Volume 712 Week 41 - Tuesday 15 March 2016Text is incorporated into the Bound VolumeVolume 712 Week 41 - Tuesday 15 March 2016[Sitting date: 15 March 2016. Volume:712;Page:9647. Text is incorporated into the Bound Volume.]Tuesday 15 March 2016Mr Speaker took the Chair at 2 p.m.Prayers.MotionsSyria—Fifth Anniversary of ConflictMARAMA DAVIDSON (Green): I seek leave of the House to move without notice and without debate a motion to mark the 5-year anniversary of the start of the conflict in Syria and to express—Mr SPEAKER: Order! I will put the leave and see whether there is any objection. Leave is sought for that course of action. Is there any objection? There is none.MARAMA DAVIDSON: I move That this House express its solidarity with the people of Syria who have been suffering for 5 years from brutal suppression widespread war crimes and crimes against humanity and call on the Syrian Government and all other conflict parties to immediately end the bombing of civilian areas including hospitals and other health facilities as well as ensuring citizens have access to food water medicines and other necessities.Motion agreed to.Questions to MinistersBetter Public Services—Progress1.Dr SHANE RETI (National—Whangarei) to the Minister of Finance: What progress is the Government making in its programme to get better results from public services?Hon BILL ENGLISH (Minister of Finance): More good news. Yesterday we released the latest results of the Government’s Better Public Services programme where 10 challenging targets were set in 2012. Benefit dependency continues to fall. We currently have the lowest crime rate since 1978. The number of children and young people experiencing physical abuse has reduced somewhat and immunisation rates continue to grow with almost 94 percent of 8-month-olds fully vaccinated.Dr Shane Reti: What progress is being made against result 5 increasing the proportion of 18-year-olds with National Certificate of Educational Achievement (NCEA) level 2?Hon BILL ENGLISH: The Government is focused on this measure because NCEA level 2 is the entry-level qualification for further training. Since 2011 the percentage of 18-year-olds achieving NCEA level 2 has jumped from 74 percent to 84.4 percent just short of our 85 percent target with 2 years to go. By way of comparison in 2008 just 68 percent of 18-year-olds were achieving these qualifications. That means 7600 more young people reach that threshold this year than was the case 7 years ago.Dr Shane Reti: What progress is being made on other targets that aim to improve the outcomes for children and young people?Hon BILL ENGLISH: Significant progress because of the work of so many teachers social workers policemen mentors councillors and advisers and they are having a positive impact on our children and young people. It is good that the percentage of children who attend early childhood education has increased each year since 2000 and is now sitting at 96.4 percent. Ninety-four percent of 8-month-olds are fully vaccinated and as I said before the number of young people achieving the basic secondary school qualification has leapt to 84.4 percent.Dr Shane Reti: How does the Government’s priority of delivering better public services interact with its other priority to responsibly manage its finances?Hon BILL ENGLISH: The reason we have better public services is partly that we have been managing our finances tightly. In the past when the Public Service wanted to show progress it would tell everybody it had spent more money aided and abetted by politicians whereas now we measure progress by whether we are changing lives—that is changing the lives of young people who are less subject to abuse; prisoners who no longer reoffend; or young people who get the qualification they need for further training.Trans-Pacific Partnership—Outcomes and Dairy Industry2.Rt Hon WINSTON PETERS (Leader—NZ First) to the Prime Minister: Does he stand by all his statements and how does he do so?Rt Hon JOHN KEY (Prime Minister): Yes and by standing here in Parliament and saying so.Rt Hon Winston Peters: How does he reconcile his Government’s comments that the Trans-Pacific Partnership (TPP) agreement will be worth $5 billion year on year by 2025 when no other proponents have made such extravagant claims?Rt Hon JOHN KEY: The member should table the quote where I said that.Rt Hon Winston Peters: I seek leave to table two quotes one from Minister Groser and one from Gerry Brownlee.Rt Hon JOHN KEY: I raise a point of order Mr Speaker. [Interruption]Mr SPEAKER: Order! The member will now resume his seat and I will hear a point of order from the right honourable Prime Minister.Rt Hon JOHN KEY: The Rt Hon Winston Peters just misled the House. He said that that was my quote. It was not my quote—Mr SPEAKER: Order! [Interruption] Order!Rt Hon Winston Peters: Speaking to the point of order—Mr SPEAKER: I need no further—[Interruption] Order! I need no further comment from either member. Standing Order 359 is the Standing Order the Prime Minister should refer to if he feels there has been a situation where a member has misled the House. As to the tabling of documents I am not going to put the leave because I do not think they will advance the order of this House. But I will invite the member to continue with his supplementary question.Rt Hon Winston Peters: I raise a point of order Mr Speaker.Rt Hon JOHN KEY: Point of order—Mr SPEAKER: A point of order. I will hear—[Interruption] Order! I will hear from the Rt Hon Winston Peters first.Rt Hon Winston Peters: Thank you very much Mr Speaker. I am happy to table the question I asked which began—Mr SPEAKER: Order! There is no need to do that. Now I will hear from the right honourable Prime Minister.Rt Hon JOHN KEY: In my opinion the member said that I had said that the TPP year after year would be worth $5 billion. I did not say that thing.Rt Hon Winston Peters: Mr Speaker—Mr SPEAKER: Order! No I need no further assistance from either member. I have advised the Prime Minister on a way forward if he feels he has been misrepresented. He needs to refer to the Standing Orders and follow that way. Now I am inviting the member—if he has a further line of questioning he is welcome to follow it. I am happy to move to the next question if he would rather.Rt Hon Winston Peters: I raise a point of order Mr Speaker.Mr SPEAKER: No I have dealt with the matter. I am inviting—Rt Hon Winston Peters: I raise a point of order Mr Speaker.Mr SPEAKER: If it is a fresh point of order I will hear it.Rt Hon Winston Peters: I have been accused of misleading the House—Mr SPEAKER: Order! The member will resume his seat. And equally if the member feels he has been misrepresented he follows the same procedure. I will not entertain any more points of order on this issue but I am happy for the member to continue his line of questioning.Rt Hon Winston Peters: Given that Tim Groser and Gerry Brownlee being part of the Government said that why—Hon Steven Joyce: Oh ha ha!Rt Hon Winston Peters: Yeah you do not like facts do you sunshine?Mr SPEAKER: Order! Now I am going to invite the member to start that question again and to complete the question without responding to interjections.Rt Hon Winston Peters: Thank you very much.Hon Member: Come on sunset.Rt Hon Winston Peters: Ha ha!Mr SPEAKER: Supplementary question the Rt Hon Winston Peters.Rt Hon Winston Peters: Why when asked for a response to the current plight of New Zealand dairy farmers is his answer always the TPP agreement when four of the countries involved have subsidies of over $110 billion as a barrier to New Zealand dairy farmer competition?Rt Hon JOHN KEY: If the member goes and has a look at the TPP he will see that the biggest area of reduction when it comes to tariffs is dairy. If the member wants to come into this House and argue that dairy farmers should pay higher tariffs he is welcome to do so but that just shows how little he knows. And he should stop making things up in this House—Mr SPEAKER: Order! That will not—Rt Hon Winston Peters: I raise a point of order Mr Speaker. I do not know what is wrong with the Prime Minister today—Mr SPEAKER: Order! [Interruption] Order! I am just making sure it is heard in silence so I can hear the member.Rt Hon Winston Peters: I do not know what is wrong with the Prime Minister but he cannot begin the first question today by attacking me and he is back to it again because around about now and given your countless warnings in the past he should be asked to apologise.Mr SPEAKER: No. Order! No. It is a robust debating chamber. Nothing at this stage has been ruled out of order and question time can continue if the member wishes it to.Rt Hon Winston Peters: Despite Tim Groser and Gerry Brownlee’s comments how is his response that the TPP agreement is a financial relief for New Zealand dairy farmers when US free-trade agreements with Colombia Panama and Korea took more than 4 years to receive congressional approval after signing? In short how will the dairy industry in 2016 2017 2018 and 2019 expect any relief at all from his flippant comments?Rt Hon JOHN KEY: This is going to come as a great revelation but Panama Colombia and Korea are not part of the TPP.Rt Hon Winston Peters: Despite the fact that I never said they were Prime Minister—and obfuscation and deviation will not work in this House—why is the Government blocking a free-trade deal with Russia and pouring massive taxpayer support into the Hollywood film industry Skycity Casino Rio Tinto and now the TPP agreement campaign when the Democrat and Republican campaigns’ leadership in the United States thinks it is a real dog—Hon Steven Joyce: What’s your question?Rt Hon Winston Peters: —no not you; the TPP agreement—and a big corporate protection racket against the interests of its workers and its farmers?Rt Hon JOHN KEY: Interestingly enough if one looks at the comments from Donald Trump the reason he thinks it is a bad deal is that he thinks that the United States has done a bad job of negotiating the terms which by definition means that we did a good job of negotiating the terms because we got a better deal.Dairy Industry—Outlook and Debt3.ANDREW LITTLE (Leader of the Opposition) to the Prime Minister: Does he stand by his statement that New Zealand is on the “cusp of something special”; if so did he mean a thousand dairy farmers being forced off their land?Rt Hon JOHN KEY (Prime Minister): Yes. In answer to the second part of the question the member is mistaken. As Dairy New Zealand said this morning possibly around 5 percent of farmers right now are under pressure from having high cost structures and high debt; that is around 500 farmers. That is quite different from being forced off their land and a number of groups are supporting them through their current challenges.Andrew Little: Is the 10 percent of dairy farmers that he said could soon be forced off their land part of the “something special” that he predicted?Rt Hon JOHN KEY: I did not say that and there is not a quote to support it.Hon Members: You did.Rt Hon JOHN KEY: No I did not.Andrew Little: Does he agree with Federated Farmers that banks should pass on the recent official cash rate savings to struggling farmers?Rt Hon JOHN KEY: Of course we encourage banks to pass on cuts in the official cash rate where they can do so but as we know it is a very complex issue in terms of the way they fund themselves. But by definition if the banks are going to follow what Andrew Little is saying today that would mean when the official cash rate goes up they forcibly will have to pass on those increased costs to every homeowner around the country. That just shows you how ignorant Andrew Little is when it comes to banking.Andrew Little: In light of that answer and statement of the obvious what action will he now take to ensure that banks pass on those official cash rate savings to help stop our farmers being forced off the land?Rt Hon JOHN KEY: This is what the Government is doing to ensure farmers can stay viable: reform the Resource Management Act signed the Trans-Pacific Partnership (TPP) agreement ensure that there is irrigation schemes to support them and support the Primary Growth Partnership. And this is what the Labour Party is doing: it is opposing all of those. It wants to have more tax on farmers through the emissions trading scheme more water taxes a capital gains tax—Chris Hipkins: I raise a point of order Mr Speaker. The Leader of the Opposition’s question was a relatively specific one. The Prime Minister has danced around it and has not got to it and has instead launched a tirade of abuse against the Labour Party. Could he perhaps answer the question now?Mr SPEAKER: I do not agree that the question has not been addressed in the answer that has been given but where the answer was then leading to is not going to help the order of this House.Andrew Little: In light of the Prime Minister’s statement about the TPP can I just clarify: is he seriously saying that tariff savings worth less than 7/100th of 1 percent of current dairy debt is going to save the dairy sector?Rt Hon JOHN KEY: Comparing subsidies that farmers have to pay with dairy debt is about as relevant as when Stuart Nash thought that the dairy farmers should have to pay tax on their revenue not their profit which by the way when Labour was not trying to pretend that it was the friend of the farmer was exactly what it was doing: charging them more taxes charging them a capital gains tax a water tax more for the emissions trading scheme worse for health and safety and opposing everything that would help them.Andrew Little: When offshore banks here are already making almost $90 million in profit each week why should they pocket extra money while forcing farmers off the land?Rt Hon JOHN KEY: Firstly the member is saying that they are forcing farmers off the land. What I can see is banks are actually working constructively with farmers. It is not just my view; Dairy New Zealand has said exactly the same thing today. In fact the chief executive officer of Dairy New Zealand said: “I have been speaking to farmers as you’d expect over the last few weeks. I haven’t heard one of them saying that there should be a bail out.” We know that the banks are working with the farmers because actually it is not in their interests to force them off the land.Andrew Little: Why should New Zealanders accept offshore banks hoarding interest rate cuts and forcing our dairy farmers off the land so those farms also end up in offshore hands?Rt Hon JOHN KEY: If the member is wanting to say that all banks operating in New Zealand should fund themselves solely on local deposits and should not use the international swaps markets to fund themselves he is even more stupid than the public think he is.Ron Mark: Reflecting on his earlier answer is he seriously telling farmers who are in negotiations with banks and creditors and unsecured creditors right now that this wonderful Trans-Pacific Partnership (TPP) agreement which will not come into force for what—Mr SPEAKER: Order! Bring the question to a conclusion.Ron Mark:—the next 5 10 or 15 years or reforms on their Resource Management Act are going to save them tomorrow; is that what he is saying?Rt Hon JOHN KEY: What I am saying is that there are certain things that the Government cannot control: the exchange rate international commodity prices the weather—these are three things we cannot control. What we can control are the direct on-farm costs and this includes helping them through the Resource Management Act making sure they have got irrigation to off-set droughts and actually yes when dairy farmers pay $100 million extra in tariffs it does affect them. When they pay potentially $100 million into Sri Lanka it does affect them. If the member does not think so he should go and speak to the management of Fonterra and see what they think when they get a reduction in the tariffs they pay.Andrew Little: Will he just level with me for a moment and tell me whose side is he on New Zealand dairy farmers or the overseas-owned banks?Rt Hon JOHN KEY: I am on the side of New Zealanders 365 days of the year. I am not on the side of farmers today but by the way Stuart Nash wanted to tax them more. Others on that side of the House wanted higher health and safety costs. These are the people who do not want irrigation schemes do not want the Resource Management Act reform and do not want free-trade agreements. This is a joke. These people are not the friends of the farmer; these are the people who try to put them out of business. [Interruption]Mr SPEAKER: Order! I have a point of order and it will be heard in silence.Dr David Clark: I raise a point of order Mr Speaker. When I raised previously with you the issue of misrepresenting Labour’s position you referred me to Standing Order 359. The Prime Minister just referred to the Labour Party being opposed to free trade which is patently untrue. I am wondering—I have written to you on your advice and I am wondering when I might receive a response to my letter.Mr SPEAKER: I am very surprised that you have not already received a response. It went from my office at about 11 o’clock on Thursday to say that there was absolutely no case of misrepresentation in this House on that particular issue.Rt Hon John Key: I seek leave to table the TPP so that the Labour Party can sign it.Mr SPEAKER: No. Order! Leave will not be put. The document is right in front of the Prime Minister. It is available to all members.Dairy Industry—Debt and Farm ForeclosuresMr SPEAKER: Question No. 4 James Shaw. [Interruption] Order! I have called—[Interruption] To Mr Scott who has a question later: if he wants to ask it stop interjecting.4.JAMES SHAW (Co-Leader—Green) to the Prime Minister: Does he stand by all his statements?Rt Hon JOHN KEY (Prime Minister): Yes. I stand by the statements I make.James Shaw: When he said on Radio New Zealand yesterday that he thought that between 5 to 10 percent of dairy farmers could fail what specific advice reports or evidence was he drawing upon?Rt Hon JOHN KEY: I would ask the member to table the quote where I said that.James Shaw: I seek leave to table a link to the Radio New Zealand website. [Interruption]Mr SPEAKER: I am trying to help the member. It needs to be a bit more specific than that. If the member can table a specific—Grant Robertson: I raise a point of order Mr Speaker.Mr SPEAKER: I am actually dealing with a point of order.Grant Robertson: I can assist the House.Mr SPEAKER: That would be very nice.Grant Robertson: I seek the leave of the House to table a printout from the Radio New Zealand website entitled “Low milk prices wiping farmers out” at 7.18 p.m. yesterday—Mr SPEAKER: Order! The document has been described in this case because there is quite a lot of discussion about it. I am going to put the leave and it will be over to the House to decide. Leave is sought to table that particular transcript from Radio New Zealand. Is there any objection? There is not. It can be tabled.Rt Hon JOHN KEY: I raise a point of order Mr Speaker. It is not a transcript and Radio New Zealand corrected their story later on. I have never said that.Mr SPEAKER: Order! The difficulty is—[Interruption] Order! Prime Minister if you want to remain for question time stop interjecting while I am on my feet. The difficulty here is I took it to be a transcript and I described it as such when I put the leave. I therefore think you need to re-describe the document and then I will put the leave because the House has a right to know what it is agreeing to table.Grant Robertson: I seek the leave of the House to table a report from the Radio New Zealand website entitled “Low milk prices wiping farmers out”. Shall I give the time Mr Speaker?Mr SPEAKER: You did earlier. It was 7 o’clock in the morning.Grant Robertson: It was 7.18 p.m.Mr SPEAKER: It was 7.18 p.m. It is a report from the website. On that basis I will still put the leave. It is over to the House what it decides. Leave is sought to table it. Is there any objection? There is objection. [Interruption] Order! The level of interjection is far too high. When I am rising to my feet and calling for members to cease yelling at each other they are not doing so. I am looking now for someone to make an example of from anywhere in this House and I will not hesitate to use that person for such a purpose.James Shaw: I raise a point of order Mr Speaker. Given that I did not receive an answer to the question would you like me to rephrase my initial supplementary question?Mr SPEAKER: It is so long past; I think that might be fair. I will allow the member to do so.James Shaw: When he spoke on Radio New Zealand yesterday about the percentage of dairy farmers who could fail what specific advice reports or evidence was he drawing upon?Rt Hon JOHN KEY: The way the member asks is exactly the right question. The point I made yesterday is that I do not know the numbers. What I said was that the advice I had had from the bank chief executive officers whom I had spoken to indicated it was a much smaller number than the 25 percent that Radio New Zealand was presenting it as.James Shaw: What number not what percentage is he expecting to fail from this dairy downturn?Rt Hon JOHN KEY: I would not have a clue. In the end it is ultimately a matter between the banks and the individual farmers. There is no doubt that some farmers are likely to suffer and have foreclosure because that happens actually in any one given year even in very high payouts. But I suspect that the numbers will be less than what people think because the banks are going to work very constructively with them as best they can.James Shaw: How many small businesses is he expecting to fail as a result of this dairy downturn?Rt Hon JOHN KEY: Again I do not know directly. I do not think anyone would know that number. But what I do know is the economy is growing strongly. Actually business confidence is strong. Treasury predictions are that growth will be between 2.5 and 3 percent. The Reserve Bank itself has indicated that they are growing more strongly. But I will say this. The member represents the Green Party. It wants to put a far higher emissions trading system charge on farmers. That certainly will make them go under.James Shaw: I raise a point of order Mr Speaker. My question was fairly brief and it was a factual question. It was not I think broad enough to invite broad insults from the Prime Minister.Mr SPEAKER: The question was brief. It was certainly answered in the initial part of the answer. There was no need for the Prime Minister to then drift into criticising Green Party policy.James Shaw: How many rural retailers is he expecting to fail as a result of this dairy downturn?Rt Hon JOHN KEY: Again I do not know. But what I do know is that the economy is growing. It is creating jobs unemployment is falling regional growth has actually been strong around New Zealand and it is a highly diversified economy. I mean you have a record number of tourists coming to New Zealand going to small and regional New Zealand and overall actually business confidence has been very high. If you have a look at the indicators of right and the indicators of wrong indicative of where the country is going it is significantly positive that the country thinks it is going in the right direction. So there are many factors in a highly diversified economy like we have. At the moment dairy prices are lower but beef prices are higher. Some years ago kiwifruit growers—Mr SPEAKER: Order! The answer is long enough.James Shaw: What is the scale of risk to Fonterra and the banks in the financial sector as a result of this dairy downturn?Rt Hon JOHN KEY: I again do not have that information but I do know that the Reserve Bank some years ago—I think last year actually—did some modelling on a downturn in dairy prices where it looked at a 40 percent reduction in land prices and indicated that banks were resilient enough for that. We are seeing virtually no reduction in land prices at the moment.James Shaw: When a Federated Farmers poll shows that 11 percent of dairy farmers are under pressure from banks when farm consultant Peter Fraser warns that 25 percent of farmers are vulnerable when the Reserve Bank advice predicts that up to 44 percent of dairy farm loans will become non-performing and the accounting software company Mind Your Own Business says that up to 100000 businesses will suffer does he now think that this is a threat to the whole economy?Rt Hon JOHN KEY: No I do not think that it is a threat to the whole economy. I think it certainly puts pressure on dairy farmers. But it is quite simple. If the member genuinely has concern for the dairy farmers of New Zealand then support the Trans-Pacific Partnership support irrigation support Resource Management Act reform make sure you do not put excess—James Shaw: I raise a point of order Mr Speaker.Rt Hon JOHN KEY: I have not finished my answer.Mr SPEAKER: I will hear the point of order.James Shaw: Again my question was not about Green Party policy. It was about the risk to the New Zealand economy. [Interruption]Mr SPEAKER: Order! When I consider the breadth of the question it was a very long question. There was a lot of information that the member took the opportunity to put into the question. It gives the Prime Minister a wider gambit in which to answer the question. Does the Prime Minister have anything further—to conclude?Rt Hon JOHN KEY: I was listing a series of different things that would actually help dairy farmers. There are certain things that the Government cannot control as I said earlier: commodity prices the weather exchange rates. But there are things that we can control as a Parliament so if this Parliament wants to support dairy farmers let us do the things that actually can support them. But as long as political parties oppose those things then you will not be able to help them and you should not pretend that you are.Health Services Canterbury—Investment5.JOANNE HAYES (National) to the Minister of Health: Can he confirm that the Government is making major investments in health infrastructure in Christchurch?Hon Dr JONATHAN COLEMAN (Minister of Health): Yes. Last week I was in Christchurch for the signing of the construction contract for Christchurch Hospital’s new Acute Services building which will open in 2018. The Acute Services building will have 413 new beds an expanded intensive care unit state-of-the art radiology acute medical assessment an expanded emergency department and a rooftop helipad. Its 12 new theatres and procedure rooms will provide for an additional 6000 operations per year. At a total cost of $445 million this facility is the single-biggest Government project in the Canterbury rebuild.Joanne Hayes: What other health infrastructure projects have been initiated in Christchurch?Hon Dr JONATHAN COLEMAN: In early February the Government announced a new $72 million out-patients facility to be built at Christchurch Hospital and to be opened in 2018. This will be a new five-storey building that will provide out-patient and other clinical services including diabetes endocrine ophthalmology and dental services. I am also looking forward to this May when the $215 million redevelopment of Burwood Hospital opens.Joanne Hayes: How much is the Government investing into health infrastructure in Christchurch?Hon Dr JONATHAN COLEMAN: In total close to $1 billion is programmed to be spent in the coming years on a range of new and/or redeveloped health facilities in Canterbury.Rt Hon Winston Peters: How much?Hon Dr JONATHAN COLEMAN: This new infrastructure helps future-proof Canterbury’s health system for decades to come—$1 billion.Rt Hon Winston Peters: $1 million?Hon Dr JONATHAN COLEMAN: “B”—billion. Turn that up.Reserve Bank—Official Cash Rate6.GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Does he support the expectation of the Governor of the Reserve Bank that banks would pass on the full Official Cash Rate cut made last week?Hon BILL ENGLISH (Minister of Finance): Yes that has usually been the experience in the past although it is not necessarily immediate or exact. Mortgage lending is a competitive industry and Kiwis can shop around. I am advised that some banks have already passed on the reduction in the official cash rate. Given some banks cut their rates almost immediately you would expect competitive pressure to flow to other banks. But we do run a system where that is a decision made by banks not by the Governor of the Reserve Bank or as the Opposition is suggesting by the politicians.Grant Robertson: Was the Reserve Bank Governor wrong to say on Friday “I’d expect floating rates to come down by 25 basis points”?Hon BILL ENGLISH: That is yet to be seen but competition is likely to put pressure on banks to pass on this element of their funding costs.Grant Robertson: Is it fair that most of the major banks have cut their deposit rates by the full 25 basis points of the official cash rate cut but have not done the same in terms of rates for borrowing?Hon BILL ENGLISH: That is a matter the member should take up with the banks. Given that the cut in the official cash rate occurred just at the end of last week it may take some time for competitive pressures to flow through. But I think most New Zealanders would support the notion that the threat of competition is probably a more reliable impact on their interest rates than the threat of politicians who talk about strong-arming and then legislating banks. If the Opposition members want to run a bank they should apply for a job running a bank.Grant Robertson: Does he think that the goal of the Reserve Bank Governor in cutting the official cash rate last week was to prop up the profits of banks?Hon BILL ENGLISH: You would need to ask the Reserve Bank Governor. He has given a number of interviews and as far as I know he has not actually specified that as a goal. But the member needs to bear in mind—if it is going to be legally required that banks pass on cuts in the official cash rate will they be legally required to raise interest rates every time the official cash rate is put up? I suspect the member does not believe that.Grant Robertson: Why will he not take the side of New Zealand borrowers and savers and call on the banks to pass on the official cash rate cut—or is he that out of touch that he thinks putting the interests of overseas banks ahead of New Zealanders is what his job is?Hon BILL ENGLISH: That is a ridiculous way to describe the issue. What the banks will listen to is customers shopping around; that will have a great deal more influence on their behaviour than politicians making statements they cannot follow through on.Banking Sector—Official Cash Rate and Dairy Industry7.RON MARK (Deputy Leader—NZ First) to the Minister of Finance: Does he stand by all his statements; if so why?Hon BILL ENGLISH (Minister of Finance): Yes.Ron Mark: Why did he say on Q+A that he was “not overly concerned” that the banks have not passed on the official cash rate cut when these banks are creaming almost 9 percent interest?Hon BILL ENGLISH: I do not know what the member’s second statement means but in respect of the first the threat of competition—of customers shopping around and of other banks cutting rates—will be the ultimate determinant of where the banks go.Ron Mark: Does he find it acceptable and in the best interests of the rural sector that a foreign bank can reject a rescue package sell up a farmer and send all the unsecured small business owners through the floor when all that bank had to do was shave its extortionate 8.7 percent interest rate?Hon BILL ENGLISH: The member may well be making that up. I mean there is no reference to any particular case—Ron Mark: I raise a point of order Mr Speaker. I take offence at that. I seek your protection. We can table documents if we want—Mr SPEAKER: Order! It is a debating chamber. There is nothing there that I think can be taken offence at. The member just said that he disagreed with the figures effectively. He could have said it another way but it is hardly offensive.Rt Hon Winston Peters: I raise a point of order Mr Speaker. I happen to know something of this case but here is the point: when you make a statement like that as your opening gambit it is an allegation of dishonesty.Mr SPEAKER: Order! No the member will resume his seat. He may well know something about the case but that is not a point of order. I will ask the Minister of Finance whether he wishes to continue his answer.Hon BILL ENGLISH: We have been saying for a while that it is in the best interests of both the banks and the dairy industry to stick together. We would expect that banks will take losses on behalf of farmers they are linked to who may not be able to service their debt completely or pay it all back and we would expect that farmers will respond to the need to reduce their debt and reduce their production costs in part so that they can meet their obligations to the banks from which they borrow.Ron Mark: Has that Minister forgotten that when the banks foreclose on a farmer it is the unsecured creditors—the small businesses like the fencing contractors the engineering workshops the irrigation engineers the vets and their employees—who will take the hit and with that in mind why will his Government not act? And in particular why will it not—Mr SPEAKER: Order! Bring the question to a conclusion.Ron Mark: —support New Zealand First’s farm debt mediation bill?Hon BILL ENGLISH: No we are fully aware of the consequences which is why for instance the Reserve Bank which oversees the banking system has been warning the dairy industry about the size of its debt for some time because the debt has been entered into freely by farmers borrowing and those who have worked for those farmers have been well aware that that is the way the industry was working—that is that a lot of the growth was financed by debt. We would fully sympathise with any farmer who finds themselves in that situation but all the indications are that the banks understand what would work in their best interests—that is the stable and orderly restructuring of some debt where farmers are under pressure—and that farmers are doing their best to adjust their spending and their debt levels so they can remain sustainable.Rt Hon John Key: Can the Minister of Finance confirm that China is New Zealand’s largest export market when it comes to dairy products and can the Minister confirm that without China as a market to be able to sell into it would be much harder for New Zealand dairy farmers? And can he confirm—Mr SPEAKER: Order! [Interruption]Order!There are three parts to that question. The first two the Minister can address.Hon BILL ENGLISH: I can confirm that and I can also confirm that one way to support the long-term outlook for the dairy industry would be for political parties to support the Trans-Pacific Partnership. I can also confirm that New Zealand First seems to want to support the—Mr SPEAKER: Order! [Interruption] Order! No.Rt Hon Winston Peters: I seek leave to table all the evidence you need that the Government is currently renegotiating the China agreement because it was a dumb deal in the first place.Mr SPEAKER: I am not prepared to put that leave because I am not sure that it was.Hon Gerry Brownlee: I seek leave to table a document showing that the Rt Hon Winston Peters was Minister of Foreign Affairs when the “dumb deal” was done.Mr SPEAKER: And I am not prepared to put that leave either.Rt Hon Winston Peters: I raise a point of order Mr Speaker.Mr SPEAKER: If it is a serious point of order I will have it but if it is another jocular one it is not going to happen.Rt Hon Winston Peters: It is a serious point of order because—Mr SPEAKER: I will look forward to it.Rt Hon Winston Peters: The point is that it needs clarity and for me to table some documents. He does not know how Cabinet is structured. That is why he—Mr SPEAKER: Order! No no no. You can have your general debate tomorrow.Roading Waikato—Waikato Expressway8.DAVID BENNETT (National—Hamilton East) to the Minister of Transport: What recent progress has the Government made on the Waikato Expressway Road of National Significance?Hon SIMON BRIDGES (Minister of Transport): Last Friday the Prime Minister and I turned the first sods on the $973 million Hamilton section of the Waikato Expressway signalling the start of the largest roading project in the Waikato’s history—in fact outside of Auckland in New Zealand’s history. The highway will pass to the south and east of Hamilton and includes 17 new bridges walking and cycling links and five interchanges all of which make it easier for freight business and tourism to travel throughout the region. When finished this new stretch of highway will be transformational for Hamilton City and indeed the Waikato.David Bennett: How will the Waikato Expressway benefit road users in Hamilton and the wider Waikato region?Hon SIMON BRIDGES: The expressway is now well under way and is about 40 percent complete. When finished in 2020 it will be a game-changer for the region. It will create jobs boost industry improve safety and reduce travel times. It will also unlock economic potential by providing stronger links between the business and agricultural centres of Auckland the Waikato and the Bay of Plenty. This side of the House is a Government of infrastructure and the Waikato Expressway is an excellent example of where we are building lead infrastructure that drives economic and social success for our country.Schools—Funding Changes9.CHRIS HIPKINS (Labour—Rimutaka) to the Minister of Education: Does she stand by her statement that “we do need to review the way we fund schools and focus more on outcomes rather than blunt proxy”?Hon HEKIA PARATA (Minister of Education): Tēnā koe Mr Speaker; yes.Chris Hipkins: Will she rule out funding increasing or decreasing based on student achievement data; if not why not?Hon HEKIA PARATA: No; because we are at the very early stages of the process so I do not want to predetermine outcomes.Chris Hipkins: If she will not rule that out how can such a system work without either punishing schools whose results improve or rewarding schools whose results get worse?Hon HEKIA PARATA: We are at the very early stages of the review. We want to explore what our options are. We want to do that with the sector and we will take the necessary time to do it.Chris Hipkins: I raise a point of order Mr Speaker. It was a very specific question about how the system would work without punishing or rewarding schools.Mr SPEAKER: Order! [Interruption] Order! I am going to invite—[Interruption] Order! I am going to invite the question to be asked again but one of the difficulties I have is I could not hear all of the question and I could not hear the answer because of the interjecting particularly from my right-hand side. It has to cease.Chris Hipkins: If she will not rule out—[Interruption]Mr SPEAKER: Order! Just a minute. To the Hon Paula Bennett that is your final warning for question time today.Chris Hipkins: If she will not rule that out how can such a system work without either punishing schools whose results improve or rewarding schools whose results get worse?Hon HEKIA PARATA: The member’s question is predicated on a view he already has regardless of my answer. I have said that we are not ruling anything in or out at this stage because we are at such an early stage so to then go on and answer a question he has made on the basis of a different answer would be to obviate the original answer I gave.Chris Hipkins: Supplementary question Mr Speaker. [Interruption]Mr SPEAKER: Order! I will just wait for a bit of silence.Chris Hipkins: How will she ensure that any move to shift funding from deciles to the risk profiles of individual children does not result in the stigma associated with deciles shifting from the schools to the individual children?Hon HEKIA PARATA: Again the member’s question is based on his view about where money will shift from and to. No decisions have been made in that regard at this point.Hon Member: It’s in the newspaper Hekia.Hon HEKIA PARATA: Oh the newspaper might say that but I am saying what I am saying.Chris Hipkins: Why is the Government considering basing school funding on Treasury’s risk profiling model when Treasury’s own analysis found that up to half the children who experience poor outcomes have none of those risk factors in their lives while a third of those who are deemed to be at risk do not have poor outcomes?Hon HEKIA PARATA: I am really pleased that the member has taken the time to acquaint himself with the detailed work that we are doing. Of course we will take advantage of all the rich material we have to consider the options that might present themselves that may result in a change at some time in the future but we are not yet at that place.Chris Hipkins: How will the Government establish the qualification levels of parents if they decide to incorporate that into the school funding system as proposed in the paper this morning which she was quoted in; will parents have to bring their CVs along when they enrol their kids at school?Hon HEKIA PARATA: The member might like to reflect on the time he spent as adviser to a former