Volume 633 Week 24 - Wednesday 30 August 2006 
Volume 633 Week 24 - Wednesday 30 August 2006 
[Volume:633;Page:4965] 
Wednesday 30 August 2006 
Madam Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Minimum Wage (Abolition of Age  Discrimination) Amendment Bill 
Referral to Transport and Industrial Relations Committee 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 Pursuant to an agreement reached in the Business Committee yesterday I move  
That the order of the day for the second reading of the Minimum Wage (Abolition of Age Discrimination) Amendment Bill be discharged and the bill be referred to the Transport and Industrial Relations Committee. 
Motion agreed to. 
Questions to Ministers 
Numeracy—Development Project 
1. Hon BRIAN DONNELLY (NZ First) 
 to the  
Minister of Education 
: How much has been spent thus far on the numeracy development project? 
Hon STEVE MAHAREY (Minister of Education) 
: 
 I have good news. Around $70 million has been spent since the year 2000 with the project achieving excellent results across more than 1600 primary schools. A recent evaluation of the project showed major improvements in maths results across 400 schools involved last year with the highest improvement being amongst students who were previously the lowest achievers and a lift in the achievement across Maori and Pasifika students. The project of course has been strongly endorsed across the education sector. 
Hon Brian Donnelly 
: Can the Minister explain the seemingly perverse findings by the National Education Monitoring Project which show that despite the considerable investment in developing numeracy skills students seem to have regressed in number facts and arithmetic algorithms yet progress seems to have been made in algebra logic and statistics? 
Hon STEVE MAHAREY 
: The person who ran the project seemed to boil it down by saying that students were doing better as was expected in thinking and understanding the maths they were doing. So therefore they were doing better in complex tasks. But for year 4 students some questions went to the heart of their basic arithmetic ability where they did not do as well as previously. It is very important to keep this in proportion. This is a sample of around 3000 pupils—years 4 and 8. On some questions year 4 students did not do as well as previously on the basic arithmetic skills and as a result we need to improve in that area. 
Dr Ashraf Choudhary 
: What were the results of the 2005 National Education Monitoring Project’s evaluation of year 4 and year 8 students in relation to mathematics? 
Hon STEVE MAHAREY 
: As I have said in reply to Mr Donnelly’s primary question the results of the study were very positive. Years 4 and 8 students are making gains in almost all areas of maths particularly on more complex maths tasks. Averaged across 61 tasks there was a 4 percent gain for year 8 students. Year 4 students showed a 3 percent gain on all tasks other than arithmetic where there was a small decline. Work is now under way to improve students’ understanding and recall of number facts. As the researcher Lester Flockton has said: “I am personally quite confident that in 4 years’ time we will find that it comes back to the right level again.” 
Gordon Copeland 
: Does the Minister recognise that there is a numeracy achievement gap between boys and girls; if so what is being done within the numeracy development project to address that? 
Hon STEVE MAHAREY 
: Yes the results show that there is a slight gap between the performance of girls and boys. Of course that is what the numeracy project is all about—to try to change the way we teach maths so that boys and other groups that have not been doing as well as others improve their performance. As the results show that is beginning to happen. 
Hon Bill English 
: When will the Minister require schools to report the results of numeracy assessments to parents so that they can know how their child is doing? 
Hon STEVE MAHAREY 
: As the member will know there is a large number of requirements on schools to report on their performance. But I would urge— 
Hon Bill English 
: Not to parents! 
Hon STEVE MAHAREY 
: Any child who is at home now would know that Mr English as usual has begun to yell in a way that he would disapprove of if that child did it. But can I say that each school of course would welcome a visit from those parents to talk about those results. 
Madam SPEAKER 
: I just remind members when asking questions and giving answers to stick to the substance of what they are saying. 
Hon Brian Donnelly 
: Would the Minister agree that New Zealand is the envy of other nations for having a system such as the National Education Monitoring Project to identify clearly and in a timely fashion the learning outcomes of our schooling system; would the Minister like to say when this system was introduced and under which Government it was? 
Hon STEVE MAHAREY 
: I would like to say that yes I think we are the envy of many countries in that we do have the ability to take a snapshot in time then use that to feed back into the results and improve the performance of students. The member himself knows that he had a direct hand in developing that project. 
Ingram Report—Confidence 
2.  
