Volume 685 Week 27 - Tuesday 6 November 2012 
Text is incorporated into the Bound Volume 
Volume 685 Week 27 - Tuesday 6 November 2012 
[Sitting date: 06 November 2012. Volume:685;Page:6261. Text is incorporated into the Bound Volume.] 
Tuesday 6 November 2012 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Questions to Ministers 
Pike River Mine Disaster—Royal Commission Report and Government Regulatory Responsibility 
1. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
 to the  
Prime Minister 
: Will he take responsibility for the failure of government policy as revealed in the Pike River Royal Commission report? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 My Government has taken responsibility for implementing the royal commission’s recommendations to ensure such a tragedy does not happen again. Although much of the fault for the tragedy lies with the Pike River Coal company the royal commission also makes it clear that the regulatory environment was not effective for 20 years and was not actively administered by the Department of Labour. I can take responsibility clearly only for the period for which I have been Prime Minister and this clearly took place over a long period of time. In response to the magnitude of the tragedy the Minister of Labour resigned. That was the honourable thing to do. 
Rt Hon Winston Peters 
: Does he accept that if the Government had proper policies in place this negligence on the part of other parties could not have and most probably would not have happened and most likely 29 men would still be alive today? 
Rt Hon JOHN KEY 
: I think the royal commission made it clear that it was possible that these deaths were preventable. The royal commission also made it clear and correctly and legally so that the primary responsibility for health and safety rests with the company but the Government as the regulator through the Department of Labour also has to shoulder some of that responsibility. 
Rt Hon Winston Peters 
: Does he not think there is a pattern here of removing sound rules and regulations such as that which led to the leaky homes disasters in the tens of thousands the  
Rena 
 disaster and the Pike River disaster and will he admit now National’s culpability in these catastrophes? 
Rt Hon JOHN KEY 
: No. 
Rt Hon Winston Peters 
: Why did he not travel to Greymouth yesterday to speak with the Pike River families on the findings of the royal commission and what does he say to Bernie Monk and others who are deeply hurt by his non-attendance given that he told the Pike River families “we’re committed to getting the boys out and nothing’s going to change that.” only to back down again on that promise? 
Rt Hon JOHN KEY 
: OK in terms of the first instance this was the royal commission’s report so it was important that that was presented. I obviously had a responsibility to deal with that to front that on a number of different areas and to chair Cabinet because Cabinet wanted to take that report and actually start putting it into place straight away. That was the first instance. In terms of the body recovery as I have said on numerous occasions the Government is committed to that process as long as there is a credible sensible and safe plan—a safe and credible plan. What the royal commission’s report actually says if the member chooses to read it—and I can point him to I think page 230 of Volume 2 where it quite clearly runs through exactly what the view of Professor Galvin from the University of New South Wales was when he was giving advice in the deed of settlement in relation to body recovery to Solid Energy. Professor Galvin says that the probability of getting into the mine is actually quite remote that it is irrelevant how much money is actually spent and that the risks to those who could go into the mine include drowning explosion the roof caving in and various other aspects that could threaten their lives. I have said to Bernie Monk and I say to the families that we understand completely their desire for closure and for the removal of the bodies from the Pike River mine but I think most New Zealanders would agree with me that it can take place only if we can be sure that those who would go into the mine to undertake that body recovery would come out alive—to not do so would be derelict in our duties. 
Rt Hon Winston Peters 
: Why did he spend so much time on television last night attacking both the company and the Department of Labour without admitting that it was National that changed the rules on these matters as early as 1992 and why does he therefore not accept the Government’s culpability because it and his colleagues are the people who were responsible? 
Rt Hon JOHN KEY 
: Firstly I do not think it would be correct to characterise me as attacking people. I did paraphrase the royal commission which was quite damning of the company. If Mr Peters does not think that a company that had in the 48 days prior to an explosion 21 recordings of methane in excess of the explosion level is a company that was derelict in its duties he is free to do so. But I would also point out that he has been a Minister in Governments over the last 20 years. If he had wanted to he also could have changed the laws. 
Mr SPEAKER 
: The Rt Hon Winston Peters. 
Rt Hon Winston Peters 
: Of course they were kicking me out of the caucus at the time. That is the reason why. 
Mr SPEAKER 
: Order! 
Rt Hon Winston Peters 
: My supplementary question is this—[ 
Interruption 
] It is exactly on these policies. Why does he think—[ 
Interruption 
] No do not apologise now. 
Mr SPEAKER 
: Order! I apologise to the right honourable gentleman. We will not get too far if this keeps going I think. Please let the member ask his question. 
Rt Hon Winston Peters 
: Why does the Prime Minister think that the Hon Kate Wilkinson’s resigning only one portfolio represents a Government properly shouldering its responsibilities? 
Rt Hon JOHN KEY 
: I would argue that properly shouldering its responsibilities is actually implementing the recommendations from the royal commission. In the end that is the thing that is likely to make the difference over the course of future health and safety issues for New Zealand workers. In terms of the resignation from the portfolio firstly that is consistent with the Westminster tradition. We see that more regularly. We have seen it in previous Governments in New Zealand’s history. And I would say the same thing that I said yesterday: there is no indication that the Minister through any action or inaction led to the deaths of the 29 miners but the ministry for which she happened to be the Minister responsible at the time clearly has to shoulder some responsibility so she did the honourable thing which was to resign. 
Hon Kate Wilkinson—Confidence 
2. 
DAVID SHEARER (Leader of the Opposition) 
 to the  
Prime Minister 
: Does he have confidence in all his Ministers? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes. 
David Shearer 
: Does he have confidence in his Minister of Labour that he will take all possible steps to improve worker safety? 
Rt Hon JOHN KEY 
: I am not wishing to be pedantic but I would point out that it is the Acting Minister of Labour who is now Chris Finlayson and the answer is yes. 
David Shearer 
: Will his Government implement all 16 of the royal commission’s recommendations to improve workplace health and safety in New Zealand including the establishment of a new Crown agent; if not why not? 
Rt Hon JOHN KEY 
: As I said yesterday it is highly likely that we will implement the vast bulk of the recommendations. This may well include recommendation one which is the issue in relation to establishing a separate Crown agent. I will say though that we have had the report for 6 days and there are other examples of independent Crown agencies where they are not necessarily always the best way to measure things. There are pros and cons of the issue and the Government is asking officials for advice on that. It is very possible that we will implement an independent Crown agency but let us just make sure that we have got it absolutely right. 
David Shearer 
: Does he accept that his former Minister of Labour was wrong to reject the safety concerns about underground mines raised by Labour MP Damien O’Connor in May 2010 6 months before the Pike River tragedy saying that there was “visible and credible enforcement” and she did not see any need for a review of the current mine inspection programme? 
Rt Hon JOHN KEY 
: I may be incorrect but I am pretty sure the member was referring to the issue in relation to small mines. That was where the work was actually undertaken. It started as a wider review but it was in relation to small mines in which case yes I think the Minister was right. 
David Shearer 
: Does he accept that there is a lax attitude towards health and safety in his Cabinet given that his last Minister of Labour has resigned and his ACC Minister in June last year said that training of workplace health and safety representatives is a touchy-feely notion; if not why not? 
Rt Hon JOHN KEY 
: No. I think what is true is that in the course of about 20 years there has been a change in the way that basically health and safety issues have been viewed by the Department of Labour. Firstly the primary responsibility has gone to the company and the regulator has taken a view that it can rely particularly in the case of something like Pike River on a high-trust model. I think that has gone in a slightly different direction from other countries like Australia which has had a much more prescriptive regime. We think that the National Government has tried pretty hard to be sensible about this issue but I will make the point that for 9 years—including the time that that member was the Minister of Labour—there were not a lot of changes. 
David Shearer 
: In light of his last answer what action will his Government take to reduce workplace injury rates which are about twice that of Australia and almost six times that of the UK? 
Rt Hon JOHN KEY 
: We have set up a small ministerial task force that will now be looking at the implementation of the 16 recommendations from the royal commission. 
Housing Affordability—Government Work Programme 
3. 
JONATHAN YOUNG (National—New Plymouth) 
 to the  
Minister of Finance 
: What policy steps is the Government taking to make houses more affordable in the medium term? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The Government has agreed with almost all of the Productivity Commission’s recommendations on housing affordability. We agree on improving land availability and the provision of infrastructure. We also agree with it on reducing costs around the regulation and construction and reducing delays which would all contribute to making new housing more affordable. I would also point out that stable and low interest rates and rising wages are also helping to ease affordability problems. Floating mortgage rates around 5.5 percent are around half of what they were in 2008 so a family with a $200000 mortgage is saving about $200 a week. 
Jonathan Young 
: What other problems associated with housing affordability are these policies trying to address? 
Hon BILL ENGLISH 
: About a third of New Zealand’s households spend more than 30 percent of their disposable income on housing costs. As these costs rise demands on taxpayers to assist with housing costs increase. I have seen projections that income-related rentals for the Housing New Zealand Corporation’s tenants currently costing $590 million a year will reach nearly $800 million a year by 2015-16. The accommodation supplement on which we currently spend $1.2 billion a year will rise by 9 percent over the next 4 years or an extra $100 million. So the less affordable housing is for households the more taxpayers are required to pick up the difference. 
Jonathan Young 
: What effect does borrowing for housing by New Zealand households have on the wider economy? 
Hon BILL ENGLISH 
: If New Zealanders are borrowing unnecessarily for purchasing housing it makes the economy vulnerable. Through the last cycle from about the year 2002 onwards housing prices rose rapidly New Zealanders borrowed large amounts of money at high interest rates and that left our household sector as one of the most indebted in the developed world. The Government is setting out to deal with the underlying problems that can lead to excessive borrowing by improving the flexibility of the supply of housing with the expectation that this will have some moderating influence on house prices and therefore on debt levels for households. 
Jonathan Young 
: What reports has he seen on the Government’s housing affordability package? 
Hon BILL ENGLISH 
: There has certainly been a wide range of interest in the issue. The Salvation Army with which we have been working for 3 to 4 years now on housing issues described the Government’s package as a welcome next step. Auckland Mayor Len Brown essentially agrees with the Government’s direction though he does say housing affordability is a complex issue that requires Government and councils to work together. To that list I would add banks the building industry and developers. The Families Commission has said the package is an important step in the right direction. 
Pike River Mine Disaster—Royal Commission Report and Health and Safety in Mining Industry 
4. 
KEVIN HAGUE (Green) 
 to the  
Prime Minister 
: Does he stand by his statement in regard to the report of the  
Royal Commission on the Pike River Coal Mine Tragedy 
 that “the company completely and utterly failed to protect their workers”? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes. The first obligation of any employer is to keep its employees safe. By any measure Pike River Coal failed to do so. 
Kevin Hague 
: Does he agree with the royal commission that at Pike River production was put before safety? 
Rt Hon JOHN KEY 
: Reading the royal commission’s report I am drawn to the same conclusion. 
Kevin Hague 
: How is it possible that for years we had an underground coalmine operating in New Zealand with only one usable exit? 
Rt Hon JOHN KEY 
: I think the member raises a good point. There is a whole section on the ventilation issues and the use of an underground ventilation fan in the Pike River mine. The member will also be aware that some of that was done to accommodate a variety of reasons including demands by the Department of Conservation that looked at the conservation issues. 
Kevin Hague 
: Does he agree that the deregulation of occupational health and safety that occurred in the 1990s was the major factor in creating an environment where management at Pike River were able to ignore workers’ calls to improve safety; if not why not? 
Rt Hon JOHN KEY 
: No. Let us take a step back. The primary responsibility of any company when it comes to health and safety issues rests with that company so a good employer is always going to make sure that their employees are safe in the workplace. The role of a regulator is someone to ensure that the company is fulfilling its obligations not to fulfil those obligations for the company. The company itself must do that. In the case of Pike River Coal the company utterly failed. 
Kevin Hague 
: Does he agree that standard economic theory suggests that profit-maximising firms will always prioritise profitability over safety unless the Government as regulator ensures the safety of workers? 
Rt Hon JOHN KEY 
: I think that is a ridiculous statement. That is saying that a company is prepared to risk the deaths of its employees and the reputation of the company for the sole purpose of making money and even from the most hardened socialist I find that something difficult to believe. In the case of the Pike River mine let us argue just for a moment that the Pike River Coal company was halfway through its mining operations and was a successful operation that was operating well. An explosion of the magnitude that took place back in 2010 would have then completely and utterly collapsed that company. That would have made no economic sense to anyone. 
Kevin Hague 
: Will his Government address the pervasive “low touch high trust” regulatory culture that he referred to yesterday that continues to kill and to injure workers in other areas besides mining such as agriculture forestry and manufacturing? 
Rt Hon JOHN KEY 
: I think what is quite clear from the royal commission’s report yesterday is that while it is specific at one level to the Pike River mine disaster it makes wide-sweeping recommendations in relation to health and safety issues across the entire New Zealand workforce. In that regard the Government is committed to implementing those recommendations. Therefore there will be significant change and that significant change will permeate across all industries around New Zealand. So in answer to his question my view is that there will be a difference of approach in the way that health and safety issues are managed in New Zealand. But I go back to still the most fundamental point: in the end that responsibility still rests with the company. We can change the way that we go from being a more high trust regime to being a more prescriptive regime but that is still a situation of dealing with the issues after the fact. We still need New Zealand employers to make sure they deploy the highest safety standards they can. 
Kevin Hague 
: Given that the ideology of deregulation in our workplaces has cost at least these 29 lives will he now assure the public that the era of ideologically driven deregulation is over? 
Rt Hon JOHN KEY 
: In one regard all issues of policy are ideological. You can take an ideological view that something should be more prescriptive over something being more deregulated. Secondly I would take issue with the statement that the member made—it was not a question; he started it with “given”. His statement was that the primary responsibility rests with the Government. The primary responsibility rests with the company. 
Hon Trevor Mallard 
: Did the review of safety in underground mines instituted by the Labour Government and scrapped by his Government relate to all underground mines or only to small mines? 
Rt Hon JOHN KEY 
: I simply do not have that paperwork in front of me to comment on that. 
Social Development Ministry—Employment Issues and Security of Private Information 
5. 
JACINDA ARDERN (Labour) 
 to the  
Minister for Social Development 
: Does she stand by her statement in relation to the Work and Income security breach that “I am going to be as upfront and as transparent as possible and I will put as much information out there as I can as we work our way through this process”? 
Hon PAULA BENNETT (Minister for Social Development) 
: 
 Within the statement’s context yes. That is why we said we would respond in 2 weeks. We have released the entire Deloitte report made an extensive proactive release of the information relevant to the report and have been responding to Official Information Act requests as quickly as we possibly can. 
Jacinda Ardern 
: Why will her department not contact all of the individuals affected by the Work and Income security breach? 
Hon PAULA BENNETT 
: Because it has been following the Privacy Commissioner’s guidelines which state quite clearly: “If a privacy breach creates a risk of harm to the individual those affected should be notified. … Each incident needs to be considered on a case-by-case basis ...”. It is the ministry’s advice that it has had by working with those guidelines and also with the advice of Crown Law that they should not all be individually contacted. 
Jacinda Ardern 
: How can she or the Ministry of Social Development be sure that only two individuals accessed people’s private and personal information when in response to Keith Ng’s recent post someone noted in the comments section “when I was on one of those kiosks a few months ago I did the same thing ...”? 
Hon PAULA BENNETT 
: The information that we have is that only two people did and that we got all of that information. I am not going to take comments from a blog as I am sure that that member will not. We have got as I said two people who have come forward; no others have. It is to the best of our knowledge that only two people accessed the information. 
Jacinda Ardern 
: Did Janet Grossman receive a termination benefit upon departing her role as the head of Work and Income? 
Mr SPEAKER 
: I am not sure and I am at a loss to know how—if the member could maybe reword the question to make it obviously relate to the primary question. 
Jacinda Ardern 
: Did Janet Grossman who was head of Work and Income during the period that the kiosks were rolled out receive a termination benefit upon departing her role? 
Hon PAULA BENNETT 
: Well the chief executive and the State Services Commissioner are responsible for all employment issues. It is not the responsibility of a Minister. 
Jacinda Ardern 
: Why was it not an operational matter on 14 June 2012 when in this House she said in relation to Grossman’s departure “her husband has had job opportunities in the UK and she wishes to return back there. That is the reason for it.”? 
Hon PAULA BENNETT 
: I understand that the member might have pre-written her questions but I did not say it was an operational matter—and I am responding to it. I did not say it was an operational matter. What I said was that employment issues around payouts are the responsibility of the State Services Commissioner and the chief executive so she should listen to my answers. 
Jacinda Ardern 
: I raise a point of order Mr Speaker. The Minister has been inconsistent in what she chooses to answer— 
Mr SPEAKER 
: Order! The Minister disputed part of the member’s question and said that what the member had included in her question was wrong. I was about to get to my feet and interrupt the Minister because I thought she was not answering appropriately but she actually made it very clear that she was disputing part of the question and she is entitled to do that. 
Jacinda Ardern 
: Will an employment investigation into four individuals restore the public’s confidence in her department’s approach to privacy? 
Hon PAULA BENNETT 
: I think it goes well beyond that. I have absolutely no doubt that public confidence in our ability to hold information has been shaken. We stand up and take responsibility for that. We need to fix it. It is going to be evident in the work that we do to restore that faith in us which needs to be done. It is not just about four individuals. 
Business Growth Agenda— 
Building Infrastructure 
 Progress Report 
6. 
MARK MITCHELL (National—Rodney) 
 to the  
Minister for Economic Development 
: How is the Government investing in infrastructure to support encourage and grow New Zealand businesses? 
Hon STEVEN JOYCE (Minister for Economic Development) 
: 
 Last week the Government released the  
Building Infrastructure 
 progress report the fourth of six Business Growth Agenda reports. This brings together 67 separate initiatives the Government is undertaking to deliver the resilient efficient and coordinated infrastructure networks demanded by a modern economy. For businesses to invest in plant and facilities in this country they need to be confident they have access to infrastructure that supports their businesses including a fast and efficient roading network a reliable electricity transmission network water storage and usage developing high-speed broadband and telecommunications schools and hospitals and the rebuilding of Christchurch. The Government’s infrastructure programme is a key part of the Government’s Business Growth Agenda. 
Mark Mitchell 
: What infrastructure initiatives has the Government invested in? 
Hon STEVEN JOYCE 
: Over the last 4 years the Government has invested very very significantly in a large range of programmes including for example $5.5 billion for the Canterbury Earthquake Recovery Fund $1.6 billion for ultra-fast broadband and faster rural broadband around $5 billion through Transpower for the national electricity grid and about $12 billion in the next 3 years in the country’s roading network. These projects are all part of the Government’s wider programme to provide businesses with the platform that they need to grow and succeed and also support jobs including for example about 2000 jobs in the roll-out of ultra-fast broadband 1000 jobs over 4 years on the Waterview motorway just under 1600 jobs on the Transpower upgrade and 1300 jobs for the horizontal infrastructure rebuild in Christchurch which has just started a major new recruitment campaign. 
Teachers and Support Staff—Problems with Novopay Payment System 
7. 
Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) 
 to the  
Associate Minister of Education 
: Does he stand by all the statements of the Minister of Education and those of her ministry regarding Novopay? 
Hon CRAIG FOSS (Associate Minister of Education) 
: 
 Yes I stand by the Minister’s statements in the context that they were made. Payroll is an operational matter for the Ministry of Education but in general I do stand by their statements about Novopay issues. 
Hon Nanaia Mahuta 
: Does he agree with the Minister of Education’s answer to oral questions on 20 September that schools not the ministry should compensate teachers for any penalties they incur as a result of payroll glitches? 
Hon CRAIG FOSS 
: I cannot recall that exact answer but right now we are concentrating on making sure Novopay is implemented and operating correctly as intended and as contracted to do with Talent2. 
Hon Nanaia Mahuta 
: Will the ministry or Talent2 be compensating schools for the time and money they have spent on fixing payroll mistakes resulting from the Novopay system; if not why not? 
Hon CRAIG FOSS 
: No decisions have been made on that matter. Right now we are concentrating on making sure that as well as the 90000 who get paid correctly the balance of relievers and other non - full-time staff matters are administered correctly. 
Hon Nanaia Mahuta 
: Thank you Minister. What assurance has he sought from the ministry and Talent2 that the backlog of more than 4000 errors remaining from Novopay’s first— 
Hon Clayton Cosgrove 
: How much? 
Hon Nanaia Mahuta 
: —4000 errors remaining from Novopay’s first two pay days will be fixed and that the system will be fully operational prior to the Christmas pay period so teachers and support staff are not left out of pocket? 
Hon CRAIG FOSS 
: I thank the member for the question. Yes about 10 days ago there were 8000 errors; right now there are about 3200 remaining. I have a commitment from the Secretary for Education and Talent2 that they will be completed by the end of this week—I think 9 November this Friday is the intention. 
Hon Nanaia Mahuta 
: In 2008 when the Novopay project board was established did he confirm an implementation plan was in place to ensure the successful switch-over to Novopay at the go-live date this year? 
Hon CRAIG FOSS 
: I got my warrant in December 2008. I cannot recall anything of December 2008 but I am quite sure at the time that Novopay had been delayed for 2 years as further work was undertaken before the implementation but I freely admit that the implementation issues as far as particular reliever teachers are concerned have not been at all satisfactory and we will be investigating that once the system is up and running as we fully expect. 
Hon Nanaia Mahuta 
: I raise a point of order Mr Speaker. Regardless of when the Minister assumed his warrant he is still responsible and he should know whether or not there was an implementation plan. That answer was vague—and if that was an answer I am a ballerina. 
Mr SPEAKER 
: Order! There you have it. I think in fairness the Minister if I heard his answer correctly said he did not know what went on at that actual switch-over point. But if the Minister can clarify that I would be very grateful. 
Hon CRAIG FOSS 
: I do need to clarify one thing Mr Speaker. I got my ministerial warrant in education in 2011 not 2008. 
Mr SPEAKER 
: I think that although the member is correct in that the Minister remains responsible for events that took place prior to his time he cannot be expected necessarily to know all the details of that personally and that is why I think the answer was not unreasonable. 
Better Public Services Targets—Reduction in Crime and Reoffending 
8. 
Dr JACKIE BLUE (National) 
 to the  
Minister of Justice 
: How is the Government delivering on its Better Public Services targets to reduce crime? 
Hon JUDITH COLLINS (Minister of Justice) 
: 
 I am extremely pleased to announce that over the past year this Government has delivered on its promise to New Zealanders with almost 3000 fewer violent crimes committed. The first results of the justice sector against its Better Public Services targets have been released today. The total reported crime rate and the reoffending rate have each fallen by almost 6 percent in the past year which means 21337 fewer crimes. 
Dr Jackie Blue 
: What are the key results and how do they compare with the justice sector targets? 
Hon JUDITH COLLINS 
: By 2017 we aim to reduce total recorded crime by 15 percent violent crime by 20 percent youth crime by 5 percent and the reoffending rate by 25 percent. In this first year we have achieved significant progress with total violent crime down by 7 percent youth crime down by 4 percent and reoffending down by almost 6 percent. It is worth noting that for the first time homicide and related offences have reduced by 22 percent. 
Dr Jackie Blue 
: What are the key initiatives that are leading to these very impressive results? 
Hon JUDITH COLLINS 
: Since 2009 this Government has promoted the Addressing the Drivers of Crime programme which has resulted in better management of low-level repeat offenders has offered alternative pathways to success and most recently has seen the initiation of alcohol and drug courts. Through Policing Excellence and Prevention First programmes the police are providing a stronger front-line presence while the Department of Corrections has programmes under way to significantly improve the rehabilitation of prisoners. The justice sector through its leadership board shared funding pool and combined targets is working collaboratively to reduce crime which will have a long-term positive impact across New Zealand. 
Health and Safety Workplace—Effect of Proposed Legislative Changes 
9. 
DARIEN FENTON (Labour) 
 to the  
Acting Minister of Labour 
: How will the proposed changes to employment law improve health and safety in the workplace? 
Hon CHRISTOPHER FINLAYSON (Acting Minister of Labour) 
: 
 The Government signalled yesterday that it is going to accept most if not all of the recommendations of the royal commission. Some of these are going to be given effect to through changes in employment law such as the Health and Safety in Employment Act 1992. These changes are aimed at improving health and safety in the workplace by creating a more effective regulatory regime for health and safety in general and in particular for high-risk industries to ensure that disasters like Pike River never happen again. 
Darien Fenton 
: Does he accept the Pike River royal commission’s recommendation that legislation on worker participation should be strengthened so that workers have better representation and voice; if so does he think this should extend to all workplaces? 
Hon CHRISTOPHER FINLAYSON 
: As to the first part of the member’s question yes I do. That is one of the issues that I am very much looking forward to engaging with the Council of Trade Unions and the Engineering Printing and Manufacturing Union on because I think that there is a valid involvement by workers. I would also say that another aspect of the review I am particularly interested in is a possible amendment to the 1992 legislation to make directors fully and squarely responsible for their governance obligations and what they need to do in so far as management is concerned. 
Darien Fenton 
: How will the changes to Part 6A of the Employment Relations Act that the Government is proposing which will remove protection for workers like cleaners when their employer changes provide stronger representation and voice in their health and safety in the workplace? 
Hon CHRISTOPHER FINLAYSON 
: Those proposed changes I say to the member are more about improving efficiencies and making bargaining fairer. But it is entirely possible to have a flexible employment relations regime and one that is utterly respectful of health and safety in employment. They are not mutually exclusive. 
Darien Fenton 
: How will the removal of the requirement to conclude collective bargaining and weakened rights for new workers give workers the strong representation and voice needed to improve health and safety in the workplace? 
Hon CHRISTOPHER FINLAYSON 
: I repeat what I said just a few seconds ago that creating a more flexible employment relations law is—it is utterly consistent in the context of that to have an effective health and safety regime where all players are cognisant of their responsibilities. Of course that is exactly what the royal commission said. Health and safety in the workplace is a team effort involving Government employers and employees. 
Hon Trevor Mallard 
: Why did his Government reject the suggestion of check inspectors which came out of the discussion document and summary of submissions on the review of health and safety in mining which was started under this Government and scrapped by his predecessor? 
Hon CHRISTOPHER FINLAYSON 
: I am not sure whether he meant it was started under his Government. Is that what the member was trying to say? 
Hon Trevor Mallard 
: Yes under the Labour Government. 
Hon CHRISTOPHER FINLAYSON 
: Yes. Well I am not exactly certain as to the particular work that was undertaken when he was Minister. I had the impression that not a lot was done. But that is a matter I would need to check on and come back to him Thank you very much. 
Mr SPEAKER 
: Question No. 10 Alfred Ngaro. [ 
Interruption 
] Order! I have called Alfred Ngaro. 
Foster Carers Support—Foster Care Awareness Week and New Initiatives 
10. 
ALFRED NGARO (National) 
 to the  
Minister for Social Development 
: How are foster carers being recognised for the contribution they make to New Zealand’s most vulnerable children during Foster Care Awareness Week? 
Hon PAULA BENNETT (Minister for Social Development) 
: 
 Foster Care Awareness Week began yesterday with excellence awards for foster carers and culminates with the William Wallace Awards on Friday. I joined the Governor-General at Government House yesterday to celebrate the achievements of 11 foster carers who have received excellence awards. One of these couples had cared for nearly 200 children over 50 years. Another has a sibling group of seven children in their permanent care. These are remarkable people who look after our most vulnerable children. I think this House should recognise them too. 
Alfred Ngaro 
: What will the initiatives in the White Paper for Vulnerable Children deliver for foster carers? 
Hon PAULA BENNETT 
: The white paper recognises the complexity of offering a home for life to children in care and outlines new supports to help foster carers transition foster children to family members. The Government will contract organisations more to support those who permanently take in children through fostering or Home for Life. Paid parental leave provisions to support Home for Life families will also be reviewed and parent-child interaction therapy for caregivers of high and complex needs children will be expanded. 
Alfred Ngaro 
: How are gateway assessments making a difference for children in care and their foster carers? 
Hon PAULA BENNETT 
: This Government has put nearly $43.7 million more towards getting all children in care a proper health and education assessment so that we can address any of these issues that may have come up. Over 1000 children have now been assessed. The gateway assessments have picked up health problems in every single child who has gone through that assessment and more than half were found to have emotional behavioural and mental health issues which can now be addressed leading to a better life for these children. On behalf of New Zealanders I want to thank those foster carers who do that most important job. 
Public Transport Auckland—Integrated Ticketing System and Snapper 
11. 
PHIL TWYFORD (Labour—Te Atatu) 
 to the  
Minister of Transport 
: Did Hon Steven Joyce meet with the Snapper CEO in March 2010 and discuss Snapper’s desire to enter the Auckland public transport integrated ticketing scheme; if so why did he not include this in his answer to Oral Question No 10 on 27 June 2012? 
Hon GERRY BROWNLEE (Minister of Transport) 
: 
 I certainly acknowledge that there was a meeting and what I was advised was that a search of the previous Minister’s diary showed a 3 March meeting with Mr Lloyd Morrison. I am advised that no other name appeared in the diary. Mr Twyford clearly knows that the Snapper Chief Executive Officer Mr Szikszai accompanied Mr Morrison to that meeting because it is in the official information released from the New Zealand Transport Agency. Had I been advised of that I would have included it in my very extensive answer to the House on 27 June. 
