585 million in initiatives in the coming year. 
I would like to particularly focus on three areas: medicines rheumatic fever and maternity services. The Budget included $80 million for wider access to medicines and it is expected that around 32000 patients in the first year will benefit from this extra funding. Together with the extra $100 million for medicines in the last 2 years this means that this Government has invested an additional $180 million in total. 
Despite the serious economic environment the Government has continued to invest new resources into health to meet our commitment to a strong and enduring public health service. This is in contrast to the approach taken by several Governments around the world that have slashed the funding of their public health services in response to the global financial crisis. In 2008 we made an election commitment to lift the pharmaceutical spending per head of population and the extra $180 million will bring us up from $163 in 2008-09 to $174 per head of population in 2011-12. This means more patients are benefiting from community medicines and cancer treatments. In terms of the number of medicines funded under this National Government we have seen the most intensive programme of medicine investment since Pharmac was created in 1993. 
This Government has acted on rheumatic fever. In the 2011 Budget $12 million has been allocated towards this debilitating disease. Maori and Pacific people most of them children living in cold overcrowded homes are most likely to get rheumatic fever. They are 20 times and 37 times respectively more likely to be admitted to hospital for the first time for acute rheumatic fever than anyone else. It is a Third World disease and we need to eradicate it from our country. It has been a health priority since 2001 but nothing has ever happened except that more children contracted this disease. This $12 million investment in the Budget this year is aimed right at rheumatic fever and will support a massive campaign across high-prevalence communities involving school-based sore throat clinics for over 22000 children. 
It has been a long time since I practised as a general practitioner but the Minister of Health showed us in the Health Committee the throat swabs that will be used for these programmes. I had not appreciated that they are actually on-the-spot throat swabs that are taken of children with sore throats and they show whether they have strep throat. If they have strep throat they have an antibiotic and that is it. If they do not have strep throat they do not need to have an antibiotic. I had not realised that technology had advanced in the time since I left general practice. I am delighted that we have this programme which will make a real difference to children in those communities. 
Rheumatic fever is a terrible disease. It can lead to heart problems. Basically it is a crippling chronic illness with a terrible outcome for children who need to have monthly painful injections of penicillin and they have a terrible outlook. This is a fantastic programme. It is long awaited—it has been waiting since 2001—and this Government is doing something about it. 
Budget 2011 has new initiatives for maternity services and to help new mothers and babies. The Budget provides an extra $33.2 million for maternity services over 4 years to improve safety and quality. A further amount of $21.3 million will boost Well Child services with particular focus on first-time mothers. The additional funding is expected to deliver an extra 54000 visits to about 18000 mothers who need this additional support. For these mothers this will mean on average three additional Well Child visits up to the first 2 months of a baby’s life. The extra $33 million announced for maternity services includes $18 million to improve the safety and quality of services for mothers and babies. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 To carry on from where we were I say that front-line health services have in fact been attacked under this Government. The Minister of Health likes to stand up in this Chamber on a regular basis and tell members that it is all about moving services to the front line. Well I ask the Minister what could be more front-line than a mental health clinic—an addiction clinic for young people? What could be more front-line than that in addressing services? Yet that is exactly what has just closed in the Nelson-Marlborough region. That is exactly what has just closed in the Nelson-Marlborough region. It is right here for the information of the Minister if he would like to read it. That clinic has closed because of the pressure that this Minister has put on district health board budgets. 
Although the money that has gone into district health board budgets has increased slightly the increase is nowhere near enough to keep up with inflation. The chair of the Whanganui District Health Board told us in the  
Wanganui Chronicle 
 that there was no way the board could keep providing the services that it was expected to provide with the money that was coming from the Government. It has simply not been enough to keep up with inflation and the cuts are coming. They are coming in front-line health services they are coming in youth health services and they are coming in sexual health services. They are coming in all the areas where New Zealanders rightly expect that there would be front-line public health services. The pressure is now going on district health board budgets and non-governmental organisations that are providing the services are having to cut back their services. That is all happening on the watch of a Minister who likes to pretend that more money is going into health and that more money is going into front-line health services when the tragic reality is that it is not. 