Dr DON BRASH (Leader of the Opposition) 
 to the  
Prime Minister 
: Does she stand by her statement to the House yesterday in which she expressed confidence in the Ingram report into matters related to Taito Phillip Field; if not why not? 
Rt Hon HELEN CLARK (Prime Minister) 
: 
 Yes. 
Dr Don Brash 
: Can the Prime Minister confirm media reports this afternoon that she has not asked Taito Phillip Field for his resignation? 
Rt Hon HELEN CLARK 
: Yes. 
Dr Don Brash 
: Is the Prime Minister effectively telling the House that misleading the Ingram inquiry taking bribes altering official documents threatening witnesses and making false representations to a Minister to secure a ministerial discretion are all unacceptable behaviour on the part of a Minister but quite acceptable behaviour for a member of Parliament; if not why does she continue to block attempts to get to the truth in relation to these allegations against Mr Field? 
Rt Hon HELEN CLARK 
: On this side of the House we do not ask for resignations over allegations. Apparently that is the standard of natural justice that goes on over there. 
Dr Don Brash 
: Can the Prime Minister confirm that Mr Ingram raised with her officials requests from witnesses who were prepared to appear before his inquiry provided they had access to legal advice and appropriate protection and why did she decline to authorise such protection and legal advice? 
Rt Hon HELEN CLARK 
: I have no knowledge of such a request. 
Dr Don Brash 
: Does she regret that no legal protection or legal advice was provided in the light of revelations in the Ingram report that on 2 October last soon after the inquiry had commenced Mr Field attended a meeting designed to establish the source of leaks to the media and to intimidate potential witnesses to the inquiry; and can the Prime Minister tell the House what construction can be placed on that action other than that she simply did not want to discover the truth? 
Rt Hon HELEN CLARK 
: Indeed I think Dr Ingram told me everything I needed to know about the course forward and that was that Mr Field should not be a Minister. 
Dr Don Brash 
: Has she discussed with her colleague H V Ross Robertson the promoter of the parliamentary code of conduct his obvious personal knowledge about Mr Siriwan’s engagement to work on Mr Field’s house in Samoa in complete contradiction to Mr Field’s own account to the Ingram inquiry; if not why does she not wish to see that conflict of evidence resolved? 
Rt Hon HELEN CLARK 
: As I have advised the member on the basis of the Ingram report I made a judgment; Mr Field is not a Minister. 
Dr Don Brash 
: Does she now have any regrets about her decision to restrict the terms of reference for the Ingram inquiry thus making it impossible for key witnesses to give evidence in the light of continuing revelations about Mr Field’s conduct? 
Rt Hon HELEN CLARK 
: I repeat the Ingram report told me as Prime Minister what I needed to know. There was no conflict of interest— 
Madam SPEAKER 
: Order please. All members are entitled to hear both the questions and the answers. 
Rt Hon HELEN CLARK 
: Unlike Robert Muldoon I do not go around ordering inquiries into private members or I might start with Dr Brash— 
Madam SPEAKER 
: I am sorry. Would the Prime Minister please sit down. I could not hear that answer and after I had asked members to enable the answer to be heard there was the barraging again. I ask the Prime Minister to repeat her answer please. 
Rt Hon HELEN CLARK 
: Unlike Robert Muldoon I do not order inquiries into private members. If I did Dr Brash’s secret election funding John Key’s electoral registration and John Hayes’ rest home would all be good candidates for such investigations. 
Gateway Programme—Reports 
3.  
H V ROSS ROBERTSON (Labour—Manukau East) 
 to the  
Minister for Tertiary Education 
: What recent reports if any has he received on the Gateway programme? 
Hon Dr MICHAEL CULLEN (Minister for Tertiary Education) 
: 
 I have received reports showing that an additional 92 schools will be joining the Gateway programme next year allowing more senior school students to gain valuable hands-on workplace experience. 
H V Ross Robertson 
: What benefits for students will arise from the extension of the programme? 
Hon Dr MICHAEL CULLEN 
: This means the students in nearly three-quarters of schools will now have the opportunity to participate in 1 day’s work experience a week. The scheme helps students to make better career choices and helps employers to identify and attract staff particularly in the crucial trades area. Last year 27 percent of students participating in Gateway ended up being directly employed while another 57 percent went on to further secondary or tertiary study. 