Phil Twyford 
: How can he reconcile his statement that there was no ministerial involvement in the decision to allow Snapper to roll out its card on the Auckland buses with the letter to Steven Joyce from Snapper’s Chief Executive Officer Miki Szikszai in which Mr Szikszai said: “Thank you for taking the time to meet … last week. … I understand that you have met with Geoff Dangerfield and Brian Roche”—from the New Zealand Transport Agency—“following our meeting and that your expectations are that given Snapper’s assurances NZBus should be free to proceed on its current plan to implement Snapper equipment … in Auckland.”? 
Hon GERRY BROWNLEE 
: Well it is not uncommon for Ministers to meet with the chief executive of their ministry nor of the board of that agency as well. So that is quite in order. As for the so-called Snapper letter I think it needs to be put in the context of Ministers determining what policy is and in this case it was to ensure that there were open standards across the country that would accommodate all sorts of front-end cards. It is worth noting that that Snapper letter also outlines a number of other concerns that Snapper had including the expression that “In effect this creates a state-owned monopoly with the power to exclude others from the market. I am not sure if this was the intention but it most certainly is the effect.” What is behind this is an intention from Snapper to become the main contractor. It lost that contract. The New Zealand Transport Agency has it. It is important it does have it because as people forward-pay their fares there is a significant banking-type operation and the balances positive from that should accrue to the users. They do so through the New Zealand Transport Agency. 
Phil Twyford 
: I seek the leave of the House to table the letter of 17 March from the Snapper Chief Executive Miki Szikszai to Steven Joyce in which he recounts the meeting and the Minister’s expectations. 
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. 
Phil Twyford 
: I also seek to table the letter of 23 March from Geoff Dangerfield of the New Zealand Transport Agency back to the chief executive of Snapper in which—this is after the meeting with the Minister—the agency communicated a new openness to Snapper’s participation in the Auckland integrated ticketing scheme. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? [ 
Interruption 
] Order! There is no objection to the document being tabled. 









Document by leave laid on the Table of the House. 
Phil Twyford 
: How does he explain that officials had a policy against Snapper’s system being implemented in Auckland then Snapper lobbied Steven Joyce then Mr Joyce told the New Zealand Transport Agency he wanted Snapper in the project and then within days officials announced that Snapper would be included in the integrated ticketing scheme? 
Hon GERRY BROWNLEE 
: Firstly it is incorrect to say that the New Zealand Transport Agency was instructed by the Minister to include Snapper. That is quite wrong. The policy in these matters is set by Ministers and the policy was that there should be open protocols available for all sorts of front-end cards. The member should not be surprised that we wanted as many people as possible to be able to offer service to public transport users. 
Phil Twyford 
: Did Steven Joyce communicate his expectation to the New Zealand Transport Agency chair Brian Roche and the New Zealand Transport Agency Chief Executive Geoff Dangerfield as explained in the letter of Snapper’s chief executive officer to the Minister that Snapper should be free to join the Auckland scheme? 
Hon GERRY BROWNLEE 
: Firstly there is no ministerial responsibility for the view that Mr Szikszai expresses in his letter. What is clear is that the Minister made clear to the agency the expectation that it would be an open protocol that would be available to a number of front-end cards. That is a policy decision rightly made by the Minister. 
Environmental Reporting—Reporting Regime and Potential Legislation 
12. 
EUGENIE SAGE (Green) 
 to the  
Minister for the Environment 
: Does she plan to introduce legislation this year to establish independent state-of-the-environment reporting as the Government promised before the last election; if not why not? 
Hon AMY ADAMS (Minister for the Environment) 
: 
 The Government is committed to independent high-quality environmental reporting but it is unlikely legislation will be introduced this year as my top legislative priorities for the year are improving our freshwater and natural resource management framework. It should be noted that part of the reason those reforms are needed is to address the current barriers to getting reliable consistent data which is the foundation of high-quality environmental reporting. 
Eugenie Sage 
: In the interim will her ministry prepare a comprehensive national-level state of the environment report? 
Hon AMY ADAMS 
: What my ministry has committed to do is to continue to put out regular up-to-date indicator reports on each of the very same areas that were covered in the state of the environment report put out in 2007. I note in fact that in the time that we have been the Government we have to date published 30 such reports and it is our intention to continue to publish those reports while we work on the legislative framework for the new independent high-quality environmental reporting structure. 
Eugenie Sage 
: So when does the Minister expect that independent high-quality environmental reporting structure to be in place? 
Hon AMY ADAMS 
: As I indicated in answer to the primary question it is my intention to first of all ensure that we have reliable consistent data coming through and we have indicated that we have discovered a number of barriers to getting that. To date in the time since I have been Minister we have done a number of things. We have introduced 10 new tier one statistics for environmental statistics taking them from the existing two up to 12. We have worked with local councils on how we will improve the data coming through and we are working on reforming the Resource Management Act to ensure that we can collect that data. When that is together and I hope that is as soon as possible we want to complete the legislative vehicle to deliver those reports. 
Eugenie Sage 
: I raise a point of order Mr Speaker. It was a question about when. The Minister enumerated a number of issues but she did not say when which is a time issue. 
Mr SPEAKER 
: It may just possibly be given that the events the Minister described have to take place first that she cannot put a date on exactly when at this stage. That seemed pretty obvious. I cannot expect Ministers to give word for word an answer the member wants but it is pretty clear that the Minister made very clear what has to happen first. 
Eugenie Sage 
: Given that the previous Minister for the Environment promised that legislation would be introduced this year and that the Parliamentary Commissioner for the Environment would be producing a report next year how can New Zealanders be confident about the state of our environment without comprehensive national-level monitoring and reporting given that she has cancelled the report due in December? 
Hon AMY ADAMS 
: First of all I would note that the member’s assertion on which she bases her question is factually incorrect. What I would also comment is that that member herself has said that what the country needs is accurate reliable and regular national-level reporting and as I answered in the primary question in the last 4 years we have produced 30 such reports. 
Eugenie Sage 
: Could I table a speech by the previous Minister for the Environment the Hon Nick Smith on the occasion of the 25th anniversary of the Parliamentary Commissioner for the Environment when he said that the Government looks forward to public discussion— 
Mr SPEAKER 
: Order! This document is readily available on the parliamentary website I take it because it is a speech made by a Minister? [ 
Interruption 
] Order! We do not need to table it. The House already has that information. 
Hon Ruth Dyson 
: I seek leave for the Environmental Reporting Bill in the name of Grant Robertson to be introduced and set down for first reading as members’ order of the day No. 10. 
Mr SPEAKER 
: Leave is sought for that course of action. Is there any objection? There is objection. 
Urgent Debates 
Pike River Mine Disaster—Release of Report Government Response and Ministerial Resignation 
Mr SPEAKER 
: Honourable members I have received a letter from Darien Fenton seeking to debate under Standing Order 386 the release of the report of the Royal Commission on the Pike River Coal Mine Tragedy the release of the Government’s response to it and the resignation of the Minister of Labour the Hon Kate Wilkinson. This a particular case of recent occurrence for which there is ministerial responsibility that warrants the immediate attention of the House by way of an urgent debate. I call on Darien Fenton to move that the House take note of a matter of urgent public importance. 
DARIEN FENTON (Labour) 
: 
 I move  
That the House take note of a matter of urgent public importance 
. [ 
Interruption 
] 
Mr SPEAKER 
: Order! I want to hear Darien Fenton. 
DARIEN FENTON 
: Firstly I note with sadness again the needless deaths of 29 men on that awful day nearly 2 years ago at the Pike River mine. My thoughts and the thoughts of the Labour Party go out to the families whose lives have been broken by this tragedy. Their heartbreak is inconsolable. Their courage is immense. 
After they were told yesterday the findings of the Royal Commission on the Pike River Coal Mine Tragedy they said that they hoped that good would come from this tragedy that the legacy of the loss of the men will be that we do something about our appalling health and safety record not only in mines but across the country. That is the job of the Government and the Government needs to adopt all of the recommendations of the Pike River mine commission without delay and extend them to all workplaces. 
The ex - Minister of Labour and John Key can blame the Department of Labour—and there has been a lot of that going around in the last 24 hours—they can try to shift responsibility on to the overworked and under-resourced staff but that is not good enough. It is good that the Minister has stepped down over this. She should. John Key says it is the honourable thing to do. Kate Wilkinson says it is about her integrity. But this is not about the Minister. It is not about her. She stood on the stage with the Prime Minister at the memorial for the Pike River mine deaths next to Peter Whittall. She wanted to be part of that. But she has wanted no part in making the real change that is needed. It has been almost 2 years—2 years—since this tragedy happened. 
I do believe that eventually Kate Wilkinson became very concerned about health and safety. She was laissez-faire about it to start with and as John Armstrong has described she was the ultimate deregulator. She was a born-again deregulator. But she eventually came round to it and set up the task force to look into health and safety in New Zealand because of our alarming record of deaths and injuries in this country. So the deaths of 29 men in the Pike River mine are just part of this picture. 
Something changed her mind. She was telling the Engineering Printing and Manufacturing Union (EPMU) in a letter back on 12 November 2009 in response to the consultation around underground mining that my colleague Trevor Mallard the former Minister of Labour had set up—around underground mining not small mines; she narrowed it to apply to only small mines—that she “considers that an educational rather than regulatory approach is appropriate to support small mine operators …” and that she “considers that the existing legislative framework under the Health and Safety in Employment Act 1992 already provides a good basis for effective employee participation.” and that she “does not agree to a regulatory change to introduce ‘check’ inspectors nor for an approved code of practice for employee participation … in the mining sector.” So she had a chance back in 2009 to respond to some work that had been done to respond to some work that had been initiated by Labour—consultation. She had a chance to do something and she told the miners union that she did not agree to it. That was 3 years ago—before the Pike River mine tragedy. 
That Minister Gerry Brownlee stood in this House and mocked that consultation document. He held it up with its picture of Damien O’Connor—who is from the West Coast and has had to live through this tragedy and work with the families—Trevor Mallard and an EPMU delegate. He held it up and he mocked it. 
Hon Gerry Brownlee 
: No I didn’t. 
DARIEN FENTON 
: Shame on that Minister! He mocked it. He mocked it. He mocked it and that shows you the attitude of this Government to health and safety and to mine safety. It all very well 3 years and 29 deaths later to be saying it is going to do something about it. 
At the same time going back the Government was busy making cuts to the Department of Labour to health and safety and employee representative training. I remember asking the former ACC Minister who was responsible for prevention why the Government was cutting worker participation why it was making millions of dollars worth of cuts to the training of health and safety reps on the job—those workers on the job who are entitled to have a voice who are entitled to have a say and who are entitled to stand up for their safety on the job. Do you know what he said? “Oh that is a touchy-feely notion.” He said it was a touchy-feely notion. That is disgraceful. I do not believe that that Minister has changed as well. 
In June 2010 5 months before the first explosion Kate Wilkinson wrote to my colleague Damien O’Connor who had raised his genuine and serious concern about mine safety on the West Coast that she did not see a need for any review of the current mines inspection regime. You know she kept saying it time after time after time. 
Let us look at the cuts that the Government made to workplace health and safety. Let us look at the cuts that it made. It cut the ACC-funded training for workplace health and safety by $1.5 million. It ran the Department of Labour down. It ran the Department of Labour down to the point where there was only one inspector one mines inspector for the whole of the country—for the whole of the country. The department had a vacancy but could not find a replacement because it did not pay enough. That inspector was also responsible for checking the thousand or so quarries throughout New Zealand. He said they had not been inspected for ages—so goodness knows what has been going on there—and he said that safety issues at Pike River were difficult to address because inspectors visited the mine only occasionally. What we found out through questioning is that those inspectors could not even get the money—the travel allowance the travel costs—to travel to mines to carry out an inspection so stingy had this Government become. It was so mean and so focused on cost cutting that it denied a travel allowance for the mine inspector to go and inspect the mines. 
At that time when that evidence was given to the Pike River royal commission the Minister of Labour was called on to resign. She was called on to resign because she had discounted the proposals that had been put forward arising from the consultation document and review by my colleague Trevor Mallard. She discounted them. She wrote to the EPMU saying that they were not necessary she narrowed the inquiry to small mines and she did nothing. So there were calls on her then to resign. Do you know what she said? “I have no intention of resigning.”—she had no intention of resigning. She was confident back then that she had done everything for this mine. Now she is not of course because we all know the terrible terrible story that has come out of this Pike River mine commission. 
We have gone from having something like 9735 workplace health and safety reps trained in the workplace in 2008 to half that in 2010-11 and it has continued to drop. And yet what did the Pike River commission of inquiry say? It said that one of the most important things about workplace health and safety is employee participation—employee participation. The Government also scrapped industry training funding for health and safety courses. So more money—$9.5 million—was taken out of that. That cost people’s lives. And the Employment Relations Education Contestable Fund was cut by 40 percent in Budget 2010 and much of it was being used for health and safety training. The families want something good to come from this inquiry. The first thing the Government could do is reinstate that funding to get things moving while it mucks around thinking and considering implementing the recommendations of the inquiry. 
New Zealand has a terrible terrible death and injury record. Over 100 people a year die from workplace accidents between 700 and 1000 people die as a result of gradual work-related diseases over 6000 people notify the Ministry of Business Innovation and Employment—including what used to be called the Department of Labour—of a serious harm incident in their workplace around 190000 people claim medical costs from ACC as a result of being harmed at work around 23000 people are injured seriously enough to be off work for more than a week and around 370 people are injured seriously enough to require hospital care and be diagnosed with a life-threatening condition. Our injury rates are almost twice those of Australia and almost six times those of the UK. 
This is a cultural issue but it is also an attitude issue. I thank the Acting Minister of Labour today for making it very clear in answers to my questions that he does not understand the link between workers’ rights—look at those members pulling faces. Minister Finlayson does not understand the link between workers’ rights the way they are treated on the job and the confidence they have to raise health and safety issues. She has never understood that. So all of these proposals can be implemented and at the same time the Government is proposing changes to employment law that will take away rights of low-paid cleaners. That will have an impact on the health and safety of every school where there are contracted workers. I bet the Government has not told parents that the schools are about to have their toilets cleaned by franchise companies that are understaffed. The Government is also about to weaken collective bargaining making it harder for workers to get pay increases and so on. I have said this to the former Minister of Labour time and time again: until you get the understanding that you can have all of these things—you can have if you want a mountain of labour inspectors because that is what the Government is going to need—but if you never get the picture that until workers feel safe enough on the job to raise safety issues until they are confident enough to be able to do that until they can join their union and collectively bargain without fear and until we have laws that actually promote that in the good tradition of other countries in the ILO our health and safety record is going to continue to be a disaster. 
Again I want to record our condolences to the families. We know that it was a terrible day for them yesterday. I do thank them for their courage and their determination. There is a lot of work to do on this issue. Labour will support of course the recommendations being implemented but we say they need to be done quickly and they need to be done soon and the Government needs to get real about other things that affect workers in the workplace. It needs to get real about it in memory of the 29 men who died at the Pike River mine. 
Hon CHRISTOPHER FINLAYSON (Acting Minister of Labour) 
: 
 That was a very disappointing speech from Darien Fenton. Yesterday I thought the Leader of the Opposition quite correctly stood up and said Labour would accept its share of responsibility and I applauded him for that. But within 24 hours we have had a nasty and unpleasant speech from Darien Fenton that really lets the side down. There are major issues that need to be addressed—major issues that need to be addressed—and I have already said on a number of occasions that this Government is utterly committed to addressing them. 
Last week the report came out and yesterday Mr Brownlee and I went down to Greymouth to present the findings of the Royal Commission on the Pike River Coal Mine Tragedy’s report to the families. I want to refer to what the royal commission said about those families on page 27 of volume 1: “The loss of 29 lives at Pike River exacted an enormous toll on the men’s families friends and colleagues. Many family members attended the commission’s hearings. A number provided written witness statements and some provided heart-breaking oral evidence to the commission. The commission was impressed by their fortitude and courage.” It is fair to say on behalf of Mr Brownlee that we certainly saw that yesterday. They are very very fine people and what they had to deal with yesterday as the report’s findings were read out to them was not pleasant. 
Let me make it perfectly clear as the Prime Minister has made it clear that there are 16 recommendations in the report and as has been said all of them are going to be followed. There is an issue as to structure in relation to whether or not we have a Crown agency or a Crown entity but in many respects that is a technical matter. The substance of the recommendations is to be accepted and yesterday Cabinet met and agreed to the intent of those recommendations and it said they would be progressed urgently. As I said to the families yesterday afternoon I gave them my categorical assurance that everything that needed to be done would be completed by the end of 2013. 
There are a number of findings in the report. I do not intend to go through them in detail; some of them make profoundly sad and unpleasant reading. They contain significant criticism both of the directors and the executive management of the company and of Government regulators. Directors are criticised for failing to ensure health and safety was being properly managed and executive managers are criticised for not properly assessing the health and safety risks that the workers were facing. As I said to the families yesterday and I say it in this House this afternoon there has been some comment in the last few days about whether or not we should look at the offence of corporate manslaughter in New Zealand. A change would enable prosecution of companies and organisations when serious management failures result in death. That issue is going to be looked at. The task force will be looking at that issue. There are precedents from the United Kingdom in 2008. If we need to go down that path we will indeed. 
 Let me say something given Darien Fenton’s claims about the 1992 Health and Safety in Employment Act. It is important to bear in mind just exactly what the commission said under the heading in volume 1 page 32 “Legislative change required”: “The HSE Act remains generally fit for purpose. The commission has identified a few changes although the suggested expert task force may well identify more. Two areas in the act require early attention.” and the first—and I responded to it in answer to one of her more coherent questions in question time today—is “Worker participation (including contractors)”. They said that “The legislation on worker participation should be strengthened. Workers sometimes do not understand health and safety rules or ignore them to get the job done. They should be entitled to receive key information on health and safety risks without having to ask for it.” and that is something I totally agree with. As I said I will be looking forward to working both with employers and unions to ensure that any necessary changes are made. 
The second issue which I have also highlighted in answers to questions this afternoon concerns the duties of directors. Again the report says that this is the second area that requires early legislative attention—that of dealing with governance by the board of directors. They should see health and safety risks as their concern and should give them the same careful attention they apply to other risks facing the company. There are various ways in which those reforms could be enacted either through the Companies Act generally or through the 1992 legislation but I give my assurance to the House that those matters are going to be looked at as a matter of urgency. The third area I might just touch on is that the commission has recommended that the penalty regime be reviewed to ensure health and safety obligations are taken seriously. Again I totally agree with that and we are looking at that as a matter of urgency. So in terms of the 1992 legislation it is generally fit for purpose but requiring some urgent remedial legislative attention and that is going to happen. The Government will be acting on these matters and will be inviting the independent task force to review those matters to ensure that there is a strong health and safety focus and governance. It is beyond any question I would have thought having read some of the material in this report that New Zealand’s record in this area is simply unacceptable. 
On regulatory change the Government accepts that there were systemic failures in the regulatory regime across successive Governments. We could stand here and adopt the old “you too” approach and point the finger. But where does that get the families of the 29 men? Where does that get health and safety in New Zealand? It is the responsibility of all of us to address these issues and not get into “it happened under your watch; it happened under your watch” kind of routine. I think that is demeaning and insulting to those poor men. The royal commission also found there is no predictable period following an explosion when a gassy mine may be safety entered before a second explosion. Importantly it rejected criticism that rescuers did not go into the mine during the so-called window of opportunity. I was very pleased to read the commission’s very helpful report on the issues of body recovery. I have said to the families when Mr Brownlee and I were meeting them yesterday that they want someone they know they can engage with on these issues—as it were a point person within the bureaucracy—so they are not having to deal with layers and layers of bureaucracy when dealing with these matters and I have undertaken to get back to them within 14 days naming such a person. So I am very keen to see what I can do during my tenure as Acting Minister of Labour holding this portfolio to address these issues. I am not particularly interested in pointing the finger of blame across the Chamber at three former Ministers of Labour who were in power for 9 years. I think that that is pretty childish and immature. I want to get on with the important task of addressing these issues to honour the memory of those 29 men who died so sadly. 
I also in closing want to place on record my acknowledgment not only of the families but also of Nick Davidson their lawyer and his tireless advocacy on their behalf and I also thank the commissioners for their tremendous work. It is I think a very powerful report. It is a call to this Government and to all of us that we need to get on with these issues immediately. There is as I said to the families a real determination on the part of this Government to address these issues and as I say they are a mixture of legislative and regulatory. We are going to get on with these straight away and I look forward to the cooperation of other parties in this House. 
I want to finish by reading the words of the commissioners with which the Government is in complete agreement: “The lessons from the Pike River tragedy must not be forgotten. New Zealand needs to take urgent legislative structural and attitudinal changes if future tragedies are to be avoided. Government industry and the workers need to work together. That would be the best way to show respect for the 29 men who never returned home on 19 November 2010 and for their loved ones …”. 
KEVIN HAGUE (Green) 
: 
 The very quotation that the Acting Minister of Labour Chris Finlayson has just used to conclude his remarks was the one I was intending to begin my speech with so thanks for the extra few seconds Minister. 
The Green Party welcomes the report from the royal commission on the Pike River disaster. We believe that all of the recommendations in the report deserve to be implemented in full and without delay and we offer to play our part in ensuring that that occurs. To that end I have offered our party’s willingness to collaborate and have suggested that a cross-party group to oversee the implementation of the recommendations would be a valuable way forward. 
 I want to look briefly at some of the historical context to this disaster against which we must view the recommendations—not in detail but in the broad strokes—because I do believe that the wave of ideology from the 1980s and 1990s that saw a belief in small government lies at the heart of this issue. That philosophy had at its heart the belief that individuals and firms acting out of self-interest and aggregated all together would actually represent the best outcomes for society as a whole. I believe that that ideology is fundamentally wrong and that it has been demonstrated to be wrong again and again most recently in the report received yesterday. 
Amongst this language of “unfettering” and “unshackling” that accompanied the 1980s and 1990s we saw the Health and Safety in Employment Act in 1992 reflecting actually the Robens report from 1972 in Great Britain which believed—appropriately I think—that employers ought to have greater responsibility for the safety of their workers. That was a good thing. But critically—and the commissioners in their report make this point—when New Zealand implemented that Act and that general direction rather than having a corresponding growth in standards regulations and codes of practice that would provide appropriate guidance for employers New Zealand did the reverse. The commissioners expressed some disbelief some astonishment that we did that. But what New Zealand did at that time was to strip away all of the regulations. So we were left with an Act that placed the onus on employers but with virtually no guidance whatsoever. The standard of course that the Act imposes is one of “where practicable”. That as the royal commission identifies and as we have discussed in the House over the last couple of years is one of the critical failures of the regulatory regime. 
In tandem with that failure of regulation we also saw a failure of enforcement and oversight with a mines inspectorate that had been built up in fact over centuries whittled away—decimated in fact first of all and then whittled away—to the point that when the Pike River disaster occurred we had just two mines inspectors who were trying to enforce the light-handed regulation in all of New Zealand’s mines and all of New Zealand’s quarries. 
The central problem that occurs is this. The whole economic theory is based on the rational choice model: individuals and firms will make choices to maximise their own self-interest and aggregating those together will produce the best results for society. In the theory of the firm—again a sort of fundamental tenet of economics—firms will act to maximise profit and they do that by increasing revenue and reducing costs. Health and safety costs significantly and generally does not bring in any revenue. What that means is that unless there is some constraint on the firm provided by the Government as regulator that requires compliance with mandatory standards then firms or at least some firms will take shortcuts. They will not do some of the things that could improve worker safety. And they will especially do that on what we call process safety risks. These are the risks that have a low frequency—so they do not happen very often—but when they happen they have an extremely high consequence. These are the very risks involved in the Pike River disaster. 
At Pike River we had a company that was short on cash and that was way behind in production. The evidence that is provided in the commissioners’ report is that the company started with good intentions but as it fell behind in its targets those good intentions went by the wayside and production was put ahead of safety. The company became unresponsive to repeated worker calls for improved safety mechanisms and became obstructive in fact to occupational health and safety. That reflects exactly what we would expect to see in that light-handed regulatory environment. All of this was able to occur because of the catastrophic failure of the Government as regulator. So the regulations were inadequate and included that “where practicable” standard. What that means of course is that a company that is well resourced can afford to do everything that we would expect of a company to ensure worker health and safety but a company like Pike River Coal which was behind in its production schedule and was cash-strapped will say: “We couldn’t afford to put in that second exit from the mine. It would not be practicable for us to do so.” 
The royal commission evidences the inspectors struggling with that standard and saying: “Well technically you”—the Pike River Coal company—“have complied with the regulation.” There were just those two inspectors who repeatedly called to their superiors for greater resources to be able to do their job and said it was not possible for them to do it; inspectors who were not trained in systems audit systems improvement in quality and safety; inspectors whose seniors knew nothing about mining; inspectors who were unclear how to interpret the standard. 
So contrary to what the Prime Minister has just said in the House in question time today but actually in agreement with what Minister Finlayson has just said in his contribution to this debate it is extremely clear that it is the failure of the regulatory regime of the Government as regulator—it is the failure of deregulation—that has led to a situation where this company Pike River Coal could take those catastrophic risks. Those are the risks that have led to these 29 deaths. So there is no question that deregulation is absolutely implicated in this disaster. 
I want to conclude by expressing my own view and I know the view of many of the Pike River families. It is one of relief in relation to this report the report of the royal commission because many of us sat through all of the evidence we heard the evidence and we believe that the commission has done a thorough and comprehensive job. It has not pulled its punches. It has made the right recommendations. We welcome the Government’s general support for those recommendations and we again offer our support and our cooperation in ensuring that all of those recommendations are implemented in full and immediately. 
DENIS O’ROURKE (NZ First) 
: 
 To say that the report of the Royal Commission on the Pike River Coal Mine Tragedy is sobering is an understatement. This was the worst mining disaster in 96 years 29 lives were lost and it should not have happened in this day and age. It was a tragedy that should not have happened and that could have been prevented. So the question that I ask and the question that most New Zealanders will be asking today is where the responsibility lies. The royal commission found that the Department of Labour did not have the focus capacity or strategies to ensure Pike River Coal was meeting its responsibilities under health and safety law. Serious problems with the mine’s ventilation and drainage systems were identified and yet nothing was done. Permits were given without any real scrutiny of health and safety requirements. 
The underlying reason for this shocking state of affairs which I am sad to say reveals New Zealand as a Third World State as far as mine safety goes is light-handed regulation and inadequate resources for the department which lacked the necessary means to ensure safety at this mine and presumably at others. Every New Zealander should feel ashamed of Government negligence on mine safety—because it is first and foremost a Government issue and it is secondly a company issue. I think the Prime Minister was completely wrong when he said today that it was firstly a matter for the company itself. It is not. It is firstly a matter for the Government to ensure a robust safety culture in this country. It just shows I believe more bad leadership by this Prime Minister more “spray and walk away” and more light-handed stuff which leads to this sort of result. 
When Pike River Coal management was advised that a ventilation shaft with a 110-metre ladder was unsuitable as a secondary emergency exit no checks were in place to ensure that the necessary action would be taken. The commission noted that during the inquiry when Department of Labour inspectors were shown examples of safety records they were visibly dismayed by what they were seeing. If only they had been dismayed 2 years ago. It is unforgivable and totally unacceptable that this could ever have been allowed to occur in this country. 
The royal commission’s findings are clear and unequivocal: this has been a systematic failure by Government—I repeat by Government—to ensure workplace safety in New Zealand. The responsibility for what happened at Pike River does not simply rest with field inspectors who acted within legal guidelines and standards set in place by regulators. The responsibility ultimately rests with the Government itself; it rests with the Department of Labour; it rests with the Minister of Labour who to her credit has resigned; it rests with Cabinet; and it certainly rests with the Prime Minister who was so visible immediately after the events of Pike River. To Chris Finlayson I would say simply this: too little too late. The right course of action was for the Minister to resign and New Zealand First praises Mrs Wilkinson for that decision. But she is the fall guy for an inept Government now trying to squirm out of its responsibilities. 
This Government I believe stands indicted in the court of public opinion for what is nothing less than its negligence over a lack of a robust safety culture in this country. That has occurred since 1992 and every Government since then also stands indicted. New Zealand First calls upon the Prime Minister to acknowledge his own culpability and that indeed of the National Government as a whole. Since the 1990s there has been a recurring theme of removing sound regulation for the sake of increased efficiency—so-called—and increased profits. Policy makers have demonstrated an appalling lack of regard for human life and regulatory responsibility for the maintenance of safe standards has been transferred from Government departments to businesses themselves. It went far too far. It was really an abdication of responsibility and it demonstrably did not work. 
 Now we have seen the worst possible results of this tried and failed Government policy. Now is the time for the Government to admit its failure not just to accept the 16 recommendations that Chris Finlayson talked about. That is the very least we can expect. We need much more than that. We need also for the Government to give the country an unequivocal assurance that a new much tougher regulatory regime will be introduced. This must include at the very least a new offence of corporate manslaughter to bring home to those who run companies that deal in industries that are difficult and dangerous and perhaps require much more regulation that they must also take responsibility for themselves. The Government must also give the country a similar assurance that the responsible department will get the expert staff and the resources it needs too to ensure the rebuilding of a safety culture in New Zealand business—mining in particular—that will drag New Zealand back out of the Third World status we have fallen into. 
I would like to conclude by saying again that New Zealand First deeply regrets what happened at Pike River offers again its sympathy to the families of those who lost their lives and will do all New Zealand First can to assist this House this Parliament and the country to bring back a level of safety for industries such as mining where safety is so important and to bring back a regime that we can all rely upon to ensure that disasters of this kind never happen again. 