Minister of Education when the decile system was introduced and where the qualifications of the family are included in the meshblock that the census uses—Hon Trevor Mallard: I raise a point of order Mr Speaker. It is a very poor reflection on the Hon Dr—Mr SPEAKER: Order! Can I just—[Interruption] Order! The member will resume his seat. He knows the rules better than most. If he wants to raise a point of order he should do so.Chris Hipkins: Why should New Zealanders have confidence in her ability to introduce a new funding system when she has botched other similar projects like Novopay and has allowed the level of donations collected from parents to increase by over 30 percent since National came to office?Hon HEKIA PARATA: For every hundred dollars that the taxpayer pays to fund our education system parents pay $1.80. That makes up a very small part of our education vote and that is a choice that parents make. Moreover earlier in the House today we heard that all achievement in schools particularly in National Certificate of Educational Achievement level 2 but also including participation in early childhood education has gone up under this Government.Road Safety—Speed Limits Outside Schools10.JULIE ANNE GENTER (Green) to the Associate Minister of Transport: Will he support the Green Party plan to make 30kilometres an hour the default speed limit outside schools given that kids have less than a 50:50 chance of surviving being hit by a car travelling at the current default speed limit of 50kilometres an hour?Hon CRAIG FOSS (Associate Minister of Transport): Of course this Government supports making our roads safer for all users. We are spending approximately $1 billion each year on road safety which includes funding towards safer roads roadsides and dangerous intersections all of which benefit those walking and cycling both young and old. I note schools and their local communities already have the ability through their local road-controlling authority to lower speed limits around schools to 30 kilometres if that is what is required. This allows local solutions to local issues supported by local communities.Julie Anne Genter: Does he acknowledge that the current process for reducing speed limits is unnecessarily bureaucratic and puts hurdles in place for those local authorities that would like to drop the speed limit outside of schools and that explains why fewer than 20 percent of schools have the safe speed limit of 30 kilometres an hour in front of schools?Hon CRAIG FOSS: No I do not accept that that is the reason. The process that we have now has been in place—I think it was last changed in 2003 under the previous Government supported by that member’s party. So no I do not accept that that is the reason why some of these speed limits are not changed by local authorities or road-controlling authorities as that member would like.Julie Anne Genter: Given that the number of children walking and cycling to school has declined significantly in the time since this process was put in place will his Government consider changing the process to make the default speed limit outside schools the safe speed limit of 30 kilometres an hour to make our kids safer?Hon CRAIG FOSS: No. One size does not fit all here. Local communities do know best about their conditions around local schools. I do note we have rural schools and urban schools and sometimes changing a speed limit on a road be it a 100 kilometre-per-hour road or a 70 kilometre-per-hour road can in fact make more danger or create more risk than in fact a 70 kilometre-per-hour limit which many schools already have. I also note that we note concerns around this—so there are limits in and around passing school buses where if a school bus is stopped the limit is 20 kilometres per hour regardless of which direction the car is travelling.Julie Anne Genter: Can he explain why his Government supports 30 kilometres an hour as the default speed limit when driving past road workers but not when it is around schools where our kids’ safety is threatened?Hon CRAIG FOSS: They are two totally different issues. A road worker in the middle of the road obviously working on an infrastructure investment—possibly a cycleway possibly one of the safer roads that this Government is investing in—needs to be kept as safe as possible. But of course every life is as valuable as the next.Julie Anne Genter: I seek leave to table the research done for the Government which shows that 30 kilometres an hour is the appropriate speed around—Mr SPEAKER: Order! We just need the source of the research and the date.Julie Anne Genter: This is the Safer Speeds Programme which was a collaboration by the New Zealand Police the New Zealand Transport Agency the Ministry of Transport and ACC.Mr SPEAKER: And it is available on the website?Julie Anne Genter: It is.Mr SPEAKER: Then I am not putting the leave.Crime Resolution Rate—Burglaries11.STUART NASH (Labour—Napier) to the Minister of Police: Why did the number of burglaries that were resolved fall from 9770 in 2008 to 6136 in 2015 with the proportion of burglaries that went unsolved rising from 84 percent to over 90 percent?Hon CHRISTOPHER FINLAYSON (Attorney-General) on behalf of theMinister of Police: In response to the first part of the question I am advised that the figures the member is quoting are not directly comparable. The first figure refers to the number of burglaries resolved in 2008 while the second figure refers to victimisation—something the police started counting in 2015. In response to the second part of the question I can advise the member that police are actively working to get those resolution rates up.Stuart Nash: Does she think that it is acceptable for police to tell burgled South Auckland dairy owners that they are too busy to investigate?Hon CHRISTOPHER FINLAYSON: I cannot confirm that that statement was made. The police are very concerned with dealing with resolution rates for burglaries and in particular in South Auckland.Stuart Nash: Will she admit that cutting the number of general duties constables by almost 18 percent since 2009 has contributed to the Police Association’s inability to respond to burglaries?Hon CHRISTOPHER FINLAYSON: I do not accept the underlying basis of that question.Stuart Nash: I seek leave to table an answer to an Official Information Act request to the Minister of Police.Mr SPEAKER: On the basis that it could inform members of the House I will put the leave. Leave is sought to table that particular response to an Official Information Act request. Is there any—Hon Gerry Brownlee: Are they all published?Mr SPEAKER: They are not all published. Is there any objection? There is no objection.Document by leave laid on the Table of the House.Stuart Nash: Does she believe that there is an issue when 86 percent of Police Association members believe that front-line general duties branch police are under-resourced?Hon CHRISTOPHER FINLAYSON: I actually have not seen that survey but if people are asked whether they would like more resources the answer on most occasions would likely be yes.Stuart Nash: I raise a point of order Mr Speaker. It was not about whether they required more resources but the fact that they—Mr SPEAKER: Order! No the question has been addressed.Stuart Nash: Why has she allowed three Auckland districts to underspend their budgets by almost $14 million while unresolved burglaries are now at over 90 percent?Hon CHRISTOPHER FINLAYSON: I would have thought that they were operational matters but let me make it clear to the member that the question of burglary is not taken lightly by the police or this Minister. This is a very difficult crime to resolve in many circumstances often because it is reported long after the actual event. The key thing is that the police are focused on this issue and the Minister is supporting them.Irrigation—Support and Investment12.ALASTAIR SCOTT (National—Wairarapa) to the Minister for Primary Industries: How is the Government supporting our regions through irrigation and water storage projects?Hon NATHAN GUY (Minister for Primary Industries): As a Government we are strong supporters of irrigation and water storage projects. Analysis by the New Zealand Institute of Economic Research has shown that irrigation contributes $2.2 billion to the national economy. That creates jobs and is helping to revitalise many towns throughout the regions. Of course water storage also has real environmental benefits. This includes more consistent river flows in the summer and reduced pressure on groundwater aquifers. It is well summarised by Ikawai farmer Gert van’t Klooster who said that reliable irrigation “gives you the certainty to farm in the black and gives you the possibility to be green”.Alastair Scott: What positive effects does irrigation have on different farming models?Hon NATHAN GUY: Good question. There are many misconceptions about irrigation schemes. One in particular is that they only intensify dairy farms. The reality is that dairy accounts for about 50 percent of the irrigated area in New Zealand with 25 percent relating to sheep and beef finishing and the remainder going into cropping and arable. Irrigation allows for more efficient farmer models in terms of both environmental performance and productivity. One example is the Waimea dam near Nelson which would enable the conversion of un-irrigated pasture into high-value apple orchards with a reduction in nutrient leaching and the Central Plains Water scheme will ultimately help support half of the world’s radish seed and a third of the world’s carrot seed which is grown here in New Zealand.Alastair Scott: What recent announcements has he made regarding support for irrigation projects?Hon NATHAN GUY: Last week I announced three new irrigation investments in the Wairarapa Hawke’s Bay and Gisborne. These investments come from the Ministry for Primary Industries Irrigation Acceleration Fund with a total of $1.6 million. Analysis shows that Ruataniwha Dam could increase regional GDP by around $200 million a year and will lead to 2250 fulltime-equivalent jobs in that region. In the Wairarapa analysis shows that the Black Creek and Tividale projects could add around $100 million to the wider region per year.Hon Damien O’Connor: Will the Minister assure the Tasman District Council that the Government will pay it the $40 million required to build the Lee Valley dam?Hon NATHAN GUY: There is a process to go through and that of course will be through Crown Irrigation Investments Ltd which has a board that makes the ultimate decision. So the member if he is interested in water storage projects should actually talk to his colleagues who are opposed to jobs in the region who are opposed to exports who are opposed—Mr SPEAKER: Order! The answer is quite long enough.Kermadec Ocean Sanctuary BillFirst ReadingHon Dr NICK SMITH (Minister for the Environment): I move That the Kermadec Ocean Sanctuary Bill be now read a first time. I nominate the Local Government and Environment Committee to consider the bill and I intend to move that the bill be reported to the House by 2 August so that we can put the sanctuary in place by November. This bill delivers on the proposal announced by Prime Minister John Key at the United Nations last September to create a fully protected marine area around New Zealand’s most northern territory the Kermadec Islands.The bill is anchored in the philosophical view that humankind does need to put some limits on its development and have the wisdom to set aside areas for nature. New Zealand was a global pioneer in this thinking when Tūwharetoa chief Te Heuheu in 1887 with the support of our parliamentary forebears created the Tongariro National Park. It was the fourth such park in the world and since then Governments have progressively protected over 30 percent of our land in public parks in reserves and in sanctuaries.The new frontier for protection is the marine environment. It makes up 71 percent of the globe and is facing the stresses of overfishing of pollution of increased pressure for resources and of climate change yet less than 1 percent nationally and internationally is protected.This bill is part of this Government’s ambition to be a world leader in the management and protection of our ocean environment. We started in 2009 by addressing the obvious anomaly of having no environmental regulatory system in our huge exclusive economic zone and we set up the Environmental Protection Authority to undertake that role. We have got on with protecting specific areas creating 11 new marine reserves in our territorial sea. We have a discussion paper out on comprehensive reform of our system of marine protected areas. Our Government has been pulling out all stops diplomatically with the US in trying to secure support for a huge marine protected area in Antarctica’s Ross Sea. At the UN last year we also successfully sponsored a resolution on strengthening ocean protection in the high seas which are beyond national jurisdictions.The Kermadec Ocean Sanctuary is the most significant of these initiatives. The 620000 square kilometre area is twice the land area of New Zealand or about the size of France. This amounts to 15 percent of New Zealand’s exclusive economic zone and New Zealand is one of the few countries overreaching the global 10 percent target for marine protection. This area is 35 times the area of the total of all the existing 44 marine reserves and 50 times the size of our largest national park in Fiordland.It is not just the size that makes this initiative significant but the outstanding geological and biological diversity of the Kermadecs. The Kermadec area contains the longest arc of underwater volcanoes anywhere in the world and it descends to a depth of 10 kilometres deeper than Mt Everest is tall. The depths of the ocean combined with the underwater volcanic activity makes an extreme environment of pressure of temperature and of mineral content where unique forms of life exist that are almost as fascinating as studying life on another planet. The marine life includes over 6 million seabirds of 39 different species 35 different species of whales and dolphins three species of sea turtle—all of which are endangered—and over 150 species of fish.The Kermadecs also have a rich history. They were a crucial stopover point for the migratory waka that made the long and treacherous journey between the Pacific and New Zealand. They were the only part of New Zealand that got caught up in the horrific global slave trade of the 19th century with the atrocious deaths of 160 Pacific slaves destined for South America on Raoul Island in 1863. The recognition of the area for natural values gained momentum in the 1930s with a nature reserve gazetted in 1939 and the territorial sea was protected in 1990.The details of this bill prohibit all fishing all mining any disturbance of the seabed dumping and any harmful vibrations from the likes of seismic surveys. The intent is to protect the area to the fullest extent possible while being consistent with our legal obligations under the United Nations Convention on the Law of the Sea. The Pew Charitable Trusts has noted that New Zealand is setting the gold standard internationally for marine protected areas with this bill. The bill provides for scientific research as such areas are invaluable in benchmarking the broad estate of the oceans. The Environmental Protection Authority will be responsible for regulating such work while the Department of Conservation will be responsible for its day-to-day management with the support of key partners like the navy.The bill provides for a new conservation board to be responsible for developing a conservation management strategy for the total area—i.e. the new sanctuary in the exclusive economic zone the existing marine reserve in the territorial sea and the nature reserve on land. The board is proposed to include a representative from Ngāti Kurī and Te Aupōuri the two iwi with a statutory acknowledgment as well as a third member to be appointed by the Minister for Māori Development noting that other iwi also have an interest and connection with these islands. Four members are to be appointed for their skills their knowledge and their experience to support the work of protecting the Kermadecs.Let me address the three criticisms that have been made of these sanctuary proposals. The Greens have asserted that it is contradictory of the Government to be promoting the sanctuary while also supporting development of our fishing our aquaculture and our oil gas and mineral resources at sea. This misunderstands our blue-green approach of providing for areas of economic development as well as protection both at sea and on land. It is about balance and ensuring New Zealand is both economically and environmentally successful.The other criticism from the opposite end of the political spectrum in New Zealand—from ACT—is that somehow this protection is meaningless because 20-odd tonne of fish caught each year may well be caught in other areas of our exclusive economic zone. On this basis you would not protect any geographical areas. I challenge ACT to visit the long-established Leigh Marine Reserve and others and observe the stunning size of crayfish snapper and other marine life because they are living proof that marine protected areas work.I want to conclude by generously acknowledging those who have long advocated for this protection: Ngāti Kurī and Te Aupōuri the Kermadec initiative partners the Pew Charitable Trusts and its tireless advocate Bronwen Golder World Wide Fund for Nature New Zealand and the Royal Forest and Bird Protection Society. I also want to acknowledge those hardy workers and volunteers from the former Wildlife Service and the Department of Conservation including those who have died doing this work for their contributions to this special part of New Zealand.This sanctuary initiative is about New Zealand raising the bar on ocean protection globally and working with our partners in the Pacific like the forum countries—the US the UK and Chile—on building a network of marine protected areas in our region. This bill is about securing a better future for our oceans and I commend it to the House.Hon NANAIA MAHUTA (Labour—Hauraki-Waikato): I rise to take a call in this first reading of the Kermadec Ocean Sanctuary Bill and to register Labour’s support for this bill to go to the select committee. I want to acknowledge our previous spokesperson Ruth Dyson because she long believed in extending the Kermadec Marine Reserve into the exclusive economic zone well before it was National’s policy. She also believed that it was important if we were going to lead in this space that by having a sanctuary going out into the exclusive economic zone it would send a very clear signal that not only are we a country that is surrounded by water but we believe that the protection of the marine ecosystem is a priority and that we of all countries should take leadership in that space.It would be trite to make that comment in the absence of pointing to some of the aspects of the bill that I think will provide an opportunity for submitters to contribute to improving what is already there. The Minister made comment on the Kermadec Islands and the role of Ngāti Kurī and Te Aupōuri in being represented on the management model. They refer to the Kermadec Islands I understand as Rangitahua. It is an area that is well-known within our navigational stories throughout the Pacific as a place of stopover. It also was a place where migratory mammals—marine species—would often pass and people noted those stories and the times of the seasons.But let us come back to the bill. This will be the first time that an ocean sanctuary has been extended into the exclusive economic zone. As the Minister said all around the world other countries will be looking at this particular model as an opportunity to gain greater understanding about what they could do to take leadership in the area of protecting geological and marine biological diversity. As was mentioned the area includes the world’s longest chain of underwater volcanoes. As I said it is a migratory pathway for marine mammals home to a significant number of threatened and endangered species and also an area where a number of species of fish that are fished commercially are caught.When the bill gets to the select committee it isan opportunity I think to hear some of the concerns. I would just note the concern of Te Ohu Kaimoana with regard to the fisheries settlement and the fact that the Minister is not entertaining any compensation for the loss of rights in fishery management area 10 yet that is in direct contrast to the approach for the marine protected areas discussion document and what it was proposing there. It will lift the recognition and participation of iwi and kaitiakitanga in the greater marine space to a whole other level. Minister you proposed to set up a management committee with representation of iwi which I understand falls a little bit short of what they were hoping for but it is a start in their minds. On that note I want to acknowledge both Rick Wītana and Harry Burkhardt who represent Te Aupōuri and Ngāti Kuri respectively and have made very positive comments in terms of an enduring relationship to promote marine protection from their particular perspective and in their part of the world.The issues around marine scientific research are provided for albeit by way of a process. We are anticipating that there will be submissions in relation to the transitional provisions—in particular on the issues that have been recognised in the departmental disclosure statement. I want to just comment on that. In particular it says that “there is no proposal to protect area-specific Māori commercial fishing interests awarded under the Fisheries Deed of Settlement or any customary fishing interests from the impact of the Sanctuary’s creation. This lack of protection is likely to be criticised as failing to uphold Māori interests protected by the principles of the Treaty of Waitangi.” Both Matiu Rei and Peter Douglas have commented on that. However Shane Jones did make the comment that very little fishing is happening in that part of the world. I anticipate that the select committee will be able to ask questions on this particular point and gain some clarity on some of the issues.On the issue of the marine scientific research obviously we believe that the balance of opinion should be in favour of protecting the marine ecosystem but it will come down to the process that is being proposed and that is outlined in Part 2 clauses 13 to 22 of the bill. I anticipate that there will be a lot of discussion around the way in which for example consultation occurs and the information goes to the Environmental Protection Authority before a decision is made.I want to come back to a comment that was made around illegal fishing in the exclusive economic zone and the extent to which it may or may not impact on this bill. The point was well made that unless you are monitoring what is happening wide out in that part of the world anything could happen. So although I definitely applaud the Kermadec Ocean Sanctuary Bill including the exclusive economic zone for all the right reasons—and the fact is it is taking a leadership stance and covers 15 percent of our exclusive economic zone so it could be just the start—it really is about how the monitoring and management of that particular area is going to be undertaken with a level of rigour that gives us an assurance that what we think we are protecting is being protected well.With that said Minister I note with respect that many of the issues that affect Treaty rights in particular have not been dealt with very well by you. The housing right-of-first-refusal approach where you totally ignored Treaty interests that were expressed the marine protected areas proposal that cuts across fishing interests and the Kermadec bill in relation to the 1992 fisheries settlement interest are I think all areas where through the select committee again I anticipate that there will be some submissions that address this particular area.Once the bill gets to the select committee it will receive a very robust hearing from all quarters. Labour will be very open to many of those concerns but again I come back to the primary matter of having an ocean sanctuary that extends into the exclusive economic zone. It is a positive step it will lead the world in marine area protection and it has been viewed albeit at its very initial stage as a positive step forward for New Zealand. Kia ora.Hon MAGGIE BARRY (Minister of Conservation):It is with great pleasure that I rise to speak on this bill as the Minister of Conservation. This does represent one of the most significant achievements of this Government and it is something I think that all New Zealanders should be very proud of. Not all New Zealanders will be able to visit it but I think it is a tremendous and significant step under the visionary leadership of our Prime Minister the Rt Hon John Key that we have been able to make this happen.I commend the hard work of Dr Nick Smith; the Pew Charitable Trusts led by Bronwen Golder;World Wide Fund for Nature New Zealand; Forest and Bird; the Department of Conservation; and many others who have made this sanctuary happen. This bill is going to honour our commitment to protect 620000 square kilometres of ocean. Size does count in this case and I will talk a little later in my call about the international response to the naming of this Kermadec Ocean Sanctuary and the international response of others who would seek to follow our lead. It is going to be one of the world’s largest marine reserves and it will make us leaders in international efforts to protect the waters of the Pacific. We will be working alongside the United States Australia Great Britain and Chile. So we are joining forces with other nations in this tremendously significant project.As has been pointed out many times the Kermadecs are a pristine environment but it has not always been that way and they are not totally pristine. Sadly the misguided colonisation that resulted in many eco-invaders taking over New Zealand—the possums the rats the stoats and some of the feral cats—has also devastated the forests and severely depleted the seabird populations that were once so abundant on the islands of the Kermadecs. The Department of Conservation has led the efforts to eradicate the rats and the cats from Raoul Island which is the largest of the chain and the staff who work for the Department of Conservation now run a year-round eradication campaign for weeds and it is ongoing challenge. The logistics are enormous. It is a remote place and so the challenges in that regard cannot be underestimated.When this bill passes twice a year the navy will be involved in sending a ship with supplies and equipment to the island to keep the base there stocked up and safe. Twice a year the Department of Conservation will also charter vessels to transfer staff to and from the islands—staff and volunteers. I commend the extraordinary work that they do and their dedication to the vision of having predator-free—and that is weed-free as well as pest-free—islands.The main focus of the groups that go through is currently weed eradication. They target things that in New Zealand we would not mind too much—or would we—such as black passionfruit yellow guava purple guava Mysore and African olive. These are things that were introduced as I said in less enlightened times and they now need to go because they are upsetting the biodiversity of these wonderful islands.The Department of Conservation staff on Raoul Island play an important role as part of our national scientific network. They collect water samples and they send them to GNS Science. They also take air samples to contribute to the international measurements of carbon dioxide and global warming and to assist with the annual whale survey for Auckland University and the research on the 6 million seabirds that inhabit this general area. But it is really in the ocean and what lies beneath the waves that the truly global significance and importance of the Kermadecs becomes apparent. Many of us will have seen the stunning images—teeming marine life in all its many weird and wonderful form the 30 undersea volcanoes with their billowing plumes of black smoke and the colourful and abundant reef systems.The Kermadecs lie on the migration routes of whales and dolphins including the gigantic blue whale. They support within their waters more than 6 million seabirds 150 species of fish and three out of the seven sea turtle species that are known to science. The Pew Charitable Trusts has described this as the gold standard of reserves and it is correct. That means that nobody can fish there. No yachtie who passes through can stop and throw a line over the side nobody can mine or dredge there and nobody can exploit and degrade the natural beauty of this place.The Department of Conservation will manage the Kermadecs as part of the Auckland Conservation Management Strategy and once the sanctuary is up and running it will work on a new conservation management strategy specifically for the islands and their waters. In the same way that the Auckland Conservation Board and the other boards around the country manage their specific areas we will create—as my colleague Dr Nick Smith has outlined—a new Kermadec conservation board once that sanctuary has been established.We have worked closely with iwi to reach agreement on the governance arrangements. The Department of Conservation will continue to authorise scientific work on the islands themselves and within their coastal waters and the existing marine reserves as well around each of the islands. The Kermadec Biodiscovery Expedition 2011report—it was about 5 years ago now that it was released—has indicated a very exciting frontier of conservation in these waters. We are still discovering more about this region and its extraordinary treasures. There is much to be found. New species of plants and animals are perhaps lurking in the depths of the world’s second-deepest ocean trench—new taonga for all of us as New Zealanders to protect and cherish and be proud of for ever.This is indeed a powerful symbol of New Zealand leading the world in conservation and environmental protection I think when we look at how the world has reacted to this. This weighty tome that Bronwen Golder sent through to my office and I think to Nick Smith’s office last October details the extraordinary response. The media ran out of superlatives really. We had “enormous” “giant” “gigantic” “vast” “huge” and “massive”. We also have announcements in here that compare the size of the Kermadecs with the state of Texas—that was the Americans of course. The Europeans chose to reflect the fact that it was the size of France. These things have not gone unnoticed.Again I commend the spirit—the wairua—and the intention of what the Prime Minister first announced at the United Nations last September as being part of the vision that we have as conservationists and environmentalists on the world stage. We are but a small country this is twice the size of our land mass and it is a remarkable contribution to the way that the world will work and the exciting prospects that lurk beneath the waves which will I think help secure our future. In order to manage what is happening beneath the waves we need to be able to measure and understand it better.As Theodore Roosevelt the President who of course protected more than 230 million acres of land in the United States—and I will conclude my call on this note—once said of the Grand Canyon: “Leave it as it is. The ages have been at work on it and man can only mar it.” The Kermadecs will be left as they are protected in perpetuity and as a legacy for all of us as New Zealanders to cherish and to value. The ages can continue their work free of human interference. I commend this bill to the House.Hon RUTH DYSON (Labour—Port Hills): It is a great pleasure for me to rise and join the calls of support for the Kermadec Ocean Sanctuary Bill. I want to begin by making a genuine commitment of acknowledgment for the hard work and passion shown by the Minister responsible for the bill the Hon Nick Smith. We are in different parties but we share a passion for the protection of the marine environment and on this particular occasion I think the tributes that have been paid to him his drive and the fact that this is regarded as the gold standard have been well-earned. So I want to place on record my acknowledgment for his work and our support for this legislation.The Kermadecs are a pretty amazing place. The drive for the sanctuary has been driven not from within this Parliament although it has certainly been Labour’s policy for a little while to support legislative protection through a sanctuary bill but from people outside this Parliament and they deserve a tribute equal to that that I have given to the Minister because they have been absolutely fearless consistent passionate and factually based and have moved the whole of Parliament to this position. I hope it is the whole of Parliament. I have not heard the ACT contribution yet and you never know actually when it comes to that party but I hope the whole of Parliament is able to give its support.So I want to acknowledge not only but in particular the Pew Charitable Trusts represented in New Zealand by Bronwen Golder; Forest and Bird represented on this issue particularly by Anton van Helden; and the World Wide Fund for Nature again represented particularly on this issue by Alex Smith. There are others who have worked on it as well but those three individuals and organisations certainly deserve tribute. They have been amazing.The launch of the legislation held in the western foyer of the Beehive which is a pretty noisy place at the best of time—it has a lot of traffic going through. It was abuzz with excitement last week and I really enjoyed the fact that so many of our political parties were able to join with those organisations that I have just noted and celebrate such a good decision.The bill will not be without controversy I am sure as it goes through the select committee and I look forward to hearing from the chair of the select committee Scott Simpson—who I am sure is keen to take a call soon—and also to the second reading here after the deliberations because a piece of legislation like this will not be entirely without controversy but I certainly hope that the select committee is able to give it the consideration that it deserves. It warrants it. It warrants coming back to this House in a better shape if that is possible as a result of submissions that were made.The Kermadecs—the area that we are talking about—has 11 percent of the world’s seabird species. That is a lot. That is a lot in just one area although it is a big area. There is a 10000 metre depth in the Kermadec - Tonga Trench and it has 32 different New Zealand fish species within it. A lot of people do not know that the Kermadecs is a New Zealand territory. They think it is somewhere else. I would like to pose a question to the Minister and to the chair of the select committee because I have not yet been able to get an answer and I assume they will know the answer to this question: who is the member of Parliament for the Kermadecs? I am really disappointed that neither the Minister nor the chair of the select committee at this stage of the debate knows the answer but I bet that by the end of the third reading we will have it.I used to be the member of Parliament for the Chatham Islands. It was a great privilege. That area was stolen off me rather unfairly in boundary changes and now it comes under Rongotai and there are a few other beautiful islands that we are fortunate to have. I know that the member for Coromandel has quite a few of them in his patch because he is often boasting about them and I know that Jacinda Ardern has often told with some pride of the islands that are attached to the Auckland Central electorate. But I do not know who the member of Parliament for the Kermadecs is so I would like that to be the first challenge—Hon Dr Nick Smith: I volunteer.Hon RUTH DYSON: The member for Nelson is offering but I cannot yet see a geographical connection. I suppose the same water touches the beaches around the Nelson area as in the Kermadecs but seriously it is an interesting question and I know that a number of us would really like the answer.One of the issues that have been under debate is whether the governance structure of the sanctuary is going to be that of co-management. That is what was originally proposed but that is not what is in the legislation and I am sure it will be raised again during the select committee consideration. I want to acknowledge Rick Wītana from Te Aupōuri and Harry Burkhardt from Ngāti Kurī who spoke at the launch of this legislation and who have long been involved and have had very open and serious discussions about the governance structure.This is not a marine sanctuary that is set up in the same way as many others are. It is more along the lines of the Fiordland protection that the guardians of Fiordland set up under separate legislation but this is different again in that it has both Ngāti Kurī and Te Aupōuri represented as part of that structure. There will be as I said some debate about that.There are a couple of other points that I want to make in relation to the administration. The first is that even though the Minister for the Environment introduced the legislation and I know did all the hard work to get it to this stage the Department of Conservation will actually administer and manage the sanctuary. That is appropriate and that is good. I am very concerned though because in recent reports in the media the Department of Conservation is quoted as saying to its Minister—not the Minister responsible for this bill but the Minister responsible for the Department of Conservation—that it is so short of money that it is likely to be unable to fulfil its statutory obligations. And here we are giving it in this legislation a huge amount of more work to do—monitoring a marine sanctuary.It is appropriate as I said for the Department of Conservation to have this role. It currently has amazing staff and volunteers who work on Raoul Island—and I want to pay tribute to them. I also want to echo the words of Minister Nick Smith in paying particular tribute to those who have lost their lives on Raoul Island particularly the young volunteers who did so recently—one by drowning and one in a volcanic explosion. Those are tragedies. They are people who are so passionate that they dedicated part of their life to do this conservation work and they paid the ultimate price for it. So they should be acknowledged as well.But if we are expecting the Department of Conservation to manage this huge marine sanctuary where is the money going to come from? If we want it done properly it must be properly resourced and if recent media coverage is anything to go by it cannot even do its current work within the money that it has got. Millions and millions and millions of dollars has been slashed from its budget over the last 7 years without any justification in my view and we just to need make sure that we put the Government’s money—the taxpayers’ money—where the mouths of Ministers are in this legislation and make sure that the department is able to fulfil its job.The second point that I want to make which again I am sure will be raised during the select committee process is about the breadth of marine scientific research that will be allowed under this legislation. We are told that research ordinarily would breach the provisions of this statute but there are exemptions that can be made by the Environmental Protection Authority. I think that is a good process. If you are going to have exemptions of course you should have a robust process and I have no concerns at all about the integrity of the processes of the Environmental Protection Authority.But we do know that in some instances the intention of Parliament of legislation and presumably of Ministers is often watered down when it comes to the actions. Again recent reports about the extraction of swamp kauri are an example of that. Something that we all thought in this House was clearly not allowed has been permitted by what I think has been quite a lightweight response by the department responsible. I think in this case it was the Ministry for Primary Industries rather than Ministry of Environment or the Department of Conservation.This is a great way to start the parliamentary week with a celebration of the protection of an extraordinary piece of water of underground volcanoes of birdlife and of fish whales and dolphins. The Kermadecs have got it all. It is a brilliant part of the world and it is with great pride that this Parliament is taking this step and moving to its better protection.SCOTT SIMPSON (National—Coromandel): It is a pleasure to rise and take a call on this first reading of the Kermadec Ocean Sanctuary Bill. It is not every day that we as politicians and as members of Parliament get to speak on a piece of legislation introduced into the House that will be so significant so momentous and so important into the future.I wanted to acknowledge and congratulate both the Ministers who have already spoken in this debate on their work effort and contribution not only in the debate but also in bringing this bill to the House in the way it is and in the manner in which it was introduced last week at a function in the west foyer of the Beehive complex. I also want to acknowledge and thank the two Opposition members who have taken part in this debate so far for their constructive and useful commentary on how I think they will see this bill working its way through Parliament.The oceans of the globe continue to face increased pressure from habitat destruction from overfishing from climate change and from pollution. It is entirely appropriate that in the face of those kinds of daunting challenges a piece of legislation as momentous and significant as this should come before this the 51st Parliament. In a hundred years when we are all long gone and when nobody may recall anything of the efforts and the legislative agenda of the 51st Parliament there will be New Zealanders and people around the globe who will remember that in 2016 if those members of the 51st Parliament of New Zealand did nothing else then they did good—they did great—in actually creating the largest no-take ocean reserve on the planet. That is a provision a step that we as parliamentarians as New Zealanders and as citizens of the world can actually be enormously proud of.I am really looking forward to—and cannot really begin to describe to the House the excitement that I have as chair of the Local Government and Environment Committee—playing what will probably be a relatively small role in the process of getting this bill through the House but it will be something that I think all of us on the committee will be able to take great pride in. I am hopeful that the committee as it always does will work in a collaborative and collegial way on this bill which I see on first reading as already being a very good piece of legislation but who knows? As we go through the submission processes and through the hearing of submissions from members of the public and organisations that want to have a say on it they may want to point out to us some areas where the legislation could be tweaked or refined and improved if that is possible. And certainly I know that the committee that I chair will be open to those suggestions.The Kermadec Ocean Sanctuary that will be created by this piece of legislation is truly significant not just for New Zealanders but for all citizens of the world. Most of us will probably never visit there. Most of us will never go there. Most of us will never get to experience the wonders and the magnificence of the marine life that has its home in the Kermadecs and the islands and the water and the sea that surround it but we will all know that we have played a small part in creating something really special really important and really futureproof for ever and for all times. It is with great excitement and great passion and great enthusiasm that I commend this bill to the House because I know that on this piece of legislation we are absolutely and for certain doing real good.EUGENIE SAGE (Green): E Te Māngai o Te Whare tēnā koe tuarua ki ngā mema o tō tātou Whare tēnā koutou katoa.