Gerry Brownlee 
: Would the Gateway programme help someone like H V Ross Robertson the promoter of the code of conduct for members of Parliament have a better memory when asked questions like those put to him by the  
New Zealand Herald 
 last week as to whether he saw Thai tilers at the property of Mr Phillip Field and whether he knew that they were working for Mr Field? 
Hon Dr MICHAEL CULLEN 
: No more probably than helping people to remember pushing old people downstairs. 
Speech from the Throne—Political Integrity of Parliament and Electoral Process 
4.  
Dr DON BRASH (Leader of the Opposition) 
 to the  
Prime Minister 
: Does she stand by the statement in the Speech from the Throne in 1999 that her Government would “restore public confidence in the political integrity of Parliament and the electoral process”? 
Rt Hon HELEN CLARK (Prime Minister) 
: 
 Yes by keeping our promises—unlike National which constantly betrayed the electorate through the 1990s. 
Dr Don Brash 
: Why does she continue to use Mr Field’s vote to prop up her Government when the allegations now being made against him are such that they damage the reputation of this Parliament? 
Rt Hon HELEN CLARK 
: Madam Speaker 
Madam SPEAKER 
: I am sorry Prime Minister. Please be seated. Would members please respect those who are attempting either to ask questions or to answer them. 
Rt Hon HELEN CLARK 
: Allegations should go to the police where the police can look at them. I do not believe in trial by media. Dr Brash may think it appropriate to sack people from Parliament on allegations. We do not. 
Gordon Copeland 
: Would she consider a code of conduct for MPs as advocated by the leader of United Future the Hon Peter Dunne—perhaps as is now the case in the UK—with empowerment to investigate possible breaches of that code in order to restore confidence in the integrity of this Parliament? 
Rt Hon HELEN CLARK 
: As Prime Minister I am more than happy for such proposals to be considered by the Standing Orders Committee. 
Dr Don Brash 
: Can we take it from the Prime Minister’s statement earlier this week—that Mr Field’s role as a Labour Party MP was “a matter for him and the Labour Party organisation to work through”—that she is asking this House and the New Zealand public to believe that it is beyond her control to deal with the fact that Mr Field’s vote is propping up her Government? 
Rt Hon HELEN CLARK 
: I have constantly advised the member what my responsibilities are as Prime Minister and they have been fully discharged. 
Dr Don Brash 
: Why when the allegations against Mr Field include claims of abuse of ministerial office misuse of ministerial staff and knowingly misleading ministerial colleagues is the Prime Minister not prepared to offer New Zealanders the explanation they deserve? 
Rt Hon HELEN CLARK 
: In case the member has not noticed Mr Field is no longer a Minister. 
Dr Don Brash 
: I repeat a question I asked the Prime Minister earlier: is she saying that although it may not be acceptable for a Minister to abuse ministerial privileges and to misuse ministerial staff it is quite in order for an ordinary member of Parliament in her party to misbehave in the ways alleged? 
Rt Hon HELEN CLARK 
: I am pointing out to the member what my responsibilities as Prime Minister are. Can I say that unlike the Hon Nick Smith Phillip Field has not been convicted of anything. 
Health Services—Wanganui 
5.  
TARIANA TURIA (Co-Leader—Maori Party) 
 to the  
Minister of Health 
: What commitment does the Government have to retaining secondary health services in Whanganui? 
Hon PETE HODGSON (Minister of Health) 
: 
 This Government’s commitment to health services in Whanganui is greater than any Government’s in recent memory. 
Tariana Turia 
: Is the Minister aware of the current crisis in Whanganui around the shortage of specialist obstetricians and paediatricians and what direction will he give to the district health board which has not expressed a commitment to continue to provide 24-hour specialist cover to the people of Whanganui? 
Hon PETE HODGSON 
: I am aware that a paediatrician has recently left another paediatrician is on holiday that an obstetrician is soon due to retire and that these and other issues are currently challenging the Whanganui District Health Board—none of which alters this Government’s commitments to secondary services in Wanganui which remain absolutely firm. I might say to the member that as we speak there is comprehensive paediatric coverage in Wanganui. 
Jill Pettis 
: How does the Labour-led Government’s commitment to maintaining secondary services in Wanganui compare with previous commitments? 