CHRIS AUCHINVOLE (National) 
: 
 Lest we forget. One thing the people of the West Coast can be very sure of in this whole uncertain matter—one thing they can be sure of—is that I will never forget learning of the explosion at Pike River the overnight travel from Wellington and the waiting initially enthusiastically in the hope of rescue only for that to be replaced by increasing dismay as the full dimensions of the tragedy became clear. I will never forget that period of my life. I will never forget attending the daily hearings of the royal commission as it sat in Greymouth. I will never forget my impressions of the thoroughness the compassion and the expertise of the commissioners under the leadership of Justice Panckhurst. I will never forget the representations of the barristers acting for all the different parties and groups. I will never forget those. I will not forget the meetings with the families and their solicitors nor indeed the aspirations of them all for an outcome that would help to ameliorate if not end their grief. 
The meeting yesterday to present the report of the Royal Commission on the Pike River Coal Mine Tragedy provided some conclusion for all involved in waiting waiting and waiting. The adoption of the recommendations I think—as people said to me after the meeting—will go a long way to be a fitting memorial for those who lost their lives through a lack of safety in the workplace. I have consistently throughout my involvement with the families avoided saying that I know how they feel because I do not think one can possibly imagine how people feel after what they have endured with that first tragedy. But what it did do was inspire me to go and find my own father’s grave which I had never seen. It was their inspiration that obliged me to do that. So I would like to say again that I will never forget and I will continue to walk with each and every one of those people for as long as they require a companion. 
ANDREW LITTLE (Labour) 
: 
 Let me begin by acknowledging the 29 men who lost their lives on 19 November 2010. I want to particularly acknowledge Blair Sims who was the Amalgamated Engineering Printing and Manufacturing Union delegate—one of three delegates—whom I met at one of the regular delegate meetings that the union held. He was very proud of his union role and his family specifically requested that he have union paraphernalia at his memorial service. I want to acknowledge the families of the 29 men who have been through so much in the last 2 years as they have grieved and as they have attempted to come to terms with what could possibly have happened on that tragic day. And I want to acknowledge also the co-workers the comrades of those 29 miners and the contractors who have also suffered in their own way. The sense that many of them expressed to me as I met them was “There but for the grace of God.” That could have been them and they knew that. 
The report of the Royal Commission on the Pike River Coal Mine Tragedy is cogent it is powerful and it is a validation—at last in my view—of the serious problems that lie at the heart of health and safety in the workplace in this country. I want to acknowledge the work of the commissioners Justice Panckhurst Stewart Bell and David Henry. It is an outstanding report. It is clear and there can be no disagreement with it. They have cited the evidence and they have drawn their conclusions. 
The Acting Minister of Labour said that we should not forget the lessons but the sad reality is that we have forgotten the lessons. We have forgotten the lessons of Strongman. We have forgotten the lessons of Brunner and of Kaitangata. We keep forgetting those lessons because every generation every cycle of politicians and bureaucrats thinks it knows best. But this is no time for smugness or self-contentedness it is no time to say that some are to blame and some others are not and it is certainly no time for the sort of conceit that I have seen expressed in newspaper editorials today particularly in the  
New Zealand Herald 
 which sort of blame the company the Government and the workers. 
I look at the role of the media the ones who cheered on Peter Whittall that time 2 years ago and elevated him to hero status; and the newspapers and other media whose journalists unquestioningly accepted everything they were told by the company and its public relations representatives. I know there were public relations representatives there because as soon as I arrived in Greymouth on the Saturday after the first explosion I met them—not one not two but by Monday five public relations representatives representing Pike River Coal. I criticise the media whose journalists would not question the deception that the entire nation was put under that these men would come out alive when it was quite clear within hours that they were not going to and yet Peter Whittall’s continued representations that there was a chance they would come out alive were peddled time and again. 
Let us not be smug. Pike River Coal is thousands of New Zealand workplaces. Pike River Coal is the ultimate conclusion of years of corporate hubris and of years of running down the institutions that protect workers. In 1998 the Department of Labour’s Occupational Safety and Health Service department had 317 workplace inspectors. In 2008 it was 130. There was a tragic story of the mines inspector who was called upon to investigate incidents in the underground mine at Pike River—serious incidents like flashes. When the manager whom he was reporting to told him that their travel budget had run out he was not allowed to go. It is a travesty. The other important institution that has been run down is the workers’ voice. The media has increasingly privileged the corporate voice over any others in this country and policy makers have too. I just ask this question: in light of a report that is the most damning on a single business in New Zealand in light of a report that is recommending the most radical change affecting business regulation in New Zealand where is the business voice? Where is Business New Zealand? Where is the New Zealand Initiative? Where is the Employers and Manufacturers Association (Northern)? Nowhere to be seen. They have nothing to say. But when the Government announces another deterioration of workers’ rights the press releases come out and they are all over it. But they have nothing to say. We do not have business leadership in this country. We have greed and self-interest and Pike River Coal is the apotheosis of it. The Government if it does anything else must support every recommendation and that must include a stand-alone agency to look after health and safety as Britain has and as other countries have. We must change the culture of health and safety in New Zealand. Nothing less will save millions of other workers in this country. 
Hon JOHN BANKS (Leader—ACT) 
: 
 On behalf of the ACT Party and the people of Epsom I want to express my profound sorrow to the families of the Pike River mine 29. Although it can never compensate for the loss of loved ones I hope that the Royal Commission on the Pike River Coal Mine Tragedy’s report which could be best described as brave provides some closure to those seeking answers on what went terribly wrong on 19 November 2010 and on what led up to that fateful day. 
I have been an employer for 50 years and I can remember two occasions in the restaurant business vividly when I warned a dishwasher that unblocking an InSinkErator in a sink with his hands was going to lead to a disaster. On three or four occasions I told that dishwasher that he must not do it. On another occasion I told him that if I saw him putting his hands into it without unplugging it at the wall I would have to sack him. Sure enough about 3 months later I learnt that he had put his hands in to unblock the InSinkErator and lost most of the fingers on his hands. On another occasion with someone dealing with fat I said to the worker: “You cannot come to work in this kitchen handling big buckets of hot deep-frying fat wearing jandals. The floor is wet. You are going to have a disaster.” I was away from the business one day and I got a call to say that he came in in shorts and bare feet slipped the boiling fat went all over him and the rest is history. So for employers and employees these things can happen. 
These were just one or two occasions in a business that I was associated with. Employers have to be ever vigilant that employees can do things sometimes that are going to cause some danger. You can only do your best to try to help them out. I know that this is an institutional matter that we are talking about but on Saturday I drove down a street in my electorate and I saw a man in sandshoes and shorts on a tin roof washing his roof with a broomstick and a hose. I do not have to tell you how dangerous that is. We all do things in business and at home that are dangerous and we can be told until we are blue in the face that this is dangerous. 
Although it can never compensate for the loss of the loved ones the royal commission’s report about the responsibility of employers to employees and employees to their workmates can never be underestimated. Justice Panckhurst’s report makes harrowing reading; in essence everything that might have gone wrong did go wrong. Like trying to fix the InSinkErator while it is plugged in or trying to carry hot buckets of fat in a restaurant in bare feet the Pike River tragedy was waiting to happen. The geology and the geography were difficult the rock was shattered and the coal was deep. The company was undercapitalised there was a high turnover of management and the company directors relied heavily on the safety assurances of the company management which would have been under huge pressure to deliver to a company that was under huge pressure to deliver to its bankers. There was a high expectation and a high ratio of inexperienced miners to experienced ones. That is why in a kitchen that we would run we would often have an experienced person with an inexperienced person so accidents that can happen in a small workplace do not happen. But accidents that happen in a big workplace are multiple and in this case multiplied 29 times. 
The mining method was novel. The placement of the air extractors and equipment was unorthodox and not fire protected. Methane detectors were often ignored in the desire to keep the mine up and running and producing coal for the management so that the management could produce it to the board so that the board could produce the cash to the bank. The ACT Party supports the free market and entrepreneurship but we also support employing people and not exploiting them looking after people and valuing them teaching people and monitoring them and having a two-way relationship with them where dollars do not come before safety and security. The commission finds that the Health and Safety in Employment Act is largely fit for purpose. However it finds that the industry-specific regulations made under the Act are not and it suggests changes and more extensive reforms of the regulations. 
Finally can I say this: in relation to Pike River Coal the Department of Labour essentially believed that the mine was compliant with the regulations and that active assessment of regulatory requirements and compliance in safety was unnecessary. It is always necessary because workplace safety is always paramount and we have learnt a lot of very valuable lessons. I am very sorry for the 29 miners and their families at Pike River. 
JAMI-LEE ROSS (National—Botany) 
: 
 I think it is unfortunate that we are having this debate. It is unfortunate that we are having this debate because it is very unfortunate that 2 years ago a significant tragedy took place that claimed the lives of 29 individuals. I do not think there is a soul in New Zealand who could easily forget what happened on 19 November 2010. It was a time when I think just about every New Zealander was glued to the television hoping—hoping—that there was an opportunity that there was a possibility that the 29 individuals down there who ultimately lost their lives would come back safely. Sadly it was not the case. I think I would like to echo the comments made by a number of members in this House that we all have in the back of our minds thoughts of the families of those miners and for the individuals who lost their lives. 
The Royal Commission on the Pike River Coal Mine Tragedy has done a lot of work on this issue. It has done a lot of work on the circumstances finding out the facts and looking at the situation that led to the tragedy on 19 November. The royal commission was established roughly 10 days after the tragedy took place. It has finally brought its report back to the Government and now it is out in the public domain. This report I believe is crucial in helping us to identify what went wrong. It is very easy to throw around blame. It is very easy to try to point fingers after the fact. But the point of it all is that now we have to look forward. We have to look at how we can prevent future tragedies like this happening. We have to look to how we can improve health and safety situations for New Zealanders so that tragedies like this do not occur in the future. The royal commission has made 16 recommendations. The Government has broadly accepted all of them with some tweaks that still need to be looked at on how those recommendations are implemented. But the Government broadly accepts those recommendations because the Government believes that it is important that we work very hard as a Parliament and as a Government on how we can keep New Zealanders safe. 
I think it is worthwhile pointing out that the work that is going to take place on working on health and safety for New Zealanders does not start today; it started quite some time ago. In the 2 years since the Pike River tragedy a large amount of work has been done to beef up the regulatory regime for workplace health and safety. All underground coalmines in New Zealand have been safety checked and audited by independent experts from the Australian mining industry. We have also funded $1.5 million for a new high hazards unit which has a team solely focused on mining. We have boosted funding for health and safety by approximately $37 million and an independent task force has been set up to review the health and safety system in this country. That task force will be reporting back in approximately April next year. The Department of Labour had some failings identified. The Ministry of Business Innovation and Employment the new Government department has accepted that the department should have done better. The Minister has also accepted responsibility and has done what I believe is—and many members have been calling—the honourable thing and that should be highlighted as well. 
The report reinforces the need for change in the regulation of mines in general and particularly with regard to the issues that arose in this case. We need to work hard to ensure that that is done quickly because at the end of the day New Zealand’s safety the safety of mines and the safety of the people who work in mines in New Zealand is what needs to be kept in mind. We have heard a little bit throughout the debate about the pointing of fingers and a little bit about who is to blame and where we should be apportioning blame. That is quite easy to do in hindsight but I just want to re-emphasise the point that the best thing that will come out of this report is future work on health and safety. Recommendations will be implemented from this royal commission. 
It is not a tragedy we ever want to see repeated in this country—29 men suffered the ultimate sacrifice and we do not ever want to have to be standing in this House ever again 2 years after an event speaking about what is going to be done to help ensure it does not happen again. We do not want it to happen again. We want to ensure that robust systems are put in place big changes are put in place so that a Pike River never happens again. I thank the royal commission for the work it has done and I look forward to the work that is going to be done going forward to implement its recommendations to make workplace health and safety better for all New Zealanders. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I want to first of all acknowledge and pay my respects in this House to the families of the miners who were killed. There are boys who will not go home to their parents there are fathers who will not go home to their wives and their children and there are sons there whose lives have been tragically lost. I was the Minister of Labour for a period of 12 months before the change of Government and like I think all persons who have been involved in this sort of approach I have looked carefully at my conscience and at the actions that were taken over that time because it is an area that was under active review in the time that I was the Minister of Labour. My predecessor Ruth Dyson started some work in the department following the McGowan death in 2006. She started that in 2007 and late in 2007 I inherited the portfolio. I spent some time over the Christmas holidays looking at the matter and indicated that we would have a discussion document. That discussion document was issued early in 2008. I will say as a note to Gerry Brownlee that his offensive comments about it in this House at the time now have come back to haunt him I hope. 
The submissions on that were extensive and they were varied. There is no doubt that many of the mine owners including Solid Energy were working relatively hard to prevent what I thought and still think was a logical change to the regulatory environment to put more trust in the men who know best—that is the men who go underground. We have a system in New Zealand that has been and is much freer than in any like country. The systems are different. The United Kingdom has union-appointed check inspectors who are paid by the employers. Australia has an arrangement of union officials who are paid but who also go underground. These people basically have the right to say stop when they perceive that there is a risk. Our excesses of deregulation in 1992 removed that sort of approach and I am sorry to say that the changes that we made in 2003 which were designed to rebalance that were not good enough. Those changes relied on employers agreeing to arrangements and employers in New Zealand of miners rejected that. As a result at least two people in 2006 and possibly these 29 men died. 
There were extensive submissions to that 2008 review. Both the summary of them and the submissions themselves were made available in I think October and the balance of the people who knew about mining in practice as opposed to libertarian economic theory came out on the side of fairly extensive re-regulation. That went to Kate Wilkinson—and I say to Kate Wilkinson I think that she did the right thing in resigning. I think that as a former Minister it is one of the worst things that can happen when people die on your watch. But I also say to Kate Wilkinson that it was more than that because Ms Wilkinson repeatedly ignored warnings. Kate Wilkinson decided to abandon the review that had been started under the Labour Government. She made some very minor changes for small mines so she narrowed then rejected—even for the narrowing—some of the recommendations and accepted another recommendation for small mines. She left alone that regulation. 
Kate Wilkinson ignored representations on safety issues months before the tragedy from Damien O’Connor who was an MP representing the West Coast. I worked with Damien on his letter to her. It was a letter that was not sent with publicity at all. It was a letter that was sent privately as a warning based on what he had heard and on what all of us who subsequently—and I have been back to the West Coast six or seven times following this and have had lots of discussions with people down there. All of us are aware not necessarily of the full extent of the problems as revealed at the royal commission and the conclusions of its report but we are all aware of how bad it was. Kate Wilkinson was warned and she chose not to act on that warning. In fact she rejected that warning in writing. 
There are some questions that the Government will have to answer still and that is whether Cabinet considered the abandonment of the review of safety in underground mining or whether it was a decision taken by a Minister alone which would be surprising because a decision to have a review was a Cabinet decision. We will want to know in the fullness of time who was briefed and who was aware of those changes. We know as I said before that the whole issue was one that was the subject of mockery by Gerry Brownlee in this House and we do want to know whether other Ministers were involved in that decision. But that is a matter to be considered over a period of time. 
I say to Kate Wilkinson that I do feel for her. As Ministers we all make decisions. I made decisions as Minister of Education where if the decisions made were wrong then people were placed at risk. I say to Kate that I feel for her. She has made the right decision and she is not the only former Minister of Labour who has shed tears on this issue. 
Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery) 
: 
 Everyone participates in this debate this afternoon filled with the wisdom of hindsight and I do not think that you serve the best interests of those who are most deeply affected by these losses by getting into the sort of finger pointing exercise that I fear we are heading for. Yesterday Mr Finlayson and I went to the West Coast to give the families the first opportunity to see the Royal Commission on the Pike River Coal Mine Tragedy’s report and to hear firsthand the Government’s response to it. 
It is a report that does not pull any punches. It does not attempt to excuse anything. It is a report that tries its very best to understand exactly what happened without having had the ability to enter the mine and know for sure exactly what the causes of this tragedy have been. When we spoke to the families I think they showed all of the characteristics that they have been recognised for by the royal commission. Those quotes of the commission have been mentioned many times this afternoon. They are part of the public record in the commission’s documents. When we came to the question time we would normally expect a number of people asking for questions of clarification. There was I think an immediate sense or an understanding that the words in here—“preventable deaths”—were cutting pretty deeply into those family members’ hearts. One woman asked me very directly: “What do you think you’re going to do? All I want is my husband back. Why can’t I have that?”. You know everyone knows that is not something that you can deliver or something that you can do but it does show that for the 2 years since this event there has been no opportunity for the families to be at any way in peace with themselves or to come to terms with the deep grief that they have for the family members they have lost. All that we can do is ensure that every opportunity is taken every piece of legislation is used and every regulation is changed so that this does not occur again. 
It is easy for the finger pointing to happen. You can look in this document and see the dreadful account of so many lives lost in underground mining in New Zealand. You can recognise in this commission’s own words that we have failed to take full cognisance of what those losses meant in the past and then make a determination not to do that again. The commission’s report is damning on both the company and the regulatory system. The incidents that were reported which seemed never to get the light of day and never to be understood by people do make sober reading. There is one on page 105 of the report that very explicitly says from a deputy underground experienced in conditions: “Get the [damn] ventilation sorted out so we can cut coal. This ventilation issue has dragged on for 2½ bloody years!!!” That was in a period in the year 2010 indicating that for a very long time virtually from the start of the portal project and then the cutting of the various roadways into the resource it saw problems and apparently nothing was done. 
The commitment that the Government makes is to pick up all of the recommendations in this report to implement as many of them as possible as quickly as possible and in particular to give recommendation No. 1 the full consideration that the royal commission obviously wants the Government to make. That should be a consideration that produces a regime that will endure for a much longer period than the 1992 legislation the Health and Safety in Employment Act but also picks up many of the elements of things that have been mentioned here today. The decline of the regulatory environment did not happen overnight; it happened over a long period of time. In fact Andrew Little today I think indicated that very well. He talked about the extraordinary drop in the number of safety inspectors in the Department of Labour between the mid-1990s and up until the date he chose 2008. I think what that indicates is perhaps an overconfidence that there was a growing culture of safety in New Zealand and I do not think that that could be denied. More people are more safety conscious these days than certainly was the case when I worked on building sites 30 or 35 years ago. But none the less we can do a lot better and we do need to avoid the sort of incidents that occurred so tragically at Pike River. 
I want to make a comment about the company directors’ response to the Royal Commission on the Pike River Coal Mine Tragedy. They have today said that they are going to dispute some of the findings. When you get such a damning report as this when there is such overwhelming evidence of there having been a degree of deception in the way in which the mine itself was presented to the public and to investors then I do not think people should start running for places to hide. They should simply look at how they are going to participate in ensuring that this does not happen again. 
I want to make my final comments about the part of the royal commission report that deals with the recovery effort that was made immediately after the event. I read this with some interest because when I heard about the incident—I was at the time Minister of Energy and Resources—I was in Canterbury so I immediately went to the Pike River site. I got there around 10.30 or 11 o’clock in the evening. What surprised me was the general lack of organisation and lack of information about what the situation was. I think that all I want to say is that there is a need for a number of services who might be involved in these types of incidents to sort themselves out. Andrew Little spoke I think quite appropriately about the way in which the possibility of people being rescued from that mine was held out for such a long period of time—virtually from the Friday night right through until the Tuesday afternoon and then finally with the second big blast on Wednesday afternoon there was a recognition that it was changing from rescue to recovery. 
The tape that everyone saw on television on Tuesday evening should have been available to the families in my opinion on Saturday afternoon. Some of the people who were involved in the incident recovery team or coordinated incident management system process etc. should have been on top of that. What I am forever haunted by is the view that it was an irrelevant piece of footage and did not add to anything. The reality is that when I saw it on Monday it was total confirmation that anyone’s prospects of survival in that mine were exceptionally low. I think there was a general sort of excitement—and it sounds awful in the circumstances—that we might have a repeat in New Zealand of the rescue of the miners who were caught in the goldmine in Chile. The services who are involved here do also need to look at their performance—I am not criticising them; it was difficult and it was hard—so that they can be better prepared for future occasions. This is a good report. The Government will be acting on its recommendations. 
The debate having concluded the motion lapsed. 
Climate Change Response (Emissions Trading and Other Matters) Amendment Bill 
In Committee 
Part 1 Amendments to Principal Act 
CHARLES CHAUVEL (Labour) 
: 
 I want to just mention at the outset of this contribution that my colleague Moana Mackey is unable to speak in the Committee today. She is our spokesperson on climate change issues and she is ill. But I am very pleased to rise and make a contribution as a former spokesperson on the issue. 
I want to make just a couple of points about Part 1. It is the major part of the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill by a country mile. Of the 103 clauses and the schedule in this bill fully 102 apart from clauses 1 2 and 3 appear in Part 1. So it is to be expected that the bulk of the debate will be concentrated on this part. As was said in the earlier stages of this debate and also by many submitters to the Finance and Expenditure Committee whose submissions I have had the opportunity to read the bill is a great disappointment to those who would see progress on the issue of climate change in New Zealand. 
The legislation is fundamentally flawed. It is rushed and it will do nothing to curb the growth in New Zealand’s gross greenhouse gas emissions. Indeed the provisions of Part 1 simply reflect the delusion that seems to have seized the Government that the environment and the economy are contrary forces to be balanced against each other when actually they are two sides of the same coin and need to be seen properly as dependent upon one another. The weakening of the emissions trading scheme which this part will substantially accomplish if it is passed will make New Zealand absolutely struggle to meet even the Government’s target of a 50 percent reduction in emissions by the year 2050. 
It is instructive to compare what the provisions of this part would do with what the Government promised when it campaigned for election in 2008 once Labour had actually legislated for an emissions trading scheme for New Zealand. These were the promises. The changes National said it would bring in would be fiscally neutral. Well that promise is already broken and this part will ensure that it is further broken. The Government itself has estimated that this legislation will cost some $328 million. That is the size of the subsidy that this Parliament will be enacting if it passes Part 1. The Sustainability Council thinks that the subsidy is about four times that number—$1.3 billion. That is what Part 1 will accomplish if it passes in its current form. And this is on top of the 51 million tonne deficit that the emissions trading scheme now contains which is also estimated to cost around $1.3 billion at the current carbon cap price. This is simply a continuation of National’s approach of passing costs on to New Zealand taxpayers to reduce costs for polluters. 
This Government’s tinkering is doing more harm than good. There is no certainty in the business environment. We all I think agree that certainty to businesses is a fundamental thing that we ought to be providing so that they can get on and plan and they can get on and order their affairs. If the rules change every year if the commitments just go on to the never-never every year if the promises are postponed every year then there is certainly no certainty for business or for any other actors in this particular part of the economy. 
This bill fails to target some of the crucial issues within the emissions trading scheme—for example the influx of cheap international units making the price of carbon in New Zealand lower than in other schemes and making for a large deficit in our emissions trading scheme. What the part shows is that National is happy to manage the slow decline of New Zealand rather than moving forwards to a clean and clever low-carbon economy. That was the intention of the original emissions trading scheme and this part of the bill simply takes us further and further away from that original intention. Labour is not content to fall behind the rest of the world and we will be voting against this part of the bill. 
My colleague Moana Mackey has put forward a number of amendments that would go some way to fixing some of the damage that this part would cause. There is Supplementary Order Paper 144 where Moana Mackey’s amendments would provide for a transitional phase-out of the two-for-one surrender of units and a transitional carbon cap price. That is a very good Supplementary Order Paper and I want to commend it to the Committee. She also has on the Table Supplementary Order Paper 142 which would require 50 percent of units surrendered to be New Zealand units. That would help to deal with the problem which I mentioned earlier of the influx of units that is so undermining the scheme and the price in New Zealand. 
She also in Supplementary Order Paper 146 has amendments to clauses 42 and 71 that would provide for some transparency. I remember when Dr Nick Smith was the Minister responsible. He always said that the most transparent regime that we could achieve in this area would be the best one from the point of view of the public. Well I agree and so does Moana Mackey and what she has done is put forward an amendment that would provide for that by ensuring that the costs that are actually faced by consumers and taxpayers would have to be published by the Government so that the public could actually have an idea of what this massive wealth transfer this massive subsidy scheme which is what the emissions trading scheme has become is actually costing consumers and taxpayers. It is a very good amendment and I commend it to the Committee of the whole House. 
Moana Mackey also has an amendment on Supplementary Order Paper 141 which would delete clause 96 relating to the application of the emissions trading scheme to the agriculture sector. I said earlier that there can be no certainty in a scheme where there are constant reviews being undertaken where deadlines are continually being put out and where in New Zealand’s case the largest source of emissions the primary sector is simply being given the message that it will never be— 
Shane Ardern 
: Where’s the science? Back it up with science. 
CHARLES CHAUVEL 
: —bound by the emissions trading scheme. Mr Ardern asks: “Where’s the science?”. Well the fact that a member of this Parliament would ask that question so far into the debate the fact that the National Party still contains climate change deniers who would say that agriculture and primary production simply do not contribute to the problem is a sad testimony to what a lack of progress we have made in this country on this question—if that contribution can seriously be made in this Committee. 
There are other amendments before the Committee in the name of Kennedy Graham. He has put forward a comprehensive Supplementary Order Paper 147. I think there are a number of measures in that Supplementary Order Paper that the Committee should pay close attention to and give careful consideration to. Many of them at least on my first blush reading of them seem to make a lot of sense and I want to commend Dr Graham for having put those amendments in front of the Committee. I hope that we will see some careful consideration of them because as we have heard in previous contributions the scrutiny that this legislation got in the select committee was not the sort of detailed look at this sort of complex economic question that it merits. There was a very truncated select committee process and that is not what this question deserves. 
Dr Graham and Moana Mackey are both trying to remedy that at this stage of the debate by ensuring that there is material before the Committee that allows an alternative view to be considered and I hope that that will be what happens in this debate. I hope we hear detailed contributions on it and that we hear a response from the Minister for Climate Change Issues both to the issues I have highlighted which Moana Mackey’s Supplementary Order Papers would deal with and to the scheme that is put up in Dr Graham’s Supplementary Order Paper. It deserves I think at least that courtesy both because of the importance of the issue and because these are clearly bona fide attempts to address in good faith the major problems we face in this area. 
Hon Dr NICK SMITH (National—Nelson) 
: 
 I want to make just a brief contribution on the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill and I want to begin with the substance. The core issue that Parliament wants to address with its climate change legislation is the issue of greenhouse gas emissions. I was fascinated to read the just tabled report from the Ministry for the Environment on the level of emissions. I really would ask members opposite to pick up that report and have a look at page 17 because what it shows is this: in the years 2000 to 2008 in every single year the level of greenhouse gas emissions increased quite dramatically. In fact over that period it shows it went from 64 million tonnes up to a level of 78 million tonnes in the 8 years that Labour was in Government supported by the Greens. 
In the period in which we have been the Government it is interesting to note that in each year emissions have gone down. I was expecting to hear speeches from members opposite commending the Government for its record in that regard. I thought that was the core of what this debate was all about. So I would firstly challenge members to look at that annual report and acknowledge that under this Government the emissions trend for New Zealand has changed and that New Zealand is set to comfortably meet its Kyoto commitments. Before members opposite bag New Zealand’s international reputation in this area I want them to line up and tell me which countries are doing a whole lot better than New Zealand. I say to the Minister in the chair the Minister for Climate Change Issues that New Zealand can stand tall. We are doing our fair share as we promised. 
The second issue I want to address is the question of agriculture. I have listened to speaker after speaker concerned about New Zealand’s balance of payments wanting us to grow this country’s exports. Is there a member in this Chamber who does not understand that the backbone of New Zealand’s exporting industries is our primary industries? Yet here we have members opposite wanting to kneecap our most important exporting industry. I want to ask members opposite how that will help New Zealand’s balance of payments. 
I particularly want to challenge members opposite on an article in the  
Guardian 
 newspaper last week. Do you know what it said? It said British consumers help climate change by eating New Zealand lamb. That is what the British newspaper said. Do you know why it said that? Because scientific studies have shown that when they consume New Zealand lamb the impact in terms of emissions is about half that of consuming British lamb. The question I have for members opposite who have consistently run the argument that for environmental reasons agricultural emissions should be put into the emissions trading scheme on 1 January next year is this: for the British consumer if that takes place you are actually providing a financial incentive for them to consume lamb that is produced somewhere else other than New Zealand. That will actually drive emissions up. 
I am all for environmental responsibility but I want to see measures being adopted in New Zealand that will help not hinder the reduction in the growth of emissions. I say that the position the Minister has taken that New Zealand should not put agricultural emissions into the emissions trading scheme until we see greater progress internationally—and secondly when we see the product of the huge investment that this Government has made in research programmes that will develop the practical technology by which farmers can address those emissions—is absolutely the right policy both economically and environmentally for New Zealand. 
The third point I want to make is the complete contradiction of members opposite in terms of their campaign around manufacturing jobs. You see members opposite cannot cry foul about the potential job issues for key industries like New Zealand Steel Holcim cement and the aluminium smelter down in Invercargill—they cannot sing that tune in one breath and then in the next say that they want to impose greater costs on those same manufacturers. I challenge the next member from Labour a member who has been championing the cause of jobs in the manufacturing sector to explain how putting more costs on the manufacturing sector is going to help jobs at this economically very difficult time. Labour cannot have it both ways. 