[Thank you Mr Deputy Speaker. Secondly acknowledgments to you all members of our House.]The Green Party is very pleased to be supporting the Kermadec Ocean Sanctuary Bill establishing a new marine reserve in New Zealand’s exclusive economic zone around the Kermadec Islands. We have had a member’s bill in the ballot prepared by Gareth Hughes for some time to establish a marine protected area at the Kermadecs. We congratulated the Government when it announced its intention to create this ocean sanctuary at the United Nations in the run-up to an international oceans conference last year. We are very pleased to support the bill.As with Scott Simpson I have never been to the Kermadecs but everything I have read about this island chain and the photographs I have seen show that it is an extraordinary place of enormous significance to all humankind not just Aotearoa because of its biodiversity and geological and cultural values. Its remoteness has protected it from the impacts of fishing and from mining so as others have said it remains one of the most pristine places on the planet. It is also important because of the complexity of the deep-sea marine habitats that are there. It includes a 12000 kilometre section of the longest volcanic arc in the world which extends from the Bay of Plenty up towards Tonga. You have got two tectonic plates colliding and that means we have got this arc of underwater volcanos active hydrothermal vents and dramatic features like the black smoker chimneys. Those hydrothermal vents produce quite extraordinary conditions where you have got quite strange organisms flourishing in those dark depths in super-heated water where there are quite high levels of quite toxic compounds. We have got in the Kermadecs the second-deepest ocean trench in the world extending up to 10 kilometres deep and it is really surprising to think that fish can live at that depth. Scientists have found fish living at 8 kilometres depth and they have got amazing adaptations to be able to live in darkness and at the extreme pressure that you get at those depths.Even though we have had quite a lot more scientific exploration in recent years the Kermadecs still remain one of the least-understood habitats on the planet. It is an important area for marine mammals with blue whales fin whales and humpback whales migrating through the region en route to and from their summer feeding grounds in the Antarctic. It is a really important place for seabirds with at least 14 seabird species breeding on the Kermadec Islands and another 28 species using the oceans around the Kermadecs to feed. Ornithologist Chris Gaskin described arriving at Macauley Island. He said there were hundreds of thousands of black-winged petrels milling about over the islands. That must have been an astonishing sight.As Forest and Bird one of the champions of the Kermadec sanctuary—along with the Pew Charitable Trusts and World Wide Fund for Nature New Zealand—has noted it is one of the only places in New Zealand where you get both tropical and subtropical and temperate species of birds whales turtles fish and corals and other marine invertebrates living together. This whole constellation of biological and geological values means that we would encourage Minister Smith when the bill is passed to consider nominating the Kermadecs for World Heritage status to recognise their importance for all humankind.This bill is significant because although we have the fourth-largest exclusive economic zone in the world—an exclusive economic zone that is 15 times the size of our land mass—at the moment we do not have any effective marine protected areas in it other than the benthic protected areas which of course do not protect the water column. In New Zealand waters in our marine environment less than 0.5 percent of our territorial sea and exclusive economic zone combined is protected. As the Minister has noted this bill will increase that to 15 percent and that is why it is important—particularly with the prohibition on fishing and mining and the Department of Conservation managing the reserve and the Environmental Protection Authority managing any applications for research for scientific purposes.There was one concern: the departmental disclosure statement did note that because of the secrecy around the project there was not engagement with Māori interests prior to it being announced. That was disappointing but we note that there has been extensive consultation with Ngāti Kurī and Te Aupōuri subsequently. Te Ohu Kaimoana has raised a concern about the potential impact on fishing rights allocated to iwi under the fisheries settlement but I would note that there has been no fishing undertaken in the Kermadec region using the settlement quota in the past 10 years. So Te Ohu Kaimoana seems concerned about the potential fishing rights rather than the actual ones and the biodiversity values far outweigh the fishing values.Other countries in the Pacific have also recognised the importance of having large fully protected marine areas to preserve biodiversity to provide a safe haven for species and to do what Scott Simpson suggested which was to ensure that there are large areas that remain in their natural state for future generations. We have seen Australia protect nearly a million square kilometres in the Coral Sea and New Caledonia protect 1.3 million square kilometres in the Coral Sea. So the major concern we have—not with this proposal but with the accompanying proposals of the Government to reform the Marine Reserves Act—is that the Kermadecs seems to be it. Yes the bill certainly raises the extent of marine protected areas from 0.4 percent to 15 percent but the Kermadecs is largely subtropical and tropical. The Kermadec Ocean Sanctuary will not protect representative examples of our subantarctic marine habitats and the species that inhabit those.We need to see in our new marine protected areas legislation the ability to create more marine protected areas in our exclusive economic zone and not just have that done by special legislation such as this bill. The Minister for the Environment has referred to 10 percent of the marine environment being the target but scientists internationally have referred to the desirability of having 30 percent of our marine environment protected in order to ensure that we have healthy seas that we conserve our fish stocks and that we protect important habitats for seabirds marine mammals fish and marine invertebrates.So 30 percent is a much more appropriate target and the marine protected areas reform will not provide a simple process to have further marine protected areas created in the exclusive economic zone. We understand that that has been because of the opposition from the oil-drilling and gas industries but the value of our deep oceans is in conserving species that we have only just begun to understand. Scientists are still finding and describing new species in areas like the Kermadecs. We understand probably more about areas of outer space than we do about our deep deep oceans at the bottom of the trench. So we need to not just protect the Kermadecs but to have a process to establish other deep-sea marine protected areas. That is why there have been several thousand submissions on the Government’s consultation document seeking that there be such a process.So this bill is a very good one which the Green Party is pleased to support but we need a clear process that will provide for not just the subtropics to be protected but also representative examples of all of our deep-ocean habitats given that we have got such a large exclusive economic zone and we have got a responsibility to the world to protect that and not just leave much of it open for fishing mining drilling and exploitation. Thank you.CLAYTON MITCHELL (NZ First): I take great pleasure in rising on behalf of New Zealand First to speak in the first reading of the Kermadec Ocean Sanctuary Bill and I have to say it is wonderful that we have now had 2 weeks in a row when we have seemingly got full cross-party support with legislation coming through the House. In saying that though I am still waiting to hear from the member from ACT because of course we never know where he is going to go on any given day and in fact I am probably quite convinced that he is not sure on any given day how he is going to go. But all that being said New Zealand First certainly will be supporting this piece of legislation through to the Local Government and Environment Committee and hearing submitters’ thoughts and feelings on this bill.I would like to think that the bill in its current state is probably better served by being called the “Kermadec Ocean Sanctuary Sieve Bill” because the bill has got a number of holes that need to be remedied and rectified at the committee stage. A question was asked in the House last week of the Minister for the Environment with regard to the enforcement of this bill. The reality is when we asked what his outcome was going to be and how he was going to actually uphold this fantastic sanctuary—we said that in the current state if we are lucky if we have got three Orions fly over once a week and we may be lucky if we have got a frigate that is within the area and a Department of Conservation worker—his answer was “We’ve got more than one DOC worker.”That certainly does raise some serious concerns when we as a country are hearing time and time again about the issue around the lack of policing and the problems that that is causing in our communities. If we cannot police our own country properly because of the lack of funding then we are going to have some serious problems enforcing an area that is twice the size of our country with more than one Department of Conservation worker a couple of Orions and the occasional visit from a frigate.All that being said this is a magnificent area—pristine—and it needs to be kept that way. I think Scott Simpson summed it up quite nicely when he said that most New Zealanders—I would just about suggest 99.999 percent of New Zealanders—will not ever get to go and see this beautiful sanctuary a thousand kilometres off the north-east of the country. That should not be a reason why anybody would want to oppose this bill because of course it is looking after our natural environment and trying to keep it as pristine as possible. We note that it is a category 1 conservation area which would obviously prevent any fishing any mining and so on. But there are some contradictions in that when we move through the bill when we start looking into it further. People can apply for an exemption for research purposes and some of those things need to be run through the two iwi groups to be ratified as to whether or not they can actually receive the ability to go in and do some research in that area.But an area that is of concern which could be a loophole for people to be able to get around restrictions is with regard to naval vessels. The bill it says in the explanatory note about clause 7 “disapplies the Bill to Crown activities necessary for reasons of national security”—I do not know what national security there could be going on at Raoul Island but you never know—“(as certified by the Minister of Defence) and to ships and aircraft of the New Zealand Defence Force and foreign States.” What we could have happening and we have seen it with whaling ships is research vessels could be going in there under the name of a naval research vessel and of course they could do things that we would be unable to stop. So I think we need to look at those as an issue that we need to circumscribe.I think the sanctuary area with regard to how it has come about has happened quite quickly. When I say “quickly” it has certainly been worked on for a number of years. In fact in my first few weeks in Parliament I was given a very good briefing by Bronwen Golder from the Pew Charitable Trusts who was very passionate and gave all the right reasons as to why we should indeed be putting this area into a marine sanctuary.But I do have to take with a pinch of salt the Government’s rushing into this. It is almost like a little bit of greenwashing is required and “We need to tick the box because we said in our pre-election promises that we’re going to do something here.” Yet the Government neglected to talk about and include the exclusive economic zone in the rest of its documentation when it talked about new marine protected areas legislation. The Government promised that it was going to be in there—the exclusive economic zone was going to be included—and now we understand it has been completely removed which is a 180-degree turn which to be fair New Zealanders are getting pretty used to. The Government does tend to change its mind quite quickly on things and dish out promises that it cannot back up. So that is of concern.The sheer nature of the location of the Kermadec Ocean Sanctuary would indicate that we need to look inshore inside our territorial waters—inside that 13-mile radius—to ensure that we actually have some protected areas close to shore that people of this country can go to and look at and witness and involve themselves in not too dissimilar to those that Australia has with the Great Barrier Reef. We want people to enjoy it and we want people to access it but we want to protect it at the same time. That is certainly an issue that we need to look at.We are concerned about the lack of consultation with those affected groups in relation to their fisheries being revoked. So no compensation no consultation—we are just going to remove that. The Government says it is only 20 tonnes—20000 kilograms—of fish. It equates to $165000 worth give or take. I think in a true open and transparent Government we need to ensure that all affected groups actually have that opportunity to submit. So I am sure we will hear from those submitters at the select committee hearings which will be coming up I would imagine rather rather quickly.There are a number of contradictions. When we talk about the naval vessels and the seismic testing and so forth—we are as people sailors sailing up there going on a trip and putting on a depth sounder. That under this bill would be prohibited. Ironically and contradictorily the naval ships can use their sonar which is a hell of a lot more powerful than a little wee sailing ship with a bottom sonar and that is a concern and certainly one worth mentioning.When we talk about the setting up of the new statutory Conservation Board for the Kermadec Ocean Sanctuary I would have to say that there is a concern about nepotism and cronyism because when we talk about the board that is going to be put together specifically to look after the best interests of the Kermadec Ocean Sanctuary we see there is one nominee from each of the Kermadec iwi authorities—which by the way back in 1989 and 1992 were both granted control over one-third of New Zealand’s commercial fishing rights. So that is a right for those iwis to be there to be involved in the discussion.The second concern is the nomination “from the Minister of Māori Affairs for the purpose of representing other iwi [interest groups]”. That is where we are concerned that there could be some nepotism and cronyism coming into play because if we go down to the third point when putting this board together the Minister of Conservation is allowed to choose four members—it is quite clearly stated in the explanatory note “4 members appointed by the Minister of Conservation after following a public process calling for nominations and being satisfied as to each person’s skills knowledge and experience.” After that process they can be nominated. There are four places for those nominees but nothing like that process has been put into the decision made by the Māori affairs Minister in relation to whom they choose and how they choose them. That is a serious opening up of the door to cronyism and nepotism which I think reeks of undemocratic processes.We would certainly like that fairness to be spread throughout all decision-making processes as it has been clearly stated here—for the Minister of Conservation to be able to make those decisions as opposed to the Māori affairs Minister who can basically finger-pick whoever he thinks is going to be best on the day.Marama Fox: No faith in the Māori affairs Minister.CLAYTON MITCHELL: No that is—probably you are right too. The exclusive economic zone and the sanctuary that we find ourselves discussing here today is going to be a fantastic area for the future and certainly it is a fantastic opportunity for the world to look at New Zealand and see the cross-party accord and support for a piece of legislation that has everybody’s hearts and minds and has the environment’s best interests at heart.So we would certainly look forward to the discussions at the select committee hearing and to listening to some of those submissions and we have pointed out a number of those holes that we would like to see remedied particularly around enforcement and particularly around nepotism and cronyism and the like. Thank you.PAUL FOSTER-BELL (National): E Te Mana Whakawā Tuarua tēnā koe. Tēnā koutou katoa e ngā mema o Te Whare. I rise in support of this very fine bill the Kermadec Ocean Sanctuary Bill introduced by our excellent Minister for the Environment the Hon Dr Nick Smith who has been a passionate champion of the environment and conservation issues in this country over his long political career.This is a fine bill. It does a number of things that my colleagues on this side of the Househave already canvassed and it is important that we celebrate the fact that we are protecting one of the largest ocean sanctuary areas on the planet an area equivalent in size to France. As a country that has an enormous maritime area—perhaps the fourth-largest or fifth-largest in the world depending on how it is measured—as part of the wider Realm of New Zealand I think this bill is a major achievement of this Government and it will be part of the legacy of this National Government that this contribution to protecting and safeguarding such a precious resource has been made. On this side of the House the wildlife and the sea life that will be protected have been mentioned: 6 million birds coming from 39 different species; 35 species of whales and dolphins; and also three different kinds of turtles.But I want to touch on something that I suppose is of personal relevance to me. Through my father’s mother’s mother I whakapapa to Te Aupōuri and I am delighted to see that Te Aupōuri does have a place on the governance board of this sanctuary under this legislation along with Ngāti Kurī. This is particularly important because of the linkages that the Kermadecs provided in the Pacific to our ancestors and forebears. During that period of migration from Hawaiki or the parts of Polynesia where Māori originated from perhaps a thousand years ago there have been left archaeological remains on the Kermadecs including obsidian tools that show evidence not only of migration but actually of two-way travel for a period of time between New Zealand and the Pacific by our ancestors. I would refer members if they are interested to the research by Professor Foss Leach conducted in the early 1980s which is very interesting and effectively demonstrates that for a period of time the immigration and trade between the Pacific and Aotearoa was in fact two way—a very early example of globalisation.This is a wonderful piece of legislation. It should be celebrated throughout the land. I know the select committee chaired ably by the member for Coromandel Scott Simpson will look at it carefully but it is an excellent piece of legislation and I commend it to the House.KEVIN HAGUE (Green): I want to begin this 5-minute call with a reference to my colleague Gareth Hughes. Gareth is unfortunately away from Parliament today otherwise I am sure he would have been making this contribution. Gareth has had a member’s bill in the ballot for the last 4 years on providing for Kermadec protection and I know that he would have wanted to stand here today to praise the Government for taking the step of establishing the Kermadec Ocean Sanctuary.The thing about conservation in New Zealand is that so often the species that we need to protect exist only here. If we are not successful in protecting those species conserving them and preserving the ecosystems upon which they rely then they will vanish from the earth for ever. That is why despite being a small country with a small population we have a particular responsibility not only to the natural world but to the world—to the global population—for conservation of those unique species and ecosystems.Despite being a small country we have a very very large exclusive economic zone—the fifth-largest I believe in the world. The creation of this Kermadec Ocean Sanctuary is an appropriate recognition of New Zealanders’ desire to protect those species and those ecosystems and to live up to that global responsibility. I want to express not only praise for the Government’s initiative in taking this step but also the hope that it will consider extending this into further marine protected areas within the exclusive economic zone.Having praised the bill there is one area that I want to express some concern about and that was the decision to not consult with Ngāti Kurī and Te Aupōuri prior to the bill’s creation because consultation prior to the bill would have been most appropriate. I understand that that was not possible because of the secrecy of the project but I believe that the Treaty in fact demanded no less than proper consultation at an earlier stage. I note that both iwi are now fully supportive of the bill and of the sanctuary and I am pleased to see that they will be appropriately represented on the board.Finally I want to draw attention to one of the activities that will be prohibited within the sanctuary and that is seismic surveying for non-scientific purposes. I fully support the prohibition of seismic surveying in this ocean sanctuary. It will add to our ability to love and protect those unique species including whales and dolphins that inhabit the sanctuary or pass through it.One cannot help but think of the Government’s refusal to protect the Māui’s dolphin in its sanctuary from seismic surveying and to wonder whether it is not perhaps that the economic value of fishing that will be forgone in the Kermadec sanctuary is less than the economic value that the Government hopes to glean from oil and gas prospecting in the Māui’s dolphin sanctuary. I wonder whether that is an appropriate basis for making such a decision. Thank you.DAVID SEYMOUR (Leader—ACT): I rise on behalf of the ACT Party in support of this bill. I believe that the purpose behind this bill is a very noble one—a recognition that in New Zealand and our economic zone we have taonga in the form of the natural world that are in many cases unique and worthy of preservation. That is why I am prepared to support this bill in its first reading. However I believe that in our Parliament our process of lawmaking offers much opportunity to improve the quality of public policy through the select committee stage and there are a number of changes that could be made to this particular bill that would greatly enhance the quality because let us be honest it has been a rather rushed policy-making process. Cooked up in time for an international announcement the regulatory impact statement was to say the least rather weak. We need to be concerned not only about environmental protection but also about the livelihood of those who make their living from the fishery.The interesting thing from a conservation point of view is as I asked the Minister Smith in the House only a few weeks ago what change to the total allowable catch in New Zealand’s economic zone is brought about by this bill? Being a very experienced Minister he ducked he dived and completely failed—or succeeded perhaps—to answer the question. That is because the Minister knows that the change in fisheries taken under this bill is zero. What it will do is displace those who do catch fish to catch the same amount of fish elsewhere. From a conservation point of view that is not an improvement; it is a small backwards step in the sense that it will mean more concentrated fisheries elsewhere.The second problem—not only a conservation problem but also a commercial problem—is that $165000 worth of fisheries will be precluded from the area. I will not go into the possibility of the fishing that might have taken place in the future. The idea that is in this bill is that if you are not using a property right at a particular point then you lose it. Just focus on that relatively small value of fishing because the premise we are being asked to buy into is that as long as you are picking on only the little guy or girl that is OK—that no compensation is due as long as the person having their property rights appropriated is small. As a concept I find that abominable and I think that this Parliament ought to do better than that.I will be happy to support this bill at future readings because as I say there is a noble purpose behind protecting New Zealand’s unique and beautiful flora and fauna. It also enhances greatly our international reputation where our conservation efforts have been criticised for the lack of marine reserves. None the less we need to resolve a couple of issues. If this House is going to abrogate the property rights of New Zealanders that are legally held under New Zealand’s quota management system then we ought to compensate them for the losses that they experience. If this House is going to try to preserve the fishery then rather than incentivising people to catch the same amount of fish in a smaller area of ocean we ought to say that we are purchasing a public good and we will buy out the people who previously privately benefited from taking those fish. That is good public policy-making in line with the noble conservation objectives of this bill and it is something that I will be happy to support in future readings. The ACT Party supports this bill in its first reading so that we can debate those changes. Thank you.MARAMA FOX (Co-Leader—Māori Party): It is not very often that I find myself standing up and supporting my learned friend and colleague Mr Rāwiri Seymour. Today I find myself in quite a—David Seymour: Oh it’s not that unusual.MARAMA FOX: Well it is quite unusual for most pieces of legislation. So here we are with the legislation about the Kermadecs. I completely agree—it is a taonga not just for the people of Aotearoa but also for the population of the world of the ao. I think the fact that we are able to gift this taonga to the world is a fantastic thing. It is a place that will be held in a sanctuary for all time.However—and there is a big “however”—we are unhappy that the rights of the 58 other iwi who have been granted rights for quota during the fisheries settlement have been ignored. In fact I think the Minister has been negligent in not consulting with them face to face. I fully recognise that he has been to mana whenua the people who border that area—our Ngāti Kurī and Te Aupōuri—and they have been recognised with places on the board. I recognise that my learned colleague and Minister—the very able Minister—of Māori Development and not Māori affairs will be able to appoint someone to represent the rights of those other 58 iwi. However the Minister should have had discussions with them. The reason that the Government did not want to discuss it with anyone or announce it before it was announced to the world just does not wash. You have a contractual agreement through a fisheries settlement for these 58 other iwi who have interests in this area and that should as my learned colleague Mr Rāwiri Seymour has pointed out be compensated.So let us have a look at that. We think that suitable compromise achieves sustainability and we need to ensure that iwi are included in that conversation—we have neglected to do that with the 58 other iwi which we could go into but that would take all day. The proposal extinguishes iwi customary and commercial and non-commercial rights which is contrary to the Crown’s duty to actively protect a settlement. This is no small thing. If we think that we can just go back on any settlements that we have had to date then we are going to see a whole lot of furore in this nation over previous settlements that have been done and declared full and final. Yet the Crown has compromised its duty to protect the settlement as part of its Treaty responsibilities in this case. Notwithstanding we agree that this is a beautiful sanctuary and all it would have taken I am sure was to have a conversation with the affected iwi who are involved and who have now had those rights extinguished through this bill.The proposal put to Cabinet states that the quota held by Te Ohu Kaimoana on behalf of iwi is an “administrative quirk”. That is how they have described the fisheries settlement that has been in place for quota in this country for some considerable time—as an administrative quirk. Well I am surely hopeful that when the Ngāti Kahungunu ki Wairarapa settlement comes to this House it will not on some future date be referred to as an administrative quirk and dismissed as quickly as this has been. That contradicts the process conducted in early administration to analyse where fish stocks should be and were introduced into the quota system in that area. As a result of that process the Maori Fisheries Act provides for Te Ohu Kaimoana to hold quota until commercial catches can be assured. I say it again this was not well done. The Minister should have gone to the people and conducted a full and thorough conversation with them and they should have been adequately compensated because of the extinguishing of those rights.The proposal claims the sanctuary is a sustainability measure that is needed. In fact they have barely caught anything in that area for a long long time which in itself means that it needs to be sustainable not for catch numbers but for regeneration. Mining is one of the issues. The minerals that are found in that area might be something that everybody wants to grab for and I think the fact that we are going to protect it is a fine step again.The Māori Party wants to assure the country that we support the bill. We support the idea of the Kermadec sanctuary but the Government has been remiss in consultation with the other iwi and to describe it as an administrative quirk is simply a failure. It needs to go back and rethink how it does its negotiations and its conversations with our people.The proposal fails to identify the effect on quota rights and the quota management system. It states that the impact on commercial fishing is only small as the current catch is. Against the advice of the Ministry for Primary Industries it suggests the catch can be caught elsewhere. However the species currently harvested in that zone will then move out. The fish cannot be caught elsewhere at that time. Consistent catch throughout the year is important for the high-value niche markets involved. What it is saying is that not enough consultation was had and against the advice of the Ministry for Primary Industries the Government says that you are going to be able to catch this fish somewhere else but actually it does not know and the ministry has told it that. The proposal fails to identify the broader impact. The proposal does not reflect the true value of the quota shares.The proposal is likely to contradict international law around no-take zones. Under the United Nations Convention on the Law of the Sea New Zealand must make access available to other nations to fisheries we are not using. The ring of international fishing around the border of the Kermadec exclusive economic zone indicates a strong desire of other nations to fish in the zone. Whether or not it does are we going to be met with litigation now given that the Trans-Pacific Partnership is coming in? It is wonderful to have a taonga but we should have done our homework and I think Minister that in all fairness the 58 iwi who talk about their claim have rightly stated their issues and to be described as an administrative quirk is simply irresponsible. There is something to be answered here. If you extinguish their rights then compensation surely must be a conversation to be had in the future. I invite the Minister to have those conversations with those iwi.I am happy today that we are going to support this bill at its first reading—the same as my colleague the lovely Rāwiri Seymour—but we would be looking through to the second reading for these things to be fleshed out further. The select committee process under which submissions can be made will I feel be vigorous. I am sure that iwi will take up the opportunity to put their case forward. All of that could have been avoided had the conversation been had in the first place. So it is with some trepidation that we support the bill through this first reading stage. We are happy that we are going to have a taonga for all of Aotearoa to enjoy but let us do our homework properly so that there is nothing to come back on us in the later years and we find ourselves having to relitigate this entire issue.Nō reira e Te Mana Whakawā nā nei te mihi atu ki a koe.[Therefore Mr Assistant Speaker I do indeed acknowledge you.]The ASSISTANT SPEAKER (Hon Trevor Mallard): The Hon David Parker—a 5-minute call.Hon DAVID PARKER (Labour): Firstly can I congratulate the Hon Nick Smith on introducing this bill. As I was sitting in my chair a moment ago talking to Nanaia Mahuta as to what I would say when I took this call we both sort of reflected on the fact that if Shane Jones was still here he would say “Labour Party policy”. So I do not need to say that for myself; the Greens have also said it. I think there is cross-party agreement that this is a very good thing to do.Can I just refer to a couple of comments from the Māori Party. First of all it says it does not often vote with the ACT Party. It backs every Budget in this House that the National Government passes and were it not for the support of the Māori Party those Budgets would not sail through in the way they do.Can I say there was an interesting comment from the ACT Party. The ACT Party came here and said that you always have to compensate when you are taking away what it defines as a property right. It is interesting that people like the ACT Party would see the value of New Zealand’s fresh water grandparented and tradable amongst those people who currently have rights to use water under the Resource Management Act. I bet you that if National was foolish enough to do that—and I suspect that it has actually seen this one coming and decided that it is now not going to take that particular risk—the ACT Party would be coming along the next day and saying “I’m sorry you can’t have a decent minimum flow for that river.” or “You can’t stop us putting as much pollution into that river unless you compensate us for the property right”. I have a different view of property rights from the ACT Party—I think it over-defines them.I want to refer to something in the regulatory impact statement that goes to the issue of compensation which has been spoken to by the Māori Party. I want to read out paragraphs 47 to 51: “(47) It has been decided that compensation will not be paid in relation to the creation of the Sanctuary on the grounds of sustainability protection and biodiversity. This would be achieved by explicitly ruling out compensation in the legislation. (48) The principle not to compensate for global conservation initiatives of this significance is consistent with previous decisions not to compensate for other measures taken to secure the long-term sustainability of marine biodiversity such as the establishment of marine reserves.” I will not read out the following paragraphs because I will run out of time but I think that is an important point of principle that we should explore because if we have got to the point where around the world the only way that we can conserve things is by compensating for what are alleged to be intractable property rights in respect of those people who have got rights to harvest I cannot see the world making much progress in these conservation efforts.I think I am probably able to be convinced by the Minister—and we will listen to submissions at the select committee—that that is probably right in principle. So I hope the Minister will perhaps take some comfort from us on that because I hope that the Government is not forced into a position of actually giving up on that acknowledgment that sometimes there are actually conservation things that cut across people’s right to exploit resources that none the less ought not to be compensated when we are actually conserving something that ought to be conserved.I think I have probably just about taken the 5 minutes I am sharing with my colleague the Hon Damien O’Connor. Suffice it to say that we do think this is a worthy bill. The Labour Party had similar policies; so did the Greens. I thank the Minister for bringing this to the House.Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman): Thank you Mr Assistant Speaker and I acknowledge my colleague who has given me an opportunity to speak on this bill. There have been some very generous speeches in the House today and I am perhaps a little less generous. It is not to be small-minded or picky that I say I will acknowledge the work done by the Government rather than praise it because there have been many many parties pushing for this for some time. I would like to acknowledge and praise all of their efforts.The Government does have a tendency towards tokenism across the board. This is not a token gesture in itself—it is one of the largest marine sanctuaries in the world and indeed 15 percent of our exclusive economic zone. Labour has had a policy for many years of 10 percent of our marine areas in reserve status. A lot of people including National have consistently criticised us for that. In one fine swoop—not one fell swoop I have to say—we are effectively putting 15 percent into areas of protection. That in itself is a wonderful thing. There would hardly be a person in this country who would want to criticise this.Indeed from the fishing industry down the fact that we have identified only $600000 or thereabouts of commercial interest does not fully state as was said by the ACT Party the potential for huge economic benefit. That applies also to the fishing industry around this area of protection. As we now understand wherever we have a reserve or a protected area the opportunity for fish species and other biodiversity to flourish and then spill outside the zone also applies to the Kermadec area. So there will be fishing companies around the world in fact—not just in New Zealand—that will be eyeing the opportunity for this in the future. So the question is whether we can ensure that what we are setting out to do here in the House today can indeed be upheld—that is protection of this area and all the ecosystems within it for future generations. I can acknowledge that there will be more enthusiasm for this with the younger people of New Zealand—my daughter in particular—and in what this will do for future generations and the opportunities to explore more what happens in this incredibly diverse area. So we are taking action now to protect their opportunities.But in handing over to the Department of Conservation the responsibility for this what I have to acknowledge in this House is that the National Government has done that with other protected areas in this country on land but has failed to fund the organisation to uphold the values and protect the values that it so proudly speaks of. So the question is will we ensure that this Government and future Governments have the resources to protect the values that we are passing through in this legislation here? We have got a Department of Conservation that is under-resourced. It is talking about bringing in car parking charges and toilet fees no doubt or doing other things to try to fund the basic biodiversity work that is needed on land to protect our kiwis and our other threatened species. This reserve will protect many many threatened species and for that we have to acknowledge the Minister and the Government. But I ask the Minister—and through the select committee process I am sure there will be questions around the resourcing of the department and all the flow-on departments like the navy. When this sanctuary is indeed formed the Government agencies that will now be responsible for protecting the values that we are trying to pass through into legislation here—it is indeed a huge area.Can I come back to one more point I would like to make before I finish here. In protecting 15 percent it is not fully representative of the different marine environments throughout New Zealand. So I ask the Government will it ensure that the other areas or representations of the other areas and marine species will also be protected? I personally support the protected marine areas concept but it is not perfect. Marine reserves are a difficult and tortuous process to implement but we do have areas of marine diversity in this country that need to be protected. I ask of the Government will it ensure that it does not stop here—because it says: “We’ve protected 15 percent of our exclusive economic zone. Therefore haven’t we done well?”. Will it move to protect and work with commercial interests and recreational interests to have a true range of protection across all the marine biodiversity?This is a good piece of legislation. I acknowledge that if I find it difficult to praise the Government as I say it is not to be small-minded; it is to say that this has been a long process to get the bill here. We hope that this will continue smoothly through the select committee but I ask of the Government can it ensure that resourcing for the department that will be responsible for this area and many other areas both on and off land—will it be resourced to carry out its duties and the expectations from the public to protect our endangered species?MATT DOOCEY (National—Waimakariri): It is a pleasure to rise in support of the first reading of the Kermadec Ocean Sanctuary Bill and taking the last call in this debate it is great to hear the support from around the House for this bill. It has thrown me a bit. Normally for me I know a bill is a good bill for New Zealanders when New Zealand First votes against it. So having those members vote for this bill has thrown me a wee bit but it is good to see—it is great to see.I am not sure I am as pessimistic as Damien O’Connor the last speaker. I think this is a day when New Zealanders can be proud. I would like to acknowledge the Rt Hon John Key our Prime Minister for his vision in announcing the sanctuary at the United Nations. I would like to acknowledge the work of Ministers Smith and Barry—Ministers for the environment and conservation respectively.It is a great day to be a New Zealander and this bill has created world attention. When you look at The Guardian in the UK it said that the sanctuary will be one of the world’s most significant fully protected ecosystems and when you look at the Wall Street Journal it described it as “bigger than Texas” and it said that we were the latest island nation in the Pacific to put ecological protection and tourism ahead of the fishing and mining industries. That is great news for New Zealand. And also the World Wide Fund for Nature New Zealand said it congratulated the Government on taking decisive action to protect this incredibly special area.The Hon Ruth Dyson put a challenge to us in the fourth speech in this debate today. She said to us: “Who is the member of Parliament for the Kermadecs?”. So as a diligent backbencher I went away and did a bit of research and I have to say—Chris Bishop: Oh who is it?MATT DOOCEY: Actually no one is the member of Parliament for the Kermadecs. But any people living on the Kermadecs—mainly Department of Conservation staff—will go back to the last electorate that they resided in as the electorate that they would vote in when on the Kermadecs.Can I just finish by saying that I once heard the statement “If space is the final frontier then the ocean is the first frontier”. Many New Zealanders love their snorkelling and their scuba-diving—possibly not in the Kermadecs. But when you go under the waves and you see the diversity of the ecosystems—basically on this side of the House you know we love highways and the Kermadecs is basically one big marine highway. If you think of all that marine life shooting its way through—what is it—620000 square kilometres that is something to be preserved.I welcome this bill and look forward to it going to the select committee. Thank you.Bill read a first time.Bill referred to the Local Government and Environment Committee.Hon Dr NICK SMITH (Minister for the Environment): I move That the Kermadec Ocean Sanctuary Bill be reported to the House by 2 August 2016.Motion agreed to.Land Transfer BillFirst ReadingHon LOUISE UPSTON (Minister for Land Information): I move That the Land Transfer Bill be now read a first time. I nominate that this bill be referred to the Government Administration Committee for consideration. This bill has been developed in response to the Law Commission’s review of the Land Transfer Act of 1952. That review resulted in the commission’s 2010 report A New Land Transfer Act. The Law Commission’s report showed that the existing land transfer legislation is fundamentally sound but it is well overdue for modernisation simplification and consolidation. The bill will modernise New Zealand’s land transfer legislation to make it clearer more workable and more consistent with modern ways of working. It retains the core principles of the Torrens system of land registration and introduces new measures to improve security of property rights.The Land Transfer Act is over 60 years old and contains provisions from early legislation dating back over 100 years. Much of the language is archaic complex and difficult to understand. The Act is focused on paper-based transactions which is completely at odds with the modern reality of an electronic land title registration system. The Act has to be read alongside two stand-alone amendment Acts. This creates a legislative framework that is difficult to navigate for property owners wanting to understand their rights and obligations. The Land Transfer Bill addresses these problems by replacing all three statutes with a single statute that is clear workable and focused on electronic registration.As land is the principal source of wealth and wealth generation in New Zealand the land transfer system is critical to the ongoing functioning of the economy. Confidence in the certainty of property rights in New Zealand underpins economic growth and attracts overseas investment. A land transfer system that provides people and businesses with secure property rights is essential for a prosperous and sustainable economy. It is still true that for many New Zealanders buying a home is the biggest investment they will ever make. To ensure people continue to be secure in their property ownership the bill retains the principle of indefeasibility of title. This is a fundamental aspect of the Torrens system which provides that in general once registered a transaction cannot be set aside.However the bill also recognises that in some circumstances indefeasibility of title can result in unfair outcomes. For example an owner who is an innocent victim of third-party fraud can lose their home to a registered purchaser. Another example is where Māori freehold land is sold in breach of Te Ture Whenua Maori Act depriving current and future generations of Māori landowners of their ancestral land. To address this problem and improve security of property rights the bill gives the court discretion in limited circumstances to order the alteration of the land title register where necessary to avoid manifest injustice. In situations like the ones that I have just described if the outcome would be manifestly unjust the court would have the power to order ownership to be restored to the previous registered owner. The manifest injustice threshold is intended to balance the need for certainty of property rights with the need to protect against unfair outcomes. The limited judicial discretion is intended for use only in exceptional cases.Another measure aimed at improving security of property rights and addressing mortgage fraud is the new requirement for financial institutions to take reasonable steps to verify the identity of customers taking out mortgages. The bill also makes changes to the Crown compensation scheme for those whose land or an interest in land through the operation of the land transfer system—these changes will make this scheme fairer for landowners and the Crown. Currently compensation is based on land value at the date of loss. This can be unfair. The loss can take some time to discover and the compensation in that case would not cover an increase in property value or improvements made to the property in the interim. The bill addresses this problem by providing for compensation to be based on the value of the land at the date when the claimant discovers or should reasonably have discovered the loss. In most cases the new compensation formula will result in claimants getting more compensation from the Crown.The court will however have discretion to change the valuation date and add a loss adjustment allowance based on property market movement to avoid an unfair outcome. For example the loss adjustment allowance might be necessary when a claim is made in a rising market and land value is appreciating. However it might not be appropriate in a falling market when land value is depreciating.The bill also makes clear that landowners are required to take reasonable care in their land dealings. Compensation can be reduced where the claimant contributes to the loss. The Crown will be able to take proceedings to recover the amount of compensation paid for loss caused by a third party.The bill improves the protection of privacy by extending the Registrar-General of Land’s statutory powers to withhold an individual’s personal information for the protection of their personal safety. The bill also clarifies that the electronic register is subject to the relevant privacy principles under the Privacy Act.A number of measures in the bill will also improve efficiency. These include shifting some certification requirements from the Act to regulations. This makes it easier to automate more transactions and update requirements to keep pace with changing technology. The bill also allows covenants in gross to be noted on the title. This is a new mechanism that offers a cheaper and quicker alternative to the current practice of registering encumbrances which can slow down land development. Another efficiency measure is a simpler process for claiming landownership on a limited title on the basis of adverse possession.This bill has been a long time in the making. I want to thank the Law Commission and in particular to acknowledge the contribution of George Tanner QC the commissioner responsible for the review of the Land Transfer Act. I also want to acknowledge the contribution made by Warren Moyes the former Wellington district land registrar and Land Information New Zealand official. Sadly George and Warren have since passed away.Land underpins everything. The ability to transact in land efficiently and with confidence in the security of property rights is vital for the economic and social well-being of New Zealand. The Land Transfer Bill will deliver long-overdue reforms to New Zealand land law that will enable everyone transacting in land to do so with greater confidence and certainty. I commend this bill to the House.Hon DAVID CUNLIFFE (Labour—New Lynn): Every now and again in this House a seemingly technical and innocuous bill comes before us for reasons that I would warrant are not innocuous or technical. This bill was languishing at around about No. 90 on the Government’s Order Paper and yet it suddenly sprang up to No. 2 today and it is before us at the moment.So today in my brief remarks I am going to firstly outline what the bill contains and then go from the what to the why—why we are debating this now and what it says about the Government’s attitude to landholdings in particular at a time of great stress in our rural sector. First let us consider the substance of the bill. As the Minister for Land Information has pointed out this is—some would say—a much overdue amendment to the basic legal framework for land tenure and land registration. It follows from the Land Transfer Act first written in 1952—it is older than most members of this House—and it follows from the Law Commission’s report of 2010 entitled A New Land Transfer Act.Labour is supporting this bill to the select committee—supporting it for its first reading—so that we can hear from the legal fraternity in terms of their submissions about what is right and wrong about this drafting overhaul. One of the things that seem promising is that the bill integrates the 1952 Act with two subsequent amendments: one from the standalone 1963—a fine year that—Land Transfer Amendment Act and the Land Transfer (Computer Registers and Electronic Lodgement) Amendment Act 2002. It would be helpful all things considered to have those three pieces of legislation properly integrated into one single piece of law.As the Minister has said this bill does retain the essence of the Torrens system where title to land is acquired by registration. It is as far as possible secure and indefeasible—one’s home is one’s castle; one’s title is the anchor of one’s home. A purchaser should not need to go behind the register to investigate the root of the title—that is the title itself is gold-plated. That is also a strong tenet of tenure so to speak.The bill does make two significant changes which the select committee is going to need to consider carefully. The first is in relation to indefeasibility where the bill introduces a limited judicial discretion to order the alteration of the register in situations where immediate indefeasibility would result in what is termed a manifest injustice. So it is introducing a little more flexibility into the law provided that clear grounds can be established on which to proceed without change would be manifestly unjust and that is useful in situations where an unexpected complication has arisen between a mortgagee and a mortgagor. Sometimes that mistake results from the passage of life into an estate.The second significant change to the status quo is in respect of compensation. The bill retains the State compensation that currently operates but it makes a few modifications. Compensation will be available for loss through a registrar’s error of the operation of the land registration system in having acted in reliance on a guaranteed search but those guaranteed search periods are shortened. That is if a citizen acts in reliance on the statute and on the operation of the registry and for some unforeseen reason is thwarted and their title is “defeased” then they may in certain limited circumstances be entitled to compensation.The bill clarifies that the amount of compensation payable where the claimant has been deprived of an estate or an interest in land is the value of that estate or interest. So it rules out by implication pecuniary damages and for mortgagees compensation only extends to the value of the security and excludes any amount beyond that.There are a number of measures in the bill that the select committee will wish to hold to the bill’s stated purpose of enhancing clarity and certainty: provisions clarifying that the registered title may be limited by overriding interests in other statutes—and we will come on to some examples of that that are very important—provisions clarifying the nature and scope of the registrar’s powers of correction; removing inconsistencies around existing legislation that protects administrators from some kinds of personal liability but not others; and limiting the effect and use of covenants in gross for consistency with the original policy intent.Much of that goes to what we call good housekeeping of the law. It goes to the periodic updating of the legislative framework in part because of the 2010 review. But that is where I think the mystery starts—that is that a 2010 review has slowly wound its way through the system and was languishing well down the Government’s Order Paper until today where it leapt to the Government’s highest priority bar one. None of us would argue with the previous priority the Kermadec sanctuary and its wonderful and bipartisan innovation but this one is a little bit of a mystery. It has been around for years; it is seemingly administrative and innocuous—why now?Here I think is the reality: media over the last week have been focused on New Zealand’s growing rural land crisis—and it is a land crisis; it is driven by a sustained collapse in dairy markets. It has resulted in what Dairy New Zealand and the Reserve Bank in its publication the Reserve BankBulletin of December 2015 forecast in its worst-case scenario which was a payout of $4 per kilogram of milk solids sustained for 2 years and then rising. We are worse than that worst-case scenario now at $3.90. It forecast in this document a 40 percent decline in rural land values—a 40 percent decline. Even in the mid-case scenario where prices are rising back to $6—and that seems fanciful on today’s money—that is a 25 percent decline in land values.These are the technocrats; these are the economists. This is a matter—this analysis—that is not political but the implications start to get political. I do not think that the Government wanted to debate on this bill in 3 or 4 weeks’ time or 2 months’ time because this situation is rising to be one of the most severe economic crises that New Zealand has faced. If land values collapse by 40 percent as the Reserve Bank is predicting what is going to happen to the incomes of farmers? What is going to happen to rural towns and communities? What is going to happen to the broader New Zealand economy?The National Government is arrogant and out of touch. It is not being straight with New Zealanders about the magnitude of this challenge. If all of those banks foreclose on those farms and we see a 40 percent collapse in farm prices the knock-on effects will be huge. And I think we all know where the pressures will be. There is the National Government caught between two core constituencies: the big banks on the one hand and the dairy farmers on the other. Something is going to have to give. Do you know what it is—and this is where this bill comes in—it will be fire sales overseas. That is why it wants this legislation on the way through because it is preparing for a massive swathe of fire sales on New Zealand farmland to overseas buyers. Iwi are not that stupid; iwi do not sell their land overseas.We should be very vigilant and we are saying today in this debate that the Labour Opposition is going to be extremely vigilant about this issue. Because who takes the haircut? Is it going to be the banks that have made in technical terms a freaking killing of profit on the lending they have done to both the rural sector and residential urban real estate? Are they going to take the haircut? Is it going to be the farming families—the sharemilkers and the farmers—who get foreclosed on? Are they going to take the haircut? Is it going to be rural New Zealand communities—are they going to take the haircut when this bill facilitates the fire sale of New Zealand farmland?And what is the Government doing about it? You know if this was a rugby game it would be a brawl and the referee just abdicated the field. The Government is not even playing the role of a decent touch judge.Hon Michael Woodhouse: He’d have given you a yellow card.Hon DAVID CUNLIFFE: That has got Mr Woodhouse’s attention because he can understand football even if he cannot understand immigration. The Government is out of the game. That is why New Zealanders need a Government that can take a long-term view of land sales with secure tenure and good strategy and protect it for future generations.SARAH DOWIE (National—Invercargill): It is actually a pleasure to stand and rise to speak in this first reading of the Land Transfer Bill brought into the House by the Hon Louise Upston. My goodness if I am here as long as Mr Cunliffe and I come up with conspiracy theories along those lines please just show me the door. It is incredible to sit here and listen to 10 minutes of just absolutely phenomenal conspiracy. What this bill is about is modernisation.Mark Mitchell: It’s The X-Files David.SARAH DOWIE: It is The X-Files—it is absolutely The X-Files. It is beyond a joke. At the end of the day the Land Transfer Act has been in force for 60-odd years and it is in need of modernisation—nothing more than that. Land transfer has evolved. I was there I remember in my short 40 years as a lawyer practising and running—Hon David Cunliffe: You’ve been practising for 40 years? You don’t look a day over 60.SARAH DOWIE: —the land-based transactions in the conveyance transactions. We have changed now to an electronic—The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I am going to interrupt the member and although she might have brought the interjections on the member making the interjection should know that I am over 60.SARAH DOWIE: Thank you. The process of conveyance has actually changed and we have moved to an electronic system so it is only fair to modernise and update the Act that governs this process and make it more workable and more reflective of today’s day and age.I am really pleased that the Minister has referred this bill to the Government Administration Committee. We are the heavy lifters in this Parliament I think.Chris Bishop: Ha ha!SARAH DOWIE: We are so Mr Bishop—we are the heavy lifters. We often get technical legislation and lo and behold as an ex - property lawyer I am excited about the Land Transfer Bill—I am excited.When we talk about the Torrens title system this is a system that underpins our property transaction basis. It is an incredible system of course developed in Australia and adopted by us gosh I think it was about 100 years ago. But it really does underpin the nature of our property transactions. New Zealand is known—having adopted this Torrens system and through the Land Transfer Act—as a secure place to do business in respect of buying and selling property.Of course two of the premises behind the Torrens system are that it is a secure system and that you do not as a purchaser need to go beyond the register or beyond the title to research what is on there. You can reasonably rely on that register and of course on indefeasibility of title. That has sustained time within New Zealand—that no claim or interest can be defeated or voided with a past omission or error or act. Like I said before that has sustained time. But what this bill does is it modernises indefeasibility in respect of that premise. It is allowing a limited change to indefeasibility where there are fraudulent actions and the result would be that there would be a gross injustice and somebody would miss out or be harmed by some fraudulent action. Therefore the courts can go and look at that and indefeasibility would be somewhat modified there.Look this bill is updating the legislation in respect of the evolution of what we have seen with regards to property transactions. The e-dealings need to be properly documented and updated so that the legislation is reflective of where we are at the moment with our property system. This is a good bill. There is no conspiracy theory with it. It is updating a 60-year-old bill. It is timely it is needed and it is important. I commend this to the House.Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman): “A minor technical amendment bill”—yes well we have heard that in this House so often. Those of us who have been around for a wee while tend to look a little suspiciously at such statements. I listened to Minister Upston and I had to agree with some of her statements although not all. Land “underpins” everything she said. Now that is partly true I guess—if you are lucky enough to have some land. It “attracts overseas investment”—well that is true as well.This is more than just a minor technical amendment to a piece of legislation. It comes off the back of a recommendation made in 2010 by the Law Commission an independent body that comes to the House with recommendations—a bit like the Parliamentary Commissioner for the Environment although the Government seems to ignore those recommendations.I just want to go back as a member of a committee that had oversight of Landonline the technical electronic system that we have. It cost us a fortune to be fair. There was a huge cost blowout and now we are making some minor technical amendments to ensure that it operates properly. We in Opposition have to acknowledge that as time moves on technology certainly has. Some of these changes will be required to ensure that we can retain the property rights—not to the extent that the ACT Party might proclaim; we are not that ridiculous. We are not that neanderthal in our thinking. There are new nuances around ownershipthat are referred to in this bill such as lessees’ leases that I am not going to get into.I come back to the issue raised by my colleagues as to why this bill is going through now. There are some quite technical issues here and things that are being changed that will have far-reaching implications—some of which we will not raise or realise in this House today. But those people who are out around the worldwho might be to quote the Minister “attracted to New Zealand for overseas investment” will be looking very carefully at this.Mark Mitchell: Yes good.Hon DAMIEN O’CONNOR: The member over there who nods his head is probably quite happy to protect the rights of those people who are going to want to come and invest in New Zealand. I have a greater concern and that is for New Zealanders who currently have the land or New Zealand families who want to keep and retain the land.The fact is that we are under pressure. In 1985 when I was a sharemilker I remember going to a rally against the then Labour Government and being told that farmers should farm for productive returns and not for capital gains. The unfortunate thing is fuelled and encouraged by the banks by the Government and by DairyNZ. Farmers have ploughed huge amounts of capital into land arguably to the point where land values are unsustainable. Just as leaders of the dairy industry say that production levels around the world are actually unsustainable—that is about as true as saying that New Zealand land values are unsustainable. The question for Kiwis and for the New Zealand Government is which one should give in first. Which one is going to cave in first? That is will it be the foreign production of milk all around the world which is swamping us at the moment or will it be the unrealistic land values of farmers up and down this country?My colleague David Cunliffe pointed out the truth in his speech. The banks have walked away with billions of dollars of profit—billions of dollars of profit. What we have now is a whole lot of—thousands literally; not the 10 percent that John Key wants to refer to. It is actually probably closer to 50 percent of farmers who are under real financial pressure now. The issue of land values is crucial to their future good or bad. The reality is that unless the banks and the Government leave the door open to that foreign investment we are likely to see a downward adjustment of up to 40 percent of land values in this country. That is a frightening scenario for too many farmers up and down this country. I suggest that not as part of a conspiracy but just as part of the normal modus operandi for the National-Tory Government the Government wants to tidy up these technical details. That is why this bill is in the House now: to ensure that the foreign investors—and there are millions of them around the world who would love to come and invest in this country. The member over there is shaking his head. He should get his head out of the sand.Why would you come and invest in New Zealand? There are a couple of reasons. Firstly if you want to put your money in the European Central Bank you will have a negative interest rate of 0.4 percent. That is you will be paying them to look after your money. If you want to come and invest in New Zealand you can buy land enjoy capital gain without any taxation and most likely see further upward movement of land values—if the door is left open to further speculation from offshore investors.The Government is caught in a bind here between its constituencies as was said before—between the bankers who have got very high exposure to our land values around this country and want to secure that as best they can and the farmers who are indebted as well.There will be a downward adjustment of 40 percent which will mean potentially massive sales which will mean that this piece of legislation is absolutely crucial to protecting the property rights of those selling or purchasing and of those who might be leasing or subleasing.I am assuming that the minor technical amendments that we are talking about here actually do protect the property rights of people coming or going but my concern is for those farmers who might be going—or in future those farmers or wannabe farmers who will not be able to acquire the land.We are facing a major issue. The timing of this legislation is just a little too cute for my liking. Although I have not been and will not be on the select committee I will be following this closely because if we do not get this right and if the National Government and the banks are quite prepared to see the massive sell-out of land in this country to foreigners we will be as John Key said and preached tenants in our land—under his Government endorsed by his Government.Hon Louise Upston: After you sold so much.Hon DAMIEN O’CONNOR: That Minister is quite happy because she has acknowledged in her speech the robust and secure land tenure in this country which goes back to something that we took from the Australians—you have got to be suspicious of that in the first place—back in the 1800s. We have refined it and this bill will further refine it. But let us not get distracted by minor technical amendments.When the underlying agenda of the Government is to satisfy its mates offshore—it wants to be seen as open and welcoming to foreign investment. The banks because they want to save any potential loss from a downward valuation of farmland around this country—the poor farmers who are stuck in the middle who have been encouraged to go out and invest huge amounts in land values on the basis and the false promise of high dairy payouts are caught out. We need to support them. We need to support them not with money but with a fair deal and a fair process. I am not convinced that this piece of legislation does anything to protect the fair process. We are told it will. I am suspicious that it might be more about protecting the property rights of those who might come in from offshore.I am in this House as is the Labour Party for one reason and one reason only. That is first and foremost to look after New Zealanders—people who want to come to this country commit to this country and generate wealth. I am not here to look after overseas foreign speculators who might want to come in and off the backs of poor farmers invest in property that they get free capital gains off. If this piece of legislation supports and enhances and helps them then we are not for it. But if it does support the property rights in the place of New Zealand’s farmers—The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member but his time has expired.MARK MITCHELL (National—Rodney): Like my colleague Sarah Dowie I am really excited to take a call on this the Land Transfer Bill. I would like to refer to the previous speaker Damien O’Connor. We co-captain the Parliamentary Rugby Team. He is a pretty tough West Coaster and he is passionate about what he does. I would like to make an offer to the chair of the select committee who I am sure will be very pleased to see him come on to the committee. I would like to extend that invitation. I know that he would like to be more involved in this bill.But there is one thing that I do want to address. It is a very serious matter. It is that I think that probably the member for West Coast - Tasman was very pleased to see a National Government come into power because what we did is we stopped the flood of sales of our land to foreign investment. And it was a flood. Under the Hon David Parker there was more land sold. In fact the biggest single transaction in the sale of New Zealand land was made under the stewardship of Labour and the Hon David Parker. So I am sure that the member was very pleased to see a National Government come in where we made sure we tightened things up and we actually slowed that down. We felt that it was really important to do that. We made sure that the Overseas Investment Office process was a much more rigorous process to go through and we have been very careful about the foreign investment that we do invite into New Zealand. It is important but it has got to be the right sort of investment.This is a very important bill and I just want to refer to some of the key messages in the bill. This Government holds an important role dealing with land transfers and ensuring New Zealanders can have confidence in their property rights. This is really important because actually most Kiwis do aspire to owning their own home and having their own land and it is actually very important that they feel their property rights are protected.Our current land title registration legislation is outdated and this bill will modernise simplify and consolidate it. I just want to make mention too that Sarah Dowie in her speech raised the fact that the Hon David Cunliffe appeared to be running some type of conspiracy theory. I totally agree. I think it would not be unusual to see him sitting in Copperfields speaking to Agent Mulder and getting the new “X-file” opened up and running—Hon Louise Upston: And they’re invisible.MARK MITCHELL: That is right—and they are invisible too. The bill will make land transfer legislation clearer more workable and more consistent with modern ways of working while retaining the core principles of the current land registration system—this is very important—and there will be new measures to improve security of property rights.I just want to talk very quickly too about the need for the change and what brought about the changes that we have made. The Land Transfer Act is over 60 years old so it is an old piece of legislation and we see many times in this House that it is time to actually modernise this legislation and make it relevant to the world that we live in today. It contains provisions from earlier legislation dating back over 100 years as my colleague Sarah Dowie also alluded to. Much of the language is archaic complex and difficult to understand. The Act is focused on paper-based transactions which is completely at odds with the modern reality in the modern world that we live in now where electronic land titles and registration should be able to be done online.The Act is to be read alongside two stand-alone amendment Acts. This creates a legislative framework that is difficult to navigate for property owners wanting to understand their rights and obligations—and I think that any property owner who has entered into a transaction would agree that things can become complicated very easily. Most people try to avoid costly legal bills when they are entering into a sale and purchase agreement or a land transfer so this bill will actually go some way towards helping to reduce some of those compliance costs.As land is the principal source of wealth and wealth generation in New Zealand the land transfer system is critical to the ongoing functioning of the economy and confidence in the certainty of property rights in New Zealand underpins economic growth and attracts good overseas investment. This is a very good bill. I am very happy to recommend it to the House and look forward to the receiving it at the select committee. Thank you.EUGENIE SAGE (Green): Tēnā koe Mr Assistant Speaker. The Green Party is pleased to support the Land Transfer Bill to go to a select committee. It is quite a technical bill obviously so we will be very interested in submissions. The fact that the bill is the Government’s response to the Law Commission’s very comprehensive 2010 report A New Land Transfer Act and it closely resembles the commission’s draft land tenure bill is reassuring. When the commission did that report its recommendations were aimed at modifying simplifying and consolidating the land transfer legislation because—Chris Bishop: That’s right.EUGENIE SAGE: —as others have noted—thank you Mr Bishop—the Act was passed in 1952 and it has not been updated for nearly 60 years. It obviously has not kept pace with technology as the Act was based around a paper-based manual transfer system for land registration and now land registration is almost entirely electronic. Nor did we see back in the 1950s the same degree of sophistication around mortgagee and mortgage fraud that we are seeing today. So it consolidates existing legislation by repealing the Land Transfer Act 1952 the Land Transfer Amendment Act 1963 and the Land Transfer (Computer Registers and Electronic Lodgment) Amendment Act.This whole system of land registration that we have in New Zealand is the basis for secure title. It is the basis for people being confident when they buy and sell land because it ensures that there is a central public register that describes and records all of the material facts that relate to a particular property. It ensures that title is secure and that people do not have to go behind that title to search out relevant information in relation to that particular area of land. I have got only a very limited understanding of land law and I look forward to getting more understanding if I am on the select committee but the State through our land transfer system guarantees indefeasible title and that means that title cannot be annulled or made void and it protects any registered proprietor against the claims of someone who is claiming ownership of that. It also protects the owner—and it protects sellers too—against any encumbrances or estates or interests that do not appear on the title. So the register is intended to reflect as accurately as possible the true state of title to land so that people do not have to search elsewhere.The State supports the whole Torrens title system by guaranteeing the accuracy of the rights that are registered with the land transfer