When we go around regional New Zealand we see the impact of this. If we go to a place like Taihape we see that the hospital is gone—closed. The hospital in Hawera is under threat. But no the Minister comes in like a white knight there and says he will not cut a service if the community does not go along with that. I tell Mr Ryall to go to Rangiora. That community did not want its after-hours services to be cut but they are gone. But no the Minister did not ride in like a white knight there; the after-hours services have gone. [ 
Interruption 
] The Minister says that is the doctors’ fault. That is the problem with this Minister: he wants to wash his hands when the services are cut but it is his Government’s underfunding that means that things like that happen in Rangiora. 
In Hawera the Minister said he would ride in there. But he will not do so around the rest of the country because this Minister is underfunding the entire sector. 
Aaron Gilmore 
: If this member was the leader of the Labour Party it wouldn’t be at 27 percent in the polls. 
GRANT ROBERTSON 
: The member on the other side of the House could do with going to Rangiora talking to the people there and seeing what they feel about the cuts to after-hours services. He could do with going to the Kapiti coast talking to Linley Williams and seeing how she felt about paying $41 for her 2-year-old to go to an after-hours clinic. He could go and see the community services card holders in Ashburton who were charged $73 for an after-hours visit. 
New Zealanders deserve to have access to affordable primary health care. New Zealanders deserve to have preventive health services that will help to keep them healthy and they deserve some honesty from the Minister. They deserve the Minister not to get up and say he was delivering $585 million extra for health when the truth is that that is not what has happened. Money has been recycled around the pressure is going on key programmes and this Minister is not being upfront with the New Zealand public about the impact that this will have on health services. 
There is another thing in the estimates that the Minister may care to respond to. Why is it that when we look out to the capital budget for the next 2 or 3 years we see that it almost disappears? The Auditor-General’s office wanted to know why that money just about disappears. Is all the building over? There is an urgent need to build hospital buildings around New Zealand in the next few years and the money for that is simply not in these estimates. 
Once again the numbers are smoke and mirrors in these estimates. This Minister is trying to mislead the New Zealand public about the investment that is going into health. We need to have investment at the primary health care end. We need to ensure that there are quality secondary services available and we need to ensure that health gets the investment that it deserves; not what the Minister wants to pretend to us. For a Minister to come to a select committee to come to an estimates hearing and not be able to tell the committee even where the cuts are coming from is disgraceful. But what is more a Minister who then refuses to respond to the committee when it asks to get that detail is a Minister who is not giving the New Zealand public what they deserve in the area of Vote Health. In Vote Health New Zealanders know that there is not a bottomless pit. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 It is an absolute pleasure to take a call in this estimates debate regarding Vote Health. What a shame it is that Grant Robertson has turned into a shroud waver when in these estimates we signalled that $585 million extra will be put into health— 
Grant Robertson 
: No there weren’t. 
Dr PAUL HUTCHISON 
:—absolutely; $585 million extra will be available for health. This is a great credit to the Minister of Health Tony Ryall who since 2008 has managed to get $1.2 billion extra put into health. [ 
Interruption 
] The Minister tells me it is $1.5 billion. That is an absolute indication of how the National Government is prioritising health as being very important for New Zealanders and is delivering. What we remember over the last 9 years was a total lack of productivity in health but a total increase in bureaucracy. That is what happened under Labour. Now we are starting to get results. 
It was very rich to hear Grant Robertson talk about health prevention because under this Government there have been some outstanding achievements. One just has to go to the immunisation rate. In 2007 only 75 percent of 2-year-olds were fully immunised. Now the figure is 90 percent. 
Progress to be reported presently. 
House resumed. 
The Chairperson reported the Misuse of Drugs Amendment Bill with amendment and progress on the Appropriation (2011/12 Estimates) Bill. 
Report adopted. 
The House adjourned at 9.56 p.m.