The final point I want to make is in respect of electricity prices. You see I constantly hear members opposite saying that they are concerned about households and their power bills. I simply challenge them to be honest and upfront because the amendments they have tabled in their names will all lift the price of power bills for average Kiwi households. I am one of those who want to see incentives for renewable power but there has to be a balance. There has to be a balance towards the shift we need to make in New Zealand before there is more renewable energy—and no Government in the last 20 years has had as good a track record as what we have seen take place in the numbers that are published by the Ministry for Business Innovation and Employment. It is proper that we do that. The important reforms that my colleague Amy Adams is working on in the Resource Management Act will help us build more renewable energy. But we need to balance that with the real costs that electricity imposes on both households and businesses. The part that I get frustrated with is this: members opposite keep talking about the emissions trading scheme costs as though they fall only on corporates but they do not. Every cost that we impose in this bill is not being imposed on some corporate but on ordinary New Zealand households farmers and businesses. I challenge members opposite to bring that reality to this debate. 
The very last point I want to make is that I have heard all sorts of rhetoric from members who say that this bill takes the emissions trading scheme backwards. That is untrue. 
Dr David Clark 
: $328 million. 
Hon Dr NICK SMITH 
: That is untrue and I just want to say to the member who has interjected that actually under this bill the New Zealand emissions trading scheme will take up a new sector of gases on 1 January. Not only is it going to include industry electricity and transport fuels which are not subject to the Australian scheme but on 1 January next year it is going to include those very powerful greenhouse gases which expands the scheme next year to more than what it was this year. Sure members opposite can claim that the scheme may not be going as fast forward as they would like. That is a fair argument. But it is not— 
Dr David Clark 
: It’s in reverse. 
Hon Dr NICK SMITH 
: The member says it is in reverse but the one-for-two obligation operates now. In terms of the sectors that includes they are all there now. The truth is the emissions trading scheme under this bill will next year include more gases and will be more extensive than it is now. It is important that we debate what is in the bill not what is in the fantasies of the members opposite. 
Dr KENNEDY GRAHAM (Green) 
: 
 In the limited time we have I do not want to devote too much time to responding to the previous speaker a speaker for whom I have considerable respect not least on climate change issues. Notwithstanding that it is not too hard to refute each of the points he made. 
Firstly he commented on the increase in greenhouse gas emissions from 2000 to 2008 and the reduction in emissions from 2009 to 2012 as if that was a badge of honour for the Government. It was nothing of the sort. It had to do with the global financial crisis. 
Hon Dr Nick Smith 
: No it doesn’t. 
Dr KENNEDY GRAHAM 
: It does. The gross emissions— 
Hon Dr Nick Smith 
: It’s the stop in deforestation. 
Dr KENNEDY GRAHAM 
: That is one aspect. But the fact is that the gross emissions went down—you are talking about net—largely because of the global financial crisis. If in fact there is economic growth again and if you do not decouple then those gross emissions are going to rise again. What Dr Smith did not do was point out figure 2.1 of the Emissions Trading Scheme Review Panel’s report to the effect that gross emissions are going to rise. He did not point that out. Whichever Government is in power unless there is a strong emissions trading scheme in place gross emissions are going to rise. And I do not see him to receive the point. In fact he asked for the Government to be commended for the gross emissions going down. Well if that is the case the Government has to be commended for the emissions going down because of the global financial crisis only. 
His second point from the  
Guardian 
 is that New Zealand lamb has less of a carbon footprint than British. That is true as far as it goes. What he did not say is that in either case our agricultural emissions are going up as a result of increased meat production to meet increased global population. So unless you can decouple agriculture from an increase in gross emissions we in this country—whether we are less carbon-intensive than Britain or not—are going to be responsible for an increase in emissions. We cannot afford to do that and neither can the world. 
Point No. 3 was that with manufacturing jobs you cannot have it both ways. True you cannot and you do not have to. The Green Party put out a platform in 2011—only a year ago—for 100000 new green jobs that reduce emissions and increase the quality of life with employment going up. It is easy enough to do; it is just that we do not get hung up on the old-fashioned notion of how to get jobs. 
Point No. 4 was that with electricity prices you need a balance. I totally agree with that. It is just that you get a balance by some recycling of revenue that can be obtained through either an emissions trading scheme or a carbon tax and it does not have to be in the way that Dr Smith is implying. 
Finally he is criticising the Opposition for critiquing the emissions trading scheme as going backwards and said that that was untrue. Well he is right there. It is not going backwards; it is going forwards. It is going forwards to dangerous climate change and potentially catastrophic climate change. Nothing is going backwards. Nothing can go backwards at least not in this universe—although there may be one or two parallel ones in the Chamber. But the fact is that we cannot afford to have the kind of emissions trading scheme that is in front of us that is being further weakened if we want to have regard for what is going on around the planet. Mr Banks looks at me as if he is wondering what is happening in the Arctic. Well the fact is that polar ice has melted 80 percent since 1980 and it is on course to be ice-free for 1 day in 2015. That is 50 years ahead of 2065 which was the scientific— 
Shane Ardern 
: So how would taxing agriculture— 
Dr KENNEDY GRAHAM 
: We will get to that yes—patience and we get there. You can adopt only an emissions trading scheme that is going to be strong enough to meet the requirements coming from the science. That is the premise on which the Green’s Supplementary Order Paper 147 is based. It is a rather broad-ranging emissions trading scheme which seeks to strengthen all the provisions that have been weakened in the emissions trading scheme in the last 3½ years. 
The departure point for—let us call it—the Green emissions trading scheme is that we look to the purpose of the Climate Change Response Act 2002 which is to enable New Zealand to meet its international obligations under the convention and the protocol. That is not just the Kyoto Protocol; that is the framework convention as well which goes beyond the Kyoto Protocol. So we have to meet the requirements of reducing our greenhouse gas emissions post 2012 under the framework convention. That is an obligation. How do we do it? And how do we do it in a way that meets the science that is coming out? The science makes it clear that there is a range on countries such as ours to reduce emissions by 25 to 40 percent by 2020 and 80 to 95 percent by 2050. I note in the Cabinet paper that the Government has the impudence to say that it does not follow that New Zealand or any country has to be within that range which I suggest is an illogical absurdity and morally irresponsible. That range is determined by the scientists. All annex 1 countries are meant—meant—to be in that range. 
If we proceed from that we can then turn to the targets as they are set out in Part 1 of new schedule 5 proposed in Supplementary Order Paper 147. Here are the figures—which I have never seen come out from the Government incidentally although they are there more or less—in the review panel’s report as to the tonnages that are meant to come down. We can either say it is too damned hard and we will rip it up and throw it into the waste-paper basket and look forward to potentially catastrophic climate change or we can say: “My God this is going to be difficult and let’s work together to work out how we do it.” I am prepared to do that. I do not think for a second that we have got all the answers but these are the figures that would be required. 
Shane Ardern 
: The basic question is by taxing agriculture— 
Dr KENNEDY GRAHAM 
: Yes I understand the question—thanks for that. We will get there. If you then proceed to Part 2 of new schedule 5 you will find there are 5-yearly carbon budgets as in the British model as to how we get there. They reflect the figures that are in Part 1. If National MPs and Green MPs look to that we would be able to at least have an informed dialogue as to how to get there. 
How do we get there? We get there by setting up an independent commission on climate change to give independent advice to the Government—whether it is National Labour Green—as to what figures are meant to go into the carbon budgets to get down to virtually a carbon-free economy by 2050. We would set up an appeals tribunal to receive any pleas for financial relief from any sector—whether it is corporate farming households or individuals—that believes it is experiencing undue financial hardship as a result of a strengthened emissions trading scheme. Let us not gloss over the fact that there will be change and uncomfortable change as a result of the need to adapt to a low-carbon economy. The challenge is not to deny it; the challenge is to work our way together as to how you get through it. I do take the points about the shock therapy of an apparent carbon tax. 
The measures would be the introduction of a price floor and termination of the price cap; a phase-out of the one-for-two surrender obligation; termination of the issuance of free allocations to participants; introduction of auctioning under the general discretion of a Minister commencing in 2013; restrictions on international units that can be traded and surrendered in New Zealand to the tune of 30 percent; introduction of agriculture into the scheme in 2014 which was originally intended to be 2013; and a requirement on emissions trading scheme participants who are purchasing units under the scheme to purchase a minimum percentage of those units in the form of units held by participants in the Permanent Forest Sink Initiative. The foresters have had it bad. Permanent Forest Sink Initiative foresters are only part of that but they are probably getting a worse deal than anybody. 
There is a huge need to look at each of these provisions. I put it forward to the Committee with respect to the Minister for Climate Change Issues to engage in a proper dialogue—a respectful mutual dialogue—on each of these provisions. Although I will receive sincerely a critique of these provisions from the Government which no doubt will be on the grounds that it is too difficult and it will incur too much short-term financial pain the answer to each of those critiques to the Minister to the Government to National MPs and to all colleagues in this Committee—because we are in it together let us face it—is whether you can show to our satisfaction a weaker scheme that is going to meet the demands of the science that has come out in the last 3 years since the 2007 Intergovernmental Panel on Climate Change report pertaining to ice melt potential methane release and the impacts of climate change that are around us. Thank you. 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 I want to build on some of those comments made by Dr Kennedy Graham. There was much in Dr Nick Smith’s speech prior to it that was poppycock. I think there was not enough time for Dr Graham to constructively add to the debate and to address all of the nonsense raised by Dr Smith. 
Dr Smith in his contribution said that the desire was to address greenhouse gas emissions through an expansion of the scheme. This is a lofty way of phrasing things but it does not sit well with the facts because we know and the Government estimates that this legislation the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill will cost $328 million. It is legislation that is increasing the taxpayer cost because those costs are not being met by polluters. So the facts do not quite line up with the rhetoric. That is not unusual from this Government but it is unfortunate because here we have a serious issue that needs addressing and a Government that is scurrying from it as fast as it can. 
Dr Smith raised the issue of emissions increasing in a dramatic way between 2000 and 2008. Emissions certainly did increase and I guess that is something this Government has not had to grapple with because at this stage the increases are largely coincident with economic growth and we know that this National Government has the worst economic record of any Government in the last 50 years. 
Todd McClay 
: Rubbish! 
Dr DAVID CLARK 
: It has the worst economic record of any Government in the last 50 years Mr McClay so it has not had to deal with this issue of economic growth and to what extent one can decouple growth from emissions. 
Certainly the last Labour Government consented a significant amount of renewable energy some of which is now coming on stream. It was the Labour Government that introduced the emissions trading scheme with the support of the Green Party into this Parliament and it has seen at least some response to climate change—a response that was not particularly forthcoming before it was tackled by the Labour Government. That scheme I have to say was a fairly modest one and I think all members who supported it would acknowledge that it was ambitious in including all sectors and all gases but that it started in a modest way. Its aim was not to put businesses out of business; its aim was to shape the way in which future investment decisions were made so that businesses would make their decisions based upon an understanding that there would be a carbon price in future. 
That decision that framework is in fact the subject of one of the Supplementary Order Papers Supplementary Order Paper 142 that I wish to discuss as I get into my address to this Committee—one in the name of Moana Mackey. It talks about the possibility of having New Zealand - based units to ensure that there is actually a reasonable price of carbon so that future investment decisions are made in a way that is in New Zealand’s long-term interests not in the interests of the next couple of years—the economic returns in the short term—so much as in the longer term. 
We know that New Zealand’s products capture a higher premium price in the market because we have an environmentally friendly reputation. That reputation is under threat—that reputation is currently under threat. As New Zealand waters down this legislation we will no longer be able to attain the same premium prices in the market. When the scheme was introduced we in the Labour Party calculated that it would put an additional couple of cents of cost on a block of butter—a couple of cents. But those couple of cents would go towards offsetting the emissions and it would also help to ensure that those products were seen to be on the right side of the equation. 
Shane Ardern 
: It would go to a northern hemisphere farmer. Production would go elsewhere. 
Dr DAVID CLARK 
: Mr Ardern would like to see us wind back the legislation further but it cannot be done. The legislation that is being put through will ensure that the subsidy to farmers goes out indefinitely. The farming industry which proudly claimed itself to be subsidy-free in the 1980s now is faced with the prospect of being heavily subsidised indefinitely. The National Government is ensuring that polluters are subsidised and ensuring that those farmers who are taking measures to reduce greenhouse gas emissions through good farming practices are not encouraged. 
Shane Ardern 
: How are they doing that? What are they doing? Give me a hint of what they’re doing. 
Dr DAVID CLARK 
: Mr Ardern does not want to see those good farmers encouraged. He wants to encourage the worst farmers to continue doing what they are doing and those farmers who are making changes in their farming practices who are putting modern farming practices in place not to be encouraged. We know that the use of nitrogen on farms can be changed according to best practice to reduce emissions. 
Shane Ardern 
: Yes doing that. Yes a tick for that. 
Dr DAVID CLARK 
: Oh it is all done says Mr Ardern. He is well ahead of most of New Zealand on this issue. I will concentrate back on my speech rather than take too much more wisdom from that member on this matter. 
There is of course this prospect of losing our premium in the market—I will come back to the point—which at all costs must be avoided because New Zealand needs a smart safe business-friendly future not a future that is tied to the worst parts of our economy in terms of those who are the greatest offenders in terms of emissions but to one that rewards good farming practices and advances and clean green climate-friendly businesses. 
The studies that Dr Smith referred to in his address I have to point out that talked about lower emissions with New Zealand stock were commissioned under the Labour Government so there is a rich irony in him claiming that point. 
There is also a point that needs to be addressed when he asks which countries are doing more than New Zealand. Well most countries. New Zealand’s per capita emissions are embarrassingly high. If New Zealand with its renewable resources—with its rich renewable resources—cannot address climate change it is ridiculous to expect other nations to attempt to do so. New Zealand can at lowest cost address this issue and so it is incumbent upon us to take a lead. The costs are not great. New Zealand needs to get on with it show what can be done and take a lead in the climate change space. 
This Government instead is moving us backwards rapidly. It is costing $328 million with this legislation. It is looking to avoid—the latest reports say—future obligations in the way that very few countries did the first time round and really putting New Zealand in a space where we will be less proud to call New Zealand home. Where we need to come back to is the kind of sensible Supplementary Order Paper that stands in the name of Moana Mackey—one that encourages New Zealand units to be traded. New Zealand is the only country that currently does not place quantitative restrictions on international units. We need to step back into best practice and away from worst practice which this Government seems to be attracted to. Let us do what the Australians are doing. The Australians are looking to do this. Many other schemes do not even allow any international units at all. What we have here is a scheme that takes us backwards rapidly that undermines the framework and that in fact gives greater confidence to polluters. 
This is not good enough—this is simply not good enough. We as a country need to be leading the charge and leading the technological development for addressing greenhouse gas emissions because that is the way to future prosperity. Developing new technologies and the intellectual property that goes with them is what will lead the market and set the prices in future—that is both in the agricultural sector and across the energy sector more broadly. New Zealand needs those kinds of things. 
This Government has the worst economic growth record in 50 years. There are other ways to sort that out other than rolling back what is already a very modest emissions trading scheme. We need tools to address the exchange rate and to give the Reserve Bank those tools. We need better savings policies so that New Zealanders have money to invest in businesses. We need pro-growth tax reform that encourages money to go away from the speculative sector and towards the productive sector in our country. Those are the ways to support businesses in New Zealand. Watering down our climate change legislation is not the way to achieve economic growth in this country. 
Hon JOHN BANKS (Leader—ACT) 
: 
 In a previous life I represented a very big farming constituency the electorate of Whangarei. I do not think it is even a farming constituency today because it has come back on to the boundaries of the city. But I will take a farmer in Mangawhai Heads right now. In my day in those days farmers would love to listen on their crystal sets to what was going on in the Parliament while they were milking their cows. They would invariably be milking their cows with their wife and maybe a son and a neighbour and they would be doing their best. They have been up since 4 o’clock or 3.30 in the morning and it is now 10 to 5 at night and they are halfway through their herd of 350 cows. They listen to the Labour Party member who has just resumed his seat David Clark and the eminent member from the Green Party Kennedy Graham who I am sure is very knowledgable on these things but they are terribly confused. 
I want to take the confusion out of this debate this afternoon because if we stopped milking cows in this country today if there were no cows in this country today if the farmer from Mangawhai Heads with his wife his son and a neighbour milking their 300 cows this afternoon were not there and there were no cows being milked in this country it would not make any difference to the timing of the melting of the ice down in the Arctic—no difference at all. That is the problem. All I know is that the farmer in Mangawhai Heads listening to this debate this afternoon on his crystal set will be saying that what the Labour Party has told us today in this Committee is that it is going to cost $320 million to $350 million if this Minister this fine Minister in the chair Tim Groser does not take the decision with the support of the ACT Party and the member for Epsom to say taihoa. The farming sector the productive sector the export sector of the New Zealand economy cannot take a $380 million to $400 million hit in 2013 and maybe more in 2014 2015 and 2017 because we want to lead the world in terms of the milking of our cows so that we can stop carbon emissions on this earth. 
I am not going to debate this afternoon whether greenhouse warming and the Arctic ice—and I am saddened about that because I am an animal rights activist and greenhouse warming and the melting of the ice in the Arctic means a lot to me because it means a lot to that environment. But the problem we have here is that the country is fundamentally broke. We are borrowing $1 billion a month. We have borrowed $55 billion in the last 3 years and the farming sector that you represent Mr Deputy Speaker from the bottom of the South Island is the people who are keeping this country afloat and they really cannot take an impost of a taxation like this in the absence of the rest of the world which is not even following us. The rest of the world is not even following New Zealand let alone staying with us on the proposition. Australia Canada the United States and Britain are not even following us and we are at the forefront of this as a country. 
Going back to the Mangawhai farmer the Mangawhai farmer lives in the Kaipara constituency of the local authority. The Kaipara District Council has got more debt per capita than a citizen living in Greece. So that Mangawhai farmer listening this afternoon on his crystal set to this debate in the Parliament will say: “What is going on here? We’re struggling to make ends meet here. I’m a dairy farmer. I don’t own the property; I’m a sharemilker. I own these cows. I owe the bank $550000. I’m struggling with my debt and all I hear from the parliamentary Opposition is that it wants to put a tax on me milking my cows for the town supply of milk for the domestic sector and for exports to the rest of the world so that we can pay the interest on the $1 billion a month we’re borrowing because we’re going broke slowly.” 
Kyoto and the rest of the agreements—farmers in Mangawhai Heads do not really understand. You see the farmers milking cows in your electorate Mr Deputy Speaker or in Mangawhai Heads—there are not many farmers in Epsom—clearly understand that all costs impact on their viability to be able to pay the bank the interest on the money they owe it for the cows that they are milking and that the cows that they are milking provide export receipts for New Zealand to pay the interest on the money that we borrow which is about $1 billion a month for the last 3 years and going forward. 
It has got to be condensed into a simple debate. This National-ACT Government said at a Cabinet committee meeting not so long ago: “Taihoa on 2013. Let’s taihoa on that. Let’s make sure that the productive sector has an opportunity to pay its way pay the debt pay the interest on the $1 billion that we have been borrowing and make our export sector competitive.” 
There is no evidence that I have seen—and I would like to see it from Dr Graham who knows more about this than I will ever know and I respect that; he probably also understands this—of how you can quantify the carbon emissions from that dairy farmer’s 280 cows in Mangawhai Heads when we do not even know whether one jersey cow compared with another jersey cow has the same level of emissions. What are the emissions anyway? There is a 50 percent variance. All the work I have seen and the article that I read in  
The Economist 
 tells me that there can be up to a 50 percent difference in the emissions from one cow to the next cow. All I am saying today in the Parliament from the constituency of Epsom where there are no dairy farmers is thank you Mr Trade Minister for two things: the work you do on international trade and the gauntlet that you have picked up on emissions taxation in this country which was going to be an impost on that farmer from Mangawhai Heads with his wife his son and a neighbour from down the road who are milking 280 cows night and morning for export receipts to pay the interest on the money that we are borrowing to fund the Crown account. It is the Crown account that we are borrowing for every week and it is about funding. 
If we had oil on farms in Mangawhai Heads then maybe we could be leaders in carbon emissions on the global scene. But we do not have the oil. What we have is cows’ milk and by-products of cows’ milk for the export sector to pay for this—$380 million to $400 million. It could be more. In 2014 it could be $500 million. If we had a Labour Government a Greens Government and a New Zealand First Government by 2020 it could be $1 billion on the dairy farmers of New Zealand as taxation for this. The farmers simply cannot afford it. I speak on behalf of hard-working mums and dads who are up the metal road behind the gates up the path in the sheds—all night waking up worrying how they are going to make ends meet—milking cows for milk for production and for exports to pay the money that we are borrowing for the Crown account so that we can live in a style that we have become accustomed to and cannot afford. 
All I am saying is that when the economy comes right and the Crown account stops borrowing from the Chinese to fund it each week each month and each year then we might be able to afford to even have a debate like this. But these debates are costing $8000 a minute in this Parliament to talk about taxing farmers the productive sector of the New Zealand economy which is holding this country up. 
I will say one final thing about emissions control and this National Government’s attitude towards it. I thank the National Government for its sensible proposition that right now is not the time to be even having this discussion. Right now is not the time to be taxing farmers on their emissions. Right now is the time to be supporting the farming sector the productive sector of the New Zealand economy to pay the interest on the money that we are borrowing each week for the Crown account which we cannot afford. Thank God for the farmers and Minister stay staunch on this. It is very important to the New Zealand productive sector. Stay staunch on it. Do not buckle to any of the Supplementary Order Papers because the ACT Party and the member for Epsom will not support silly Supplementary Order Papers that mean more taxes more impost and more costs on that farmer whom I talked about who milks 280 cows at Mangawhai Heads with his wife his son and the man from down the road. 
DENIS O’ROURKE (NZ First) 
: 
 New Zealand First does not support the emissions trading scheme as it is or this Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. It is just another expensive imposition on the people of New Zealand and on the businesses of New Zealand and we think it will be an expensive failure in terms of emissions. We need to think about the whole thing again. 
The need to attack climate change and to ensure that business improves its emissions performance is not denied but doing so in this way is not the correct approach. New Zealand First understands the nature of this country’s international obligations but this emissions trading scheme will turn environmental protection into a carbon credit bank to make emissions reduction a speculative business. Issuing tradable credits means New Zealand ends up paying for the wrongs of other countries and other polluters around the world. Businesses should not be able to buy their way out of bad emissions performance. That is what this scheme will essentially do and that is the essence of our opposition. 
Continuing with this scheme will cost billions of dollars to the New Zealand economy. We simply cannot afford that especially when it will not be the emitters who pay and especially when the scheme will not be effective as a means of assisting the problems with climate change. We believe we simply cannot afford it at this stage in any case. We note that many other countries are not having a bar of it. New Zealand should rethink its position entirely. 
We believe these funds should instead be retained in New Zealand—and that is New Zealand First’s policy—in order to provide the means to tackle our own emissions and our own pollution here in this country. We should be applying environmental levies or much better-targeted carbon taxes so that New Zealand will be able to play its part. We should have the strategies the plans the legislation and the regulation to achieve the emissions performance we seek and in consultation with New Zealand business because we think that without the cooperation of New Zealand business—New Zealand business generally agriculture and the whole of New Zealand business—we will have no chance really of achieving any of these objectives. 
I might say that I think most New Zealand businesses would prefer New Zealand First’s approach over the emissions trading scheme as a whole. For example we think that transport must be a first target requiring more use of rail less polluting vehicles better public transport incentives to use non-liquid fuel vehicles and so on. We do think that agriculture needs to play its part. We think that it needs to pay much more attention to sustainable agricultural processes. We see diesel emissions as a major problem with the many old buses and trucks that are chugging along New Zealand roads. We must use emissions regulation to require better performance from them and industry as a whole. 
New Zealand First maintains that the State must strike an appropriate balance between economic progress on the one hand and appropriate emissions goals on the other. The emissions trading scheme does not in itself decrease emissions; it just facilitates the trading of credits around the world to those economies that can afford to buy them and for that reason we do not see the emissions trading scheme devised by this Government as being sustainable. We see it as nothing more than another imposition on the people and product of New Zealand without anywhere near sufficient benefit in terms of emissions or assisting the fight against climate change. 
This particular bill improves nothing whatsoever. It simply makes a bad scheme worse by so compromising it that it lacks credibility. New Zealand First opposes the bill and the scheme. We think New Zealand and the world deserve better. 
CHARLES CHAUVEL (Labour) 
: 
 I want to speak in some detail to one of the Supplementary Order Papers that sits in the name of my colleague Moana Mackey because I do think that if the Committee were to take the Supplementary Order Paper on board then this legislation the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill would be greatly improved. Indeed that is a point that Moana Mackey made to the Hon Peter Dunne in a letter dated 31 October this year which I am going to seek leave to table at the end of this contribution. 
What I want to say to Mr Dunne is this. As Moana Mackey pointed out in her letter his commitment to supporting this legislation could still be fulfilled while voting for her Supplementary Order Papers. That is something that also goes for the Hon John Banks and any other member of the House who wants to support the legislation of the Minister for Climate Change Issues. But with some sensible tweaks it could be made better. 
I listened with great interest to the contribution of the member who just resumed his seat Denis O’Rourke because I remember that when I was chairing the Finance and Expenditure Committee that heard submissions on the original emissions trading scheme legislation the Labour Party did not have a majority on the select committee. The legislation was reported back to the House with the support of Jeanette Fitzsimons and Doug Woolerton and they made the decision that they did—to support an emissions trading scheme—because they heard evidence that indicated that it would make a difference to the behaviours that Denis O’Rourke has just quoted. And so it would have. 
 The original scheme would have encouraged greater use of sustainable practices in agriculture had the signal been retained that agriculture would eventually come into the scheme. The original scheme would have incentivised more use of rail for example to transport heavy goods rather than having those things on our roads. The original scheme would have incentivised greater renewable electricity investment. I can say that very clearly. I was on the board of Meridian Energy for a number of years. I remember very well the debates on that board in anticipation of what we all knew would happen—that the Government would bring in a price signal around the use of carbon. All the generators at the time knew that that would happen in some form or another and they began to modify their behaviour accordingly. Genesis Power—Meridian’s biggest competitor at the time—essentially was making plans to exit if it could its dirty coal businesses. It was for the first time looking at making investments in wind farms. Why did this happen? It was because everybody knew that a price signal was in the wind. 
The problem with some of the contributions we have heard already in this Committee stage particularly the one from the Hon John Banks is this: he says we have to defer this scheme it is too expensive it puts too much of an impost on our productive sector and it could not cope with it. Well let us be very clear. Let us as members in this Committee and the public listening to this debate be very clear about what we are actually saying. We are saying that those who emit those who pollute should not have to bear the full costs of that activity; the taxpayer should subsidise them. For all the rhetoric we hear about being indebted to China for our lifestyle the reality is that these changes will cost the New Zealand taxpayer $1.3 billion a year. That is the subsidy that we are conferring upon the polluting sector by failing to act and failing to put in place a scheme that would incentivise all the behaviours that—I agree with Mr O’Rourke—we want to see in New Zealand. 
When we hear this talk about New Zealand leading the world with an emissions trading scheme and other countries not pulling their weight what I say to members who say that sort of thing is to wake up and look at the evidence. We are falling well behind a number of countries in a number of areas. I see that the Minister in the chair the Hon Tim Groser is shaking his head. I hope he gets up and takes a call at some point in this debate. It is always a pleasure to hear from him and it will be great to have him share his wisdom with the Committee. 
But the point is this: the reality of what countries are doing overseas in fact to put in place better use of sustainable energy the attempts by countries overseas to bring in better sustainable practices in primary production—the manufacturing of solar panels in China is one example and the attempts by that country to wean itself off its addiction to coal and on to other forms of energy so that it is not engaged in polluting practices as it tries to grow its economy—is the reality of the world environment. It does not matter whether a country is running an emissions trading scheme or not; it is what it is actually doing in practice to properly price the use of polluting technologies and to incentivise the use of renewables and cleantech. That is where when we say we are falling behind members on this side of the Chamber start to get so concerned. 
The other real concern in the debate of course is the fate of forestry and what these changes will do to that industry. Again that is why Moana Mackey was so keen to write to the Hon Peter Dunne and say: “Look you have a chance not to completely devastate that industry which was brought into the scheme right from the beginning which was sitting on valuable credits and which now sees the value of those credits effectively being devastated.” That is a sector that we rely upon for our emissions profile which Dr Nick Smith was so ready to point to in his earlier contribution. Without the forestry sector and its contribution which will go out the window once this legislation is passed our emissions profile will look very poor indeed. I know that the Minister knows that fears it and is concerned about it. What I want to know is what the Government is going to do about it. 
What Moana Mackey has done is put up some alternatives. There is the Supplementary Order Paper in her name Supplementary Order Paper 142 which would restrict international units. What would happen under that proposal is that a 50 percent restriction would be put on international units so that New Zealand units would be preferred over international ones so as to protect our forestry industry. We are not linked to any other emissions trading scheme so this would effectively limit UN offset credits to 50 percent. We know that since the emissions trading scheme came into effect there has been a sudden collapse in the price of UN offsets—which no Government could have predicted—because of the massive oversupply of world units. With current UN offset prices at around $1 and the one-for-two deal that was brought into the scheme when Dr Smith was the Minister this makes our carbon prices around only 50c per tonne at present. The only scheme in the world at the moment that is comparable is India’s which charges 50 rupees as a tax for every tonne of coal that is burnt. 