register. Anyone who is deprived of land or of an interest or estate in land because there has been a mistake in the way title is entered in the land transfer register is entitled to take legal proceedings against the Government to recover damages. So my understanding is that the bill has some new clauses around mortgage fraud and this concept of indefeasible title in order to clarify the powers that the registrar has to correct the register and around compensation if there has been a loss because of the way the land transfer system has operated. Those powers include giving the High Court the discretion to intervene in cases where there might be an obvious injustice and the discretion to correct and adjust the compensation in certain cases. The bill also requires mortgagees to know the identity of mortgagors as they have no entitlement in cases of identity fraud.My understanding too is that the Law Commission consulted quite widely in developing the draft bill that was tabled in Parliament—both publicly and with interested stakeholders. But there are still concerns that the Green Party has around the relationship between the Land Transfer Act and Te Ture Whenua Maori Act which my colleague Marama Davidson will talk about more because there is further work needed there and perhaps a major investigation.As other speakers have noted with the current collapse in dairy prices this bill which deals with changes to the way land transfers occur is going to have a major impact potentially if there is land sold because of the collapse in the dairy payout because of the milk lake that we have got in Europe the signs that the dairy industry changes may be structural rather than just cyclical and the major stress that a lot of farmers are under. Dairy New Zealand has predicted that 85 percent of dairy farmers are unlikely to make a profit this season a recent Federated Farmers poll showed that 11 percent of dairy farmers are now under pressure from their banks over their mortgages and farm consultant Peter Fraser has warned that around 25 percent are vulnerable. We have had the Reserve Bank predicting that up to 44 percent of dairy farm loans in this very heavily indebted industry—where debt totals around $38 billion—are going to be at risk of becoming non-performing.So if you have got that sort of crisis—if banks are putting pressure on farmers and farmers are being pushed to sell—then the likely buyers are obviously overseas owners and that is where there is a major gap in legislation because the Government is just saying that dairy farmers are expected to get through. It has done nothing substantial to tighten the legislation to protect productive New Zealand farmland from being sold and transferred to overseas owners. So we are facing the prospect of a double disaster if the dairying slump continues and flows through to the rest of the economy and if the Government’s very lax laws around overseas land sales mean that huge tracts of productive land are sold offshore.In China Switzerland Canada the USA Argentina Thailand Japan Ireland India and Korea there is much stronger legislation that bans the sale of farmland to non-country owners. If the Government tightened the laws on overseas ownership there would be likely to be a substantial increase in interest in leasing land. Although this bill in itself might seem non-controversial the fact that the Government has failed to prevent the sell-off of farmland to overseas interests and to adequately control that means that the land transfer process will occur more often and that is a major gap in the law that needs to be plugged.The Green Party is supporting this bill’s referral to a select committee but the bill does not address that major problem with overseas ownership of farmland. Thank you.DENIS O’ROURKE (NZ First): Before I heard David Cunliffe I thought this was a non-controversial and non-political bill. Actually I think that it is. I expect it will be supported by all parties and it will certainly be supported by New Zealand First. In fact it is a pleasure to see such an important and comprehensive piece of legislation begin the enactment process.I want to begin by acknowledging the long years of hard work on this bill by the Law Commission and others—in particular the late George Tanner QC of the commission and the late Warren Moyes of the Office of Registrar-General of Land. I think this bill is a fitting tribute to their effort their dedication and their professionalism.New Zealand has long been blessed with an efficient reliable and effective land registration system. It is still based on the Torrens system of title by registration which grants the high indefeasibility of State-registered proprietorship of land and it effectively guarantees title upon registration of a transfer or a transmission. The system was named after Sir Robert Richard Torrens the third Premier of South Australia and became the method adopted within the English law countries almost 100 years ago now. It progressively replaced the deeds system thus providing certainty and simplicity to land transactions by doing away with the need for proving a chain of title by searching through a whole chain of deeds and other documents.Before finishing my law degree as a very young law clerk—just a few years ago now—my job was to search titles. I would fill out things that were called search notes in pencil by searching through huge dusty books of titles which was a horrible job. But if that was bad enough where there was no registered title—and there was still land that was not within the system—you did have to search through the registered deeds that were available. That was very time-consuming not very rewarding and very archaic. However it had to be done.The system has improved and improved and improved over many years but even the current system has had its challenges. I remember appearing in the High Court in a number of cases concerning unclaimed land because of the informal transfers of land and I remember on the West Coast in one particular case a certificate of title was handed to me. It had written on it in pencil a number of memorials like “Last Saturday I sold this land to Joe Bloggs dated so-and-so. Bill Brown.” and there was a whole list of memorials like that. It had never been registered and nothing formal had ever been done but we found a way of getting around all that and rectifying the title with the cooperation of some very practically minded judges. I recall in particular the late Justice Roper who I thought had a particularly good and practical system of dealing with those sorts of situations.However the system basically worked very well and by the time I surrendered my practising certificate and gave up practice in 2002 the system had been computerised and was online. So over all those years it really travelled a long way.The Torrens system itself works on three fundamental principles. One is called the mirror principle which reflects accurately and completely the current facts about each title by way of a certified memorial on the face of the title document itself whether it be a transfer a transmission a mortgage or a discharge of a mortgage a lease an easement a registerable covenant or whatever. The second is the curtain principle. There is no need to go behind the certificate of title. Everything you need to know and everything affecting that title is recorded on the face of it. Thirdly and lastly is the indemnity principle: providing State compensation for loss caused by private fraud or by errors made by the registrar that causes a loss by the person who is claiming the title to the land.That stood the system well over many years and all of it was in the Land Transfer Act 1952 as amended in 1963 and later in 2002. By that time of course it had moved away from the paper system in favour of the current electronic one. But the old legislation is not well structured for that electronic system and so this bill is welcome because it modernises the law and brings it up to date with those systems as we now see them. It has great advantages for everybody. Lawyers and conveyancers can search titles and process transactions from their own offices—therefore costs are lower—survey information is better integrated and security is improved.The two main changes that I see incorporated in this bill are first of all judicial discretion to alter a title in cases of manifest injustice—that has always been needed. It is really good to see that finally arriving. And another one which has been long coming and is very welcome is the provision to avoid mortgage fraud by requiring a mortgagee or their lawyer or agent to verify the identity of the mortgagor thus ensuring that the mortgagor does in fact have the legal authority to mortgage the land. That has always been a serious flaw in the system and it is good to see that hole being plugged.State guarantee is preserved in the bill and compensation is still payable. Where for example loss occurs from a guaranteed search compensation is—as has always been the case—payable but now for a shorter period. That just reflects the speedier transaction processing now available and it is quite appropriate. Also land value will now be as at the date of the claim rather than as at the date of the loss because that was always not easy to fix. It also allows for consideration of improvements post-loss so that is another welcome change. Another one is to reduce compensation where there is some fault attributable to the claimant’s lawyer or conveyancer. That is very appropriate.There are many other changes to the bill which are far too numerous to mention here but I am glad to see that there is now a definition of “fraud” better protection of legal administrators from personal liability better ways of recording easements in gross and better control over the way statutory land charges are administered because they were always a bit of a mess—just to name a few. So the bill really takes some important leaps forward I believe and is a very welcome piece of legislation as I have said.Another thing that it does is make the land register subject to the Privacy Act and its principles thus permitting personal information to be protected in appropriate circumstances. I am glad to see that as well. And of course since last year tax statements have been required—and that is incorporated in the new legislation—as a prerequisite to the registration of a transaction. That clears the way for something that New Zealand First has wanted for a long time—that is control over who can actually own land. This is very important to New Zealand First because we want to put a stop to the sale of productive land and existing houses to overseas citizens—Hon David Cunliffe: Hear hear!DENIS O’ROURKE:—not resident in New Zealand. And I am glad to see that the Labour Party has caught up with that policy and adopted it as well and we are glad to provide a policy-making service to the Labour Party and other parties in that way. So it is good to see that happen.But overall this is a welcome piece of legislation and I look forward to studying it in a lot more detail as it progresses through the House. New Zealand First will be voting in favour.BRETT HUDSON (National): It is a pleasure to rise in support of the Land Transfer Bill. I see the member for New Lynn David Cunliffe over there. I just want to reassure him. He has been in this House I believe for about 17 years—since 1999—and the good folk of New Lynn might be somewhat surprised today to see that despite those many years of service here it appears that he could not comprehend that this particular bill does not actually amend the Overseas Investment Act and therefore has absolutely no bearing on the ease or difficulty foreign buyers have in actually buying some land. I would suggest for the benefit of that member and in fact for the benefit of his constituents that he might find that comprehension would be aided if he were to remove his tinfoil hat when reading bills.It is quite topical for me this particular bill. This is a first reading; it is going to take some time for this bill to make its way through this House. But as it so happens this Friday my partner and I will settle on two houses. We will settle a sales transaction on our current house and we will settle the purchase of a new house in Khandallah. And if I may Khandallah translates as “the resting place of God”. Let me assure you that the suburb of Khandallah is indeed a slice of paradise in Godzone. Of course you could actually use that to describe any part of the Ōhāriu electorate the very best electorate across all of the country.So this Friday we will settle on two transactions. But we are not alone because this chain as it is for many New Zealanders buying property is a chain of at least four transactions—four that we know of. Each one of those is a potential area of some uncertainty or error—we do not and would not suspect any fraud—in a law that today I think we would all agree we would describe as archaic and very complex and incredibly difficult for lay people to navigate. Therefore we would perhaps suggest there is the potential for some uncertainty in an area that is still likely to be the largest investment that most Kiwis will ever make and in terms of property rights it is something that underpins not only economic growth but also just confidence in our economy and in the rule of law in New Zealand.As I say we do not anticipate any issues in the settlement chain for us this Friday but I think by its very definition you would say that for any property settlement that goes awry particularly if it were to be due to fraud. So I am very pleased—in fact I applaud the changes we see in this bill to help to provide some greater restitution for people who might suffer a manifest injustice particularly due to the fraudulent activities of others. I commend this bill to the House. I look forward to its successful passage through the House.The ASSISTANT SPEAKER (Lindsay Tisch): The next call is a split call. Marama Davidson—5 minutes.MARAMA DAVIDSON (Green): Tēnā koe. Huri noa i Te Whare tēnā koutou katoa. I am going to stand to support all that my colleague Eugenie Sage has pointed out in this the first reading of the Land Transfer Bill. As she said the Green Party will be supporting this bill to the select committee and we look forward to what comes out of the select committee consideration so we can further ascertain what we can celebrate or what we may be concerned about in this bill.I am going to particularly outline some of the Treaty of Waitangi considerations with my Māori affairs portfolio hat on. So just to quickly summarise in 2010 the Law Commission gave some recommendations around a new piece of land transfer legislation and the bill implements those recommendations. And as people have said the driver is to streamline land transfer law so that it is up to date so that it is simpler for all of us—for ordinary New Zealanders and all alike—to be able to handle these land transactions. It does away with three other land transfer statutes and puts them all together so that we have got this one collection of land transfer legislation.The whakapapa—or the background to this bill; the driver coming into play—appears to be that the current legislation is rather old and raggedy. It needs a bit of a spruce up it needs a bit of a dust off and it just has not kept pace with technology. So this bill has possibly been a long time coming and on the face of it then this Land Transfer Bill seems like good governance. It seems like a good way to overview and review our legislation and make sure that we are keeping up to pace again for ordinary New Zealanders to make such an important transfer—one of the most important in our ordinary lives.So I come now to what if any Te Tiriti o Waitangi considerations with the Land Transfer Bill are. I too like my colleague have a limited understanding of land law. However Māori collectively have extensive experience—firsthand lived and generational experience—of land transfer. Not just of Māori land—I will acknowledge that Māori do not just own or manage Māori land. We also purchase private land that will of course obviously come under the normal part of this legislation.But I am interested in looking at how this may impact particularly on Māori land including Māori freehold land and Māori customary land. It appears that—and the Law Commission itself reports it—this bill does not make substantial changes to the current law governing Māori land. But the Law Commission does go on to say that there are—well we need to understand a little bit more. Land law on its own is complex and profound and so there is actually a little bit more information that we need—for example the issues surrounding the relationship between the Land Transfer Act and Te Ture Whenua Maori Act. Those two pieces of legislation on their own are huge and complex; we need to look at the interface between the two of them and get a good grip on what is actually happening.So I agree with the Law Commission that this does need further investigation and that is just also good governance. Keeping an eye on and keeping a monitor on how these pieces of legislation how these statutes that we put before the House impact on other statutes is always a good idea—it is a good idea for the Government. So the bill apparently does contain some changes that will impact on the treatment of Māori land.I wanted to have a go at this indefeasibility concept for listeners like my mother who is wise intelligent and deeply clever but is not a land lawyer. So we are looking at indefeasibility as a core concept of the land transfer system. It protects registered owners against competing owners—that can only be a good thing on the face of it also and particularly for those people interested who are not registered.I just wanted to say that there are some principles of land law that seem to be protected in this bill. I am interested in looking at how it interplays with Māori land law legislation. We are happy to support the bill to the select committee. Kia ora.The ASSISTANT SPEAKER (Lindsay Tisch): The Hon David Parker—5 minutes.Hon DAVID PARKER (Labour): I rise with some pleasure to support this bill. I think our Land Transfer Act is one of the most important pieces of legislation on our books. It ensures that people who buy a bit of land or take a mortgage over it can effectively get an indefeasible title without going back and looking at transactions that may go back over the prior hundred years. And if once they get a transfer in their name they have done what is called a guaranteed search prior to the date of their purchase even if the person they have purchased from had obtained their interest by fraud so long as the purchaser had no knowledge of that earlier fraud the purchaser gets clean title and the person who may have been defrauded out of their earlier interest in land actually has only a right of compensation rather than being able to knock over the title of the person who purchased it—that is assuming that the purchaser was without knowledge of that fraud. I mean that is long established. I think the leading case is Frazer v Walker which goes back to the 1960s Privy Council case that involved the venerable Justice Denning.In any event this is really housekeeping legislation. It should not be changing the law in any fundamental way. It may I understand from the description of the bill be changing some of the compensation provisions where the person who is seeking compensation may have an unmeritorious claim because they had some part in wrongdoing but other than that my understanding is that it just carries forward the existing law. It does not introduce electronic transactions—that has already been done—it just incorporates the amendment Act that currently allows computer registration and electronic lodgment into the body of this rewritten Act.I want to deal with a couple of issues that were raised by others in terms of the impending sort of calamity that we have in the dairy sector. Some of those people sadly are going to eventually be selling up at a mortgagee sale.Those rights are exercised under mortgages under the Property Law Act but the registration of those instruments is under the Land Transfer Act and I think it is proper to record two things. Firstly there is the current Government’s misallocation of capital which is protecting the dairy sector from the true cost of what it does including the cost of increasing emissions—not baseline emissions but increasing emissions—and preventing dairy farmers from facing a cost for their water and it is also giving them a tax advantage for certain asset classes where they can make speculative gains with no tax consequences. Those things together with the Government talking up the prospects of dairy and subsidising irrigation schemes all increased the price of property and encouraged the boom which has now turned into a bust. This Government just like Muldoon in prior years has caused massive misallocation of capital with billions of dollars of additional debt in this sector and the Government is partly responsible for that outcome.What will the response be now? Well the response will be to try to keep up land prices by enabling some of the sales by those farmers in distress to be made to overseas buyers. The Government says: “Oh well when Labour was in Government it sold vast tracts of land.” Actually the major transaction that those members referred to was the purchase by Graeme Hart of the Carter Holt Harvey farms and the onsale on that day to another overseas shareholder—so it went from a United States shareholder to Graeme Hart and then to a United States shareholder on the same day.In any event Labour changed its position. I was the Minister for Land Information in respect of that transaction but I was also one of those who was supportive of us changing our position because I became concerned that in this globalised world there are some assets that ought not be traded at an international market price; they ought to be traded at a New Zealand market price. There is something special about land. Land should be priced according to the ability of New Zealanders to buy land not some rich “1 percenter” from overseas who can pay more for either a house or a farm in New Zealand than a New Zealand purchaser can afford to pay.That is essentially the underlying reason why Labour has changed its position and said we should ban the sale of farms to overseas buyers. Buying our land is a privilege that should be reserved for New Zealanders not offered to overseas people.This is a good piece of legislation. There are some really important details to check through. I think the select committee should take as much time as it needs to deal with any controversies that come up through the submission process and I look forward to its report back to the House.BARBARA KURIGER (National—Taranaki - King Country): It is a pleasure to take a call on the Land Transfer Bill’s first reading. I really do want to note that the last speaker David Parker spoke of it being clearly housekeeping law which is really quite contradictory to some of the conspiracy theories that we have heard earlier in the day from members of his own party. It seems to me like they are using a very simple piece of process legislation to try to beat up on the Government around the dairy industry. The words that I did just hear from the previous speaker about the dairy industry being bust—well actually the dairy industry is having a hard time but it is definitely not bust.In terms of this bill let us not try to make a crisis out of process. There are three pieces of legislation the Land Transfer Act 1952 the Land Transfer Amendment Act 1963 and then a very long-named one the Land Transfer (Computer Registers and Electronic Lodgement) Amendment Act 2002. This bill is bringing them all together and it is trying to actually make something quite simple out of three pieces of legislation that are currently difficult to tie together.The Land Transfer Act is over 60 years old and some provisions as others have said date back over 100 years. Much of the language is archaic it is complex and it is difficult to understand. It is focused on paper-based transactions and we all know that we are not using paper for many things any more—although the paperless office seems to be more of a dream than a reality for many people. But it is at odds with modern reality and the legislative framework is really difficult to navigate for property owners. It is really important that they are able to navigate it in a very simple way so I really support that this piece of legislation is going to help do that.It is important in this piece of legislation also that limited judicial discretion has been included. In the current legislation an owner who is an innocent victim of third-party fraud can lose their home to a registered purchaser. So if an outcome—under the new planned legislation—would be manifestly unjust the court would have the power to order ownership to be restored to the previous registered owner. Another measure aimed at improving security of property rights and addressing mortgage fraud is the new requirement for financial institutions to take reasonable steps to verify the identity of customers taking out mortgages. It is really hard to believe that this currently does not happen or is not a legal requirement—I guess it happens most of the time but legally it should be happening and that is absolutely the right way to go.I would like to note that at this point no stakeholder groups in the process of bringing this piece of legislation to the House have opposed it. Land Information New Zealand has extensively consulted the New Zealand Law Society the Auckland District Law Society the New Zealand Bankers’ Association and the Financial Services Federation and they have all supported bringing this good piece of legislation to the House. Thank you.Hon NANAIA MAHUTA (Labour—Hauraki-Waikato): I stand to raise a couple of points and understanding the comments made by my colleagues want to highlight to the House that Te Ture Whenua Maori Act a significant piece of land legislation is also in the process of draft iterations yet to be introduced to the House. It is really for that very matter that I think it is important to draw the attention of the House to the potential interlocking impact of the Land Transfer Bill on Te Ture Whenua Maori Act reform in ways that may have unintended consequences or just because of the timing and the sequencing have not been lined up as well as they could. In fact my colleague Meka Whaitiri would be the very person to stand in this House and comment on this bill but here are a few things that I have captured from her concerns around Te Ture Whenua Maori Act reform that I would like to draw the attention of the House to.Firstly there is no other bit of legislation in relation to land transfer that is more important to Māori than Te Ture Whenua Maori Act. The consultations that have taken place have been extensive—yes they have. However they have continued to raise concerns amongst Māori landowners—actually small family landowners—about the extent to which that legislation assures protection of their interests in land. When we are talking about land transfer in a very practical sense for a number of Māori landowners one of the practical problems that they have is unlocking landlocked land. If for example paper roads—Māori roads unformed legal roads—are not registered on their land people have to go through a whole rigmarole to go to Land Information New Zealand to be able to investigate whether or not that is the case. If it is not recorded on the title then they have to go through the Māori Land Court. This is one simple problem that relates to the Land Transfer Bill and I think in terms of good conscience and due diligence of the select committee to consider fully the impact of going towards new legislation—and I understand all the reasons why you might want to do that—this type of issue needs to be looked at.I raised earlier the issue of interlocking legislation. Take for example the provisions of the Rating Valuations Act 1998. Section 5B specifically relates to Māori land and the Land Transfer Act 1952. I think that the select committee should consider the extent to which the Rating Valuations Act as it refers to Māori land is or is not accommodating in taking forward the specific provisions of that Act with this piece of legislation. Take also a practical situation where a number of reserve lands which were gifted by Māori a very long time ago are administered by local government and whether or not those protections and those registrations on title will carry forward. I raise that again to implore the conscience of the select committee to have a look at these types of issues to give the assurance that if it is housekeeping legislation if it is a tidy-up then nothing is lost and there are no unintended consequences in terms of taking these matters forward but also providing the types of protections over Māori land and the registrations on the title that should be there.There is another area of interest: there are Ngā Whenua Rāhui kawenata that are deemed to be an interest in land but not necessarily recorded on the title of those particular lands. It seems to me that again if you take a surface read of this bill that type of history of land gifted for a specific purpose with a specific intent—the history of that could be lost if it is not recorded on the title in the way that the bill requires that it should be.I have commented—and I am sure my colleague Meka Whaitiri would want me to make the very important point—around lands that have been taken under the Public Works Act. This is not a new issue for Parliament; there have been all types of arguments that have been brought to the attention of members of this House around the significant challenges of addressing this fully. It is not just a matter for this Land Transfer Bill; it relates to other bits of legislation: the Local Government Act Te Ture Whenua Maori Act and the like. But I did want to make mention of the Public Works Act and the potential impact of losing the historic nature of how land was acquired under this piece of legislation. If I have got that wrong I am happy to have got that point wrong but I think it does require at least a question in the select committee to pursue that because it would be in the interests of members across the House—because this is not just a Māori issue—to satisfy themselves again that there are no unintended consequences of rewriting this legislation.In fact the provisions that relate to land over 100 years ago and again I am summarising—in short it seems to me that there is the potential that land with a 100-year-long history perhaps may not have the full registration of interests on its title. If that is the case it does cover the very issues that go to the heart of Treaty settlements. I think in some practical way as Labour has put the date for settling historical claims at 2020 if it was the case that all historical claims were settled at a point in time one might consider that these types of issues would not be a matter because they would all be resolved under the Treaty settlement process. But again due diligence of the select committee I think should just pursue with a little bit of effort whether or not this is a problematic issue that has been created—albeit an unintended consequence.Members on our side of the House have raised a number of issues around land transfer and having surety of ownership in purchasing land but I really want to focus the substance of my contribution on how Māori interests in land are being dealt with under Te Ture Whenua Maori Act. There remain outstanding issues that are of utmost concern. I am really really worried about the nature of the legislation being proposed in Te Ture Whenua Maori Act reform coming to the House. I really want to register that that Act and this bill to a degree go hand in hand a point that was made by my colleague Marama Davidson. I implore the select committee to just pull through some of the key concerns ask the questions and pursue the matters that are going to give greatest assurance that in tidying up three Acts in this Land Transfer Bill you are not creating unintended consequences that create greater grievances in the House and less surety for people who want to purchase land. Kia ora.CHRIS BISHOP (National): It is a pleasure to take a call on this bill. I just want to contrast two of the speeches we heard in the debate on the bill. The two speeches I want to contrast are David Cunliffe’s and David Parker’s. Mr Cunliffe’s speech was quite an extraordinary contribution to the debate on this bill and it actually continues a long line of his speeches on a lot of bills that come before the House which is to really put on the old tinfoil hat and see conspiracy theories when they are not there. Somehow on this very technical—very important but very technical—piece of legislation he seemed to imagine all sorts of theories about foreign investment and about the dairy industry.Then we had David Parker’s speech which was a sober and serious and important contribution to the debate particularly the front half—I did not necessarily agree with the back half of the speech but it was a pretty good speech. I just want to say to the House that that was an interesting contrast.I was not at university someone who enjoyed property law. I have got to say at Victoria University across the road I enjoyed the lectures by Professor Richard Boast. I enjoyed learning about the history of the Torrens title system—and we heard a lovely exposition from the New Zealand First member Denis O’Rourke earlier who I did not know was a lawyer actually but that was an interesting thing for the House. We heard a very interesting exposition from Mr O’Rourke about the history of the Torrens title system and it is fascinating.I particularly enjoyed the lectures from Professor Boast on some of the history of Māori land law and we have just heard from the Hon Nanaia Mahuta about some of the past wrongs and some of the implications for Māori under this Act. Very very interesting—but I was not someone who was particularly interested in the technicalities of property law the indefeasibility and the way in which the Torrens title system works.But I think that the take-home point from those lectures—and this is my final point—is that the land transfer system we have in New Zealand is world class it is world leading and it is extremely important. Not a day would go by when thousands of New Zealanders around the country would not use the Land Transfer Act and the systems contained within it that have been built up over time. It is extremely important—and this point has been made by a number of speakers—to the operation of our functioning market economy based on property rights and it is absolutely very important that we get it right.I do not think I will be on the select committee considering this bill but I know that my colleagues led by Sarah Dowie and the rest of her team will be doing a good job of considering this bill in great detail. With those brief remarks I commend this bill to the House.Bill read a first time.Bill referred to the Government Administration Committee.Substance Addiction (Compulsory Assessment and Treatment) BillFirst ReadingHon PETER DUNNE (Associate Minister of Health): I move That the Substance Addiction (Compulsory Assessment and Treatment) Bill be now read a first time. I nominate the Health Committee to consider the bill. This bill will repeal and replace the Alcoholism and Drug Addiction Act 1966. Repeal of that outdated 1966 Act is one of the actions in the Government’s Methamphetamine Action Plan and it is a long-overdue reform of the law for severely addicted people. The bill represents a significant step forward in the management of people who because of the severity of their addiction and their lack of capacity to engage in treatment are at significant risk of deteriorating health and premature death.New Zealand has allowed for compulsory residential treatment of people with addictions for over a century—The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable Minister. The time has come for me to leave the Chair for the dinner break.Sitting suspended from 6 p.m. to 7.30 p.m.Hon PETER DUNNE: When the House adjourned for dinner I was on the point of saying that New Zealand has had a compulsory residential treatment programme for people with addictions for over a century. But we have moved on from incarceration and isolation as the best way of treating people with substance abuse problems to understanding that they do better now when they receive their treatment close to their homes and families.The old 1966 Alcoholism and Drug Addiction Act which this bill replaces is infrequently used today. It is poorly understood both within the addictions treatment sector and amongst the judiciary. It fails to protect the rights of people who are subject to committal and difficulties in making applications under the Act cause significant distress for families and whānau who try to use it and consequently they do not use it. The purpose of this bill is intended to enable people with a severe substance addiction and severely impaired capacity to decide on the treatment for that addiction to be committed to a place where their addiction can be assessed and they can have the opportunity to begin to engage in treatment. The purpose of compulsory treatment is to protect those individuals from harm and to stabilise their health. It is also to protect and enhance their mana and their dignity that has been robbed from them by the addiction and to restore their capacity to make informed decisions about further treatment and substance use.Let me be quite clear that this bill is not intended to deal with unwise substance use or abuse. This bill is not a means of social control. What it does is provide only for the most vulnerable people who are at the most severe end of the substance abuse spectrum. Compulsory assessment and treatment should be only for those for whom there is no other option. It should not be the first choice nor should it be used for people who will not benefit from treatment.We all know addiction is a complex condition. It is not defined by ethnicity or social class and it is not a matter of willpower. People who need specialist addiction treatment services are often extremely vulnerable estranged from family and friends and facing significant barriers to recovery. Some people are reluctant to engage in treatment or care and are ambivalent about it and there is still significant social stigma about substance addiction. We are talking about a small number of people almost all of whom will be well known to addiction treatment services emergency departments and the justice sector over a number of years. As I say the bill is not designed to cure people of their addictions but it does provide a mechanism by which they can be brought to a point where they can begin to engage in longer-term treatment.The sad reality is that addiction is a chronic relapsing illness and some people will relapse irrespective of treatment. For others compulsory treatment will not be effective in tackling their addiction. But the evidence does show that the longer a person chooses to remain connected to treatment the better his or her chances of recovery. That is why the bill is designed to support people with severe addictions to engage in voluntary treatment once they are no longer subject to compulsion. A significant improvement will be the requirement for a continuing care plan when someone returns to the community. They just cannot be left to their own devices and their families are going to need ongoing support.The bill does not allow for the courts to sentence people to a period of compulsory treatment. This bill is a matter of civil law not criminal law. There are existing mechanisms that enable people whose offences are related to their use of alcohol or other drugs to be directed by the courts to undergo treatment.In developing the principles that underlie this bill the Law Commission considered whether there was a role for compulsory treatment. The fact that some people need treatment and are reluctant to engage with addiction treatment services is not actually of itself an argument for compulsion. Coercion or compulsion can bring people into treatment but it cannot ensure or require that they actively participate and engage in that treatment over the longer term. For this reason the bill is intended to bring people into treatment for a period that enables medical oversight particularly while that person is withdrawing from alcohol or other drugs and supports them to voluntarily engage with services. There is a clear and a rational connection between interventions such as medical detoxification and the objective for protecting a person from serious harm by restoring his or her capacity to make decisions about treatment and continued substance use.Proportionality requires that the limits imposed on a person’s right to