Hon PETE HODGSON 
: It compares very well. In June of this year I announced that $30 million would be put aside for a redevelopment of Wanganui Hospital which is just the latest sign of our commitment to the health of people in the region. Members should compare this with the policy of the National Government which planned major cuts to services sending 3500 people to the streets in protest. This Labour-led Government is proud of its record in Wanganui. 
Tariana Turia 
: I am sorry that the Minister has been misled about what services are available in Whanganui. 
Madam SPEAKER 
: Would the member please just ask the question and not make a comment. 
Tariana Turia 
: Is the Minister aware that Whanganui’s ambulance service is also in crisis and as a consequence ambulances often have to travel from Palmerston North to Whanganui and back to Palmerston North resulting in a delay of up to 2 or more hours to complete the transfer; and what advice can he give to the community of Whanganui to restore confidence in the district health board and our health services? 
Hon PETE HODGSON 
: I stand by my comment that today there are comprehensive paediatric services in Wanganui. As to the inter-hospital transfers with ambulances I say that that is why we have them. 
Chester Borrows 
: Does he agree with the comments from the Labour list MP resident in Wanganui who was reported in the  
Wanganui Chronicle 
 as saying that the Whanganui District Health Board is “no worse off than many others” and Wanganui people should not beat themselves up over this issue; or does he think that the situation at the Whanganui District Health Board is as good as it gets and all the other district health boards are in a worse state? 
Hon PETE HODGSON 
: I do disagree with my colleague Jill Pettis when she said that Wanganui is no worse off. Wanganui is actually better off because it has the prospect of a $30 million new hospital development something that could not have been contemplated under National because it was intent on giving the funding away in tax cuts to its rich mates. 
Tariana Turia 
: What consideration has been given to the economic impact on Whanganui if the staffing crisis is not addressed urgently given that we have already been told by real estate agents that people with young families are no longer considering Whanganui as a place to live because of the risks of not being able to access paediatric and obstetric services? 
Hon PETE HODGSON 
: I acknowledged earlier in an answer that there are issues in Wanganui regarding both paediatrics and obstetrics and that right now there is a comprehensive paediatric service. I wish the board well as it seeks to replace paediatric services and indeed in time to strengthen obstetric services. I have no doubt that over time it will succeed. 
Ingram Report—Status 
6.  
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
 to the  
Minister of Immigration 
: Does he stand by the statement made on his behalf to the House yesterday that “I rely on the Ingram report because it is an authoritative report written by a Queen’s Counsel.”? 
Hon DAVID CUNLIFFE (Minister of Immigration) 
: 
 Yes because it is a comprehensive report. 
Dr the Hon Lockwood Smith 
: How sound is his reliance on the Ingram report when Taito Phillip Field told Noel Ingram QC that it was not until June 2005 that he became aware Mr Sunan Siriwan was being financially supported by him and his wife when Mrs Field had filled out a Samoan immigration employment sponsorship form promising to be Mr Siriwan’s employer in Mr Field’s presence on 26 or 27 February 2005 and when Mr Siriwan was issued with a Samoan work visa prior to 17 March 2005 on the basis of being employed by the Fields? 
Hon DAVID CUNLIFFE 
: As New Zealand’s Minister of Immigration neither the conduct of the Ingram inquiry nor the issuing of work permits by the Samoan Government falls within my responsibilities. 
Dr the Hon Lockwood Smith 
: How sound is the Minister’s reliance on the Ingram report when Taito Phillip Field told Noel Ingram QC that it was not until late May or early June 2005 that he became aware Mr Sunan Siriwan was working on his house in Samoa and when Mr Field’s colleague Ross Robertson told the  
New Zealand Herald 
 that he socialised with Mr Field and Mr Siriwan at the Fields’ home in Samoa in March 2005 and even then had the impression Mr Siriwan was there working on Mr Field’s house? 
Hon DAVID CUNLIFFE 
: It is by now not news that the member concerned committed a number of errors of judgment. 
Dr the Hon Lockwood Smith 
: How sound is the Minister’s reliance on the Ingram report which concludes that “The evidence does not support a finding that Mr Field knew that Mr Siriwan was working on Mr Field’s house in Samoa at the time that he wrote that letter.”—Mr Field’s final submission to the Associate Minister on 18 May 2005—when Noel Ingram QC failed to examine the Samoan work permit for Mr Siriwan obtained prior to 17 March which clearly identified the Fields as Mr Siriwan’s employers? 