So a restriction on international units coming into New Zealand is crucial to protect our forestry industry and to keep faith with that sector which has been part of this scheme for good reason from the beginning. If we do not move to protect the forestry industry then this Parliament will be ripping it off. Forestry groups—I know because I have seen the submissions—came to the Finance and Expenditure Committee and told the committee as they have told the Government time and time again that the faulty settings on the emissions trading scheme were harming forestry. They have been ignored. If we want to see deforestation on a big scale—let alone a deterioration in our emissions position—we will just go ahead and pass Part 1 as is without Moana Mackey’s amendments. But if we do actually care about those issues then we will try to deal with the issue. 
Without Moana Mackey’s amendments there will be significant job losses in the forestry sector. New Zealand is the only country that allows virtually unrestricted access to offset credits. In Australia only 12.5 percent is allowed and in Europe there is an average of about 14 percent. The 50 percent restriction that Moana Mackey’s Supplementary Order Paper would impose is generous by comparison but at least it is something and at least it would put in place some sort of protection for that precious forestry industry of ours. If we are ever going to link with the European scheme the Australian scheme or both then we are going to have to put in place some sort of restriction in order to be compatible—that is pretty clear—so we might as well do it now by way of Moana Mackey’s amendments. It would not significantly raise prices. 
At the same time we have seen that the collapse in the carbon price has had devastating implications for our carbon forestry sector—[ 
Bell rung 
] Mr Chairman. 
The CHAIRPERSON (Lindsay Tisch) 
: I am sorry the member has had four calls. 
SUE MORONEY (Labour) 
: 
 Thank you Mr Chair. I was so busy calling that I did not actually hear my name being called out. Normally I would start off a contribution on a bill such as this the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill by saying that it is a pleasure to rise and speak on the bill but it is about 6 minutes since the Melbourne Cup has been run. That I am here at all to take a call on any bill is a minor miracle— 
The CHAIRPERSON (Lindsay Tisch) 
: Who won? 
SUE MORONEY 
: —but it shows the level of my commitment. It was Green Moon who won for all of those people who are wondering whether their sweepstakes came in or not. Even though it is Melbourne Cup day it is important to be here speaking in opposition— 
Hon Trevor Mallard 
: Well isn’t it appropriate to have a jockey in the Chair at the moment? 
SUE MORONEY 
: And appropriate as my colleague points out that the member for Waikato is in the chair at this time and that that really important horse racing town of Matamata be represented in the Chair at the moment. 
I do want to get on to the substance of this bill. It is really important to speak in opposition to this bill which will take us somewhat backwards in terms of our commitment to the international issue of climate change. We have had speakers from the Government who are today of all days trying to convince us that it has flip-flopped and now agrees that putting health and safety ahead of profits is an important thing for this Government when in fact it has been guilty of doing the opposite. Here it is again on the very day that it is trying to convince us that it now understands that health and safety is more important than profits putting an important part of this country’s future behind profits with this bill. The Government is putting profits ahead of the environment in this instance. It is doing that by delaying the entry of agriculture into the emissions trading scheme. 
Dr Nick Smith said in his contribution to this debate that if anyone was concerned about this country’s balance of payments they would support this bill. Well I think he could not be more wrong because one of the reasons that our agricultural industry and the products that come from our agricultural industry are so sought after on the world market is because of the clean green image that New Zealand has which this Government is putting at risk. That is our place in the world. That is one of the niches we have. We are not there because we are a mass producer of milk; we are there because we are a good producer of milk. One of the reasons behind that is our environmental record. Here this Government is putting at risk with this bill that very important part of how we market to the rest of the world. 
What we know from previous contributions is that it is also dipping into the pockets of the taxpayer to make sure that this happens. It is subsidising polluters with taxpayer money—taxpayer money to the tune of $328 million. That amount is significant because the very day—the very day—that this Government announced its intention to increase the money paid by taxpayers by $328 million in order to subsidise the agricultural sector and to delay its entry into the emissions trading scheme it also announced a financial veto on my bill to extend paid parental leave. I think this tells us everything we need to know about the priorities of this Government. It is quite happy to spend taxpayer money subsidising agricultural polluters and actually giving them another reason to continue to pollute rather than find solutions to minimise that pollution. The Government would much rather put taxpayer money into that than into supporting families. It would much more readily put money into this area continue that regime of pollution and risk our international reputation than support children. That is where the priorities of this Government lie and that is why this bill is so fundamentally wrong. 
It is wrong because it tells us that this Government which promised the country a brighter future has absolutely no intentions of that. It has no intentions of delivering a brighter future unless what it meant by that brighter future is a future full of more pollution unless it meant a future where our international reputation goes down the gurgler and unless it had every intention of the brighter future being about making sure that we have a country where farmers do not strive to find solutionsand that they have no financial incentive to strive to find solutions for pollution but instead are given a subsidy by this Government via the taxpayer to continue on their merry old ways—the merry old ways that have actually meant that we have increased and continued to increase our emissions in this country when we are striving to reduce them. I do not know how the Government MPs can stand up opposite and argue that they are committed to reducing emissions and meeting the target we have of a 50 percent reduction in emissions by 2050. I do not know how they can do that while at the same time promoting this bill which ensures that the sector that actually contributes the most significant amount to our carbon emissions can continue to do that unchecked and without the financial incentives to actually get its act together on this. 
 I am based in the Waikato area and I know about how important this sector and its reputation is to this country. I know about how our reputation as a food-producing nation relies significantly not just on our ability to push milk out the farm gate but that it is of high quality. We will lose the race and holding that market position and holding that niche if we do not address these issues immediately and urgently. We should not be continuing along to be a follower as the Prime Minister would have us—a close follower. We need to be a world leader because that is the reputation that I want to see for our agricultural sector and our agricultural products in this country—world leading. That is the market position we must fight to retain. We will not retain that while we have measures like this that put the cost on the taxpayer while letting the agricultural sector continue on its merry old way without the financial incentives to find the solutions that we all need—that we all need—to make sure that we keep at the top of our game. 
Far from being the type of legislation that somehow protects our agricultural sector and enhances our reputation as the Government would have us believe this legislation is actually the antithesis to that. It is actually the antithesis because it damages our international reputation. Our international reputation has to be one of the most valuable things that we have when we are trading with the rest of the world. You would not know that by the way that the Prime Minister in particular bandies our international reputation around as if it is some stand-up comedy routine—some stand-up comedy routine. That is what the Prime Minister is doing. 
Andrew Little 
: In an offensive way. 
SUE MORONEY 
: In a very offensive way. Offending Finland offending Great Britain— 
Andrew Little 
: David Beckham. 
SUE MORONEY 
: Yes. And he is continuing on to make this country a laughing stock. It is no wonder that a Government led by that Prime Minister has come up with this piece of legislation which will continue to damage our reputation in exactly the way that John Key goes about with his stand-up comedy routine. He might find it amusing in front of a bunch of teenage girls but on the world stage hey Mr Key what I want to say is that makes us look ridiculous. Do not keep doing that with legislation like this with silly comments like you have been making in recent times. Our reputation is much too important to do that and to be the leader in our country going around bandying this type of legislation around and making those sorts of comments. 
Right from the start I think it was evident that the National Government really was not focused on our international reputation at all because it rushed this bill through the House to meet its December deadline. It clearly has not listened to what submitters have asked it to consider with this. Todd McClay frowns but I want him to go and see the forestry industry in his electorate and explain why his Government has ignored the submissions that the forestry submitters from his electorate came to make to the Finance and Expenditure Committee. I want to hear a contribution from Todd McClay to actually explain how he has gone to those submitters. 
Dr KENNEDY GRAHAM (Green) 
: 
 I just want to pick up essentially where I left off a short while back in introducing my Supplementary Order Paper 147 to the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill to address it in a little bit more detail and then put a question to the Minister for Climate Change Issues if he would be good enough to answer in the fullness of time. 
I want to also just pick up in a sense on the imagery that we were treated to by the Hon John Banks of the erstwhile dairy farmer in—I think he meant—Mangawhai. So we have the dairy farmer up at 3 in the morning and milking at 5.30 a.m. in Mangawhai and he is worrying about his mortgage and his revenue and his costs and his net profit which is the right thing for him and the rest of us on his behalf to worry about especially at that hour. He would also take into account—in today’s world as opposed to the time that the Hon John Banks was mentioning when he was involved with that dairy farmer; the 2012 version of the dairy farmer—and would have heard probably on Twitter rather than his radio kitset that the global emissions of greenhouse gases have to be reduced from 48 billion tonnes to 44 billion tonnes that is gigatonnes from 48 billion tonnes to 44 billion tonnes between 2010 and 2020. He will say to his wife as he comes in for breakfast: “That’s a massive global reduction needed for our grandkids to avoid dangerous and potentially catastrophic climate change. That’s a massive global reduction.” His wife will say: “Yes I agree and New Zealand will have to play its part. It will have to do its fair share.” which is the phrase that has come out of the framework convention and is essentially the yardstick that the Government and the Opposition are using to judge the adequacy of what we are doing. 
So the dairy farmer and his wife have agreed over breakfast that New Zealand has to do its fair share. They will say: “Well how do we find that out?”. The dairy farmer will say: “Well with great respect to the Minister it isn’t by unilaterally plucking out of the air a five-set conditional unilateral target of 10 percent to 20 percent off 1990.” “That will be manifestly inadequate.” his wife will say because she has been reading on the internet as opposed to listening to Parliament and she will be better informed. She will say: “That’s not enough. You must ring the Minister. He’s a decent honourable open-minded gentleman. He will respond to you.” The dairy farmer will say: “Well what’s the figure I should mention?”. His wife is a lot more knowledgable than he is because he is milking the cows and she is following on the internet. She is plugged into box 13.7 of the Intergovernmental Panel on Climate Change’s Working Group III report from 2007 which says that countries like New Zealand have to do 25 percent to 40 percent net in that year including land use land use change and forestry. So the farmer at Mangawhai will approach the Minister and he will say: “I’m informed reliably that New Zealand’s net emissions including land use land use change and forestry were 55 million tonnes in 2010. And for us to be in the mid-point of what is required for our fair share of meeting the global emissions we have to go from 55 million tonnes down to 41 million tonnes net in 2020 and further down to 6 million tonnes in 2050.” 
The dairy farmer and his wife will have agreed on that and are approaching the Minister. They are asking from Mangawhai the Minister to please explain to this House with the emissions trading scheme as it is currently constructed and under the amendments coming through—I will finish on this and I will give 5 minutes to Mr McClay—“What is your critical path during your tenure in office and afterwards so that you will have launched it for the country to go from 55 million tonnes down to 41 million tonnes net in 2020 and 6 million tonnes in 2050 please?”. 
TODD McCLAY (National—Rotorua) 
: 
 I want to take a brief call in this stage of the debate just to say to the Minister for Climate Change Issues that I think that the work he has done here in this piece of legislation the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill and the changes to the legislation are very important. I know that in the Finance and Expenditure Committee when we heard New Zealanders and went to different parts of the country indeed from memory we heard submissions for 19 hours. I did a little bit of checking and when last a bill was before this House on this very issue the select committee was not able to take that amount of time. We heard from some 780 submitters from a total of 803 submissions—again from memory—which was slightly more than when the House has dealt with this legislation previously. Finally we considered and then deliberated on this in the committee for some 9 hours. So when members opposite say that this was a rushed process I say that although the report-back time that was given to the committee may have been shorter than for other bills—and indeed when one stacks up the evidence—the committee went to great lengths to offer all New Zealanders an opportunity not only to submit to the committee to be heard by the committee but also where there was interest from members across the House where there was something more that submitters could add the committee and I as chair was happy to let those submitters spend some time. Indeed I think one submitter—I checked—had a dialogue of 50 minutes with the committee and a couple of others had 45 minutes. So we went to great lengths in the committee to make sure that New Zealanders had their say on this extremely important piece of legislation. 
What this amendment bill does—and this is why I want to commend the Minister for Climate Change Issues again—is bring balance to a piece of legislation that at the heart of the policy in the previous Government and in this Government is important to all New Zealanders. We did hear members of the Opposition say during the select committee consideration that they had concerns to some degree around the cost to New Zealand consumers and that if we did not make the changes we are making these costs would not go up. I want members to remember a submission that came to us from the very south of the South Island from Invercargill around an aluminium smelter. At the time in the newspapers members opposite were saying that the Government had to do more about the cost of electricity so that jobs were not lost in this important manufacturing sector. But on the other side of the fence members of the Opposition were also saying that we should impose greater costs upon manufacturing in aluminium than would be the case under this legislation. I would ask them to consider on the one hand why it is that they want us to find ways to lower costs so that manufacturing can continue and people can keep their jobs but on the other hand when it comes to emissions trading scheme legislation they are happy for those costs to be ramped up and indeed for jobs to be lost. 
We have heard from one of the previous speakers who occasionally passes through the Waikato to areas of the country where we grow great numbers of trees about a Supplementary Order Paper in the name of a Labour Minister—a Labour member—that is going to help— 
Hon Trevor Mallard 
: Premature. 
TODD McCLAY 
: Well I will not speak to that Mr Mallard and “premature” anything at all but what I would say to you is that when it comes to the paper that has been put forward by Moana Mackey it adds nothing at all to existing legislation. So what Ms Mackey is saying is we must put in the legislation a quantitative restriction around the importation and use in the New Zealand scheme of foreign carbon credits. But it adds absolutely nothing to the legislation because as members opposite will know because it was put in place when they were responsible for this legislation through regulation the Minister can deal with the quality of foreign credits and also the quantity of them. So we already have that ability and in fact this Government a year ago put in place restrictions on the basis of quality over some international credits so they are no longer fit and they are no longer legally able to be in the New Zealand scheme. They are no longer legal tender. 
I congratulate the Minister on listening widely to the sector and asking his officials to go and have a look at other credits to see whether or not they are up to the grade that we require them to be as part of our scheme. Indeed I would expect a report back next year when the House will have an opportunity to look at the facts at the science around this to decide whether or not they are credible. So I know Ms Mackey feels strongly about this but actually this is a bit of wolf-whistling. It is a little bit of politics. What she is trying to do is already possible under the legislation. It has already been done under the legislation and it does nothing more than suggest that members in the committee from the Opposition did not pay enough attention did not really— 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 Mr McClay has certainly enhanced his reputation with that speech. Well he has enhanced his reputation for not letting the facts get in the way of a good story. We know that that member oversaw the select committee process for the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. He has reminded us of that fact and he has tried to suggest to this Committee that it was a generous process it was a process where all submitters were heard and where due consideration was taken. Well nothing could be further from the truth. In the interests of gutting the forestry sector in his own electorate in what one might consider an ill-conceived attempt to make his own seat a marginal one Mr McClay has pushed ahead with this legislation without the full process that we would normally expect around this kind of major legislation with implications for New Zealand’s international reputation. 
National rushed this bill through the House to meet its December deadline of the transitional period ending. It said that its reason for doing this was that there had already been a significant review but the great irony there is that the Finance and Expenditure Committee did not listen to or did not take heed of the recommendations of that review. Indeed in the select committee process as it was provided there was not adequate time for full submissions. Many submitters said there was not adequate time for full submissions due to the short period of time allocated for this process. Instead of the usual 4 to 6 months that we would expect for a piece of legislation of this nature to be going through the select committee process the bill received just 7 weeks. 
Charles Chauvel 
: How long? 
Dr DAVID CLARK 
: Seven weeks—7 weeks. It was basically a rubber-stamping exercise. This piece of legislation was rushed through the select committee process. 
Hon Trevor Mallard 
: $1.3 billion a year. 
Dr DAVID CLARK 
: That is why—yes $1.3 billion a year it costs to run this and— 
Hon Trevor Mallard 
: So how much a week was the select committee then? Nearly $200 million a week. 
Dr DAVID CLARK 
: It is $200 million a week Mr Mallard says for select committee time to rush a process like this through. A mockery—a rubber-stamping exercise. It is not adequate. And what we see as a result of course is $328 million more in cost to the taxpayer. Industries that are doing good things are up for the chop with jobs going in the forestry sector in Mr McClay’s own electorate as a result of these changes and those who are doing things that are the old way of doing things are advantaged. Those who are not willing to make the transition to adopt new technologies that are climate friendly are rewarded and those who are actually making that change are punished for the additional costs of stepping up to make the change to gear up for the economy of the future. This is shameful. 
As I said the Government justified this short select committee process on the basis that it was preceded by an extended period of ministerial consultation with key stakeholders. The interesting point to note around that is that the key stakeholders did not include the environmental sector. A piece of environmental legislation and key stakeholders did not include the environmental sector—that is what the National Party calls balance. 
This piece of legislation—let us remind ourselves why it is here. The Supplementary Order Paper in the name of Moana Mackey which proposes that we allow for New Zealand Units to have a more prominent role places an obligation on participants surrendering credits for a minimum of 50 percent of those units to be New Zealand Units. That is the aim of Supplementary Order Paper 142 in Moana Mackey’s name. This would make sure that the price which is artificially low at the moment because of uncertainty around future agreements and because of the global financial crisis is kept at a reasonable level so that those who are in the space of making positive contributions to our climate are supported through the transition period to a fuller carbon price. 
That Supplementary Order Paper needs to be put in the context of the Kyoto Protocol and New Zealand’s wider obligations. We know that the Kyoto Protocol was set up because New Zealand wanted to be a part of the solution. The protocol— 
Charles Chauvel 
: The “Coyote Protocol”. 
Dr DAVID CLARK 
: Sorry? 
Charles Chauvel 
: “Coyote Protocol”. 
Dr DAVID CLARK 
: “Coyote Protocol”. My pronunciation is corrected—thank you Mr Chauvel—in line with a previous contribution. We know that this protocol aims to ensure that the world addresses climate change as a whole. New Zealand is stepping forward to do its share or at least it was stepping forward when Jenny Shipley signed it in 1998 joining 191 countries and the European Community in signing that protocol with Helen Clark ratifying it. 
New Zealand has made it clear that it intended to do its bit and subsequently we saw all kinds of behaviours as people prepared for the scheme to be introduced. We saw forests felled faster than they normally would be as those with interests in converting to dairying got on with that business before the emissions trading scheme was introduced. And then sure enough when the scheme was introduced those activities dropped off and we saw New Zealand starting to begin on a path toward a more sustainable future. 
Since that time since National came to office we have seen backwards steps. We have seen of course under the global financial crisis the price of international emissions units drop—plummet exponentially. We know of the Russian hot air which makes for very very cheap units and we know the effect that that has had on the international carbon price. With the global financial crisis production has slowed in many industrialised countries. We know that that has meant that the carbon price is artificially low at the moment and that if we are going to do our bit we need to find ways of ensuring that that carbon price is more realistic and is in line with long-term expectations of what it will cost to address climate change. 
The science tells us that the probability of climate change being natural—i.e. not human induced—is less than 5 percent. There are still some who would doubt the science and who think it is all a conspiracy theory but the scientists—I am not a scientist but as a policy maker I am inclined to believe the scientists because there seems to be a strong consensus around the issue—say we should be taking steps now because it is cheaper to address these things now than to deal with the effects of runaway climate change later. 
When we signed up to the Kyoto Protocol New Zealand—under Jenny Shipley in 1998 and then subsequently under Helen Clark—had to then effect a mechanism to ensure that our obligations were met. There are basically three broad options for doing that. One is to have a carbon tax and we know that that did not succeed politically. Subsequently when the Business Roundtable proposed it of course we all smelt a rat. You know that when the Business Roundtable proposes a tax there is something a little bit fishy going on. But what was sustained and supported by the Green Party and introduced by the Labour Party was an emissions trading scheme. That was better in the long run than having taxpayers subsidise polluters. Rather than taxpayers encouraging polluting activity for ever there would be a scheme that ensured that we started to attribute the actual costs of pollution in our country the costs that New Zealand incurs under the Kyoto Protocol back to those who were generating them so that their behaviour would change. A price incentive would encourage behaviour to change so that those who were employing newer cleaner greener high tech mechanisms and business solutions would succeed and those who were not willing to change would face challenges and be forced to change their behaviour and make future investment decisions that were smart and in New Zealand’s long-term interests. That is why the scheme was introduced. 
But what we have seen from this Government as those international market prices have gone into freefall is a general acceptance of that hot air of the limited change it brings and of the way in which it slows down the transformation of our economy to one that is ready to tackle climate change and ready to lead the way in terms of research and development and in terms of introducing new technologies that are better for the planet and to actually generate a better return for New Zealand. This is I suppose at least consistent with a Government that is not in any hurry it seems to get our economy back on track. It has got the worst economic record of any Government in the last 50 years. We see that it is not willing to step in and make the big choices to actually help us to transition to a low carbon economy. In fact it is extending subsidies for the foreseeable future. 
Moana Mackey’s Supplementary Order Paper 142 allows for New Zealand credits to have a significant standing in the market. It places obligations on participants to surrender credits for a minimum of 50 percent of their emissions units— 
MAGGIE BARRY (National—North Shore) 
: 
 I move  
That the question be now put 
. 
GARETH HUGHES (Green) 
: 
 Kia ora. Nga mihi nui ki a koutou. Kia ora. In the last month we have heard extremely disturbing news from the world of science. We are hearing that the Arctic summer ice melt is happening faster and worse than scientists predicted. We have seen the impact of the super-storm Hurricane Sandy on the Caribbean and the East Coast of North America. There has been a huge economic cost and a huge people cost. Even the marathon has been cancelled there. Then in New Zealand we have seen our fair share of nature-related disasters in part caused by the more extreme weather that scientists are warning us is happening from climate change. This is having real costs for farmers real costs for horticulturalists and real costs for the New Zealand economy. 
In my second reading speech on the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill I talked about my motivation for why I am voting against this bill which is my kids. I want my kids to grow up in a world with a stable climate. But what I want to talk about in this contribution dealing with Part 1 of this legislation is my motivation for again opposing this bill which is the economy. The economy is a strong reason to be opposing this bill and a strong reason why our country should be advocating greater climate change action. 
The fact is what this bill does and what an emissions trading scheme does—and we all know it is incredibly complex; very few people in the country actually understand what it is. It is an incredibly thick piece of legislation. It is incredibly complex and incredibly bureaucratic with incredible rent-seeking behaviour which we are seeing from certain sectors of the economy in New Zealand. It is something hugely complex but basically what it is is a fancy way of saying that we need a price on carbon. It is a fancy way for putting a price on carbon and trying to acknowledge that there is an economic externality which is carbon and the other greenhouse gases that impact on the climate impact on our agriculture and impact on our economy. The whole point of a carbon price is to send an economic signal through our economy. It is trying to encourage consumers to invest in low-technology appliances in their household or maybe to take the bus or walk or cycle instead of driving or maybe purchase a more fuel-efficient car. It is trying to send an economic signal to people with capital to invest in economic development so that they can invest in more efficient technology so that they invest in perhaps sustainable biofuels or woodchips for their milk dehydrator rather than digging up more low-grade dirty coal. It is about trying to affect those investment cycles. 
What we are seeing with the gutting that we have seen over the 4 years of the current Government is not the right signal flowing through the economy which is consumers investing in efficient devices and reducing their consumption of greenhouse gases. We are not sending those signals to people investing in our economy to invest in afforestation or to invest in efficient appliances. In fact we are sending the reverse message through these subsidies through the very clear signal this Government is sending to them to keep investing in dirty technology to keep investing in old-fashioned technology to keep polluting. That is the very strong economic signal this bill and the changes in this part send. Of course we can see it because we know our emissions have increased 25 percent above what our country promised—our Kyoto obligation. We are seeing it in our deforestation rates and our planting rates. We are seeing what should be a very rational very well predicted—economists obviously can and have modelled it. We are seeing exactly what you would expect which is when you send the signal to invest in old dirty polluting technology people will. 
So when we go through the history of this long debate in New Zealand the fact is that everyone could acknowledge that climate change is a severe economic environmental and social problem and a moral problem as well. We acknowledge that we need a signal on carbon to change some of those economic behaviours. We acknowledged—all the parties did—that it was a negative externality and in 2008 Labour in September of that year passed the emissions trading scheme with the support of the Greens. It was not perfect; I am the first to acknowledge that but it was essential that we sent an economic signal to send people the message to do the right thing. The fact was it was not the only lever the Government was using. There was also the thermal electricity ban work around biofuels and work around public transport. Basically the way we were and the way we are going to deal with what is probably the greatest security challenge and the greatest moral challenge of our generation is to use all the levers. You are never going to solve it with just one lever. You need to have a price on carbon you need to have community action you need to have strong regulation and you need to have people making a difference. The fact is people are making all sorts of changes to do the right thing in their lifestyles but their Government is telling them that it is not important and that it is going to continue to subsidise polluters. 
So what we see in this legislation with the significant changes we see in Part 1 is a destruction essentially of the emissions trading scheme. My colleague Dr Kennedy Graham calls it weakening it to an irrelevancy. Brian Fallow says it is putting the emissions trading scheme into an induced coma. The Parliamentary Commissioner for the Environment calls it toothless and a farce. And Rod Oram I think says it most bluntly of all which is: quite frankly you are killing it. The fact is that what we are seeing in the changes in this bill in Part 1 is more offshore sham credits flooding our market. We are seeing some firms if they are trade-exposed firms covering only 5 percent of their carbon costs. So for a firm with say a million dollars in pollution-related expenses the cost for it is $200. That is a subsidy. We can have a debate with the Minister for Climate Change Issues and the Government benches about what a subsidy is but the fact is that the taxpayer is picking up the tab—the taxpayer is paying—and if that is not a subsidy I do not know what is. We are sending the wrong message. 
We are seeing the changes in this part of the bill maintain those one-for-two surrender obligations past 2012. We are seeing that $25 price cap maintained indefinitely. We are seeing agriculture’s inclusion put off indefinitely. I mean that is half of our country’s emissions. We can rail against what other countries are doing or not doing on climate change but the fact is that in New Zealand where half of our emissions are coming from the agricultural sector we are not taking the responsible step. In fact we are taking the wrong step because we are not sending those signals to those farmers to invest in new efficient milking sheds or nitrification inhibitors or different ways of nitrogen and fertilising budgeting and it is good to see Supplementary Order Paper 147 which deals with this. But the fact is that there is a whole bunch of negative changes weakening and destroying the emissions trading scheme. It is good to see that my colleague Dr Kennedy Graham has a number of very common-sense and smart incentives to actually put our economy on the right foot. I guess the first thing is his amendment to clause 5 which actually puts it on a science footing. What we are not hearing from the Government benches of course is the science rationale for why it is making these changes or how they will impact our gross and net emissions or what it is going to mean for the climate. 
We are seeing that Supplementary Order Paper 147 in Dr Graham’s name inserts new section 69B which is putting the trade back into what is called a cap-and-trade scheme. We are seeing in subsection (3) an actual floor—a $10 floor—to the price of carbon. And of course we are seeing a restriction on the international units. What we are seeing through our economy is in fact a worsening of economic conditions. Our current account balance is going to continue to deteriorate. We are sending New Zealand dollars—our hard-earned New Zealand dollars—offshore to buy these sham offshore credits. We are sending the message that we are going to purchase other people’s emission reductions not ours. We are investing in less efficient appliances meaning we are importing more fuel. I mean this is the biggest strategic threat to our macroeconomic situation—this $8 billion fuel bill which is just not going to reduce under this legislation. We are seeing a worsening of economic conditions. 
What we are seeing through this bill is New Zealand losing and continuing to lose that green race as our most successful business leaders are warning us. For example I was reading about a wave-powered device that not the New Zealand Government but the US Department of Energy is funding and trialling off its coast. I was also reading today about the wonderful things New Zealand is doing for solar power in Tokelau. That is wonderful and I totally support it but why on earth can we not do some good things about solar power in New Zealand? We are seeing changes to electric cars. I have just met a fellow last week who cannot get a meeting with this Government. He is a world leader in electric car technology. He is being flown by President Obama to meet him at the White House but this Government will not do it. So the economic signals that this bill sends and the direct actions this Government is taking are sending Kiwis the wrong messages. 
Hon Trevor Mallard 
: Stick him in a red jersey. 
GARETH HUGHES 
: Stick him in a red jersey and he might get a call with the Prime Minister—maybe an apology. The fact is that we spent a billion dollars in the last financial year on these subsidies these emissions trading credits. All the seismic surveys all the picking winners—in the oil and gas sector the fact is that we are flogging off the energy assets. 
We could actually be addressing climate change. We could be using the amendments that Dr Kennedy Graham has put forward to switch our economy. We could keep our assets super-charge them and we could be a world leader not only in addressing climate change but in exporting clean green technology. The world is crying out for it. In fact in the last year international investment in clean energy outstripped that in fossil fuels. It is like we are looking to the past for our economic rule book when we should be looking to the future. The clean energy market is predicted to be an $800 billion industry yet we are moving away from it. We are doing everything possible to tell New Zealand businesses and Kiwis not to invest in clean energy and not to develop the expertise to export and manufacture what is surely going to be the 21st century’s economy. We are telling them to continue to pollute. It is bad for our economy. It is bad for our environment. It is bad for our kids and their future. We should do the right thing because it is the right thing but we should also take action on climate change because it is in our economic self-interest. Kia ora. 
TIM MACINDOE (National—Hamilton West) 
: 
 I move  
That the question be now put 
. 
The CHAIRPERSON (Lindsay Tisch) 
: The question is that the question be now put. 
Charles Chauvel 
: I raise a point of order Mr Chairperson. I said during my earlier contribution that I would seek leave to table a letter and I omitted to do so. I seek that leave now. 
The CHAIRPERSON (Lindsay Tisch) 
: After I have put the question the member can. The question is that the question be now put. 
A party vote was called for on the question  
That the question be now put. 