refuse treatment go no further than necessary. That means that the benefits of those limits must outweigh the harm arising from the infringement of their rights because for most people who are dependent on alcohol and drugs the acute risks of harm tend to be short-lived. Only a relatively short period of compulsion can be justified and most people with a substance abuse disorder do not require compulsory treatment. Some will attend treatment voluntarily or as a result of informal coercion from family or friends or a more formal coercion perhaps as a condition of employment. Others will be compelled to attend treatment by the criminal justice system. It may well be a part of their sentence.Some people will refuse treatment but compulsory treatment would not be appropriate for them because they have the capacity to make that decision for themselves. In that instance it will be the responsibility of the addiction treatment services to work with people and their families and whānau to motivate them to engage in treatment and to support them to remain sober. This means that services developed will need to be accessible acceptable and responsive to a range of needs and cultures. As I said a small group will always refuse treatment but will not benefit from compulsory treatment because they have reached a point in their illness where alcohol and drug treatment of whatever type can no longer help them. As I previously noted people with severe substance addiction are often people who are highly vulnerable.Those who receive compulsory treatment must have their rights to that treatment balanced with the specific protection of certain other rights including the right to seek legal advice to receive and send mail including emails and to have the company of others. The bill is explicit as to how it intends to protect individuals’ rights. Furthermore it provides for district inspectors to ensure that the rights of patients are protected and that breaches of rights are investigated. The use of district inspectors has a long history in mental health legislation and it has proven to be an effective means of safeguarding the rights of people who are subject to compulsory treatment.Finally this bill is designed to fit within the range of addiction treatment services. I am aware that a number of those services will need to make some changes to enable the legislation to be used effectively. Planning for the implementation of those new services has already begun and will continue to develop as the process unfolds. As I say there will be those who object to any form of compulsory treatment and I understand that is an issue that will inevitably engender polarised positions but I am satisfied that this bill has been through a very comprehensive consultation and development process spanning some years now but the select committee process will also see a variety of complementary and opposing positions raised. That is how it should be. That is why we have select committees. I have every confidence in the Health Committee to guide this bill through to its second reading with the interests of our most vulnerable people very much to the fore.As I said the bill has been a long time in the development it replaces a piece of legislation that is very elderly and it gives me huge pleasure today to be bringing this bill to the House and to speak to what I think is a particularly important piece of health legislation. With pride I commend this bill to the House.Dr DAVID CLARK (Labour—Dunedin North): I rise to announce the Labour Party’s support for this bill at least through to the select committee. It is very nice to be able to support a Government bill in the health area. We are painfully aware of the effects of the $1.7 billion in cuts to the health sector by this Government. I guess perhaps we should note that this bill comes from the Hon Peter Dunne who is a member of a minor party in the Government rather than the major party which seems to be increasingly out of touch with ordinary New Zealand and the aspirations of ordinary New Zealand which include being able to go to the doctor and being able to have affordable and accessible quality medical care and that goes for the vulnerable of course as well as everyone else. So Labour will support this first reading to update the Alcoholism and Drug Addiction Act 1966. It is 50 years—Hon Peter Dunne: It’s to replace it not update it.Dr DAVID CLARK: Replace it—my apologies. The Minister is correct. It is to replace it. The Act is 50 years old. It is time for it to be replaced. It is not in line with modern clinical practice and delivery. So it is good to see the recommendations of the Law Commission being picked up and finally being put into legislation.Under the current 50-year-old legislation two medical certificates are required to make an application to the court for compulsory treatment and neither has to come from a specialist drug or alcohol practitioner. Therefore we on this side of the House support the idea that it will be a requirement that compulsory treatment can start only via an approved list of specialists when the criteria for compulsory treatment are met. It seems a sensible step.There are of course risks that go with the change and we must safeguard the rights of patients undergoing compulsory treatment. There is a risk that these new measures will be taken up in greater number because it is seen to be more relevant or shorter term or for whatever reason—these are the debates as the Minister points out that we will have in the select committee—and there is a risk that in that process with more people going through the system the safeguards will not be observed in the way that they might be. But I think these are risks worth taking because it is time to update this legislation and there is no doubt about that. But we just must find the balance so that patients have the same rights as those held under existing mental health legislation.Having a shorter time period—8 weeks with the option of extension with the goal of moving an individual into voluntary treatment—seems a far more progressive approach to treating severe substance abuse where patients are unable to make a treatment decision. It is a transition and ultimately we want the patient in so far as they are able to take responsibility as a part of their own care and rehabilitation back to the state they would like to be in. The statutory period for treatment under the current legislation is 2 years which far exceeds the time frame needed for treatment in many cases.The regulatory impact statement indicates a best guess of 200 orders per year being the result of this legislation as opposed to the 70 orders that are currently the case. On this side of the House we want to raise questions about whether that will be adequately funded. The regulatory impact statement makes the claim that there will be net economic benefits and there is a study quoted an American study that says—and this is from the regulatory impact statement provided by the Government—that “It is estimated that for every dollar spent on addiction treatment programmes there is a $4 to $7 reduction in the cost associated with drug-related crimes. With some non-residential programmes total savings can exceed costs by a ratio of 12:1.” We must take that of course with a grain of salt. It is coming from the USA and it is not looking at the New Zealand context. The results may vary as the saying goes. But there is a clear indication that there is likely to be a net benefit from looking after those with addictions and looking after the mental health issues that go with them. That of course is something that I suspect will be accepted around this House.The question comes as to how it will be funded. It is a net benefit to the economy but that does not mean that it does not come with an accompanying cost in the health system. We are told in the papers produced by the Government that there has been $775000 given to the health sector for implementing similar legislation annually and that that should cover the cost of this increase. I guess the jury is out on that and we will invite submissions to the select committee about whether that will realistically cover the costs in the sector which is already stretched—hugely stretched.Members of this House will have people coming to see them in their electorate offices to describe some of the unfortunate consequences of having a stretched health system in the area of mental health and addictions. I am sure all members of this House have had people come to speak with them about those issues many of which end in very tragic circumstances. It is incumbent I believe upon this House to ensure that these kinds of changes are properly resourced so that the intent of looking after the vulnerable is realised rather than platitudes merely being mouthed in this House.We have got plenty of evidence that the health system is squeezed. There are 20 district health boards that have sent 160000 people to their GP without specialist appointments since 2010. There is a constant flow of information about the implications of having an underfunded health sector and with that figure of $1.7 billion in underfunding it is little wonder that those areas where people are more vulnerable are the ones that tend to get squeezed first. The Labour Party has discovered through Official Information Act inquiries that this financial year a further $163 million worth of cuts are being enforced across 17 district health boards and of course that all flows through. That number dwarfs the $775000 that is claimed to fund this particular activity as is listed in the regulatory impact statement.So we have got a health sector that is being squeezed by this Government and that is having negative consequences for the public of New Zealand who are recognising that they cannot access the health care that they would expect to in a prosperous nation. We have seen things like the drug Keytruda erupting into public debate and I think that that is a symbol of a wider concern that New Zealand cannot afford medications that are funded in the UK in Australia and elsewhere because it seems the current Government does not place the same priority on health care that a Labour Government would.We on this side of the House in the Labour Party believe that the public health system must ensure essential health-care services are provided free for all New Zealanders and we believe that that health system is currently under threat. The health system is no longer able to provide Kiwis with high-quality safe patient care where and when it is needed in every case and that is a sad situation to be in. So I come back to the point that the promises in this legislation will need appropriate resourcing in order to be realised.There are other points in the regulatory impact statement that warrant highlighting in the first reading of this bill. There is very little international evidence on the effectiveness of civil compulsory substance addiction treatment in achieving good long-term outcomes for individuals. One might hope that shortening the period of compulsory treatment might go some way towards addressing that and if a modern progressive approach is used—where the buy-in of the patient comes earlier in the piece—perhaps new evidence will emerge that that is a more successful approach. But we must acknowledge that the evidence around compulsory substance addiction treatment is thin and that is acknowledged indeed by the Government in its regulatory impact statement.We must also recognise that there is little data in New Zealand on the number of people in New Zealand who have a severe substance addiction and who may meet the proposed threshold for compulsory treatment so we just do not know how many people this will apply to. The estimate of 200 that the Government has brought to the table is a guess—it really is a guess—and the estimate of funding that will be supporting it is based upon the funding that it believes will be necessary to support a guess. The number of people who qualify for this or who may fall under the legislation may be a far greater number particularly in this day and age when we are observing growing inequalities in society which have been very clearly linked through the literature to an increase in mental health concerns within a society.So we have got a case where we have a New Zealand that is not as it should be where we have financial pressures growing on far too many and where the 1 percent are charging ahead under a Government that looks out for their interests—a Government that is increasingly out of touch with the lot of ordinary New Zealanders—and therefore we have a growing number of people presenting with mental health issues. You just need to go and speak with the police. A significant proportion of the police’s work these days is concerned with mental health cases. That happens increasingly in a society where there is that gap between the very very wealthy—the ultra-wealthy—and the rest of the country and where that gap between the richest and the poorest grows ever more.So let us bear that in mind when we look at the estimates of the cost and the support that has been given to the district health boards to implement this legislation. That is where our concern will lie with this legislation—that the resources simply are not there. District health boards are being asked to make over $163 million in cuts across 17 district health boards this financial year alone. In that circumstance it is very hard to imagine just how they will afford to put this kind of legislation in place effectively in the spirit in which it is intended.More than half of the district health boards in the country are running deficits at present. Indications from Treasury are that cost pressures demographic changes and an ageing population will require even more significant changes to the health system over the coming years. This Government does not seem to have a plan for our health system. This is one piece of legislation though that we can support because it modernises something and is in line with the recommendations of the Law Commission which seem very very sensible.SIMON O’CONNOR (National—Tāmaki): I am very pleased to take a call on this first reading of the Substance Addiction (Compulsory Assessment and Treatment) Bill. I want to thank the Associate Minister for introducing it into the House. I think it is just another example of this Government’s good work in this space and there is a lot of work going on. This basically fits in a broader context with the Government’s Methamphetamine Action Plan amongst other things in basically working in the space of mental health and with a particular focus on youth. I think also it touches on some of the wider areas that the Minister himself is leading around work-drug control. So again thanks to the Minister for that.I think the Health Committee is looking forward to taking the bill and to teasing it out. It is quite a complex bill. I would not say “complicated” but it is a complex bill. There are a number of elements to it and probably the two that create the major tension are ultimately the desire to help and serve a particular individual or individuals but importantly to balance that with their rights.I was not pleased—well I was going to say “disappointed”. Actually let us start with the positive. I was pleased to hear that the Labour Party is supporting this bill at the first reading and I am hoping that other parties in the House—New Zealand First and the Greens—will be doing the same so that we can tease this out.I have to say for the record that I became a little bit disappointed but not completely surprised that the particular points of this bill were then taken to basically start a whole lot of predictable clichés attacking the Government in the area of health.Hon Ruth Dyson: What were they again?SIMON O’CONNOR: Well there is no point in actually putting them out again because they are all sort of falsities. And the fact that the Opposition just continues to put them out time and time again—it is that sort of old axiom that if you say it long enough people might believe it. The only problem we have is that when I am in my own electorate and around the country people are actually very grateful for the work that this Government is doing in the health sector and there is nothing like results to prove that.Sue Moroney: How patronising.SIMON O’CONNOR: See here we go again. We have been accused now of being patronising. You see it is just that classic ad hominem emotional attack without any facts going right back—Sue Moroney: Ha ha!SIMON O’CONNOR: And now they are laughing again. It is just so predictable really. I tell you what.Had I studied psychology I could have done multiple theses on these people.Hon Member: Theses?SIMON O’CONNOR: Theses—it is the plural of thesis. Gosh we really do need to do more work on Latin declensions here!We have a very good story to tell in the health space. We have increased the health budget now to $15.9 billion. The health budget is increasing. The attempts to jump through hoops and spin things that there is actually somehow a decrease basically falters very fast in the face of the facts.Hon David Cunliffe: Except for inflation.SIMON O’CONNOR: Here we go. Now we have got a little bit of alliteration thrown in there as well. Importantly in this particular context the funding for mental health has actually gone up from about $1.1 billion to $1.4 billion. Really important and a fact that the Opposition particularly Labour at this point has forgotten is that the whole point of district health boards in the way that they are structured is for them to choose how they want to allocate moneys to support people in their area. I think as a Government we are very supportive of that and we heard that through the district health boards as they came before the select committee. They are making choices all the time on behalf of their communities. So where there may be areas where we need more support in substance addiction I have every confidence that they will do so.I am quite interested in this bill from a personal point of view as well. It goes back a few years but I used to work in an addiction centre a drop-in centre in King’s Cross in Sydney of all places. It was a real eye-opener to understand that addiction particularly around drugs and alcohol is a disease. This is something that all people in many ways do not choose. The devastation that can bring not only to the individual but to the family and the wider community was very clear to me day after day week after week working with these people.One of the things I found working at this centre is how profoundly human those suffering this disease and addiction are. I mention that because it is all very easy to sort of put it outside or to demonise them stigmatise them and so forth. But actually they are human beings like you and me but they have their problems. And we as a society have to choose how to engage appropriately and I would stress proportionately. I think that is what this bill ultimately does.So if someone has an addiction—alcohol is the one that jumps to mind but of course various forms of drugs—how do we respond proportionately as a society to help them? Because by and large they do want help. That has certainly been my experience. A big part of that is to try to work alongside them to bring them to that situation themselves where they can understand what is occurring and to enable the help to be given in a way that enables them to release from the addiction from the disease.In most cases that is voluntary—it is voluntary—and those who understand they have a problem and need assistance will get the best results. But as we heard from the Minister there are a very small number of people in society who will never voluntarily seek help and of fundamental importance their level of addiction their substance addiction is so strong and so high that it is causing them immense harm. Importantly I want to stress again the addiction not only causes them harm but it has been very clear to me over the years from that experience in Sydney or in other places here in New Zealand that it has an immediate and profound impact on the family the whānau and the wider community. This is not something that is ever isolated and therefore we as a community have a duty—I would argue a moral duty—to step in and assist in these rare cases.So again this is not compulsory for all people by any means. It is for a very limited number. If you will excuse me for reading out a couple of my notes here—there are four elements within the purpose of the bill to describe when it is required. Of these four two are needed is my understanding. So the first test if you will is if someone has a neuro-adaptation to the substance. For those who do not know what a neuro-adaptation is basically it is when your body compensates for the presence of that particular chemical or substance and enables you to function quite normally. It is not quite at this level but we often talk about high-functioning alcoholics. They can knock back an incredible amount of booze or others smoke various substances or inject but somehow they are able to keep on functioning and working and you do not know how. That is neuro-adaptation: the body is able to compensate. So if the doctors and clinicians can see that this is at work that is one of the conditions.The other is quite broad of course. It is craving for the substance. That makes a lot of sense. The third one is unsuccessful efforts to control the use of the substance. And the fourth one is the use of the substance despite harmful consequences. It is those last two for me that really typify the point of this bill. If someone is unsuccessful they have tried to treat or have had someone attempt to give them treatment and they refuse it and the continuation of the substance abuse is leading to harm to themselves we as a society need to step in.The bill as outlined provides basically a whole range of steps which the committee will look at further as to how we begin to assist someone. But that brings me back to the first point that this is really balancing two needs: obviously the desire to help a particular person but also to work to protect their rights. From my first look over the bill I think we have got most of that in a very good space but I am looking forward to having it in front of the committee again—I am trusting and hoping—with unanimous support and to tease it out and to bring it back to the House in very good condition. So again thanks to the members and to the Minister.POTO WILLIAMS (Labour—Christchurch East): Tēnā koe Mr Deputy Speaker. Thank you. It is a great opportunity to be able to speak on this bill which as Dr David Clark has said we are supporting to the select committee. The intent of the bill is positive but there are certainly some questions that I as a member of the Health Committee am very keen for the select committee to investigate.There is no denying that when somebody has relinquished their liberty and also when they are provided treatment potentially without their consent there is a fine balance that needs to be struck between their rights as an individual our rights as a community to safety and their rights to not be harmed. It is a balance that we need to get right and there are some questions that need to be answered in my mind before we can actually get to a point where I am comfortable that this is the right way to track down and support people with severe substance addictions.There is no denying that the Alcoholism and Drug Addiction Act is outdated. In 1966 I do not think that many of the substances that are being consumed now or the ways that they are being consumed would have even been heard of. In my earlier days I recall being quite taken aback when people were consuming glue by sniffing. It was called sniffing but these days young people are huffing all manner of substances that were not conceived of in 1966 when the Act first came into effect. Also society has changed in its attitude to the use of some substances so there is no doubt that we need to update the legislation.As I pick up on the point that Dr David Clark made we currently detain about 74 people with severe substance addiction. The estimation is that this will go up to around 200 under this legislation but we do not know for sure and we cannot know for sure until we have tested out several things. One of the things that we need to test out is the assessment on which someone will actually come within the purview of this legislation. If we are talking about the assessment as will be defined within the legislation it will be based on three criteria: the severity of the substance abuse the risk to that individual from significant harm and whether they have refused treatment.Here is where the concept of compulsion comes into the discussion. Anecdotally I know from work that I have done in the past where I have worked with groups who were compelled to attend various sessions—in this regard I am talking about young people who might have been compelled to go to groups held by the Department of Corrections as part of their probation conditions. Anecdotally it is thought that compulsion is a really important part of the compliance to a treatment and the success of the treatment programme. But that is anecdotally and unfortunately it does not appear that we have the evidence that compulsion is a proven pathway to ensuring that someone who is compelled to do a treatment programme is actually successful at getting through that programme and has a successful result.Here I want to add that the experience of mental health consumers in this regard has not been entirely positive. Mental health consumers will want to I am sure contribute and submit to this bill because of their previous experiences. In that regard I am referring to what may have happened in the past around the electroconvulsive therapy which for mental health consumers was something that they were compelled to do and in many instances was very detrimental to their ongoing mental health. So there is a cautionary tale in that. In discussion with organisations such as the Citizens Advice Bureau the treatment will be residential and it will require us to change our way of working with people with addictions due to the provision of wet houses.A wet house is a place where you can safely use a substance until such time that you can wean yourself off that substance because if you have a serious substance addiction you cannot go cold turkey—it is very dangerous to do that. This is a change in the way we would treat people with addictions. In my view it is actually an option that could be open to a whole lot of other people who have substance abuse not just the most at risk of severe harm. It is a method that is used overseas; it is not something that we use here but it is certainly something that the Health Committee could look at as an option for treatment for people with other levels of substance addiction.This bill also tends not to include the co-morbidities that go along with someone who has a serious substance addiction. Here I am talking about mental illness talking about family violence sexual abuse and other social harms. We cannot see this person in isolation—only around their addiction. We have to actually review the whole environment that this person lives within. Neither can we actually then discharge somebody back into an environment that is completely unsafe because that will mean that they are then triggered by whatever is in their environment and we potentially will not get a successful treatment option for that person. I am hoping that the select committeewill be able within the purview of this legislation to ask questions of health officials about what is going to be provided for somebody post-treatment so that they can have a successful reintegration back into the community.I want to refer to the regulatory impact statement. There is a reference to not including the criterion of significant harm to others within the bill. I just want to quote from the regulatory impact statement. It says: “Existing legislation directed at child protection family violence and other criminal behaviour is available to deal with situations where behaviour arising from the substance addiction results in a risk of serious harm of others.” It concerns me that serious harm to others is not part of this legislation.I want to refer to the Mental Health (Compulsory Assessment and Treatment) Act 1992 where serious harm to others is part of that legislation. For me I am concerned that for someone who is under a compulsory treatment order and is mentally unwell there is a component of risk to others within their assessment. However somebody who has a serious substance abuse addiction does not have serious harm to others as part of their assessment. I think we are missing an opportunity here to ensure that things such as children who are in homes where methamphetamine is being manufactured for example are not a significant risk to that child or that young person. It is my belief that the Health Committee should examine this as something that we should include in the legislation.There is much more that I could say but in conclusion I just want to talk about the Code of Health and Disability Consumers’ Rights because there are elements of this legislation that are in breach of this code of rights. The right to freedom from discrimination coercion harassment and exploitation—the coercion aspect of right No. 2 does come into play here. Right No. 6 the right to be fully informed is about when somebody does have a compulsory treatment order imposed upon them and they are not completely informed. Right No. 7 the right to make an informed choice—there is also an aspect of not being fully informed and being able to give your permission. And right No. 10 is the right to complain. I understand the district inspector service will be part of this legislation and hopefully anyone who is ordered to have treatment as part of this legislation actually has the option to complain. On that note I commend the bill to the House. Thank you.BARBARA KURIGER (National—Taranaki - King Country): It is a pleasure to speak on the Substance Addiction (Compulsory Assessment and Treatment) Bill this evening. In doing so I want to mention that we all know that this is replacing a bill that was written in 1966.I would like to make note of the people led by Maurie Zinsli who have recently taken the time to commemorate those who died at Tokanui Hospital. It is a really sad case of people who were in a psychiatric hospital which is 14 kilometres south of Te Awamutu. A lot of those people in those days when we did not understand as much as we do now about mental health issues substance abuse and the like were taken into that hospital. Many of them were buried there.There is a lovely plaque that has just gone up. It has got “Tokanui Hospital Cemetery 1914 - 1964” which is only a couple of years before the piece of legislation that we are replacing was passed. It says: “May the 500 plus people buried here Rest in Peace.” I think it is significant that we remember them because we have learnt a lot. We have made a lot of medical physical progress over the years but in mental health and substance health and those sorts of things it has taken us a very long time.I would like to comment on something that one of the speakers said before. They talked about the difference between rich and poor people but actually this is a disease that does not distinguish. The bill is not designed to say that it happens only in certain economic classes or socio-economic situations; it is something that can happen to anybody. Often it is stress that leads to mental health issues that then leads to substance abuse—whether it be abuse of alcohol whether it be abuse of drugs—and so I think it is really really important that we do look as the previous speaker Poto Williams said at the links between those things because it fits in quite nicely with a lot of the other stuff that we are doing on the Health Committee.The bill is based on extensive work that was undertaken by the Law Commission in 2010. It is a significant step towards managing people who are seriously ill as a result of their addiction to alcohol or other drugs. The bill in its first reading sets out the criteria for compulsory treatment. “Compulsory treatment may only be given to people who have a severe substance addiction and whose capacity for making informed decisions about treatment for that addiction is severely impaired.” It is really something that is not going to be taken lightly and I am sure that in our debate in our select committee we will ensure that that remains the case.The bill sets out the meaning of severe substance addiction and it also sets out that the definition is applicable only if two of four highlighted conditions are part of the process. Before the select committee’s chair talked about neuro-adaptation to the substance. It could be because of “craving for the substance unsuccessful efforts to control the use of the substance and use of the substance despite harmful consequences.” I know that in a lot of these situations although these people would dearly love to break the cycle themselves unfortunately the addiction and the disease are such that they are unable to do so.The bill states that “compulsory treatment is necessary only if voluntary treatment is unlikely to be effective.” Generally we are looking at an 8-week period. If those who have this severe addiction are under 18 years of age participation by the family in decision making is really important. It also states that the “Area Director must assign a responsible clinician to every patient for whom a compulsory treatment certificate has been signed and this must be done as soon as practicable after the Area Director is notified of the patient’s identity.” So we cannot let these things lag. The bill also says that “a compulsory treatment order for children and young persons who are under 17 years of age may be made only if the court is satisfied that appropriate treatment cannot be given pursuant to an order [or other determination] under the Children Young Persons and Their Families Act 1989.”I am looking forward to this piece of legislation coming to the Health Committee. There has been an increasing shift towards more mental health and addiction services being provided in our communities and this aligns with the updated New Zealand Health Strategy draft which emphasises the importance of care closer to home. Thank you and I look forward to this bill coming to our committee.KEVIN HAGUE (Green): For at least the last 30 years the alcohol and other drug treatment sector has been saying with a more or less unanimous voice that the Alcoholism and Drug Addiction Act 1966 has not been fit for purpose and needs to be replaced. So it is certainly with perhaps an overdue sense of welcome that I thank the Minister for his introduction of the bill today.Several other speakers have referred to the Law Commission’s work and I am going to quote from the commission’s report on this matter. It became interested in this topic largely through its very extensive study on controlling and regulating drugs and alcohol in our lives. What the commission said was that one of the most persistent themes from submitters and experts whom it dealt with during that inquiry was the need for robust and effective treatment services which we often lack.One of the things the commission said when it followed up that work by specifically reviewing this Act was this: “One component of any coherent framework for delivering alcohol and drug treatment is the use of compulsion to require people to undertake treatment. Outside of the criminal justice system the only provision for compulsory treatment specifically for dependence can be found in the Alcoholism and Drug Addiction Act 1966. That Act is now outdated and there are difficulties in reconciling the broad powers of detention with the rights and protections in the New Zealand Bill of Rights Act 1990. Over the years some provisions of the Act have also fallen into disuse and the overall framework of the Act has not kept pace with subsequent changes in allied legislation such as the Mental Health (Compulsory Assessment and Treatment) Act. Reform of the Act is long overdue.” Hear hear!The framework in the current Act in fact is in some ways more akin to punishment. It is as if legislators were confused about what they were attempting to do. Just as with other aspects of the legal framework that we use to regulate alcohol and other drugs the Green Party believes that we need to move this framework from one that is based on justice and punishment through to one that is actually health-based. Certainly we welcome the emphasis that is in this bill on harm reduction and we specifically welcome the fact that compulsory treatment will used only if that is in the interests of reducing harm to the person concerned.The framework that is set out in this bill is a very substantial step forward. The current Act is unwieldy and often inappropriate. Even in those circumstances where the current Act actually would be helpful it is so hard to use that it often is not and that is the sign I should think of an Act of Parliament that is no longer fit for purpose. Change to it—or rather as Peter Dunne said not change but the replacement of it—has been supported almost unanimously by the sector.It is also worth noting that it was a recommendation of the National Drug Policy summit in August 2013 which comprised policy makers and treatment providers as well as other stakeholders like the Principals’ Federation and the Police Association. Very many stakeholders in drug policy came together in Wellington and formed a consensus statement about the direction that drug policy should follow. One of its recommendations was that the replacement of this Act was one of the urgent priorities that the Government should undertake.I was reminded as I prepared for this contribution on this bill of a singular day that I spent as the guest of one of the two alcohol and other drug treatment courts that are currently being trialled through the Auckland District Court. Under that approach what is happening is that offenders who are repeatedly in front of the courts for offending that is caused by or related to their alcohol or other drug use are instead offered treatment options under the jurisdiction of the court and I was particularly struck by the very strongly client-centred approach that was being taken by the court. From the judge on down to every other participant in that process the focus seemed to be on providing the best-possible outcomes for that person—reducing their harm and leading them to the best outcomes that were possible.In the afternoon when I saw the offenders appearing before the court seeing the relationship that those offenders had with the court and with everyone concerned I have never—and I have been in many courts over the years—come across such relationships before. They were genuinely therapeutic in nature. Would it not be great if we were able to augment the limited tools that those alcohol and other drug treatment that courts have at their disposal to give them another tool that was useful for them in actually achieving harm reduction for the people they are trying to help? Would that not be great?Some other speakers have raised some concerns about the bill that the select committee will need to take into account and I am particularly mindful of the very thoughtful contribution from Poto Williams. I thought that was an outstanding contribution to this debate. The select committee will need to look at whether the balance has been properly struck between the powers that exist in the bill that are necessarily still coercive and the rights and freedoms that we have determined to be a necessary part of participation in society. As Poto Williams has rightly pointed out there are some examples such as some of the use of electroconvulsive therapy the use of seclusion in some mental health facilities—or the excessive use of seclusion—and the excessive use of restraint where that balance has been struck in the wrong place. Indeed resource constraints as others have referred to can lead to those techniques being more often used and that is something that the select committee is going to be interested in following up I am sure.There is debate about whether compulsory treatment is ever appropriate. There are some who believe that it is not and I am going to be very interested to hear the views of those submitters on the select committee to see whether we have that set right.David Clark is correct to point out that alcohol and other drug treatment services are currently struggling with resourcing. They have falling resourcing in real terms and have increasing need that they need to service. Well actually we will be cutting off our nose to spite our face if we add to the arsenal of treatment services a useful tool but we then actually hamstring those same services by under-resourcing them. We need to properly resource them to maximise