Hon DAVID CUNLIFFE 
: I repeat that the conduct of the Ingram inquiry does not fall within my ministerial responsibilities. 
Dr the Hon Lockwood Smith 
: How sound is the Minister’s reliance on the Ingram report when based on Taito Phillip Field’s evidence Mr Ingram QC could not establish that Mr Field was aware of the fact that Mr Siriwan was working on his house any earlier than 26-30 May 2005 and when had Mr Ingram examined Mr Siriwan’s Samoan work permit he would have found that the work permit established the Fields as Mr Siriwan’s employer from March? 
Hon DAVID CUNLIFFE 
: That would be a matter between Mr Ingram Mr Field and if necessary the Samoan Government. 
Dr the Hon Lockwood Smith 
: Is the Minister still satisfied to rely on the Ingram report when the evidence now clearly shows that Taito Phillip Field lied to either Noel Ingram QC or the immigration authorities of the Samoan Government; if so why? 
Hon DAVID CUNLIFFE 
: Having commissioned a reputable Queen’s Counsel to undertake this inquiry I am not in a position to second-guess the veracity of statements made by Mr Field nor am I responsible for doing so. As my colleague Mr Cosgrove said to the member yesterday if the member is in possession of new additional information he should provide it to the police or to me. 
Feltex Carpets Ltd—Securities Commission Investigation 
7.  
SUE BRADFORD (Green) 
 to the  
Minister of Commerce 
: What investigation has been undertaken by the Securities Commission into the initial public offering of shares in Feltex Carpets Ltd and what was the outcome of any such investigation? 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I am advised and it is on the public record that the Securities Commission conducted an investigation into the 2004 initial public offering prospectus of Feltex Carpets Ltd. On 25 August the commission announced that it had found no breaches of the securities laws in the prospectus. However I am further advised and it is also on the public record that the commission has not yet finished other aspects of its investigation that relate to continuous disclosure and financial reporting issues. 
Sue Bradford 
: Does the Minister consider it appropriate for the Securities Commission to investigate its own role in this massive $200 million expropriation from New Zealand shareholders given that it granted nine exemptions to Credit Suisse First Boston the company that owned and floated Feltex? 
Hon LIANNE DALZIEL 
: I am advised that the exemption-giving process is not unusual. Granting exemptions addresses a recognised technical problem in the law and has been granted in similar circumstances by the Securities Commission for over 20 public share offerings in the past 8 years. These matters are being considered though by the Government in its review of securities law. 
Sue Bradford 
: Whom does the Minister suggest that Feltex shareholders turn to if they are not convinced that the Securities Commission will undertake a sufficiently independent and impartial investigation into the events before and after the Feltex initial public offering? 
Hon LIANNE DALZIEL 
: I remind the member that the commission is an independent Crown entity but I note for the record that there is a right of appeal on a matter of law in the Securities Act. 
R Doug Woolerton 
: What effect does the Minister think the Securities Commission’s ruling in respect of Feltex has had on investor confidence in the New Zealand sharemarket especially on the so-called mum and dad investors whom the Government continues to encourage to invest less in property and more in equities? 
Hon LIANNE DALZIEL 
: The only comment I can really make in that regard is that the Securities Commission is continuing to investigate other matters subsequent to the earnings downgrade announcement in April 2005. 
Sue Bradford 
: Is the possible purchase of Feltex by Godfrey Hirst—a company owned by companies registered in the tax haven of Vanuatu—likely to give investors more or less confidence in the securities market than a bid by the owners of the well-known company Sleepyhead which manufactures in New Zealand employs New Zealand workers and pays New Zealand taxes? 
Hon LIANNE DALZIEL 
: I endorse the commission’s vision of having confidence in the securities market which has driven the Government’s programme in respect of securities law reform. However which securities individuals or corporate investors choose to invest in is a matter for them not for the Government or the Securities Commission. 
Peter Brown 
: Does the Minister understand what Godfrey Hirst means by “synergies” it wants to get out of taking over Feltex New Zealand and does she share the view that it is just code for Kiwis potentially losing their jobs and their factories and mum and dad shareholders losing a large part of their investment; and if she does share that view will she do anything to rectify the position? 