Ayes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 55 
New Zealand Labour 32; Green Party 14; New Zealand First 8; Mana 1. 
Motion agreed to. 
The CHAIRPERSON (Lindsay Tisch) 
: The Ayes are 64 the Noes are 55. The question will be put. Point of order Charles Chauvel. 
CHARLES CHAUVEL (Labour) 
: 
 Thank you Mr Chairman— 
The CHAIRPERSON (Lindsay Tisch) 
: I am sorry; my apology. I did say I would put the votes first. 
The question was put that the amendments set out on Supplementary Order Paper 145 in the name of the Hon Tim Groser to Part 1 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 58 
New Zealand Labour 32; Green Party 14; New Zealand First 8; Maori Party 3; Mana 1. 
Amendments agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 144 in the name of Moana Mackey to Part 1 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 55 
New Zealand Labour 32; Green Party 14; New Zealand First 8; Mana 1. 
Noes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Amendments not agreed to. 
The result corrected after originally being announced as Ayes 58 Noes 61. 
The CHAIRPERSON (Lindsay Tisch) 
: We move now to Dr Kennedy Graham’s amendments as set out on Supplementary Order Paper 147. These have an impact on the Government’s fiscal aggregates and were not lodged 24 hours before the House met and so are out of order. 
The question was put that the amendments set out on Supplementary Order Paper 142 in the name of Moana Mackey to Part 1 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 58 
New Zealand Labour 32; Green Party 14; New Zealand First 8; Maori Party 3; Mana 1. 
Noes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Amendments not agreed to. 
The result corrected after originally being announced as Ayes 55 Noes 64. 
Dr KENNEDY GRAHAM (Green) 
: 
 I raise a point of order Mr Chairperson. I would be very grateful if you are able to explain the distinction between Supplementary Order Paper 144 which involves changes to the price cap which obviously in the Chair’s opinion is not to be ruled out of order because it did not attend to fiscal issues and Supplementary Order Paper 147 which is regarded as addressing fiscal issues. 
The CHAIRPERSON (Lindsay Tisch) 
: Yes the Minister has advised that there is a fiscal implication in Supplementary Order Paper 147 in the member’s name. That is not the same as Moana Mackey’s Supplementary Order Paper 144. That is why the member’s Supplementary Order Paper has been ruled out of order. 
Dr Kennedy Graham 
: I raise a point of order Mr Chairperson. 
The CHAIRPERSON (Lindsay Tisch) 
: Well there is really nothing to talk about but I call Dr Kennedy Graham. 
Dr KENNEDY GRAHAM (Green) 
: 
 With respect I would query the fact that Supplementary Order Paper 144 involves changes to the price cap and therefore has implications for fiscal policy. 
The CHAIRPERSON (Lindsay Tisch) 
: No these are debating points. In terms—[ 
Interruption 
] These are debating points. In terms of the Standing Orders if we were to refer to Standing Order 325 and also to a number of Speakers’ rulings the point that I made earlier was that the Minister has said in the case of Supplementary Order Paper 147 that there is an impact on the Government’s fiscal aggregates and so that has been ruled out of order. That same advice was not given on Supplementary Order Paper 144 in the name of Moana Mackey. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Chairperson. Just to confirm for the member the way that the Standing Orders work is very much dependent on decisions on the part of the Government to make declarations. If it fails to make a declaration on a particular amendment and just chooses to vote against it that is its call and the Chair does not have the ability to override—either to rule something out or to rule something in—if a Minister says so in this way. 
The CHAIRPERSON (Lindsay Tisch) 
: The other point to bring to the member’s attention which I made in my initial ruling is that amendments have to be lodged 24 hours previously. In the case of amendments on Supplementary Order Paper 147 in the member’s name that was not the case and it was the case with Moana Mackey’s Supplementary Order Paper 144. 
Dr Kennedy Graham 
: May I speak once more to that without— 
The CHAIRPERSON (Lindsay Tisch) 
: Well it is not debatable because I have ruled. 
Dr Kennedy Graham 
: I understand that. I accept that. 
The CHAIRPERSON (Lindsay Tisch) 
: I will let the member because he has a number of these amendments. 
Dr KENNEDY GRAHAM (Green) 
: 
 I accept the decision and I understand the necessary condition of 24 hours was not met. My question pertains to Supplementary Order Paper 144 which did meet the condition of— 
The CHAIRPERSON (Lindsay Tisch) 
: It had 24 hours’ notice and the other point— 
Dr Kennedy Graham 
: Yes I understand that. 
The CHAIRPERSON (Lindsay Tisch) 
: The member will sit please. It had 24 hours’ notice and as I said the Minister had no comment on Supplementary Order Paper 144 but did have on Supplementary Order Paper 147. 
The question was put that the amendments set out on Supplementary Order Paper 146 in the name of Moana Mackey to Part 1 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 55 
New Zealand Labour 32; Green Party 14; New Zealand First 8; Mana 1. 
Noes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Amendments not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 141 in the name of Moana Mackey to clause 96 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 55 
New Zealand Labour 32; Green Party 14; New Zealand First 8; Mana 1. 
Noes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Amendment not agreed to. 
The CHAIRPERSON (Lindsay Tisch) 
: The question now is that Part 1 as amended stand part. Those of— 
GARETH HUGHES (Green) 
: 
 I raise a point of order Mr Chairperson. Notwithstanding Standing Order 325 the Committee is still the master of its destiny. I seek leave of the Committee for Supplementary Order Paper 147 in the name of Dr Kennedy Graham to be considered for a vote. 
The CHAIRPERSON (Lindsay Tisch) 
: No I cannot do that. I have ruled it out of order and that is the end of the matter. 
A party vote was called for on the question  
That Part 1 as amended be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 58 
New Zealand Labour 32; Green Party 14; New Zealand First 8; Maori Party 3; Mana 1. 
Part 1 as amended agreed to. 
CHARLES CHAUVEL (Labour) 
: 
 I raise a point of order Mr Chairperson. I seek leave— 
The CHAIRPERSON (Lindsay Tisch) 
: I am sorry to interrupt the member. It is time for me to leave the Chair. This debate is interrupted. I shall resume the Chair at 7.30 p.m. 
Sitting suspended from 6.08 p.m. to 7.30 p.m. 
Part 2 Miscellaneous 
CHARLES CHAUVEL (Labour) 
: 
 In an eagerly anticipated move I seek leave to table a letter on behalf of my colleague Moana Mackey that she wrote to the Hon Peter Dunne on 31 October making clear Labour’s position on the points that I dealt with in my earlier speech. 
The CHAIRPERSON (Eric Roy) 
: Leave is sought for that purpose. Is there anyone opposed to that course of action? It appears not. Leave is granted. 






Document by leave laid on the Table of the House. 
LOUISE UPSTON (Junior Whip—National) 
: 
 I seek leave to correct a vote on behalf of the Maori Party. 
The CHAIRPERSON (Eric Roy) 
: On Part 1? 
LOUISE UPSTON 
: Yes to correct two votes. First the Maori Party voted three votes in favour of Supplementary Order Paper 144; that should have been three votes opposed. Correcting the vote on Supplementary Order Paper 142 it should be three votes in favour. 
The CHAIRPERSON (Eric Roy) 
: Does that change the outcome? 
LOUISE UPSTON 
: No it does not. 
The CHAIRPERSON (Eric Roy) 
: No it does not. Leave is sought to amend the vote. Is there anyone opposed to that course of action? It appears not. Leave is granted. 
The CHAIRPERSON (Eric Roy) 
: Is some member seeking the call on Part 2 a very small part? 
Hon DAVID PARKER (Labour) 
: 
 It is a very small part but if the Chairman had read the part he would see that there is a change to the definition of “layer hens”. Layer hens are addressed in this part of the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill and it is that issue that I wish to address. This is yet another example of where in this bill the Minister for Climate Change Issues has got it wrong and the Government has got it wrong because what the legislation proper does is remove layer hens from the ambit of the emissions trading scheme. It is another area where this “all sectors all gases” legislation has been narrowed by the current Government in a way that is inconsistent with its original purpose. 
The logic that the Government gave us in respect of removing layer hens from the emissions trading scheme legislation was that it was over-regulation. It said that layer hens should not be included in the emissions trading legislation. We pressed them a little bit at the Finance and Expenditure Committee on this. I was sitting on the select committee. When the organisation the Egg Producers Federation came along in support of this amendment to remove layer hens it said “Oh we’re all little ma and pa businesses and therefore this is a big burden for us.”—or it did not say “all” but it said that it was made up of lots of small hen houses. And so I asked them whether the big corporates in this Mainland Poultry and the probably half-dozen firms—the old 80-20 rule probably applies as probably 80 percent of the layer hens are owned and the eggs come from a small number of corporates. And so the idea that this is somehow a large compliance cost for the largest egg producers is fiction. If the Minister wanted to remove the smaller egg producers from having some obligation to account for their greenhouse gas emissions why did he not do that? Why did you not just exclude the little ones and leave the big ones in? I cannot understand that. 
I asked the Egg Producers Federation that when it came in because it said “Look we’re not big greenhouse gas producers anyway and in fact per unit of output and per unit of protein that is produced hens produce lower levels of greenhouse gases than ruminants.” So the obvious thing here would be that if you wanted to get a rational response here where people were actually reducing the pressure on the environment you would actually have a price signal here and somewhere someone would be buying and eating eggs instead of a lamb chop. That is what this is meant to do. You cannot regulate for this sort of thing. That is why you use prices. 
Clare Curran 
: That’s very rural of you. 
Hon DAVID PARKER 
: Very? 
Clare Curran 
: Rural. 
Hon DAVID PARKER 
: That is very rural of me is it? Well no this is actually why we have a price on emissions so that you do not have to regulate everything. This is why we are meant to have a price. What this does is because they are now taking layer hens completely out of the emissions trading scheme which is what this Part 2 does; it revokes the definition of “layer hens”. So I am asking the Minister to take a call and say what sense this makes removing a more greenhouse gas - efficient industry from the scheme particularly the major players and whether it would not be better to have a rational economy-wide “all sectors all gases” scheme. 
If the agriculture sector started to face a marginal cost for its emissions the relative economics of low - greenhouse gas food i.e. layer hens and the eggs that they produce would be improved. That is exactly the same theory as we are applying in other parts of the economy. We are still keeping a price on petrol. We are still keeping a price on emissions from steel and aluminium so that the cost of an aluminium ladder somewhere in the economy is slightly more expensive than a wooden ladder and somewhere someone is building a wooden ladder instead of an aluminium ladder or a wooden product of some kind compared with an aluminium product. That is what emissions pricing is meant to do. It is meant to change the behaviour of consumers and therefore the behaviour of the people in our society who produce greenhouse gases. That is the whole theory behind emissions prices. 
So this is yet another example of where the Government’s recognition of the underlying principle is shown to be wanting. Again you ask why it is doing this. We know from the evidence at the select committee that eggs are low - greenhouse gas goods relative to other sources of protein so why is the Government having to exempt eggs? Because it has effectively exempted agriculture. That is the underlying reason. If you put agriculture on the never-never in respect of agricultural emissions and you do not deal with eggs you would effectively be prejudicing the egg industry which has lower greenhouse gas emissions than the ruminants and is the lower greenhouse gas industry—the egg industry and the layer hen industry—compared with the agricultural sector. So these are the knots that the Government is starting to tie itself up in because of the idiocy of its original proposition which is that there should be no emissions price in agriculture. 
So not only do we still have a cross-subsidy in these other sectors not only are consumers who are paying for our petrol our electricity emissions and the industries that consume a lot of electricity or use a lot of fuel effectively paying a cross-subsidy to the agriculture sector which is getting no price on any of its agriculture emissions but we are also creating all of these second-round inconsistencies and complexities. We are getting this sort of maze of regulation and consequential amendments that are necessary as a consequence of the Government getting it wrong because it has gone away from the fundamental principles of the original legislation which were that the lowest way to reduce your emissions in a country is to have a price on all emissions and to let the market sort out what is the most efficient way of reducing emissions. If that means that somewhere the cost of eggs is lower relative to the cost of a lamb chop well that is what should happen because that is what the price signal is meant to do. As a consequence because somewhere someone would be eating an extra egg instead of a lamb chop New Zealand’s emissions would be lower and that would be—I know it sounds a very arcane argument—the cheapest way to meet our environmental obligation and reduce emissions. 
I look forward to the Minister in the chair taking a call to defend why it is that we have got to this position where we have got exemptions for agriculture and now we have got these flow-on effects with layer hens. 
A party vote was called for on the question  
That Part 2 be agreed to.  
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 57 
New Zealand Labour 32; Green Party 14; New Zealand First 8; Maori Party 2; Mana 1. 
Part 2 agreed to. 
Schedule 
The question was put that the amendments set out on Supplementary Order Paper 145 in the name of the Hon Tim Groser be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 57 
New Zealand Labour 32; Green Party 14; New Zealand First 8; Maori Party 2; Mana 1. 
Amendments agreed to. 
A party vote was called for on the question  
That the schedule as amended be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 57 
New Zealand Labour 32; Green Party 14; New Zealand First 8; Maori Party 2; Mana 1. 
Schedule as amended agreed to. 
Clauses 1 to 3 
SUE MORONEY (Labour) 
: 
 It is indeed a pleasure to rise and speak in opposition to clauses 1 2 and 3 of this bill the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. It is quite misleading—in particular clause 2 the commencement clause. It has two commencement dates. One is 1 July 2013 and the other one is 1 January 2013. I think that is quite misleading in terms of the big impact that this proposed legislation actually has because in fact the major thing that it does and the big blunder it makes for New Zealand is that it removes the entry of agriculture into the emissions trading scheme. The date that is in the Climate Change Response Act currently for the entry of agriculture into the emissions trading scheme will in fact be removed. So the commencement dates are quite misleading because when it comes to agriculture there is no commencement date for its entry into the emissions trading scheme. 
That will mean that on the international stage our country will be seen to not be pulling its fair share. Worse than that its international reputation will also be damaged. This international reputation has made us world leading in terms of agricultural products. That is why the market place out there wants to buy our goods—in particular our dairy products. It is not because we are the cheapest or because we are the largest mass producer. We will never win that race—we will never win that race. We are never going to be the largest producer. We are never going to be the cheapest but we can be the best and we can have the best quality. 
In particular we could trade on our clean green image if it were not for the stupidity of this Government which is via this bill dumping the biggest trading edge we have when it comes to agricultural products. The biggest trading edge that we have is our reputation—our international reputation. You know that reputation that the Prime Minister trashes day in and day out by going after David Beckham and annoying everyone in the UK with the stupidity of his comments and that Gerry Brownlee trashes by annoying Finland and its neighbours with stupid comments with regard to that country. It seems that this Government is hell-bent on ruining our international reputation rather than enhancing it. 
This bill I am afraid is yet another example of this. Although the title is indeed the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill I think it should be called the “Climate Change Lack of Response Bill” because in fact that is what this bill is proposing. The largest amount of emissions by any sector is through agriculture. The main thing that this bill does is it removes agriculture from having obligations and from having a financial incentive to actually lift its game when it comes to actually emitting pollution. Agriculture is New Zealand’s largest source of emissions. It generates 47 to 48 percent of our total all by itself—all by itself. That is the sector that the Government has delayed. Well I say “delayed” in the hope that it will eventually have a commencement date but in fact it is removing the date completely from the Act. 
So is the Government telling us that it never intends for agriculture to be brought into the emissions trading scheme? It has not proposed an alternative date; it has just gone silent on it. But is that not what New Zealanders are coming to expect from this Government: that it has no plans? It has no plans in place; it just goes silent. It just sits on its hands and does nothing. That is not the way that it will produce the brighter future—the so-called brighter future—that it actually promised New Zealanders at the last election. This bill I think shows exactly how devoid of ideas this Government is for that actual brighter future that it promised because far from delivering a brighter future this bill actually ensures that the Government cannot meet its commitment to reduce emissions by 50 percent by 2050. That is not the brighter future that it promised at the election. It is in fact a dirtier future. 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 I rise to oppose this bill the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill and clauses 1 to 3. I could be tempted to support a change of name to one that in my view more nearly reflects the intentions of the bill. This bill modifies the emissions trading scheme as we have heard in a way that weakens it by extending the transitional period for polluters indefinitely along with not including the agriculture sector in this scheme at all. It also makes various technical changes. The bill is a disappointment. It is fundamentally flawed. We have already heard that the select committee process was rushed in order for the Government to get this through in a time frame that did not actually allow for the concerns of the different sectors to be heard and taken seriously. We have heard that it is destroying the forestry sector in Mr McClay’s electorate the man who chaired the committee. We have heard that it will not help us reach the Government’s target of a 50 percent emissions reduction by 2050. 
This bill reflects National’s delusion that the environment and the economy are contrary forces to be balanced against each other when they actually are dependent upon one another. It increases the costs to taxpayers. So one suggestion for a name change would be the “Climate Change Response (Additional Costs to Taxpayers) Bill” because under one calculation it increases the cost to taxpayers by $328 million—which is a conservative cost—and another estimate at the carbon cap price has an additional cost to taxpayers of $1.3 billion. That is what this bill does for those who are watching at home: it increases the costs to taxpayers by subsidising polluters further. 
 So it could also be called I suggest the “Climate Change Response (Certainty to Polluters) Bill” because that is what it does. It gives greater certainty to polluters. Those who have invested in the technologies of today and yesterday are given greater certainty over their financial future than those who are investing in the technologies of today and tomorrow. It is a tragedy because as we prepare our economy for the battles of yesterday we are not putting ourselves in a good position to fight the economic challenges of tomorrow. 
It could also be more accurately called the “Climate Change Response (Weakening of Price Signal in the Market) Bill”. That is the effect that it has. It weakens the signal in the market. It makes those who are doing good things in the market more wary about investing. The forestry sector as we have heard will be damaged by the changes in this bill. It is likely that there will be job lay-offs. It is likely that that industry will suffer as a result of these changes. So that weakening price signal has a very real effect and it would be a good thing to include in the title to be very clear what the Government is trying to achieve here. 
Another title change could be the “Climate Change Response (Weakening of New Zealand’s International Standing) Amendment Bill” because that is one of the other effects that we have heard about. This bill makes New Zealand a laughing stock. Where once we were pioneering an all sectors scheme that sent a very real market signal here we have a Government running away from market signals. It seems to be a Government that increases red tape on businesses but is not concerned with letting markets do its bidding where they are actually designed to do so. This weakens the market. It collapses in New Zealand effectively the market in the units that would be traded in order to battle emissions worldwide. 
A further point here really is that this commencement date I would suggest should be pushed out for ever because this bill is not one that responsible parties in this Parliament can support. This bill is an irresponsible bill that sees New Zealand back-pedalling on its commitments that sees New Zealand not doing its fair share and that makes us a target for international ridicule. 
So overall the “Climate Change Response (Perhaps Emissions Increase) Amendment Bill” would be a far more fitting title. The others that I have suggested could also be picked up by the Government. I will be interested to see whether the Minister in the chair leaps to his feet and adopts any of these title suggestions in order to give a more real reflection of what this bill is achieving; otherwise I leave those thoughts with you. 
STEFFAN BROWNING (Green) 
: 
 I am concerned about the title of this bill the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill too. There is a series of alternative titles for it because this bill is really one of those bills or pieces of paper that you really feel like chucking over your shoulder—but I dare say that that is inappropriate in this building in this Chamber. It is the “Kill the New Zealand Brand Bill”. We have our best products going to the best supermarket chains in Europe and other places that value our clean green “100% Pure New Zealand” image that this Government seems set to destroy. Those people who buy into that and give us the best prices for our best products expect us to be doing our bit. This bill is about us not doing our bit and it will affect our reputation in a very very negative way. 
It also could be called the “Deforestation Bill”. It very much is the “Deforestation Bill” because this is all about it seems enhancing an urea-based dairy industry in this country for the indefinite future. This is an industry that we should be really looking at and seeing whether we can improve it by getting it into the emissions trading scheme or being appropriately charged for its carbon. We should actually be giving our farmers the opportunity to be sequestering carbon by encouraging diversity on those farms instead of the path of these great green deserts that we seem to be going down which we then have to fight all the symptoms and the externalities of including the emissions. There are other very very positive alternatives that we could be doing in this country and standing and walking tall while we do it. 
Another title for this bill could be the “Future Generations (Climate Change Failure) Bill” because we are doing nothing—nothing of any substance—in this bill that is going to be looking out for the future generations that we all in here are responsible for. It is appalling. It is the “Climate Change (Fiddle While the Earth Burns) Bill” because as my colleague Kennedy Graham has put to this Committee very eloquently we are in emergency times and this does not go anywhere. It just puts it off to a new Government which will obviously be including the Greens to deal with the mess that this current Government is leaving behind. 
It fails as I have said to bring in agriculture. What an opportunity lost for New Zealand. It is important that New Zealand at the bottom of the world gets amongst it and starts to look at the vision for agriculture the vision for forestry and the vision for sustainable primary production in any form in New Zealand. There is no vision here apart from some crude commodities and maybe a couple of flash little items made from some ingredients. Overall there is no vision. What are we really doing about our soils in this country? What are we doing about erosion? What are we doing about our rivers in this country? We are doing next to nothing and certainly what is happening is nowhere near fast enough. There is no vision. The Greens have a vision. They have a vision of how we would deal with climate change. They also have a vision of how we will deal with primary production. 
The forestry sector is hurting because of this. Is this because the Government concedes that 80 percent of it is foreign-owned at this stage? Is that the reason? Is it because it is a monoculture and needles are dropping throughout New Zealand and we have got some serious disease issues? Is there something the Government is not telling us? What is it? Or is it just because you are sold on Fonterra you are sold on dairy? I think that might be what it is. It seems to be a real shame. Also the emitters the industrial emitters that you seem to want to look after there is a cap for them all right! They know where they are. They are really comfortable carrying on emitting while the rest of us pay for it. 
Hon DAVID PARKER (Labour) 
: 
 I want to talk to the title of this bill which is the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. The title implies that this bill is a serious attempt to respond to climate change and I want to say why in my opinion the bill should not proceed with that name. It is a misnomer to suggest that this bill will do anything meaningful to reduce New Zealand’s climate change emissions which after all is the objective of climate change policy. 
The main response for New Zealand to the challenges posed by our climbing emissions is to price emissions and that is intended to give an economic encouragement to the people who consume emissions-intensive products—like petrol or aluminium or steel—or to the people who produce the goods that are consumed by society to change the mix of goods that we consume in a way that reduces emissions. That simply put is what emissions pricing is going to do. Emissions pricing is an alternative to the other way we can reduce emissions which is to regulate. If you want to do something other than education the only two ways you can influence behaviour are by pricing something to encourage people to change their behaviour or by regulating and saying that thou shalt not do this or thou shalt do less of this. 
In New Zealand after quite a period of debate that lasted for more than one Government—National then Labour—we eventually got to the point in New Zealand where Parliament agreed that we should be trying to do our bit in the world in part through pricing emissions. It was never going to be the complete answer but it was always a very important part of the prescription for New Zealand. It worked in New Zealand in two main ways. First it was discouraging of increases in emissions-intensive goods and second it was effectively giving a price benefit to people who reduced emissions like those in the forestry sector because they sequester carbon in the trees which as they grow take carbon dioxide out of the atmosphere. That was the essential intention of the Act. 
For anyone to influence behaviour by price the price has to be meaningful. Otherwise it is a fig leaf and an excuse for inaction that you would take if you were not doing anything via price. And that is where we have got to in New Zealand now. This is just a fig leaf. This is not having any material effect on behaviour. We know that because the foresters who are the biggest potential reducers of greenhouse gases emanating from New Zealand came to us and said that the price now is so low that it does not influence behaviour. It does not allow them to overcome the disadvantage they have because they are facing the land price being paid in some areas by the dairy sector which can afford to pay a higher land price than they can in part because the dairy sector is protected from having any obligation to account for its agricultural emissions. 
So the forestry sector says that not only is the price very low and not acting as a sufficient incentive to new forests which are what New Zealand is overly reliant upon in terms of emissions reductions but also that it suffers this disadvantage of competing for land against a sector that is not facing any cost for its agricultural emissions. This bill if enacted puts that inclusion of agriculture on the never-never. It says that under this legislation it will never happen. Effectively Parliament would have to come back to legislate again. How does the bill do that? [ 
Bell rung 
] Mr Chairman— 
The CHAIRPERSON (Eric Roy) 
: The Hon David Parker—oh I might have pressed the bell a minute early. My apologies. 
Hon DAVID PARKER 
: Thank you Mr Chairman. I do accept your apology. 
The CHAIRPERSON (Eric Roy) 
: I do apologise. 
Hon DAVID PARKER 
: No that is all right. These things happen. What it does is it depresses the price of carbon into the foreseeable future down to such a derisory level that it is ineffective. We heard from the people who are service providers in buying and selling carbon rights and they said that because of the lack of a floor on the price of carbon and no restriction on some of these units that are washing around the world at a very low price effectively New Zealand’s price of carbon goes down to a dollar or $2 a tonne—not enough to influence behaviour. 
Let us not forget that the Government was worried that the price was going to go over $25 a tonne not so long ago and so it put a price cap in last time. The price has now gone to about a dollar or two dollars and the Government does not think that it needs to restrict units or have a price floor. [ 
Interruption 
] Five minutes from now is it? Thank you Mr Chairman. 
Well it just does not make sense particularly given this Government saying—and I remember the Hon David Carter saying it in earlier contributions on prior legislation—that we ought not to move ahead of Australia; Australia had a carbon price that was going to be later and the Government said lower than where New Zealand’s carbon price was heading. So that was the justification for both delay and a cap on price. 
The Australian price now is far higher than New Zealand’s price currently. It is about $30 a tonne—A$30 a tonne. It is probably going to come back from that a little bit but it is still a hell of a lot more—an enormous amount more—than the dollar or two dollars a tonne that we have got in New Zealand. So much for this pretence that this was about coordination with Australia—if that was the intent the Government has abandoned that. This scheme is so permissive of low prices that we will never be able to link with the European scheme. The Europeans are not going to link with a carbon pricing scheme that is as loose as this one is. So the idea that we can link with other schemes and therefore have deeper carbon markets is wrong too. 
We have got one-for-two free allocation. Even at a low price of $2 or $3 per tonne the Government is still saying not only can you have the benefit of that really low price but we will halve it again because you are going to have to remit only one unit for every two units of your emissions. Why is that necessary? This is just a fig leaf for inaction and as other speakers have said it makes a mockery of the Government’s pretence that it is going to reduce emissions by 50 percent by 2050. And I think that is sad. I do think that is sad. 
I do not think New Zealand can overcome these problems alone and I am not someone who says that we should sacrifice the interests of all our industries so that we are just chasing a pyrrhic victory all on our own. I do not think anyone on this side of the Chamber says that but I do think we should be doing something meaningful and I do think that means that we have a responsibility to the world to be actually doing something to try to curb our emissions growth. If it is not going to be through this legislation then maybe it should be though regulation. I certainly think there should be a floor on the price of carbon so I was disappointed that the Government voted down Kennedy Graham’s amendment to that effect. There should be a floor if you are going to have a ceiling. You cannot justify that asymmetric interference with what is meant to be a market-based approach to minimise emissions at the lowest and most efficient cost to the economy. 
This legislation is a disappointment. This legislation is a shadow of what was originally produced. It can actually be fixed in the future but at the moment New Zealand’s climate change response is effectively nil. 
Dr KENNEDY GRAHAM (Green) 
: 
 I feel obliged to take the floor once more because I have just submitted an amendment to the Clerk. Effectively under clause 1 the title clause it would change the name of the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill to the Climate Change Response (Emissions Encouragement) Amendment Bill. Although the Minister for Climate Change Issues and his colleagues might be disposed to dismiss that as a bit of light-hearted fun that could be seen as possibly wasting the time of the Committee I would demur and suggest that he and his colleagues recognise that it is not quite as mischievous as it may seem because in fact the way the amendment bill is crafted it actually will have the effect of encouraging emissions. 
I want to draw the attention of the Minister once more to the Emissions Trading Scheme Review Panel which was set up with a view to advising the Government of the day as to which way the emissions trading scheme should go and advanced its recommendations most of which have not been incorporated. The review panel—and I refer again to figure 2.1 of the report—makes it clear that both gross and net emissions of New Zealand are projected to increase on the way the emissions trading scheme is currently structured. Any further weakening by this Government of the current structure can only make figure 2.1 worse. It can result only in further increases in gross and net emissions. It cannot reduce them. 
If you as the bill plans continue the price cap without change continue the one-for-two surrender obligation indefinitely refuse to allow any restriction on the trading of units coming in from overseas and defer agriculture indefinitely you cannot in logic— 
The CHAIRPERSON (Eric Roy) 
: Order! 
Dr KENNEDY GRAHAM 
: Sorry Mr Chair—the Government cannot in logic say that that is strengthening the scheme. It is unavoidably weakening the scheme. If you weaken the scheme the emissions go up. You are encouraging the emissions. So the title actually has to be the Climate Change Response (Emissions Encouragement) Amendment Bill. 
I will finish by just reiterating a request I made before dinner to the Minister to address before both this title clause and the bill go to the vote the figures that I quoted earlier—I will not cite them again—and explain to the Committee to the satisfaction of all New Zealanders how the amendment bill as it is structured can provide a critical path to emissions reduction. Even with the Government’s own figures of 10 to 20 percent with a mid-point of 15 percent and setting aside the Green Party’s Supplementary Order Paper 147 figure of the mid-point of 25 to 40 percent—33 percent—take the 15 percent and explain to the Committee in all honesty how this weakening of the principal Act can conceivably do other than encourage emissions and result in increasing gross emissions. 