the value of this change that this bill would make.Finally I just want to say would it not be great if we actually took the action that was necessary to prevent harm as well as just to reduce it? I look forward to further action by this House in the bill that we are to debate following this bill and in many others to reduce the harm that can be caused by alcohol and other drug use. Thank you.BARBARA STEWART (NZ First): I am very pleased to rise on behalf of New Zealand First to take a call on the Substance Addiction (Compulsory Assessment and Treatment) Bill. New Zealand First is supporting this bill to select committee and we will be most interested to hear submitters’ views on this complex issue.As others have said the current legislation is outdated and did need to be reviewed. We cannot have an Act that is 50 years old as part of the legislative framework. When we have a look at compulsory treatment we know that there are provisions for compulsory treatment already that are followed by the courts but we also know that the process itself is very complicated and very time-consuming. Applications have to go through the District Court hence the provisions are rarely used.I was most interested to read the regulatory impact statement and to read the concerns of the Law Commission. When I read through those concerns I agreed totally with them so that is one area that we are going to be looking at in the select committee. One of the main problems that was identified was that “although two medical certificates are required before a person can be committed there is [absolutely] no requirement that either [of the medical certificates] be issued by a specialist alcohol and drug practitioner following the personal assessment”. That is quite a concern I believe.The Law Commission also said that “the statutory period of detention is two years which far exceeds what is normally necessary to undertake any form of treatment” and there again I can agree with that particular area. It said “the Act makes inadequate provision for review of the detention decision”—so quite a concern there for people’s human rights—and “there are generally insufficient safeguards to protect the rights of people held under the Act”. One of its biggest areas which I thought was most interesting was that “few treatment facilities are actually certified to accept people under the regime and consequently there is little flexibility in the type of … programme available”. Those are big issues that need to be resolved and no doubt we will be spending quite a bit of time on them at the select committee.All of us in this House know that we have got a problem with illicit drugs. In fact we have got one of the highest drug rates in the world. Although we are aware of this we are also aware that there are no real statistics on this very issue. We are operating in an area where we are uncertain of how big the problem actually is. We do not have any idea of the extent of the problem we are dealing with. We do not know how many people are even likely to be affected by this legislation. We all know though that the devastating effect that addiction has on an individual a whānau and the wider community cannot be overestimated. Of course there are all the resulting hassles that result from that: poor health and education outcomes increased crime and the breakdown of relationships and family groups.In his latest report the Director of Mental Health reported that the number of people who accessed specialist mental health and addiction services in 2014 was quite vast because would you believe addiction treatment is not recorded separately from mental health. So really when we get down to it it is very difficult to determine how many people are actually accessing this specialist addiction treatment.We do know that district health boards are struggling to cope with increased and overwhelming demand. So we are concerned on this side of the House that if there is going to be an increase in the use of compulsory treatment provision our current workforce is resourced adequately to cope with that increased demand. We know too that we have got an “ambulance at the bottom of the cliff” approach to this bill and it is often only when one hits the bottom that the compulsory treatment report comes into being. It should only ever be used in extreme emergency situations where there is no other option. We do not want to see the open-door attitude that the United States often has to compulsory treatment. We have heard very bad stories from across in the United States.But we were pleased to see that severe substance addiction is defined as “the compulsive use of a substance that is of such severity that it poses a serious danger to the health or safety of the person suffering from it or seriously diminishes the person’s ability to care for himself …”. We would also like to see the addition of a clause that states that no other treatment options have been considered or that they have all been considered and tried.We all know that compulsory treatment is not the best way to facilitate treatment so how can we encourage those who actually need help to seek it for themselves? It is quite an interesting challenge there because the stigma towards mental health issues and seeking help has to be removed; therefore we need some funding directed towards the situation. We need education as well as treatment and that in itself is a big ask.We are pleased that there are provisions in the bill to inform family members of the person’s status and to notify them of the centre where their family member is receiving treatment as well as any other information but we believe that families should also have the opportunity to have some input into the decision making. It is difficult to see how the bill will be incorporated as part of the Director of Mental Health’s vision for mental health in 2030 for “a holistic family/whānau-focused model of service delivery”.During the select committee’s consideration we are going to be interested in discussing how the rights of the person can be protected and ensuring that the bill does not contravene the UN conventions. We are adamant on this side of the House—New Zealand First in particular—that any benefits of compulsory treatment have to outweigh any potential infringements on the person’s rights. The criteria around compulsory treatment have to be robust.Additionally we have got concerns about the lack of evidence or otherwise of the ability of compulsory addiction treatment to deter future substance abuse—and of course there are no statistics on that. It is critical that the person is actually receiving the best form of treatment—I think other people have actually mentioned this as well.When this bill passes into law—because it inevitably will—it is expected to cost $775000 to implement. We would like to know whether there is going to be new money allocated for this or whether it is expected to be taken from the existing mental health and addiction budget because that is already stretched at this point in time.New Zealand First supports the bill. We are going to be following the issues that I raised very closely. We look forward to hearing from a wide range of people to carefully consider their views and the issues that they have identified as well. Thank you.SCOTT SIMPSON (National—Coromandel): One of the fascinating things that occurs when one becomes a member of Parliament is that you learn things. Members of Parliament have an opportunity to hear information to absorb information and to participate in decision making in a way that others sometimes do not. On the Health Committee we get an opportunity to do that very frequently in areas that are difficult and sometimes contentious. They are areas that sometimes transcend the moral the ethical and the medical. It is judging the fine line and the balance between those competing and sometimes conflicting priorities for individuals and the State that makes decision making difficult and complicated for us as members of Parliament.This piece of legislation is very timely; in fact it is probably well overdue. I have been very impressed with the careful considered contributions of all members across the House this evening in this first reading debate. I think it is an example of Parliament working at its best when we consider these delicate sensitive but important issues as carefully and as well as we have this evening.This bill has its genesis in some very good work that was done by the Law Commission back in 2010. It seeks to update replace and modernise the principal Act which goes back to 1966. Of course that was a long time ago; so much has changed since 1966 with the way that medicine treatment and even the causes of addiction have transformed people’s lives. Back in the mid-60s most people were concerned with the drugs in fashion at the time and now we find that all these years later those drugs still exist they still inflict harm and damage upon people but now they have been added to by a huge range of more complicated more horrendous and more damaging drugs which cause even greater harm to society and of course to the individuals who become addicted.The question that the Health Committee really will need to address when it considers this piece of legislation and when it hears from submitters is where the balance is in the responsibility of the State to intervene in an individual’s life when that individual either cannot or will not for whatever reason be in a position to address those issues for themselves. At what point do we find that it is right and proper for the State and us as responsible members of society to intervene upon the sacrosanct rights of individuals to make their own decisions in a way that affects them personally?This change in mental health and addiction treatment that has occurred since the principal Act was introduced way back in 1966 is going to be very important not only for the people who find themselves in a situation where they need help and assistance today whether or not they know it but also for those who are yet to come ahead because sadly the scourge of drugs and addiction is going to be with us for a very long time—probably for the rest of time as we know it. So it is right and proper that this Parliament addresses these issues.It is a technical but complicated ethical piece of legislation but it is something that we as politicians and members of the New Zealand Parliament need to get our heads around in an intelligent informed and careful way. I am very confident that under the very capable chairmanship of Simon O’Connor the Health Committee and other members will be able to do that. I commend this bill to the House.Mr DEPUTY SPEAKER: David Clendon—a 5-minute call on behalf of the Green Party.DAVID CLENDON (Green): On behalf of the Greens I am pleased to reiterate our support for the Substance Addiction (Compulsory Assessment and Treatment) Bill to go to select committee for a good investigation there which I am sure it will receive. The point has been made and I will not labour it that the legislation this will replace does date to 1966 and that since that time our understanding of addiction is very different. There are many more substances it would seem to which one can become addicted. Our understanding of what constitutes appropriate treatment has changed.As my colleague Kevin Hague mentioned a shift away from a punitive regime to one genuinely focused on treatment is entirely appropriate. I think those are all things that this bill seeks to achieve. Sadly what has not changed of course is that it would seem that there is still a need to have a legislative power to compel people to take treatment if they are in such a state of mind that they are unable to make those decisions on their own behalf as an option of last resort for people who either lack family or community support or indeed have rejected that in the depths of that addiction.I should just say in passing that I have the greatest admiration for people at the sharp end of this sort of work who work with severely addicted people. I think you would have to have a more than usual quality of compassion because people in that very degraded state would not be the most attractive people to get up close and personal with I believe. It is a credit to those folk who do this work day in and day out that they manage to pick people up out of that pit and help them on to a better path.The Law Commission in 2010 issued a report on which this bill is based and established a number of key principles which we hope to see and indeed there is evidence of them being embedded in the text of the bill. For example there is a very high threshold for compulsion and that is as it should be. It is an extraordinary intervention in a person’s life and it is against their rights in a sense to compel them to take treatment and so the threshold needs to be high and I think this bill does do that. The notion of limited duration—8 weeks—seems to make a great deal more sense than 2 years which does seem excessive. One would hope that after 2 years a person may be in much better shape to make their own decisions. Also there is the notion of protecting human rights of course and the idea that the compulsory treatment should lead directly on to a pathway—that people are not simply brought out of crisis and then abandoned but that there will be an ongoing pathway for them to pursue a voluntary course of treatment for as long as that takes.In terms of protection of rights it would seem the bill does make some efforts to address that. I like the fact that there is a clear definition of exactly what constitutes severe addiction so that those people doing that assessment can make as sound a judgment as can be made. The bill defines clearly what treatment is and excludes certain things that on a bad day may be deemed treatment but in fact would look more like punishment. There are criteria around which the compulsion may be determined to be the appropriate way to go: proof of severe addiction severely impaired judgment and that appropriate treatment is available because of course it makes no sense to compel someone to a course of treatment if in fact there is nothing available to them. One would hope there always would be. So there are these fairly high bars set and a degree of principle underpinning that.We understand that of course the legislation does allow for some use of force if people are unwilling to be taken to a place of assessment or a place of treatment and there are some safeguards around that. I am particularly pleased to see that the treatment centres will be listed in the Crimes of Torture Act as places of detention and therefore subject to the “OPCAP” the Optional Protocol to the Convention against Torture and so the national preventative mechanisms—the Human Rights Commission the Ombudsman and so on—will have oversight of these treatment centres and I think that is an appropriate thing. As I say these will be some of the most vulnerable people in our community when they are in this condition and of course it is appropriate that we have the highest order of monitoring of those sites where they will be treated.So I will simply finally say that if we seriously wish to reduce the number of people who will fall into this category of severely addicted we need to look very hard at the current resourcing of community-based drug and alcohol treatment. I suspect that there is scarcely a provider in the country that has no waiting list and is properly resourced. I would encourage all of us to take that issue very seriously. Thank you.Mr DEPUTY SPEAKER: The Hon Ruth Dyson—a 5-minute call on behalf of the Labour Party.Hon RUTH DYSON (Labour—Port Hills): Can I begin my contribution to the Substance Addiction (Compulsory Assessment and Treatment) Bill by paying a tribute to all those people who in the past under different regimes have died as patients or residents—or inmates as they were previously called; can you believe—in our psychiatric institutions around the country. I have no criticism of the health providers or the decision makers of the time because I think everyone did what they genuinely thought was for the best in the best interests of the person and their treatment. We have clearly come a long way since then and thank goodness for that.I also want to pay a tribute to two women who in my view changed the way that Parliament considered and acted in relation to mental health learning disabilities and drug and alcohol treatment and they are the Rt Hon Jenny Shipley and the Rt Hon Helen Clark. Both of those women as leaders of Labour and National at the time made a conscious decision to stop using people particularly people with mental illness as pawns in this institution that we are privileged to serve in. And I think that was good not just for Parliament but it was also good for our consideration of mental health and therefore the treatment that people got. So I just want to put on record my appreciation of that change.I hope that other changes are driven in Parliament as well. Too often we make—I have only been viewing second or third-hand actually through Twitter. Is it The Bachelor New Zealand? Whatever that programme is I think we make that look quite sophisticated from some of our behaviour. I will just stop there but I hope that we can get some other change driven.I also want to acknowledge the Law Commission. It started this process. It saw an area where work needed to be done. It does mostly really robust thoughtful work and it gives Parliament something very strong to build on and that is evident I think from the contributions that have been made from a range of different parties already tonight.So this bill will throw out the old system—and so it should; it is outdated—and move to a new system that has an entirely different frame. We are no longer talking about penalty and punishment and the justice system in our area of drug and alcohol addiction. Let us wait for other recognition of that move of a frame as well—but at least it is starting in the treatment area—through to a harm reduction. So that health approach I think is a very bold step and it is one that clearly Parliament is up to supporting.My concern is not for any of the specifics or the principles of this legislation. I think the Hon Peter Dunne has done a jolly fine job actually in picking up the Law Commission’s work and then fine-tuning it through the various processes of Cabinet into a bill that we all support. My concern is that in the end the services that we rely on so greatly in our communities have to be resourced well enough to do the job that we expect of them. So we are setting in place here a legislative framework where the provision of services will be different and additional to what we have now.I just want to put on the record that these organisations that do this amazing work around our country need the money to pay for it. They cannot employ cheap monkeys. They have got a high-quality professional job to do and they should pay them properly. So this needs to be resourced. If the $1.7 billion out of the health budget is an indication of how seriously the Government takes this then we should be concerned.I have enjoyed the debate so far tonight and I am sure I will enjoy the remaining few speakers. It is not very often that we have an issue that is so important to so many people—so many individuals and their families—and yet it has such support across the various parties in Parliament. It is I think a long-overdue measure but it is one that has taken the proper time to come to fruition and a proper process. The Law Commission is a very good place to start this work and I think that the process that has been undertaken since then and the discussion papers widely debated throughout the provider and support advocacy group community has ended up with a jolly fine bill as a result.Dr SHANE RETI (National—Whangarei): It is a pleasure to speak to this the Substance Addiction (Compulsory Assessment and Treatment) Bill a bill that looks to help people who have severe substance addiction and substance problems get assessment and treatment. I mention both of them specifically because we have all gone to the compulsion to treatment; just remember that the first step is actually the compulsion to assessment. And certainly I found that the most challenging.When you are on duty doing after hours in a city and you get called by the “DAO” which was the 1992 definition—the duly authorised officer—to come along with them because they have got a patient they are concerned about you go out the back of a block of flats and there is this really large male in various stages of undress who is clearly not coherent. You are always very mindful and grateful to have the experts around you but you are stuck with what the step is. The step to assessment was very complex; it was not clear. And we were looking at each other saying: “Well who does what? What’s the next step? Clearly this person needs assessment.” Well this bill looks to clarify that and it gives us the opportunity to talk about that pathway to assessment because I believe that once people have touched the system and got specialist attention the best outcome that can happen generally does.What this bill says is that when people have a loved one or someone they are concerned about who has substance abuse problems often one of the first contacts is what the bill is calling an authorised officer. That will be a health professional and that professional is appointed by the area director and the area director makes sure there are always enough authorised officers in the region. The first thing that authorised officer does is seek voluntary compliance from the patient. Is there a way that you can help them with their own consent? If that fails what then happens is the authorised officer approaches a medical practitioner. That medical practitioner has two tasks. The first is to assess whether that person has severe substance abuse and the second is to assess whether they have capacity to make informed decisions.As has been mentioned there are four criteria for whether a person has severe substance abuse. Two of those four criteria are required. The first one is neuro-adaptive changes. With substance abuse the common pathway is dopamine in the brain. What neuro-adaptive changes mean effectively is you get down regulation of the dopamine receptors. You get fewer of them and they become less sensitive. We know that as tolerance. So they are looking for evidence of that: craving unsuccessful attempts to control the use of the product and ongoing use despite harmful consequences. I think the second criteria the capacity to make informed decisions can be quite complex. There is a lot of contemporary discussion around what autonomous decision-making means but I think there is a good piece of work here in clause 9 saying it is to understand the relevant information retain that information and be able to communicate that decision.What happens then is the medical practitioner has to document their findings. They have to attest that they are not a relative of the applicant or of the client themselves. If for any reason you cannot get a medical practitioner to do that the authorised officer is able to do that by completing a memorandum. The authorised officer then makes the arrangements and those arrangements can also involve the police and then the person enters the system. They are able to be assessed and hopefully the best of care can be obtained.I think this adds clarity to an area that I have personally found in practice to be really complex. When someone is shouting and when they are threatening you often it is unclear as to who does what. I believe this adds clarity. I personally have no issue with compulsory incarceration or detention for treatment. When you see some people who are clearly a harm to themselves and clearly a harm to the public you just want to get them back to that state where they can make their own decisions. However you do that in a clear and concise way I think is a good thing. I think in its first reading this is a good bill. I support it and commend it to the House.CARMEL SEPULONI (Labour—Kelston): I wish I were on the select committee for this bill; unfortunately I am not but just reading through the Health Committee’s notes before standing up to do this speech it is a really interesting area and an area that I am sure many of us in this House are concerned about. I have an electorate office in west Auckland in Glen Eden that I share with Peeni Henare and Kelvin Davis and on a regular basis we see citizens outside our office who clearly are exhibiting either mental health issues or substance addiction issues or both. So seeing this bill is of high interest to me.The Substance Addiction (Compulsory Assessment and Treatment) Bill sets out a framework for the compulsory treatment of people who are assessed as having a serious substance addiction and lacking the capacity to consent to treatment. The explanatory note states that only a small number of people are expected to be treated and treatment will be for a limited time. The departmental disclosure statement describes the aim of the bill as restoring “the capacity of people with severe substance addictions to be able to engage in and remain in treatment.”The bill seeks to repeal and replace the Alcoholism and Drug Addiction Act 1966. The Act is described as “outdated” by the Law Commission which notes that “there are difficulties in reconciling the broad powers of detention with the rights and protections in the New Zealand Bill of Rights Act 1990.” The bill’s provisions for both compulsory treatment and detention in a treatment centre have been assessed by the Ministry of Justice as being consistent with the relevant sections of the New Zealand Bill of Rights Act 1990.Labour supports this first reading to update the Alcoholism and Drug Addiction Act 1966. The Act is almost 50 years old and not in line with modern clinical practice and delivery. It is good to see that the recommendations from the Law Commission are finally being implemented in legislation. Under the current 50-year-old legislation two medical certificates are required to make an application to the court for compulsory treatment and neither has to come from a specialist drug and alcohol practitioner. We support the requirement that compulsory treatment can start only via an approved list of specialists when the criteria for compulsory treatment are met.We must safeguard the rights of patients undergoing compulsory treatment. There are circumstances where compulsory treatment is necessary due to the incapacity of the patient to make a decision on treatment for themselves. However the rights of patients must be upheld and appropriate safeguards must be in place for situations where compulsory treatment is not found to be necessary. It is important that these patients have the same rights as those held under the mental health legislation.A shorter time period for treatment—so 8 weeks with the option of extension—with the goal of moving an individual into voluntary treatment is a far more progressive approach in treating severe substance abuse when patients are unable to make a treatment decision. The statutory period for treatment under the current legislation is 2 years which far exceeds the time frame needed for treatment. Under the current legislation there is an average of 70 compulsory treatment orders per year and it is estimated in the regulatory impact statement that these changes will lead to an increase to approximately 200 orders per year.Even though it is extremely important and necessary to update this legislation we do have to make sure that at the same time we are resourcing health professionals and the New Zealand Police to enable them to carry out their duties under this bill. At this point I will point out the fact that under the National Government we have seen a $1.7 billion cut over 6 years out of the health system. Of course that has implications for areas like mental health and addictions.It is crucial that any estimated uptick in demand for mental health services is resourced and I have to say that is a criticism that we have of the National Government. Often it puts things into legislation without thinking through the implications and the additional areas that need to be resourced. So we need assurance from the National Government that it will be increasing its resourcing in this area to ensure that all of the good things that are trying to be attained through this legislation are actually able to happen. We have seen the consequences of under-resourcing in mental health and of expecting the New Zealand Police to become the front line of mental health services. It is the police—it is every social service agency that is expected to pick up where the Government has failed.I just want to point out an article that I saw in the New Zealand Herald. It was an opinion piece—I cannot remember who wrote it—over the Christmas period and it was just about the increasing levels of homelessness that this person was seeing and the fact that actually what they wanted to know was that their tax dollars were taking care of these issues so that every day they were not having to be confronted by these issues. I think all New Zealanders will agree that they want to see their tax dollars spent on areas like this so that every day when we walk out of our homes when we walk into our shopping centres and when we walk out of our offices we are not confronted by the homelessness by the mental health issues and by the drug and addiction issues that we currently are confronted by on a daily basis. Jami-Lee Ross laughs but it is not funny.Putting it in legislation creating a bill like this is all good but just going back to what I was saying it is about making sure that the support services—the health professionals the New Zealand Police and everyone who contributes to addressing these issues—are adequately resourced. So that is the challenge we have to put to the Government. The regulatory impact statement states that “Additional resources have been made available to district health boards for medically managed withdrawal beds.” but it will be interesting to see whether the $775000 of additional operating costs is sufficient to cover the increase in orders.Another serious resourcing question arises as to whether these additional costs will result in new funding being given to district health boards or whether as has become standard practice in health services the shortfall is made up from district health boards’ already overstretched baselines. We have seen in recent months—especially I think in Canterbury—cuts to mental health funding. Mental health funding drug and addiction funding—we need the Government to make sure that our district health boards are adequately resourced to be able to address those areas.The bill also creates offences relating to the ill-treatment or neglect of patients undergoing compulsory treatment or for the staff at a treatment centre assisting or allowing a patient to be absent without leave. We have seen recent media cases of patients under compulsory treatment escaping care with tragic consequences. It is noted that this risk is going to be managed by the development of a management treatment plan for each individual and there are provisions in the bill to return a person to a treatment centre by an authorised officer or the police.This is an incredibly important bill. We will be supporting this bill. Not only are we confronted on a daily basis with mental illness with drug and addiction issues and with homelessness but also we come across many families who have this as their daily reality. They are having to live through this with their children having to put up with a whole range of things whether it be the fact that they have family members who are violent because of these issues or whether they have family members who are stealing from them because of these issues—a whole range of consequences of substance addiction. I know that these families I am talking about who have to live this nightmare on a daily basis are going to be supportive of this bill as well. Thank you.MAUREEN PUGH (National): It is a pleasure to stand and take this short call in support of this bill. This Government continues to focus on four priorities one of which is delivering Better Public Services. The Substance Addiction (Compulsory Assessment and Treatment) Bill fits well within that priority. As we have already heard tonight the health budget has grown to a record level of just under $16 billion under this Government. With that core services such as treatment for alcohol and drug addiction continue to receive Government support.This is a sensible bill; it modernises the legislation to reflect the support we offer to New Zealanders who struggle with drug and alcohol addiction. Most people who abuse alcohol or other drugs do not need compulsory treatment; however some people are just so unwell that they are not able to make that decision for themselves. I have confidence that families who have struggled with loved ones suffering from severe alcohol and drug addiction will support this piece of legislation as do I. I commend this bill to the House.Bill read a first time.Bill referred to the Health Committee.Sale and Supply of Alcohol (Display of Low-alcohol Beverages and Other Remedial Matters) Amendment BillFirst ReadingHon Dr NICK SMITH (Minister for the Environment) on behalf of theMinister of Justice: I move That the Sale and Supply of Alcohol (Display of Low-alcohol Beverages and Other Remedial Matters) Amendment Bill be now read a first time. I will be nominating the Justice and Electoral Committee to consider the bill.The passing of the Sale and Supply of Alcohol Act in December 2012 marked the first time in more than two decades that the Government moved to restrict rather than relax New Zealand’s alcohol laws. The Act introduced a range of measures to combat alcohol-related harm crime and public health problems. It also empowered our communities across New Zealand giving them a chance to have a say in how alcohol in their area is sold and supplied. Two years on is still early days to draw overall conclusions on such a major regulatory reform. However the early signs are encouraging: we are already seeing far fewer alcohol outlets the first local alcohol plans are coming into force and more communities are getting the chance to have a say on the way in which alcohol is sold in their community.This relatively short bill is not an overhaul of New Zealand’s alcohol laws because they need time to settle. Rather this bill addresses a couple of unintended effects that have arisen since the passage of the Act—a couple of tweaks in the law that are needed. Such changes are unfortunately always possible when such large reforms are done and this is not atypical.The first change addresses how non-alcoholic and low-alcohol beer and wine are displayed in supermarkets and grocery stores. Under the Act supermarkets are required to place all alcohol and promotions of alcohol in a single area of their store and no other products may be placed there. This was quite properly put into the alcohol reform law so that it would limit how much shoppers are exposed to alcohol and—for those people familiar with alcoholism—to recognise how difficult it is for people going to get their essentials to not be inadvertently tempted to attempt to buy alcohol. It is part of the broader effect of trying to improve New Zealand’s drinking culture.However because of the way in which alcohol has been defined in the law stores cannot now legally place beer and wine with very low-alcohol content in that single area. This sometimes leads to supermarkets having to place very low or no-alcohol beer or wine with the fruit drinks and soft drinks or opting not to sell them at all and that is not to the community’s advantage. Although these products have existed for some time there has been a significant increase in their popularity. I for one—particularly with the change in the drink-driving limits—confess to often wanting to choose to drink low-alcohol beers of which there are some excellent products. They are positive moderation products which allow people to enjoy the social aspects of drinking while limiting their intake of alcohol. I have no doubt that it was ever the intention of this House to place a legislative block in the way of these sorts of low-alcohol products being sold alongside full-strength alcohol.The amendment in this bill addresses this by permitting supermarkets to place these products in the alcohol area. It will allow supermarkets to place these alternatives alongside the full-strength alcohol where shoppers would expect them to be and in my view where they will actually have the positive effect of people making that choice more often. It will remove the need for the products branded like alcohol to be sold with fizzy drinks and fruit juice—which I actually think is also counter-productive to what the intent of the House was in requiring supermarkets to have a clear separation of those sorts of products. So the provision in this bill is a common-sense solution that provides clarity for the stores for responsible drinkers and for the general public.The second change that is proposed in this bill addresses the definition of a “company”. Under the previous Sale of Liquor Act companies were explicitly included under the category of those who could hold an alcohol licence. This was not carried over in the same way to the new Act. Although this oversight has not caused problems it is important to make clear in the law that companies can continue to hold licences as they always have done. I think most of us would acknowledge in our communities that most of our stores that hold licences—cafes liquor stores—are in the structure of a company and it is appropriate for them to be able to hold a liquor licence in the name of that company. The amendment simply adds “company” to the list of who can hold a licence and rectifies this problem.Although the changes in the bill are minor they are necessary and positive for the overall functioning and common-sense way that I think the House would expect the law to function. I commend the bill to the House.JACINDA ARDERN (Labour): I think it is a useful opportunity—now that we have as the Minister has described a relatively minor tweak to the Sale and Supply of Alcohol Act—to have a slightly broader discussion about whether or not this bill could have been a vehicle for perhaps some other tweaks that even the Government itself flagged at the time that it introduced the primary legislation in 2012. I will come to that point later.But first to address the substance of what otherwise is a rather minor and technical bill—and for that reason one that Labour will lend its support to but as always we will be interested to hear from submitters via the select committee process as to what their views are on this amendment. Just to explore probably the most substantive of the amendments which is around section 114 of the Act which will allow for the display promotion or advertisement of low-alcohol or non-alcoholic beer wine—important—or the mead that apparently we still retail within an alcohol area part of our problem is that within the legislation as it stands “alcohol” is clearly defined. “Alcohol” is defined as a product that is 1.15 percent or more ethanol by volume. When you give such clarity in your legislation—as good drafting does—as to what constitutes alcohol anything that sits outside that definition is therefore precluded.When you go to the primary legislation which of course is the Sale and Supply of Alcohol Act 2012 many members of this House will remember that it required that supermarkets and grocery stores in particular have designated areas for the sale of alcohol. The reason for that was people were complaining that when you would come through a supermarket you would often be forced even if you were getting bread or milk to go through the area where there was the sale of alcohol. It would be a thoroughfare for the supermarket often because there were heavily discounted alcohol products within the supermarket and these were often used as advertising to draw people into supermarkets. Some debated whether or not there was loss-leading—we will not go there in this debate—but that was one of the things that was raised during that discussion.I remember at the time that we had people coming to the select committee and saying for instance: “I have suffered from alcohol issues in the past. I have overcome those but I feel confronted every time I walk into a supermarket.” So that is what section 114 was attempting to remedy. It required those suppliers to create these single areas and it had conditions around how they might be constructed. They could not be the most direct pedestrian route for instance between any entrance to the premises and its main body. They basically had to be able to be closed off in order to fulfil the requirements of off-licence hours and so on.Part of section 114 for instance (1)(a) says “no display or promotion of or advertisement for alcohol occurs on the premises at any place outside the alcohol area;” and section 114(2) says: “If the alcohol area has not been so described that it is divided into 2 or 3 sub-areas a single-area condition also takes effect as a condition that the licensee of the premises concerned must ensure that no display or promotion of or advertisement for a product that is not alcohol occurs on the premises at any place inside the alcohol area.” There are two things happening here: (1) you cannot advertise alcohol outside the designated area and (2) you cannot advertise any non-alcohol product within the designated area—obviously to stop that crossover—so you could not advertise bread in the alcohol area.But the problem with saying that a product is not alcohol as I have already raised is that “alcohol” is clearly defined as a product that contains 1.15 percent or more ethanol by volume. So immediately a DB Export Citrus drink that is intended to be a substitute for beer and that is zero percent alcohol—but is considered to be a beer substitute—could not therefore be advertised within the alcohol area. Obviously that is not what this Parliament intended. It is a by-product of some very tight drafting in order to try to achieve a particular outcome but it has had a knock-on effect.Here is my question though. That legislation was passed in 2012 and here we are debating this amendment in 2016. I know that the Food and Grocery Council has been involved in advocating around this. I know that for instance DB Breweries and groups like this became aware of the problem and have lobbied to have it changed and why would Parliament have a problem with allowing those products to be advertised in an alcohol area if we are trying to promote alternatives to alcohol including low-alcohol or no-alcohol options as a substitute. When was this issue first raised with the Minister of Justice?The reason that I am interested in this is that I am going to make a bit of an assumption here that most members of this House are likely to support this amendment bill. I am making an assumption; I might not be correct. But most of us I assume are wanting to promote if you are in an alcohol area an alternative to full-strength alcohol when you are in that area. I think that probably if we are in that trade-off situation then that is what we would want to do. Why was this not done in a Statutes Amendment Bill? It strikes me that for something like this—and statutes amendment bills are designed to be non-controversial where you are able to garner the support of the—Chris Bishop: It’s about alcohol.JACINDA ARDERN: —entire House. Oh write down your little note there for your piece of rebuttal Mr Bishop. But I would have thought—now I take your point. Alcohol has been treated as a conscience issue by this House before; not by your party because conscience issues do not exist for National. But on this side of the House we have started treating it as a health issue. So we would have looked at that as a party and said: “Does this have some benefit in terms of encouraging alternatives to the use of alcohol?”