The CHAIRPERSON (Eric Roy) 
: I will put the questions. The amendment in the name of Dr Kennedy Graham is ruled out in accordance with Speaker’s ruling 116/6. 
Hon DAVID PARKER (Labour) 
: 
 I raise a point of order Mr Chairperson. I know that proposals to change the title that are not serious are ruled out of order but given that the effect of the legislation is as all Opposition parties have said to encourage the increase in emissions I would suggest that that is perfectly within the Standing Orders and it should be put to the vote. It cannot be said to be some capricious attempt to make fun of the legislation. It is trying to describe it as it is and as you have heard from many speakers in this Chamber in this debate we heard a number of submitters at the Finance and Expenditure Committee say exactly the same as Opposition parties are saying that this will encourage the increase in emissions. So I challenge that ruling. 
The CHAIRPERSON (Eric Roy) 
: I am upholding the ruling. Speakers’ rulings 116/6 and 117/1 are quite clear on that. There are a number of examples. I will cite you one comment: “An amendment to the title of the bill must be a serious or objective description of the bill rather than an attempt to criticise its contents.” There are several examples set out in Speaker’s ruling 117/1 so I am upholding my ruling. 
Hon DAVID PARKER (Labour) 
: 
 I raise a point of order Mr Chairperson. This does not do any of those things. This does properly describe the bill. It is quite open to the Government to vote the amendment down but it should not with respect be ruled out of order. If that is your ruling I will ask for the Speaker to be recalled. 
The CHAIRPERSON (Eric Roy) 
: Are you moving that? 
Hon DAVID PARKER 
: I will Mr Chairperson but it seems a perfectly easy thing for you to do to actually put that to the vote because that is not a capricious amendment. It is a proper description of the legislation according to the Opposition and it is our right— 
The CHAIRPERSON (Eric Roy) 
: Order! Is the member moving that the Speaker be recalled? 
Hon DAVID PARKER 
: I am actually suggesting a very easy way through this. 
The CHAIRPERSON (Eric Roy) 
: No I have indicated that I am upholding my ruling. The member is entitled to— 
Hon DAVID PARKER (Labour) 
: 
 I have never done this before but I am. I am going to ask for the Speaker to be recalled. 
The CHAIRPERSON (Eric Roy) 
: Those in favour of the Speaker being recalled will say Aye to the contrary No. The Noes have it. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 I raise a point of order Mr Chairperson. It is a convention of the House that motions to recall the Speaker are supported by the Committee so I ask that you put the question again. I seek leave that you put the question again. 
The CHAIRPERSON (Eric Roy) 
: I will put the question again. Those in favour will say Aye to the contrary No. The Ayes have it. The Speaker will be recalled. 
House resumed. 
Speaker Recalled 
The CHAIRPERSON (Eric Roy) 
: Mr Speaker The Committee has determined that you should be recalled to give an oversight on a ruling that I gave in relation to an amendment from Dr Kennedy Graham. We are debating clauses 1 to 3 and he has submitted an amendment to change the title. Essentially he wants to remove the words: “This Act is the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill”. He wants to delete those words and insert: “This Act is the Climate Change Response (Emissions Encouragement) Amendment Bill”. I gave this some consideration and was guided somewhat by Speakers’ rulings 116/6 and 117/1. Speakers’ ruling 116/6 states quite clearly: “An amendment to the title of a bill must be a serious or objective description of the bill rather than an attempt to criticise” the bill. Although I would certainly concede that Dr Kennedy Graham is indeed serious about his concerns after having listened to the debate I just believed that this was a step too far. It is in fact an amendment to the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. To assert that this bill is now a bill that encourages emissions was I believe beyond the pale of what was a serious amendment. There are some examples quite clearly that I felt fitted around this and they are set out in Speakers’ ruling 117/1. Accordingly I was challenged by a point of order. I upheld my ruling and the Committee has deemed that you be recalled to give your consideration on my ruling. 
Dr KENNEDY GRAHAM (Green) 
: 
 I apologise for unintentionally causing such concern on the part of the House. Even though the amendment was submitted at a late stage in the discussion—in the debate—it was not my intention to be in any way mischievous in misleading the Committee. The points I made when I advanced the amendment—and I will just summarise them for your consideration—are the following. 
The Emissions Trading Scheme Review Panel from last year published its document which contained of course recommendations to the Government for the future of the emissions trading scheme. In that it shows in figure 2.1 both gross emissions and net emissions projected to increase. That is my first point. 
My second point is that if you then have in response to that an amendment bill in which you demonstrably defer obligations under the scheme—namely a deferral of the price cap at the same figure an indefinite continuation of surrender obligations no restrictions on international credits coming in and an indefinite deferral of the entry of agriculture into the scheme—then it is a logical inescapable conclusion that those provisions in the amendment bill will not reduce emissions; they can be seen to only increase emissions. So if you have the original projection that increases emissions and an amendment bill that can be interpreted only as increasing emissions my point was that it is a necessary conclusion that this bill will encourage emissions—hence the need to change the title. 
MICHAEL WOODHOUSE (Senior Whip—National) 
: 
 Just briefly Mr Speaker I do not think that the member who has proposed the amendment Dr Kennedy Graham intended to be frivolous in the title and he has explained that but I am influenced by Speaker’s ruling 117/1(2) by Chairman Kyd in respect of the Employment Contracts Bill which referred to the “Exploitation of Workers Act”. That was a value judgment. The Government disputes that emissions will rise under the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill necessarily and therefore it is either a debating point or a value judgment. However the point I am raising is that it is very similar to the issue that Chairman Kyd had to consider—what is effectively a value judgment. 
Hon DAVID PARKER (Labour) 
: 
 It was me who raised the point of order and unusually followed it through to your recall. I do not do that often. The first point I would make is that we know the demeanour of different members of this House. You certainly cannot call the member who put this amendment Kennedy Graham one of the more capricious members of this House. He would be one of the more serious members of this House and he believes that his amendment is appropriate. 
Secondly the discussion that you have already had to hear as to whether this is an appropriate amendment shows that it is a debatable point. It is a debatable point. If the Speaker has been listening to this debate as the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill has proceeded through earlier stages and earlier parts of the Committee stage he will have heard that it is the Opposition’s contention that by excluding 50 percent of New Zealand’s greenhouse gas emissions from the emissions trading scheme it has the effect of enabling an increase in emissions. That is a debatable point that it is within the purview of Opposition parties to put. 
The third point I would say is that I understand why these rulings are starting to be made. There were times when there were hundreds of amendments being put to the titles of bills and some of them were effectively trying to unfairly delay the business of this House. There is one amendment to the name of this bill on the table. With respect I believe that the appropriate course if the Government disagrees with this change of name is to vote against it. It is not appropriate that the amendment be ruled out of order because in my submission it is quite properly in the power of the Opposition to call a bill what it really is doing and that is all this amendment tries to do. 
Mr SPEAKER 
: I thank members for their contributions to my consideration of the matter. The issue to me is how a reasonable person would respond to what has taken place because we do not have a specific Standing Order covering these matters but there are fairly clear Speakers’ rulings. If one looks at Speaker’s rulings 117/1 they cover a very similar issue where it is proposed that titles of bills should be changed to be less than objective to create a political view if you like of what a political view may consider the legislation to be doing. They have all been ruled out. I think a reasonable person would say that to change a bill’s title from the “Climate Change Response (Emissions Trading and Other Matters) Amendment Bill” to the “Climate Change Response (Emissions Encouragement) Amendment Bill” is a very different title and contains the same kind of political view that is expressed in those titles in Speaker’s rulings 117/1 that have been ruled out. I think a reasonable person would arrive at that conclusion. I just want to encourage the House on these serious matters—because I fully accept that this is a serious matter—to be reasonable. That is why I believe I must support the Chair of the Committee in ruling out that amendment to the title based on Speaker’s rulings 116/6 and particularly 117/1. I therefore declare the House in Committee for further consideration of the bill. 
Dr Kennedy Graham 
: May I speak to the point of order? 
Mr SPEAKER 
: Does the member wish to raise a further point of order? Dr Kennedy Graham. 
Dr Kennedy Graham 
: Well just to— 
Mr SPEAKER 
: I have just declared the House back in Committee. I will withhold that for a moment so that I do not preclude the member from raising his point of order. 
Dr KENNEDY GRAHAM (Green) 
: 
 I raise a point of order Mr Speaker. Without drawing out the time of the House I would just say that I consider myself to be a reasonable person. 
Mr SPEAKER 
: Forgive me I did not mean to imply that the member was not; I was just asking members to think about those changes. I now do declare the House back in Committee for further consideration of the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. 
In Committee 
Debate resumed. 
Clauses 1 to 3 ( 
continued 
)  
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 57 
New Zealand Labour 32; Green Party 14; New Zealand First 8; Maori Party 2; Mana 1. 
Clause 1 agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 57 
New Zealand Labour 32; Green Party 14; New Zealand First 8; Maori Party 2; Mana 1. 
Clause 2 agreed to. 
A party vote was called for on the question  
That clause 3 be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 57 
New Zealand Labour 32; Green Party 14; New Zealand First 8; Maori Party 2; Mana 1. 
Clause 3 agreed to. 
Bill reported with amendment. 
Report adopted. 
Local Electoral Amendment Bill (No 2) 
First Reading 
Hon DAVID CARTER (Minister of Local Government) 
: 
 I move  
That the Local Electoral Amendment Bill (No 2) be now read a first time. 
 I nominate the Justice and Electoral Committee to consider the bill. At the appropriate time I intend to move that the bill be reported back to the House on or before 11 March 2013. 
The Local Electoral Act 2001 which sets the rules of the conduct of local elections every 3 years has as one of its principles that the public have confidence in and understand the local electoral processes. The Act also provides for fair and effective representation for individuals and communities and aims to provide people with a reasonable and equal opportunity to cast an informed vote and to accept nomination as a candidate. 
There have been significant changes since the Local Electoral Act was enacted in terms of both the changing landscape of the local government sector and amendments to the Electoral Act—the legislation that regulates parliamentary elections. Simply put the legislation governing local government elections has not kept pace with the changes imposed on central government political candidates. This bill strengthens the Local Electoral Act to ensure that it meets its principles and to bring it closer into line with the provisions of the Electoral Act. 
A number of amendments in this bill implement the Government’s response to the findings of the Justice and Electoral Committee in the conduct of the 2010 local authority elections. The amendments also reflect the Government’s response to the Local Government Commission’s 2008 statutory review of the Act. The bill improves the balance between requirements for fair and effective representation of communities by territorial authorities. Councils will have more flexibility in setting ward boundaries that reflect existing communities. The amendments also streamline technical aspects of the representation review process. In short the bill will give electors more effective democratic representation. 
This bill will also ensure electors have better information when deciding whom to vote for. Candidates will need to declare if they are standing for more than one elected position. Candidates will also have to declare whether they live in the local area for the positions they are contesting. In addition the bill will streamline the production of voting documents and candidate nomination processes. This bill will also increase openness and accountability in local elections through new and enhanced provisions for the receipt disclosure reporting and recording of donations especially anonymous donations. Legislation surrounding anonymous donations has needed to be improved for some time. As it now stands the current legislation has unnecessarily created uncertainty and confusion in the local government elections. This bill provides that certainty. 
The bill contains provisions that are modelled on existing checks and balances in the Electoral Act which covers of course parliamentary elections but they are adapted to apply to local elections. Having similar provisions across both the parliamentary and the local electoral systems will make it easier for candidates for donors and for others involved in local elections. The key changes proposed in the area of donations include the expanding of the definition of “anonymous” to mirror the descriptions in the Electoral Act—that is to include situations where the candidate could not reasonably know the identity of the donor. In addition where a donor gives a donation to a third party to pass on to a candidate and the third party knows the identity of the donor the third party will have to disclose this information to the candidate so the donation cannot be treated as anonymous. 
Anonymous donations will also have a limit of $1500—the same as is in the Electoral Act. If a candidate receives an anonymous donation over that limit they cannot keep the excess but will have to give it to the electoral officer appointed by the local authority to conduct that election. The bill also increases the obligations on candidates to record and report on the donations they receive. I do not consider the obligations to be onerous as most would be reasonably expected from efficient financial and administrative practice. New penalty provisions will accompany and enforce the new obligations. Those who are found guilty of breaching the law will be held accountable and could be liable on conviction for a fine. 
The Local Electoral Amendment Bill (No 2) will strengthen the integrity of the Local Electoral Act enhance the transparency and efficiency of the local electoral system and the representation of electors and as a result increase the public’s confidence in the local electoral system as being efficient democratic and transparent. I commend this bill to the House and hope that it finds good support from all parties across the House. 
Hon ANNETTE KING (Labour—Rongotai) 
: 
 The Labour Party will be supporting the Local Electoral Amendment Bill (No 2). As we have heard this bill amends the Local Electoral Act 2001 and the Local Electoral Regulations 2001 to implement the Government’s decision on amendments to the legislation. I think it is important to point out what the purpose is—it is threefold—“It will improve provisions for the conduct of local elections; increase transparency and accountability in the provision receipt disclosure recording and reporting by candidates of electoral donations; and strengthen the integrity and efficiency of the local electoral system. As a result public confidence in local elections will increase.” according to the explanation on the bill we are talking about tonight. 
I have also looked at the regulatory impact statement on this bill. It says this: “In the Department’s view the analysis and consultations it undertook to develop the proposals meet the adequacy standards. The analysis provides a sound basis for decisions to amend the Local Electoral Act. The proposed amendments will provide clear consistent robust and reasonable legislation.” Well let us be honest about what the sound basis for this bill is. It is mentioned but not named in the regulatory impact statement. This bill should be called the “John Banks Bill” because this bill is about straightening up the behaviour of one of the National Government’s Ministers. 
You see Labour had a bill in the ballot for months that addressed the ridiculous situation we have seen with John Banks and his so-called anonymous donations. It was in the name of David Cunliffe. It was a bill that does just what this Government bill does. 
Hon Simon Bridges 
: It’s David Carter. 
Hon ANNETTE KING 
: It was in the name of David Cunliffe for the member who has obviously got bad hearing. It was set down by the Labour Party for months. For months the Government took no notice of it mainly because it was an Opposition bill. Of course nothing the Opposition ever does could be good enough for this Government. It was set down for us to be able to debate such a bill. It was ignored. It was not good enough. And then hello we have got a Government bill that is almost identical to the one that was set down by Labour. I wonder why the Government could not have picked up the bill that was already there. 
When you have a look at the timetable from the Government announcing that it was going to have a bill there is a little discrepancy. In Parliament when the Deputy Prime Minister was asked whether he would support such a bill by Grant Robertson Bill English said that yes in fact he would. Bill English said: “Yes the Government would be likely to support such a law. It seems to make sense that the disclosure laws for local government political donations would be similar to those for central government political donations.” Grant Robertson then sought to table the Labour bill. Hello it was turned down by the National members. But later that day in what the media described as a surprise announcement the Minister of Local Government David Carter said that work was already under way and the Government was making good progress on a Government bill. Well 6 weeks later Mr Carter’s announcement on the Wednesday did not include a new bill but said that it would be introduced early next month in order to enact the changes by May 2013. What it showed was that in fact no work had been done on a bill from the time of the surprise announcement through to the time when he announced that there would be a bill later on. To me that was not quite honest because announcing that work was being done that good progress was being made and that the Government was already on top of this issue was an effort to cover up what John Banks had been doing. 
Well in fact the Government was not on top of this issue and so what we have had I think has been something that has been bad for this Parliament and bad for local government—that is the behaviour of one of our members in this House a member who knowingly received and has been shown to knowingly receive donations and then forget that he received them. We cannot have a system where one person can bring so much odium on the rest of us because he cannot remember whether he got those donations. 
And then we have the Prime Minister. The Prime Minister said: “Well you know there is a wide definition of ethics.” when it came to John Banks. That is a direct quote from the Prime Minister. He said: “There’s a wide definition of ethics.” Well I would say to Mr Key that there is one definition of ethics that ought to be applied to members in this House and particularly to Cabinet Ministers and that is that they ought to be able to remember whether they received donations. These donations for John Banks came when he was standing for Mayor of Auckland. These donations he did not make transparent. He did not declare that he knew they existed although he took a cheque from Skycity in an envelope. He instructed Dotcom as to how he ought to pay these donations. We had a candidate a candidate of long standing—a person who had been a member in this House and who had been a former Minister of Police—who was prepared to forget that he had donations. Well that is not good enough. We needed this legislation some time ago. It is not appropriate for a Prime Minister to allow that sort of behaviour from a local government candidate to be brought into this House and bring the rest of us into disrepute. That is exactly what has happened. 
I deplore the double standards that have been applied over the years particularly by the Prime Minister. Some of us can remember John Key saying in 2008: “It is no longer acceptable or credible for Helen Clark to assert a facade of confidence in her Foreign Affairs Minister and to fail to ask the plain questions of him that she has a duty to the public to ask.” That is a direct quote from John Key about Helen Clark and Winston Peters in 2008. Then we come to 2012 and to John Banks and his donations that he received knowingly. John Key said: “It’s not my responsibility to ask questions. If someone thinks John Banks isn’t telling the truth it’s a very simple remedy: go to the police. It’s not my job to do a forensic examination.” That is not what he said about Helen Clark. He said: “… Helen Clark must stand Mr Peters down as a Minister. That is what I would do if I were Prime Minister.” Well Mr Key has failed to stand down a Minister who knowingly received donations who by the police’s own admission knows he received those donations and who has brought local government and this place into disrepute. 
This bill goes some way to fixing those problems in terms of donations. There is going to be a much more transparent process for the future. It aims to prevent the situation we have seen with John Banks. It aims to have the same requirements for candidates in local elections or polls in relation to donations their disclosure and the filing of electoral returns as those that are already in place for candidates in the parliamentary elections. It is also going to ensure that there is consistency between the Local Electoral Act 2001 and the Electoral Act 1993. The provisions in the Electoral Act 1993 are stronger and they are clearer in terms of accountability required by a candidate in an election. So we will support this bill but it ought to be called the “John Banks Bill” because it relates to the Government hastily trying to fix something that the Prime Minister said was not a problem—that John Banks had— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: I am sorry to interrupt the honourable member. Her time has expired. 
TIM MACINDOE (National—Hamilton West) 
: 
 Not for the first time we have just been treated to crocodile tears and what could be described as creative rewriting of history by the member Annette King who has just resumed her seat. I grant you that she does mock outrage incredibly well but let us just recall and point out to anybody who may be listening to this debate—and I know of at least two in Orakei at this moment—that the 2011 local body elections were held less than 2 years after the current Government had come into office and they were based on very loose provisions that had been enacted in 2001 by the former Labour Government of which the member for Rongotai was a Minister. Those particular provisions remained in place for the next decade during which time the Labour Government and that member could have at any time moved to improve them but they said and did nothing—absolutely nothing—for all of that time. Only when those members came into Opposition did they start to show an interest in making some reforms. 
I want to acknowledge the current Minister of Local Government the Hon David Carter who had been in his current role for only a matter of weeks when he announced a couple of months ago that the Government would move to fix an issue that we all acknowledge has been a matter of public concern. It has attracted considerable media scrutiny and comment in the public arena in recent times and I think all members of this House would acknowledge that change is needed. So I do welcome the Labour Party’s expression of support for this bill the Local Electoral Amendment Bill (No 2) and I hope it will receive similar support from the minor parties which we will hear from later in this debate. But as I say let us put on record the bunkum that we have just been exposed to because for a decade or so Labour could have done something to prevent the situation and it did nothing. 
I am the chair of the Justice and Electoral Committee and I look forward to receiving this bill. The Minister has indicated that it will be directed to our committee. I point out that it modernises local electoral law and will improve the transparency of local electoral donations. The whole purpose of the bill is to help restore and build public trust in the local electoral system. By and large what we are trying to do is to achieve the same degree of public trust as exists for central government electoral laws of this type. It is not possible entirely to blend the two because some of the provisions for central government electoral law just do not fit round local body electoral laws but as much as possible this particular bill will blend the two together. I believe that that is to be welcomed and indeed I know that many people have already commented on the fact that it is a change that should be broadly supported. 
So I simply reiterate that the donation amendments will bring the Local Electoral Act closer into line with the Electoral Act for central government and that the concern that is out in the public arena at the moment about transparency and accountability of candidate donations and particularly surrounding anonymous donations is squarely tackled under this bill and should be rectified. I believe that this bill is a timely and appropriate measure. I again commend the Minister for bringing it forward and for the alacrity that he has directed to the task. I commend the bill to the House and I hope it will attract widespread support. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I guess that I was a little bit surprised to hear that the Minister of Local Government was described as having brought this bill the Local Electoral Amendment Bill (No 2) to the House with some alacrity because I would have thought that any member of that Government would be embarrassed as to why we were bringing this matter before the House now. I think it all goes back to a certain cup of tea when a certain Prime Minister sat down with a certain leader of a certain party in order to make certain that it was represented in Parliament after this general election. That was one Mr John Banks and the reason that Mr John Banks is so pertinent to this particular debate is a certain set of transactions that he remembers nothing about. 
I am absolutely gobsmacked that somebody with such an incredible role of responsibility in this Parliament cannot remember receiving the kinds of donations that he received from one Mr Kim Dotcom but nobody remembers Mr Kim Dotcom. I do not know about anyone else in this House but when I first heard his name which was actually quite some time ago I thought how prescient his parents were to have a surname like Dotcom not knowing that one day it would come to mean something quite different from what it meant in those days. But it certainly did strike me as a name that you would not forget. So if anyone ever heard the name Dotcom you would remember the name Dotcom would you not? It is just one of those particular names. But in actual fact— 
Hon Annette King 
: What if he was 6 foot 9 and 240 pounds? 
Hon LIANNE DALZIEL 
: Well yes he is sort of the guy whom you would not forget meeting either unless you were somebody who could not remember a significant donation from somebody like a certain person whom you could not remember meeting such as that. 
But the point that I am trying to make is that I think the Government is playing ducks and drakes on this particular piece of legislation. The reason we did not turn our attention to the financing rules under the local electoral legislation is that there was not a case that had been brought to anyone’s attention in this Parliament until this very recent case in relation to Mr John Banks. That is why it behoves the House to address this issue and bring the legislation in line with the electoral finance rules that apply in a general election. So I think we would be dealing with this in the same order of events had that occurred at an earlier stage. We still would have addressed this issue in line with the general election rules if in fact this had arisen at the time. And of course it had not been brought to anyone’s attention. 
We think that it is a good idea to change the law to bring the local electoral rules into line with the central government rules but I do not think anyone in this House can pretend that any of this is particularly ideal because of course we all know that there are people in this House who have approached people to ask for anonymous donations and to have those anonymous donations immediately under the threshold—$1500 for an individual and $15000 for a party. An amount of $14999 is written out as a cheque to the National Party as a donation of course anonymously not having to be disclosed because that was the point at which the non-disclosure would have prevailed. 
So I believe that we have to face up to the fact that in actual fact there are a number of instances where there are attempts to avoid the donation rules wherever they apply. But this particular one I guess does raise some serious concerns and I am actually glad that it is coming to the Justice and Electoral Committee because I think we need to face up to the reality that people in this situation have actually worked to technically stay within the rules of the law but when they have breached the spirit of transparency that New Zealanders expect around political donations I think people can feel justifiably let down. 
I think people have been justifiably let down or have felt disappointed in the way that the Government has responded to this particular issue. A lot of people felt that when John Key stood in front of the people of New Zealand in 2008 and said that he wanted to achieve things for this country they believed in him and I believe that a lot of people are disappointed in what he has failed to deliver and the way that he stuck up for John Banks I believe adds to that sense of disappointment in a very very particular way. 
People felt that there was no reason for the Prime Minister to stick up for Mr Banks when it became absolutely crystal clear that he had received donations in his role as a mayoral candidate even though he was not a Minister at the time. To accept that that person could remain a Minister with that lack of integrity in the way that he dealt with donations at that time I believe is absolutely relevant to whether he should be a Minister today. There is not actually a person in New Zealand who disagrees with that with perhaps the exception of Mr John Banks. 
I believe that most New Zealanders are absolutely committed to the idea that the integrity in that role traverses the experience of when he was standing for the mayoral candidacy and when he is in a ministerial position. If the people of New Zealand cannot trust one of their own Cabinet Ministers or Ministers outside Cabinet to actually have that degree of integrity in his role as a mayoral candidate then I believe that they are quite justifiably sceptical about the degree of trust that they can put in his role as a Minister. I think it is a shame that there has been no acceptance on the other side of the House that this has come about because of the circumstances that were revealed in a way that would not have come to the public attention if it had not been exposed in the way that it was. 
We put legislation into a member’s bill at the time that this became an issue so that we could align the Local Electoral Act with the Electoral Act and it was raised as a particular point of view I think by one of my colleagues Grant Robertson who was commenting on the lack of consistency saying quite clearly that what we have seen in Mr Banks’ case is that although he might be able to claim that he has not technically broken the law he has clearly breached the spirit of transparency that New Zealanders would expect around political campaigns. 
So despite the fact that we had legislation in the name of one of our Opposition members the Government really was not taking this seriously until it felt that it really could not back away from it any further. So there has been a degree of—and I am not allowed to use a certain word to describe what it does look like but it does seem— 
Andrew Little 
: You can have a hypocritical position. 
Hon LIANNE DALZIEL 
: Can you have a hypocritical position? 
Hon Annette King 
: Yes you can. 
Hon LIANNE DALZIEL 
: OK. I think that there have been hypocritical positions adopted in this particular matter and that there are issues that I believe the Government has to front up to on this point. 
I think that there has been too much memory loss over this particular matter. First of all we had the memory loss relating to Mr Banks himself. He could not remember various things that had happened. Then there was the deliberate decision I think of the Prime Minister not to read certain information or not to have advice provided to him on certain information. 
Andrew Little 
: Wilful blindness. 
Hon LIANNE DALZIEL 
: That is called wilful blindness. So we have memory loss and wilful blindness and I believe that that is not good enough. I think that the people of New Zealand actually require of their politicians that we have a corruption-free environment and that we do not have the degree of undisclosed interests that dominate the environment in other countries and we are observing an election in another country at the moment. 
Of course the amount of money that people see being collected and spent in that environment is something that we would never want to see in this country. Part of what protects us from that is absolute upfront disclosure. That is why we will be supporting this bill. 
EUGENIE SAGE (Green) 
: 
 I am pleased to take a call on the Local Electoral Amendment Bill (No 2) and I think the “John Banks Bill” would be a very good title for it. The Green Party will be supporting this bill because it was the so-called anonymous donations from Mr Kim Dotcom and Skycity to Mr John Banks in the 2010 Auckland mayoral campaign where Mr Banks allegedly cannot recall the donors’ identities that highlighted the significant gaps in our electoral law. The bill requires that candidates declare any donation over $1000 if they know the source yet Mr Banks’ convenient memory lapses allowed him to circumvent this. That is why the Green Party is giving qualified support to this bill because it certainly takes some steps to improve the law and increase the transparency of local elections and candidates’ disclosure recording and reporting of donations. But we will be looking to achieve some significant changes at the Justice and Electoral Committee to strengthen the bill particularly so that it better regulates electoral financing. 
The provisions in my colleague Denise Roche’s member’s bill which is currently in the ballot are wider in scope and would be a very good guide to some of the changes that the Green Party is seeking. They put a cap of $5000 on donations by any person or group. The bill puts a ban on overseas donations. It would regulate third-party spending and it would establish a pecuniary interest register for members of local authorities—those things that we do not see in this bill. 
But there are some useful changes in this bill and one of those is ensuring that donations are clearly considered an electoral expense. It is also a good change that anyone who works with a candidate and knows the identity of a donor who gives more than $1500 must declare the identity of that donor to the candidate. This should certainly help Mr Banks with his memory lapses. The bill also creates a disincentive against anonymous donations because where a purported anonymous campaign donation to a candidate exceeds $1500 the excess has to be given to the local authority’s electoral officer. Another improvement in the bill is that the return of the donations has to have more detail in it it does increase the disclosure reporting and recording obligations and it introduces some penalties for non-compliance—all good things. 
The bill also makes some wider changes which I would like to comment on briefly and that is to change the balance between fair and effective representation and to increase the criteria where the local authority can adjust the boundaries of wards or constituencies and not have to comply with the 10 percent plus or minus rule—the fair representation rule. This is so that there is more of an emphasis on fair representation. Two circumstances where that could occur are where there would be communities of interest that would be separated or where two very different communities would be joined in the same ward. Those changes were certainly recommended by the Local Government Commission in its 2008 review of the Local Electoral Act 2001. The commission in its review thought that it was very important to ensure that the representation arrangements in local government were configured so that the ward and constituency boundaries went along the lines of recognising communities of interest and that electors were therefore able to identify with the area concerned and that that could assist voter participation in elections. 
The commission also thought that this flexibility was needed to promote fair representation so that the boundaries would ensure that there was convenient access to local authority services and that it would avoid grouping communities that had little in common. It is puzzling that on the one hand the Government in this bill is promoting fair representation yet its proposals in the Local Government Act 2002 Amendment Bill its push to super-sized councils around New Zealand and its belief that big is better cut right across this whole principle of local government being about local democracy and local councils representing local communities which the Local Government Commission thought was important in its review of the local electoral legislation. It is the amalgamation provisions in the Local Government Amendment Bill that will make it so much easier to push through super-sized councils regardless of whether communities that are adjacent to each other want to be lumped together because they are going to be denied the right to have a poll on those amalgamation proposals— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Order! The member is far outside the scope of the bill. This is about— 
EUGENIE SAGE 
: I will come back Mr Speaker. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Yes. Do so. 
EUGENIE SAGE 
: The Green Party also has concerns about the new powers in clause 21 because that would allow the Minister of Local Government through an Order in Council to adjourn elections. The current Local Electoral Act allows the electoral officer to adjourn the close of voting for up to 14 days in certain situations such as a natural disaster but the new bill allows the postponing of the whole election for up to 6 weeks and that can be rolled over. Given that this Government has postponed elections for Environment Canterbury until 2016 we are not confident that the Minister will not abuse this power and will not use it to postpone elections. So given that this Government does not trust Cantabrians to elect councillors to the regional council who can provide “stable effective and efficient” government because it has a one-eyed focus on maximising irrigation on the Canterbury Plains what confidence is there the Government will not use the provisions in this bill to postpone elections in other circumstances? So we will be supporting the bill but we want to see it strengthened at the select committee and we have reservations about some of the provisions in it. 
Dr CAM CALDER (National) 
: 
 It is a pleasure to rise and take a short call on the first reading of the Local Electoral Amendment Bill (No 2) and I am delighted that so far support seems to be unanimous in the House. The bill combines the changes of the Local Electoral Amendment Bill which was tabled in 2011 with further changes to electoral donation laws reflecting public concern about transparency and accountability of candidate donations particularly anonymous donations. 
The purpose of this bill is threefold. It will improve provisions for the conduct of local elections. It will increase transparency and accountability in relation to candidate donations particularly anonymous donations in response to the aforementioned concern and it is interesting to note at this point that Labour passed the current loose provisions around the anonymous donations. The National Government is rectifying this matter. This bill will strengthen the integrity of the local electoral system. 
It is our belief that improved transparency will help build public trust in the local electoral system. These local electoral reforms are part of National’s drive for better local government which also focuses on councils operating more efficiently and helping them to be more fiscally responsible. 
As well as limiting the size of an anonymous donation a candidate can retain up to $1500. In other provisions around donations the bill also increases flexibility for city and district councils to set ward boundaries to better reflect communities and prominent geographical features. As part of our drive for greater transparency candidates for local election will also be required to provide information about whether they live in the area and whether they are seeking election to more than one position. 
These changes reflect recommendations from the Justice and Electoral Committee’s inquiry into the 2010 local elections and also the recommendations from the Local Government Commission’s review of the Local Electoral Act. I commend this bill to the House. 
DENIS O’ROURKE (NZ First) 
: 
 New Zealand First will support this bill the Local Electoral Amendment Bill (No 2) but with some reservations. I would like to begin by recommending a more descriptive title the “John Banks Honesty Transparency and Accountability in Local Government Candidacy Memorial Bill” a title that fittingly nobody will remember. 
New Zealand First will be happy to support the main provisions of the bill and I will go on to mention some of those parts that we have some concern about. But first of all we do think there is some good sense in what a large amount of the bill covers. First of all clause 5 which allows territorial authorities and regional councils to make minor alterations to boundaries is very sensible. Especially we like the idea that they would go to the Local Government Commission first for it to uphold them. That is a good check on whether those alterations would be suitable. Similarly we agree with clause 8 under which communities of interest must be considered by the territorial authority or regional council and it is required to specify the ratio of population to proposed members for each proposed ward; and again with clause 10 in which there are two situations added: wards and subdivisions of a community may be defined either by dividing a community of interest between wards or subdivisions or by uniting within a ward or subdivision two or more communities of interest with few commonalities of interest. Those are two situations where special attention should be paid to communities of interest. Again reference to the commission is a good idea. 
We agree also with clause 21 which inserts new section 73A to add a power to adjourn an electoral process by Order in Council in certain situations. Those of course are the sorts of situations that we found in Christchurch. They did not actually require any action there because there was no local government election at that time but it could have happened that way and then it would have been necessary for some action to be taken. This provision will make it possible for up to 6 weeks’ deferral of any of the important dates for an election to be made. That is just common sense. We are glad to see it there as well. 
But some of the provisions we have concerns about. The first of these relates to the vexed area of donations and expenses under Part 5 of the Local Electoral Act. I might say first of all that one of the omissions that I see here and that is also in the Electoral Act for general elections is the omission in respect of loans made in the same sorts of circumstances as a donation loans that are not repaid or forgiven before election day. These I believe should be recorded as a donation as well because it is simply too easy through the mechanism of making a loan to get round some of these requirements. So that is something I would like to see the Government look at as part of this bill before it goes too much further. 
I would like to also refer to new section 103A in clause 27 where it refers to the circumstance in which it may be reasonably expected for a candidate to know whether a person has made an anonymous donation or not. The words “reasonably expected” need to be taken seriously; they have not been I believe by some members opposite and they should be. So we hope that those words will be sufficient for the purpose; we will wait and see. We disagree however with new section 103A(b) where it refers to goods or services being “provided to a candidate or to any person on the candidate’s behalf under a contract at 90% or less of their reasonable market value”. We say that it would be difficult to prove such a value and that a 10 percent discount is really not a donation and should not be regarded as such. That is one of the things I think should come out of the bill. It is just not practical and it is certainly not necessary. 
I would like to move on to new section 103E in clause 27 and certain other sections of the same kind that refer to penalties. We in New Zealand First believe that a $5000 penalty for offences such as intentionally concealing the identity of a donor is insufficient. It should be at least $20000. It certainly is not a large enough fine to be a deterrent. The same applies to section 103G for a person concealing the identity of a donor. That is too low at $5000 and it should be at least $20000 as well. Similarly in section 103I that penalty should be $20000 and not $5000. These are all the sorts of offences that really do need a heavy deterrent and $5000 just does not get there. Another one is new section 112D—in clause 31—“Filing a false return of electoral donations and expenses”. That requires a stronger deterrent as well and New Zealand First says $20000 and not $10000 or as in paragraph (b) 5000. Neither of those is anywhere near sufficient. 
So New Zealand First will be happy to support the bill but we would like to debate further some of those provisions that I have mentioned and especially the inadequacy of the penalties that have been provided under some of those sections that I have mentioned. 
Dr JACKIE BLUE (National) 
: 
 I am very pleased to speak to the first reading of the Local Electoral Amendment Bill (No 2). It will modernise the Local Electoral Act 2001 and improve the transparency of local electoral donations. The changes to the electoral donations will bring this Act closer in line with the Electoral Act which central government candidates work to. The changes reflect the recommendations of the Local Government Commission and the review of the Local Electoral Act. 
The legislation is planned to be enacted by May 2013 in time for the election in October 2013. There will be a number of changes to donation provisions such as limiting the size of anonymous donations that a candidate can retain to $1500. This bill will strengthen transparency and accountability and strengthen the integrity of the electoral system. I commend it to the House. 
ANDREW LITTLE (Labour) 
: 
 I take pleasure in rising to speak on the Local Electoral Amendment Bill (No 2). Saying that the mere fact that electoral practices must be free from corruption goes without saying. It is essential for our democracy the sort of democracy that we are used to and that we celebrate here that electors must know that the people who are standing as candidates and who are seeking public office are people of integrity and free from hidden constraints promises or connections. That has been the tradition in New Zealand both at the central level and also at the local government level. But the sad reality is that our reputation is under threat. Our reputation for a corruption-free electoral system and corruption-free electoral environment is under threat. There have been the odd alleged transgressions at the central level. I remember a flyer produced when I was the national secretary of a union which was referred to the police once. The police were so embarrassed about it that they rang to apologise for wasting my time. And then there was the National Party which has always concerned itself with corruption issues suing me and the union I belonged to for being involved or having a connection with the Labour Party in the 2008 election. It took it twice to the High Court. In the end the High Court judge got thoroughly annoyed and threw the whole thing out. 
But when it comes to local government elections there is no question. We have reached the high-water mark. We reached it in 2010 in the Auckland mayoral election with the candidate none other than a member of this House John Banks. That must surely be a source of huge embarrassment to members of this House who have watched the tawdry affair unfold in this House; to every Aucklander and to most New Zealanders to watch what happened: to watch every effort made to conceal what went on; eventually a police investigation; and then a huge effort to get the police file disclosed to the public on a matter of considerable public interest and eventually it was. What we saw in that campaign and what we saw with the conduct of John Banks was an act of courting donors one in particular—a very large donor. And when I say a “large donor” the donations of course were large but so was the donor. We saw extensive contact between the candidate John Banks and the donor Kim Dotcom. That contact involved meetings parties dinners complimentary remarks to his wife trips on his helicopter observing fireworks displays—I could not imagine a more extensive range of memorable experiences and yet in the inquiry and the ensuing public disclosure— 
Hon Lianne Dalziel 
: I’m struggling to think of the last time I took a helicopter to a meeting! 
ANDREW LITTLE 
: Listen I travel on helicopters with my donors every day of course! Maybe it is a novel experience to John Banks. But how affronting to the intelligence of the Auckland voting public that he should declare that he could not remember any of those activities. And then with the allegations of soliciting donations that is what the police found in their inquiry. As the police said in their report: “Police have established that in September 2010 Mr John Banks personally solicited a request for help from a Donor who prefers to remain anonymous” and yet Mr Banks was able to get away with a declaration that did not disclose the identity of that donor because the legislation in place then and in place now did not require it. How could you have an anonymous donor who was known to the candidate? That is not anonymous; that is a nonsense. 
I think the pity of it is when we look at people in public office. Someone like Mr Banks who has occupied high public office—not just an MP not just a leader of a party albeit a one-man party but a former Cabinet Minister—knows the story about ethics. He knows that the expectation of the New Zealand public is that people and those in public office do not just comply with the letter of the law but should comply with the spirit of the law. He has totally failed in that standard. It is even more disappointing that of course the Prime Minister of the day who held out great hope to the public of New Zealand that he would have high standards in public office at least in his Cabinet has not been able to follow through. The Prime Minister has defended Mr Banks’ conduct on the grounds that he technically complied with the law not that he complied with the spirit of the law. Well that is just not acceptable. At this point when we know all the information that has now come out however grudgingly and however it has to be prised out with a crowbar in this dreadful inquiry it leads us to one conclusion and that is that we all smell a giant rat. We all smell a giant rat and it is not very pleasant. It has led to this law change notwithstanding Grant Robertson’s own member’s bill. The Government has produced its own to achieve the same effect. So this bill represents a new spirit at least—a new spirit that we should be holding all candidates to in local body elections regardless of where that local body election is. 
I just want to draw attention to one problem however that I see in the legislation and the select committee no doubt in its deliberation its consideration and inquiries will look more closely at. It is in clause 27. There are two particular sections and the first I will talk about is new section 103H. This talks about anonymous donations which must not exceed $1500. It refers in that section throughout to an anonymous donation not exceeding $1500. But try as I may when I read that section and the other sections that are around it as part of clause 27 I cannot see that that section deals effectively with what I would call the Dotcom cheque-splitting problem. It does not prevent a candidate or a candidate’s campaign staff saying to a donor who wishes to remain anonymous “Don’t give us $3000; give us two cheques for $1500. The candidate won’t know and we won’t need to tell anybody.” It does not stop that from happening. So the select committee will need to look very closely at that. 
Then in new section 103F in clause 27 it talks about those involved in the administration of the affairs of a candidate that if they know the identity of a donor they are required to disclose it. But there is nothing in that clause—and in any other section in that clause—that requires a candidate who knows the identity of a donor to disclose it. That went to the heart of the issue with John Banks’ Auckland mayoralty campaign. He knew who some of the big donors were. He knew Kim Dotcom was a donor. He knew that Skycity was a donor. It handed him an envelope with cash in it or a cheque in it made out to “Team Banksie” and then he claimed subsequently that he did not know who the donor was. Well these provisions do not go far enough in that regard to remedy the problem that the John Banks Auckland mayoralty campaign threw up—and made us all throw up as a result. So those issues will have to be addressed as the select committee deals properly with it. 
I come back to my opening comments and that is that all electoral law whether central or local government needs to require of the candidates and those working with them and those administering those campaigns to work to the highest standards of integrity. The New Zealand public expect nothing less. Our law must reflect public expectations and we must make sure as this law goes through the House that it properly reflects the expectations that New Zealanders now have of those who seek public office. Those standards those expectations I suggest have probably risen a notch or two now because of the embarrassing affair that was the John Banks mayoralty campaign. As my colleagues have said we will support the bill because it will achieve a great leap forward in terms of electoral law and electoral integrity. But there is some work that needs to be done and we look forward to the select committee doing that work and bringing back a bill that will cover off all the issues raised by that tawdry nasty little affair. 
ALFRED NGARO (National) 
: 
 I stand and take a call on the Local Electoral Amendment Bill (No 2). There has been increasing public concern that the Local Electoral Act 2001 does not require candidates for local authority elections to provide the same degree of transparency and accountability in regard to donations as that required of parliamentary candidates. This bill forms part of the Government’s response to the recommendations of the two reports of the Law Commission and recommendations by the previous Regulations Review Committee. 
The Law Commission has rightly said that our statute law as a whole currently lacks coherence is untidy and can be difficult to understand and use. The Legislation Bill supports the efforts of the Parliamentary Counsel Office— 
Charles Chauvel 
: I raise a point of order Mr Speaker. I think somebody might point out to the speaker that he is speaking about the Legislation Bill which is yet to be debated. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: I am listening very closely. 
ALFRED NGARO 
: This bill aims to modernise and improve the law relating to the publication availability reprinting revision and official versions of the legislation. 
Hon Lianne Dalziel 
: I raise a point of order Mr Speaker. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Yes. We are actually talking about the Local Electoral Amendment Bill (No 2). It might pay if the member concentrates on that and spends some time on that. If the member does have this bill in front of him he is way wide of the mark. 
ALFRED NGARO 
: What this bill does do is limit the size of anonymous donations that a candidate can retain requiring any candidate not to retain an anonymous donation of more than $1500. We do realise that this is something that is important to the public giving them confidence and the ability to be able to trust. I know as my first foray into politics was actually in the 2010 Auckland City elections. It was there that what was most important— 
Hon Member 
: Here’s the confession. 
ALFRED NGARO 
: Well not so much a confession but actually just declaring the fact that I was there in those elections. It was about confidence. But the confidence we are talking about is not just in terms of the amount of the donations; most important the bill is actually about declaring that candidates are local candidates and it is about the work that they do. I think if anything the rats are around the donations. The true aspect the public want to see is candidates who are trustworthy and candidates who are actively working in their local community and the provisions of this bill absolutely commend that. I think that is what is going to be absolutely important. 
I commend this bill to the House. I commend the Government for taking this step. I commend the efforts of the Minister of Local Government and also the Justice and Electoral Committee which is ably chaired by my colleague Tim Macindoe and the committee members who are there. I look forward to the debate in the House on this bill. Thank you. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: I understand the next call is a split call. Charles Chauvel—5 minutes. 
CHARLES CHAUVEL (Labour) 
: 
 Labour has actually had a bill in the ballot for a number of months that would substantially achieve the ends that this legislation would. I know because I wrote it. 
Louise Upston 
: Did you write all of them? 
CHARLES CHAUVEL 
: Well I know that the junior Government whip likes to circulate the myth that I write all members’ bills but as is her wont she is just being too kind. The reality here is that we have heard all sorts of extraordinary claims from across the House including from the chair of the Justice and Electoral Committee that the Government has moved with alacrity to deal with this situation. I think members might like to just remember the time frame here. On 1 August John Key said that the Local Electoral Act in its current form was literally an ass in this particular case. What happened? Well Grant Robertson got up in the House and sought leave to introduce the member’s bill that I mentioned and lo and behold the Government refused leave for that to occur. So this bill could have been introduced to the House in substantially the same form 2 months ago but it was not because some petty member on the opposite benches decided that it had to be done by way of Government measure rather than by a member’s bill. It could have been read and sent off to a select committee. We could probably have had the legislation back by now and dealt with. Instead it has dragged on until now. 
Later that day after leave was refused in what the media described as a surprise announcement the local government Minister said that work was already under way and it was making good progress on a Government bill. It was 6 weeks later that David Carter announced on Wednesday that although he did not have a bill ready it would be introduced early in the next month in order to enact the changes by May 2013. Lo and behold today we have the first reading of this bill. That is this Government’s “alacrity”—a very interesting definition of the term. 
An earlier speaker Eugenie Sage mentioned that the problem here arose not in the term of the previous Labour Government but when those members opposite or those of them who were here in the previous Parliament rushed the Auckland super-city legislation through under urgency. That member hit the nail on the head because that was the legislation that caused this problem. That was the legislation rushed through this House that saw mayoral candidates in our first and hopefully our only super-city start to spend the sort of money that political parties in and of themselves spend in an entire general election. Well of course there was the need to foresee that and to provide for proper regulation when the circumstances were created to allow that situation to arise. But it was not dealt with and we have now seen the consequences of that. We saw the fiasco that occurred over the Banks and Dotcom financing that other members have mentioned. So not only do I reject what we have heard about the Government proceeding with alacrity but it is absolutely unfair to lay blame for the situation that has arisen at any door other than the previous Government which rushed that super-city legislation through without thinking through the consequences of having super-city mayoral campaigns that would cost the sort of money that they ended up costing. 
I want to make one or two other points in conclusion. I think there have been a number of contributions about how this bill might be improved in the select committee process. I certainly look forward to that. I think the area of penalties does need a closer look. I think the issue that my colleague Andrew Little raised about whether this deals with the sort of split cheque donation issue also needs careful consideration. I think the issue of whether or not overseas donations ought to be permissible in local elections is one that the committee also ought to consider. But with those concluding words I do commend the bill to the House. I wish that it could have been before us earlier but we are at least now able to make some progress on this vexed issue. I hope we move with true alacrity to restore public confidence in the electoral process. 
DENISE ROCHE (Green) 
: 
 The Greens will be supporting this bill the Local Electoral Amendment Bill (No 2). It is weak in parts but it is a step in the right direction and that is a direction that the Greens feel very passionately about. It is about ensuring there is transparency and accountability in elections. 
The Greens have got a really good track record of creating bills and legislation that ensure transparency in our democracy. We believe that local government elections should be subjected to the same scrutiny as general elections. We have always resisted any attempts by the wealthy to buy elections. We have just had an example in Auckland recently where the Communities and Residents trustees of the Auckland Energy Consumer Trust changed the rules of their organisation which is owned by the public so they could post out a $320 dividend to every electricity account holder in Auckland and they also posted a nice pictures of themselves. The voting papers arrived within a few days. Needless to say the same Communities and Residents trustees were re-elected. This bill will not fix that but it will go some way towards creating a system where there are some limits on the amount of money that can be donated to a local government election campaign anonymously and that is the part we agree with. 
For some time now we have had our own bill in the ballot the Local Electoral (Finance) Amendment Bill which puts a cap on donations by individuals or groups at the sum of $5000 and removes the ability to have anonymous donations for any amount over $500. It also has rules for the regulation of third-party spending and penalties for avoiding the rules relating to donations. As well as that as my colleagues have already said it ensures there is a register of pecuniary interests for members of local authorities and that would be open to the public. Amongst other things in my bill the preamble says that the purpose of it is to maintain public and political confidence in the administration of local body elections. It also says it will prevent the undue influence of wealth on electoral outcomes and provide greater transparency and accountability on the part of candidates and other persons engaged in election activities in order to minimise the perception of corruption. We have had this bill in the ballot since before the last election. 
Public confidence is certainly something that we need a lot more of now and we are more justified in wanting a bill like this now because of the behaviour as others have stated of Mr John Banks during this campaign to become mayor of the super-city in Auckland. The legislation that forced the amalgamation of the seven councils in Auckland is partly to blame for the fact that there is now more than ever a need to mend our political system so that we are more transparent. The legislation that created the super-city created the super-mayor and it created the super-allowance the super-spending allowance with more than half a million dollars being allowed for each mayoral campaign candidate. This is why there was so much forgotten soliciting or forgotten donations during Mr Banks’ failed campaign. 
The second point of my Local Electoral (Finance) Amendment Bill is to prevent the undue influence of wealth on electoral outcomes. This bill says that only donations of $1500 or lower can be anonymous and that a donation from Skycity for example would not have been anonymous. Under this system which we support Mr Dotcom would have to split his cheques not into two $25000 sums but into 33.33 cheques which I think would give him overuse syndrome. 
 When you consider that this bill is really an attempt to remove the wriggle room that allowed Mr Banks to fudge his campaign returns and to get away with it we need this bill more than ever. We will be supporting it. The Prime Minister is on record as saying that the existing legislation is an ass. Well we think this legislation could be stronger but we agree that this is probably about covering the one that belongs to Mr Banks. 
JAMI-LEE ROSS (National—Botany) 
: 
 I am pleased to take a call on this Local Electoral Amendment Bill (No 2) and I am pleased that I am hearing from the Opposition that there is a level of support behind the bill. It does bring about more transparency. It does bring about some changes to the electoral expenditure and donation rules which are welcome. I am looking forward to also hearing back from the Justice and Electoral Committee after it has examined the bill through the public submissions process. 
I was sitting up in my office listening to some of the debate and I heard Opposition members talking a little bit about memory loss—some might call it a crystal set that I was listening to; I call it a television—but if anyone is going to talk about memory loss then we should talk about those who cannot remember who passed the actual legislation that led to the expenditure issues in the 2010 local body elections because actually that legislation was passed in 2001 and it was the Labour Party that was in Government in 2001. 
Labour members have the cheek to try to blame the super-city legislation for the problems that they say arose through the local body elections in 2010. Actually it had nothing to do with that legislation because the expenditure and donation legislation they are working under was the 2001 Local Electoral Act. 
The other bit of memory loss I would like to mention is the fact that the other side cannot remember that there were two candidates who took large anonymous donations. We do not hear about the second candidate because the second candidate happens to be a Labour Party member but the second candidate Len Brown my good friend from Manukau City—the Mayor of Auckland currently—took half a million dollars of anonymous donations as well. It was funnelled through a trust an anonymous trust where the public of Auckland knew nothing of this half a million dollars. 
If we are going to talk about anonymous donations if we are going to talk about memory loss let us talk about the people who cannot remember who passed the legislation that led to the issues in the 2010 local body elections. Let us talk about the people who cannot remember that there were two candidates who took half a million dollars in anonymous donations one of whom happens to be a Labour Party member. We do not hear about that from them because they do not want to admit the truth. 
This piece of legislation will resolve many of those issues. This piece of legislation will tidy up the donation problems of the 2010 local body elections. I look forward to it being passed and I look forward to some more constructive comments coming through from the Opposition in the second and third reading debates. [ 
Interruption 
] 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Order! Order! Members order! Members this debate has concluded. 
Bill read a first time.  
Bill referred to the Justice and Electoral Committee. 
Hon DAVID CARTER (Minister of Local Government) 
: 
 I move  
That the Justice and Electoral Committee report the bill to the House on or before 11 March 2013. 
Motion agreed to. 
Legislation Bill 
In Committee 
Debate resumed from 6 October. 
Part 3 Subordinate legislation: Disallowable instruments and incorporation of material by reference  
CHARLES CHAUVEL (Labour) 
: 
 Part 3 is an important part of the Legislation Bill. It does two things in substance. First of all it replaces the current definition of “regulations” contained in the Regulations (Disallowance) Act with a new definition “disallowable instruments”. It describes what such instruments are. It goes on to replicate in substance some of the provisions of the disallowance legislation which are necessary for the operation of the Regulations Review Committee and it determines the circumstances in which material may be incorporated by reference into delegated legislation. 
I want to speak about each of those issues because each of them is a matter that has been considered on a number of different occasions by this House but also often on reference from the Regulations Review Committee itself. First of all on the issue of what will now be a disallowable instrument the definition of the new type of instrument for want of a better term is set out in clause 37 of the bill. Clause 38 also provides some elucidation on the term. 
I know that when members look at the clauses they will think that this is an odd way perhaps at first blush of going about the definition because it is going to be possible only to determine whether or not an instrument falls into the category of a disallowable instrument through a relatively complex process of analysis. But this decision has been made deliberately as members who read the report of the Regulations Review Committee will be able to see and it is done in the interests of ensuring that the House is able to deal with the widest category of delegated legislation something that is not as satisfactorily able to be done as it might be in reliance only on the definitions that are contained in the current Regulations (Disallowance) Act and in related Acts. 
 I think it will be very much a matter of having a look at how experience unfolds with the definitions that are set out in clauses 37 38 and 39 before the House can determine whether or not this is the right approach but it was the approach that commended itself on advice to the Regulations Review Committee and it is I think a worthwhile experiment to be getting on with. 
The next important parts of Part 3 are contained in clauses 40 41 and 42. They deal with the procedure that is to be followed when disallowance of an instrument is to occur. Clause 40 sets out the general principle that the House is the master of delegated legislation; that any piece of legislation made under the authority of a statutory instrument or under the prerogative of any other type of subordinate legislation must always be subject to the ultimate control of the House. Clause 40 sets out that principle and clause 41 goes on to describe how disallowance should be able to occur. 
Basically disallowance may be by motion. Then there are the particular provisions in complement to the Standing Orders that govern the Regulations Review Committee’s procedures; the provisions that provide for that committee’s particular ability to exercise oversight of delegated legislation. These are effectively a re-enactment of the provisions of the Regulations (Disallowance) Act. 
The scheme will be well known to a number of members but perhaps not to all members and the effect of the Standing Orders and the convention is this: if somebody makes a complaint to the Regulations Review Committee the committee hears the complaint and a member of the committee determines that the complaint has substance then that member is entitled to come to the House and put a resolution to disallow the particular instrument on to the Order Paper. The Government of the day has 21 sitting days in which to bring on a debate about the disallowance motion. It must do that and if it fails to bring on the debate then the effect of that failure is that the—as it will now be—disallowable instrument will lapse. 
Listeners might think “Well why does that matter? The only consequence of a disallowance motion is that after 21 days there has to be a debate.” Well the scheme of the current Act which this bill continues and which the Standing Orders complement is one of transparency. If there is to use a colloquial expression something fishy about a piece of delegated legislation then a member who has heard the complaint about it can bring that piece of legislation to this House and up to 2 hours of precious sitting time can be taken out of the legislative programme in order for it to be debated—that is if the Government does not as it so often does simply agree to amend the offending piece of delegated legislation through a process of negotiation or agreement which is of course the way that about 90 percent of the Regulations Review Committee’s work is done. 
I think it has been a satisfactory means to exercise oversight of delegated legislation to date. This bill does not extend the mandate of the committee in any way but it would be timely I think at some point for the House to consider whether overseas experiments with substantive review of legislation itself against particular principles of good lawmaking or particular pieces of legislation such as a Bill of Rights might be an appropriate role for a committee. But at the moment we are not in that territory. It is simply a question of the legislation being re-enacted so as to apply only to delegated legislation—as I have said the new term will be “disallowable instrument”. 
The last point that I really want to make in this contribution relates to what Subpart 2 will do over incorporation by reference in instruments. It has been a concern of the Regulations Review Committee for some time that delegated legislation can make reference to extraneous material that is not contained within the four corners of the instrument itself. 
For example the material might be in a treaty or in rules made by an international body that New Zealand has agreed to cede some power to by becoming party to a treaty. Those rules might exist in some place outside New Zealand. They might exist on the internet or they might exist in some other place. The issue of accessibility arises in respect of the particular rules that are made the law of the land but do not appear in writing in any easily accessible spot. 
What Subpart 2 of Part 3 of the Legislation Bill does is try to put some limits on the way in which delegated legislation will be able to incorporate such material by reference. I think the rules are sensible and they will improve the way in which such material does become part of the law of the land. The provisions that are proposed will certainly increase accessibility in ways that the select committee has previously recommended. I certainly commend the subpart to the Committee. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 Thank you for the opportunity to participate in the debate on Part 3 of the Legislation Bill. I think that the Government member Alfred Ngaro who was speaking on the previous bill the Local Electoral Amendment Bill (No 2) was referring to this bill when he talked about it being intended to modernise and improve the law regarding the publication availability reprinting revision and official versions of legislation and bring them together into one piece of legislation which is precisely what this bill does. 
I sat on the Regulations Review Committee when it undertook the inquiry relating to incorporating material by reference which is a particular feature of Part 3 of this bill. The reason that I wanted to perhaps invite the Minister to take a call on this particular matter is that it is an issue that I do not actually know the answer to and in a way it was not something that was specifically dealt with in that particular review. What this particular part of the legislation does is that it essentially says that you can incorporate into the legislation by reference another instrument as my colleague Charles Chauvel has pointed out. But what it means essentially is that if there is a subsequent change to that instrument then it does not have to be specifically mentioned in the legislation that the changes to that instrument are in fact incorporated because it is always speaking to the present tense. 
But the one issue is around making copies of the proposed material available free of charge on an internet site maintained by or on behalf of the administering department unless doing so would infringe copyright. Of course that deals with the whole of the building code. I have always actually wanted to know the answer to this question because as I say I do not know the answer to this question. We have as one of our fundamental provisions in relation to building regulation in this country our building code but because the Standards Council is not able to obtain any public-good funding for the work that it does— 
The CHAIRPERSON (Eric Roy) 
: I am sorry to interrupt the member but the time has come for me to report progress. 
House resumed. 
The Chairperson reported progress on the Legislation Bill and no progress on the International Finance Agreements Amendment Bill. 
Report adopted. 
The House adjourned at 9.55 p.m.