. Therefore we would have looked at that and if Amy Adams came to us and said “We would like it as part of a Statutes Amendment Bill.” we would have said: “Look that sounds reasonable.”—that sounds reasonable. Even if there might have been a question mark over whether you could treat an alcohol issue previously treated as a conscience vote as part of a Statutes Amendment Bill why not test it? It is up to this House to decide whether or not we universally agree as a Parliament that this is the kind of amendment we would be happy to make within a Statutes Amendment Bill. Anyone who has seen the way statutes amendment bills work would know that we get a little list from Simon Bridges with an individual amendment for every suggestion that has been made and an explanation of what it is and we tick yes or no—simple. Why did it not happen that way?The alternative is that we now have to go back to the select committee—a very robust process which of course allows the public to have their say on whether or not we want to promote no-alcohol and low-alcohol options for the public within our retail chains. The question could be asked: is that a great use of time? Why if we are going to have to be in a situation where we debate this little amendment did we not go the whole hog and review the other things the Government said that we would review as part of this Act? In 2010—and this is really important so I want to read it out. On 8 November 2010 in response to the fact that the Law Commission said: “We regard pricing policies as the central plank of any reform package aimed at reducing alcohol-related harm.” what was the one thing the Government’s bill on alcohol did not do? Anything on pricing. It did nothing at all. So what did Simon Power in his defence say? On 8 November 2010 “Mr Power says”—and I have got this from a Beehive release—“the Government is committed to investigating a minimum pricing regime but does not have the evidence base it needs either locally or internationally to set a minimum price immediately.”He gave retailers a year to give him that information and said that if they did not he would legislate to get the information. What happened? How is it that 6 years later we are in position where we do not have that information and we do not have any suggestion from the Government that it is going to look at it even though it gave us that guarantee? What happened? I will tell you what happened: Judith Collins happened. Simon Power left this House Judith Collins took over the portfolio and with one fell dismissive swoop—no talk of evidence or research—she wiped out the chance of doing any review on this. The only thing she said in response in the National Business Review was: “It’s important to understand the vast majority of New Zealanders are quite happy to have a glass of wine.” That was it—review over. Minimum pricing investigation gone. The evidence did not matter. Judith Collins declared it was unnecessary. So if the Government wants to do work—The ASSISTANT SPEAKER (Lindsay Tisch): Sorry to interrupt the honourable member. Her time has expired.CHRIS BISHOP (National): I take a great degree of interest in bills like this not the least of which for the reason that in the Hutt Valley we have got some fantastic breweries: Panhead Custom Ales up in Upper Hutt—now the world-renowned Panhead Custom Ales—Baylands Brewery in Pētone and Kererū Brewing up in Upper Hutt. So I take a great degree of interest in bills like this.It is a sensible bill as Jacinda Ardern made mention. Actually I had Retail New Zealand representatives in my office—it would have been about 6 to 8 months ago—and they raised this issue with me and I thought: “Well that actually seems pretty fair enough. That seems pretty sensible. It doesn’t destroy the intent of the Sale and Supply of Alcohol Act.” It clearly seemed to be an absurdity created by poor drafting or an unintentionally bad outcome from the legislation. I thought “Well that seems pretty good. Maybe that’s a little member’s bill I can take through to the caucus and put on the floor of the House—a pretty sensible change we can make.” and then lo and behold a few days later a Government bill was introduced and I thought: “Oh that’s that opportunity gone for a sensible member’s bill.” My colleagues—Stuart Smith is laughing away here in the House—next to me on the left and right know that certainly on this side of the House that is you know a classic sort of member’s bill that we could advance from the Government backbenches.It is a sensible bill and it does fix an absurdity in the law that came about through the Sale and Supply of Alcohol Act. Really we do not want a situation where you have low-alcohol beer or alcoholic products in next to fruit juice and in next to fizzy drink and all the other plethora of different types of beverages you can get. It makes sense that those beverages would be available in the alcohol area of the store and as other members have rightly pointed out—including the Minister in his introduction—it is right that those products can be seen as an alternative.I just want to briefly pick up on Jacinda Ardern’s comments towards the end of her speech about why this amendment is not in a Statutes Amendment Bill. Well the simple reason is that alcohol issues in this House have traditionally been treated as conscience issues and statutes amendment bills are reserved for those highly technical incredibly specific changes to statutes for which there will be obviously—obviously—overwhelming support around the Parliament. I would say that they are the sorts of bills where no reasonable person could disagree that it is a sensible change to make. It is the sort of change where you add an “and” into a section in an Act or an “or” here and there in order to make the policy intention clear. It is not appropriate—and it just shows Jacinda Ardern’s lack of knowledge of parliamentary procedure despite spending 8 years in this House—that she would think that something to do with alcohol would be considered appropriate for a Statutes Amendment Bill.She said: “Oh well the Labour Party now regards alcohol issues as a health issue.” Well that is all well and good for the Labour Party but it is actually not how those members regarded the last major piece of liquor legislation to go through this House in 2012 when we had this reasonably interesting scenario of the Labour Party splitting on individual lines for each division on the bill. For each stage in the Committee of the whole House debate on the bill a variety of Labour MPs would vote one way and a variety of Labour MPs would vote with their conscience another way. So that is a reasonably new development if indeed the Labour Party is going to regard something like alcohol—which has been regarded as a conscience issue for a very long time in this Parliament—as a health issue.Then right at the very end of her speech what did we hear? We heard Labour’s real cracker of a policy which is that the minimum pricing for alcohol should be $2 per standard drink—which is what it was going into 2014 election. So this is the idea that the minimum price of a bottle of wine in a supermarket will be $14 or $15. No no you cannot get your $8.99 sauvignon blanc with fish and chips on the way home on a Friday night—no. That is not allowed any more. No you cannot get your $13.99 bottle of Pinot noir or your bottle of chardonnay from the Hawke’s Bay—no. The minimum price is $2 and so all wine will have to cost $14 and above. The reason minimum pricing was rejected is that it does not work. It does not hit the very drinkers you are trying to make drink less and actually the irony of the whole thing is that it actually guarantees profits for alcohol companies. That is literally what minimum pricing does. It says that it is $2 per standard drink—The ASSISTANT SPEAKER (Lindsay Tisch): Order!CHRIS BISHOP: —and guarantees pricing for alcohol companies. This is a sensible bill—The ASSISTANT SPEAKER (Lindsay Tisch): Come back—come back.CHRIS BISHOP: Yes I take your point Mr Assistant Speaker. I was moving slightly away from the bill but I was just responding to the speaker before me which I think is within the Standing Orders. It is a sensible bill. I commend it to the House.KRIS FAAFOI (Labour—Mana): It is a pleasure to follow Mr Bishop on the Sale and Supply of Alcohol (Display of Low-alcohol Beverages and Other Remedial Matters) Amendment Bill. I do remember in 2012 when the principal legislation came through this House. It was a conscience issue for members in the Labour Party and there was a rather large spreadsheet to make sure that our whips knew which way we were to vote. But in amongst all that the Government’s process was so good that it forgot to put this in that bill. So that is why we have to take up the time of this House and the time of a select committee—as Jacinda Ardern has said it is a very robust process—to fix up what I think the Minister called an oversight through this minor and technical bill.It used to be Simon Bridges who provided the House with his fix-up bills but this is another piece of legislation that we have got before us—and if people are watching yes we are debating where we put low-alcohol and non-alcoholic beer in a supermarket. That is what this piece of legislation does.If you are watching and you are wondering why we are talking about this back in 2012 when this House passed the principal piece of legislation there was an oversight and low-alcohol drinks and no-alcohol drinks were excluded from the special area that you see in the supermarket. So if you go to the supermarket now and you look at the options around your normal wine and beer you will not see low-alcohol beer and you will not see no-alcohol beer because the law forbids them to be placed with those products. It is a minor and technical bill but for many reasons we think it is an important one so we on this side of the House—in the Labour Party anyway—are going to be supporting this bill.There are two perspectives around this bill that I will talk about in my contribution. The first one is the simple one and it deals with the mechanics of the bill. From a customer’s point of view—as I think Mr Bishop mentioned in his speech—you do not want to go looking around the supermarket for your low-alcohol or no-alcohol option but that is the reality at the moment. If you are the retailer you also do not want to put a product that should naturally be with the family of products that is wine and beer with fizzy drinks and other juices. From a producer’s point of view—and I know that the Brewers Guild has been concerned about this. It does not want some of the products that it has been creating because of the new regime around drink-driving—that is low-alcohol or no-alcohol drinks—to be placed with other juices and other drinks either. It wants to make sure that those options are right next to the normal alcohol products that we see in the supermarket.But also from a public health perspective I think we want these products to be with their family of products so you want the low-alcohol beer to be with the full-strength alcohol beer. So if you are going home on a Friday night like Mr Bishop does for his fish and chips you can say: “Mmm I don’t want the Steinlager Pure. I will take the low-alcohol option.” That is the option that Mr Bishop is faced with on a Friday night and I think that is the best way for us to approach it—to give consumers options about another choice in terms of alcohol. So in the functional respect of this piece of legislation we think that is a good thing. It does give people a lower-grade option whether they want to drink and socialise and have a beer or to have a beer and have no alcohol. That is a good thing.The other perspective I would like to look at is one that Jacinda Ardern also looked at and that is how this bill has come about. I think this bill was introduced on 7 December 2015 and then at quite lightning speed got its first reading in the House. I think that speaks to the priorities of the Government. There are many other things that we on this side of the House think that the Government could prioritise. You could prioritise maybe the 6-year long wait that we have had for the Radio New Zealand Amendment Bill to pass through this House.Peeni Henare: How long?KRIS FAAFOI: Six years. We could prioritise safer houses and warmer houses or a whole lot of other things in the health area and in education where we think you should get in there fast and get them done. But what is getting done fast here? Getting a beer. Having a beer. You have to wonder where the priorities of this Government are when what it makes happen fast is the ability to buy beer down at the supermarket. Mechanically I have no problem with that because I do not think it is such a big issue but when you look at it in terms of the priorities of the Government I think there are some genuine questions that could be asked by the voters out there just saying: “Hmm is this as much of a priority as other things that could be put on the agenda?”. I think that you know there are genuinely other things that are of a higher priority than low-alcohol and no-alcohol beers at the supermarket.One of the other aspects of this bill—and it is a minor and technical bill—is that it gives a company the ability to hold a licence. I think one of the issues that you can have with that is that if someone is to hold a function it has had to be an individual who held the liquor licence but a company could not do that. I think if an individual within a company had to get the licence and something went wrong it was the individual who was up for any penalty if the liquor licence was not adhered to. So this piece of legislation does tweak the principal Act and allows a company to be a licensee in this sense which I think is a good thing for the protection of the people who are working for those companies.But in general going back to the mechanics of the bill it does get rid of a piece of red tape that I think was an oversight back in 2012. As I said it was a time when there were lots of options on the table in terms of what could be ruled in and what could be ruled out of the sale and supply of alcohol legislation at the time and this one got left out. I do not know how it happened—the Government was in charge of the process at the time so maybe someone from that side of the House could explain to us how that happened—but I do not think it is the best use of this House’s time to be arguing over or debating this.There was an argument put forward by my colleague Jacinda Ardern about whether this amendment could have been contained within a Statutes Amendment Bill. Then Mr Bishop rebutted her comments saying that we did not know whether or not this whole House would have agreed to this but we could have saved at least 4½ hours in this place and a select committee process if the Government had come to other parties and asked: “Could we do it in a different way? Could we do this in a Statutes Amendment Bill?”. I think that would have been a much tidier process and a much more efficient process and would have allowed other priorities of the day to be put through this House rather than this piece of legislation that is before us right now.A couple of people on this side of the House have asked about something that is a little bit quirky in this bill and that is mead.Hon Member: Talk about mead.KRIS FAAFOI: Ha ha! So let me talk a little bit about mead. There is a meadery not in my electorate but in the electorate of Rongotai—in Houghton Bay I believe. If you do not know what mead is it is a honey-based alcohol. I am a whisky person myself as someone over across the hall will know. Mead is not necessarily my drop but if you are a big fan of mead—and I know there are some fans of mead out there—this piece of legislation also covers mead. So if you are one of the very small percentage of New Zealanders whom I believe would enjoy a good drop of mead—I think Mr Mark Mitchell would; he looks like a honey man to me—then this piece of legislation also covers mead. So do not worry the Government has taken care of the mead fans as well in this piece of legislation. I do not think that looking after the mead fans in this country is a massive priority but hey that is what the Government has decided to do.There are things other than mead that this House could be talking about. So maybe in the future the Government would like to take a different approach to these kinds of bills and try to look to a Statutes Amendment Bill as another way to progress this through other than wasting the time of this House on an oversight that it made when it passed the principal legislation.ALFRED NGARO (National): I rise to take a call on this bill. I remember coming into the House in 2011 after the 2011 election—so I was coming in at the tail end of a round of consultation in our communities around the sale of alcohol and liquor in our communities. I know that prior to that in the community there was a round of consultation that was quite significant and I was part of facilitating some of those meetings that they had.One of the key concerns for the communities at that time was the binge drinking and especially the harmful behaviour and crime and the public health problems that were coming out of that—domestic violence and so forth—which was a contributor to some of the challenges and issues that our communities face. Out of that the key concern that came out through the Sale and Supply of Alcohol Act of 2012 was also the ability to allow communities to be able to have a say in that consultation around some of the regulations especially with regard to territorial authorities and local bodies as well. So that was a concern that was raised but was also then met through the legislation which allowed for that to happen as well.I think one of the things that was important in that was how we could ensure that there was a restriction and not relax the laws but at the same time allow for a way for those restrictions to definitely address the issues around binge drinking. So in 2012—and being in the House when that legislation came through—it was coming through at the end of that consultation seeing that legislation come through. Mr Faafoi talked about that piece of legislation and I suppose minimised the extent of what this House will do but this bill is intended to correct I suppose unforeseen circumstances although the Act has done a significant amount of work. I do remember and recall though in that time in 2013—I think there were about 20 Supplementary Order Papers that came through from the Labour caucus. So there was a little bit of confusion—Kris Faafoi: Because we care.ALFRED NGARO: Well yes it did say that you cared but there was probably a lot of confusion that reigned through there in 2013. Lianne Dalziel also talked about these things so there was some confusion. On this side of the House there is no confusion.I think it is very clear that though there are minor changes they are significant enough because obviously there is a concern to just remedy some of the unforeseen circumstances. I know the fact is that when we do talk about those circumstances and those changes in certain places where people do shop and frequent they do want to ensure—I suppose it is the separation really where you can go to a place where there is non-alcoholic and low-alcoholic beverages. People may want to see that. It is part of a change in lifestyle. That may be part of it.So although these may be small technical changes we believe it is important to again ensure that the substantive work of the Act that we are talking about—the Sale and Supply of Alcohol Act of 2012—continues on so that it continues to be the legislation that it was intended to be. Most important it is about reducing the binge drinking giving consultation and giving the ability for local communities to be empowered to consult and to look at the regulations that would be important for the localised issues in their communities. In fact I remember some of the ads that were on. One of them was I think at the Ōtara flea market where people got up and were trying to say to people: “Have your say.” So they were having their say and we think that is important.I do commend these changes that have come back into the House. We do think that they are important. They are small and they are technical but I think they are changes that will be important to the overall—and I want to continue to emphasise that—essence and the intent of the legislation. So with my brief statements to this House I commend this bill to the House.KEVIN HAGUE (Green): I want to begin this contribution by making a bit of a comparison between two bills because the bill that the House considered immediately prior to this the Substance Addiction (Compulsory Assessment and Treatment) Bill is one that also deals with alcohol-related issues. It does so from a health perspective. It actually takes some measures that were in the law and that largely had a justice orientation to them and replaces them with new measures that have a health orientation and specifically a harm-reduction orientation. And yet in the debate on this bill we are back to dealing with alcohol-related issues and back to dealing with trying to reduce the amount of harm associated with alcohol consumption in our community but doing so from a justice lens.I would urge the Government perhaps to think about that because here we have a bill that has been introduced on behalf of the Minister of Justice. It is going to be referred to the Justice and Electoral Committee a select committee that in fact—with all due respect to the members on that committee—does not have expertise around health issues and around harm-reduction issues. The signal that that sends to the community is that the Government has not yet made the shift in thinking from dealing with alcohol as an issue of justice to dealing with alcohol as an issue of harm. It is a shift that the Government ought to have made.The Act that this bill amends came from the Law Commission’s report. The Law Commission’s report is called Alcohol in Our Lives: Curbing the Harm. It set out to reduce harm. The Law Commission in its recommendations believed that the Act that we ought to have set up in 2012—actually the Law Commission thought we ought to have done it prior to that—should have been called the “Alcohol Harm Reduction Act” not the Sale and Supply of Liquor Act. Once again this is an illustration of the failure to actually make that shift in thinking.The evidence about harm reduction is extremely strong. We know pretty much—or at least we do in the health sector—that changes to alcohol-related behaviour do not come about from prohibition. Equally they do not come about from giving people education which is perhaps counterintuitive. It turns out that education—giving people information—may be a necessary prerequisite but the thing that actually changes people’s consumption behaviour is change to the environment. And that is why the Law Commission recommended that we should address the availability of alcohol—where it could be purchased when it could be purchased and the licensing hours. It recommended that we address pricing both minimum pricing and the excise tax and it recommended that we introduce controls around advertising and sponsorship. All of those changes were recommended in order to change the environment in which alcohol purchase and consumption takes place.So this bill is a welcome step forward. It does actually address that issue of a person perhaps in their supermarket or some other shop being confronted with aisles’ worth of alcohol and not actually seeing the low-alcohol options there by providing that direct availability of that low-alcohol option at the point of purchase. I would agree with the point that Chris Bishop made which is it must surely have been an oversight of this Parliament not to have incorporated that change at the time; similarly the change around liquor-licensing and companies. These were oversights of the House and of the Government. I guess my reflection would be that the mood that the Government was in at the time that that bill was making its way through Parliament probably made it not conducive to careful thought about the detail. The Government was not in a mood for looking at the detail or for countenancing any change to the bill that it put in front of the House.I agree with some of the other speakers who have said that it is a shame that the Government has not included some of the other measures that have also become apparent since we passed that bill into law—the changes for example that local government has called out for such as some protection for communities against the bullying behaviour of the industry when they attempt to put in place local alcohol plans. There is the evidence that has come to light since we passed that bill and produced the Act around the balance of minimum pricing and the use of excise tax to actually ensure that we reduce consumption without taking an unbalanced approach. I also think that it is a shame that this bill has not been used to implement the recommendations of the panel that was led by Graham Lowe about restricting sponsorship and marketing activities from the industry. So those were all things that the Government could have used this bill to do given that in fact Parliament was setting out to change the principal Act by this bill. So the opportunity was lost.Ultimately what the House will need to do is stop addressing this kind of issue with piecemeal legislation. What we need instead—and I have spoken on a number of occasions in this House about this—is a piece of legislation that provides a single integrated legal framework for the regulation of all of the drugs both those that are currently legal and those that are currently illegal. This legislation should be health-based not justice-based and the Government clearly has a step further to go in that direction. It should be aimed at reducing harm by using principles around harm reduction that are in the health sector and with which we are extremely familiar. So we should be preventing the harm in the first place if we can; mitigating it if we cannot in a stepwise process; and using the regulatory tools that we have available such as age availability price restricting the marketing licensing or perhaps prescription in some cases. And there is the further principle of proportionality—regulating those substances in proportion to the risk that they might cause health-related harm.A framework like that is the right approach and that approach would be one that pulls together different strands. It would use perhaps a base such as that which the House set up with the Psychoactive Substances Act because that is precisely what that framework does. It would pull in alcohol legislation tobacco legislation and indeed the Misuse of Drugs Act and substances currently controlled using that Act to actually produce for this country a genuinely 21st century framework that minimises the harm to this country and its citizens from drug use. Thank you.DENIS O’ROURKE (NZ First): New Zealand First will support this bill. The two corrections it makes are OK: firstly permitting low and non-alcohol beer wine and mead to be displayed for sale in a single area of supermarkets and secondly clarifying that any company can hold a licence under the Act. But big deal! What a pathetic little bill when you think about the magnitude of the harm that alcohol abuse does in this country. This bill is just tinkering when what is really needed is a full overhaul of the 2012 legislation which was itself a piece of legislation that was so changed so altered so reduced and is now so pathetic that it really did not make much difference and the problems that it sought to address are still with us.The truth is that the Sale and Supply of Alcohol Act 2012 had generated at that time very high expectations amongst the public that those reforms would be comprehensive and would make a difference as was in fact recommended by the Law Commission. Those expectations were grossly not met. This Government’s attempts over all these recent years at the reforms needed around alcohol have been an utter and complete failure. The drinking culture amongst the young is getting worse not better. The big commercial interests in alcohol are obviously feeling very satisfied with this Government whose arm they have twisted up its back. They will be well and truly off the hook and doing well as an alcohol industry all because of the utter inaction and pathetic response of this Government to the public’s expectations of realistic reform. The 2012 Act was an opportunity lost for meaningful and effective reform. It was an opportunity to turn back the tide of alcohol abuse especially amongst the young.In New Zealand First’s view there are a number of things that this bill should now be doing instead of these pathetic little measures which will make little or no difference. Amongst those there were three particular things that we in New Zealand First felt needed attention. I might say that we did not treat those matters as conscience issues—we were unified. We knew what we wanted as a party and we said it at the time. These were those three things: the first was the failure to return the age for purchasing alcohol to 20 years. That would have really resulted in a significant reduction in consumption by that age group. It would have given them also a good signal that they needed to try to change the culture of binge drinking that has developed amongst that age group and that continues unchecked today.The second matter was the failure to deal with the problem of those ready-to-drinks—those sugary alcohol-loaded easy-to-drink beverages that are so popular amongst the young and that can get them so drunk so quickly. Their sugar levels are very high. The drinks are very attractive and yet very harmful.This bill should be attending to some of those things not just what can be presented and how in a supermarket. What we are seeing is that those problem drinks are still being pushed and are not being limited. They are condemned by the experts and the Law Commission itself. They are the most potentially harmful to young people. Those are the things that this bill is not addressing. Instead it is addressing what can be displayed on supermarket shelves. Well that is pathetic. It is not enough.The third issue—and others have mentioned it—is the need for targeted minimum pricing. I would say to Mr Bishop that nobody ever intended to increase the price of wine but other alcohol drinks should have minimum pricing and that can be done through excise taxes and other means. It would have been worthwhile. The Law Commission recommended it. Other experts recommended it. Mr Bishop may not understand it but that just means that he does not understand the issues.Chris Bishop: I understand it perfectly well Denis.DENIS O’ROURKE: That just means he does not understand the issues and he thinks the experts and the Law Commission are wrong. In fact it is he and his party who are wrong.I will finish on this. Although this pathetic little bill is supportable—it does some good; hardly any—it will not be noticed it will not make any difference and the problem will still get worse whether it is passed or not. Much much more is needed by this Government and hopefully the next time it looks at alcohol reform it will do something worthwhile.BRETT HUDSON (National): It is with pleasure I rise to support the Sale and Supply of Alcohol (Display of Low-alcohol Beverages and Other Remedial Matters) Amendment Bill. For the benefit of the member Denis O’Rourke who has just taken his seat I say that the bill is very carefully and clearly pitched at being a small remedial bill to address a couple of issues that arose and that had not been considered in the last set of reforms. It is not intended to be a major reform or review of the sale and supply of alcohol. So it is no great surprise then that it does just what it says it is going to do and if Mr O’Rourke cannot quite fathom that then I am afraid he is beyond our help. For the benefit of another member who spoke a little before and who said that he felt that this was going through a long process in order to achieve some small things—well I have some advice or some suggestions for Mr Faafoi too. If he thinks that it is a long and involved process to make a couple of small changes he could help by just taking much shorter calls. The quality of content would be the same and the time would be much less.This bill will simply address a couple of unforeseen consequences of the earlier reforms. Those earlier reforms have not actually made any negative changes around the supply of those low-alcohol beverages. It is just that unfortunately it has meant that they could not be displayed or promoted in the alcohol section of the establishment—say the supermarket—where the law demands that the other alcoholic beverages must be sold.For instance at the moment if an organisation really wanted to it could place the mead or the low-alcohol wine along with the vegetables. I for one do not normally make an association between a mead and a swede—a swede and a mead I see no need—and I do think that it is absolutely right that those low-alcohol beverages should in fact be restricted to the same area of the supermarket or liquor store as the other alcoholic beverages. I think it is a very sensible move to tighten it up in that sense.But I will remind the House that although there were some unintended consequences of the earlier reforms they have not led to those beverages being more accessible but just perhaps to them being displayed in the wrong area. I look forward to the passage of this bill through the House and to the much shorter calls from Mr Faafoi and his colleagues—and that way it will be wrapped up a lot sooner. I commend this bill to the House.PEENI HENARE (Labour—Tāmaki Makaurau): Tēnā koe Mr Assistant Speaker. Thank you very much for this opportunity. I rise to make a short contribution to the Sale and Supply of Alcohol (Display of Low-alcohol Beverages and Other Remedial Matters) Amendment Bill. As a father and as a family man you roll into the supermarket and you are always mindful of what your children will see. I think some of the members this evening have raised very good points about a broader look at the amendments that could be made to make this bill a better bill to make sure that the original intention of this particular piece of legislation will meet the requirements as expected in our community. What those are really about is minimising the harmful effects of alcohol in our communities.Some of the members—and the member Alfred Ngaro has mentioned it this evening in his contribution but I am mindful of the proliferation of the number of alcohol outlets in particular in South Auckland—particularly in my electorate of Tāmaki Makaurau and in the good electorate of Manukau East the electorate of my colleague Jenny Salesa. Many of the communities have spoken out against the proliferation of these alcohol outlet stores. I think about those communities when we consider that large supermarket chains—large supermarkets where you can go and purchase alcohol—tend to get these kinds of amendments through by successful lobbying. Although I appreciate that when you go into a supermarket you do not want to be inundated with advertisements about alcohol and you want your children to enjoy the experience of shopping without having to see these things it is important that we do have specific areas for the sale of alcohol in supermarkets. But I do want the House to reflect on what this means in the communities in particular in Tāmaki Makaurau and in South Auckland.The Labour Party does support this bill. In my contribution I want to pick up on some of the points made by my colleagues on this side of the House. One of them—and I think the main one about this particular bill—is that the health consequences arising from this bill should be considered. We on this side take that very seriously because as my colleague Carmel Sepuloni mentioned in respect of the previous bill in front of the House our offices deal with the consequences of alcohol addiction and drug addiction and the problems that ensue in communities. They come into our office where we have to deal with our good constituents and we try our best.It is relatively minor and relatively technical this particular amendment but it does highlight a greater need. Some of the contributions this evening have mentioned the greater need and that is about the advertising of liquor in general. We know that the Labour view when the first piece of legislation went through was that we needed to seriously consider the harmful effects of alcohol sponsorship of sports teams. For some reason—it is just a Kiwi thing. You go to a game of rugby and you have a beer and a hotdog and chips. Although most of us have enjoyed those times I think that if we are really serious about this as an issue moving forward into the future it is important that we make sure that these pieces of legislation are substantial—that they deal with the issues fairly and finally in one hit. It does not mean that we keep coming back to tinker with these types of important pieces of legislation.Far too often in this House in my short time as a member that is what we seem to be doing—coming back here and tinkering with substantial pieces of legislation when of course because of the expediency agenda of this Government pieces of legislation are missing these things. They are missing what the Government might see as small oversights but really in the bigger scheme of things if it had been done properly and if it had been done right at the beginning then we would not have to be here wasting the time of the House. Instead we could be considering—The ASSISTANT SPEAKER (Lindsay Tisch): I am sorry to interrupt the honourable member. The time has come for me to leave the Chair.Debate interrupted.Sitting suspended from10 p.m. to 9 a.m. (Wednesday)