Hon LIANNE DALZIEL 
: The first of those questions asked: “Does the Minister understand …”. Yes I do believe I understand what was meant by what was said but it is not within my portfolio responsibilities to comment on it. 
Sue Bradford 
: I seek leave to table the Securities Act Feltex Carpets Ltd exemption notice of 2004 which grants nine exemptions to Feltex and Credit Suisse. 
Document by leave laid on the Table of the House. 
Sue Bradford 
: I seek leave to table the news release of the Securities Commission dated 25 August 2006 which states that the commission has found no breaches of the securities law in the prospectus and that no further action will be taken. 
Document by leave laid on the Table of the House. 
Sue Bradford 
: I seek leave to table two records from the New Zealand Companies Office dated 30 August this year showing that the shareholding in Godfrey Hirst is owned by a company whose address is in Port Vila Vanuatu. 
Documents by leave laid on the Table of the House. 
Immigration Service—Ministerial Discretion 
8.  
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
 to the  
Minister of Immigration 
: Does he stand by his statement to the House on Thursday 20 July that no ministerial discretion was exercised when the New Zealand Immigration Service approved a work visa for Mr Bulakorn Nakhen on 17 February 2005 in response to submissions by Taito Phillip Field? 
Hon DAVID CUNLIFFE (Minister of Immigration) 
: 
 Yes. I am advised that the Associate Minister had previously declined to intervene in Mr Nakhen’s case and that Mr Nakhen was required to leave New Zealand. 
Dr the Hon Lockwood Smith 
: When Ms Mary-Anne Thompson Deputy Secretary of the Department of Labour told the Ingram inquiry that the “issuing of a work visa to a failed applicant for refugee status could be viewed as a true exception to normal practice;” why did Immigration New Zealand issue a work visa to Mr Nakhen a failed applicant for refugee status following submissions from Taito Phillip Field? 
Hon DAVID CUNLIFFE 
: Quite simply it was because Mr Nakhen was married to a New Zealand citizen and with supporting information and documents the department was satisfied the relationship was genuine. 
Dr the Hon Lockwood Smith 
: When Mary-Anne Thompson told the Ingram inquiry that had failed refugee Mr Sunan Siriwan applied to Immigration New Zealand for a work visa the application would have been unsuccessful why was the application for Mr Nakhen successful following representations from Taito Phillip Field when Mr Nakhen had twice applied for refugee status and been declined on each of those occasions and had failed on appeals on each of those decisions? 
Hon DAVID CUNLIFFE 
: The answer is very simple. The member’s representations on behalf of Mr Nakhen occurred on 31 August 2004; that is before the Minister declined to intervene on 13 October 2004. The subsequent decision by the department was made on completely different grounds. 
Dr the Hon Lockwood Smith 
: If as the Minister told Parliament on 20 July and has confirmed today no ministerial discretion was exercised in the case of Mr Nakhen in response to submissions from Taito Phillip Field why did Mr Field’s ministerial secretary email the ministerial secretary of the Associate Minister Damien O’Connor on 13 October 2004 claiming an agreement whereby Mr O’Connor would “grant Mr Nakhen a work permit if he voluntarily left the country for 2 months”? 
Hon DAVID CUNLIFFE 
: Clearly I am not responsible for Mr Field’s secretary and equally clearly she got it wrong. 
Dr the Hon Lockwood Smith 
: If as the Minister has advised Parliament no ministerial discretion was exercised in the case of Mr Nakhen in response to submissions from Taito Phillip Field why did his department not write back to correct the misunderstanding when Mr Field wrote to them on 27 October telling them of the understanding he had reached with Mr O’Connor whereby Mr Nakhen “would be allowed to reapply for re-entry via a legal permit preferably a work permit”? 
Hon DAVID CUNLIFFE 
: MPs on all sides of the House are free to write in support of individual applications to Immigration New Zealand. However the correct reporting line is from the department to its own Minister. The department does not follow the characterisation of its Minister offered by other MPs. 
Dr the Hon Lockwood Smith 
: Did the fact that the Minister’s department did not dispute the claim of Taito Phillip Field that he had an agreement with Damien O’Connor whereby Mr Nakhen “would be allowed to reapply for re-entry via a legal permit preferably a work permit” reflect the fact that his department believed Mr O’Connor had reached such an agreement which was why his department approved a work visa for Mr Nakhen an illegal overstayer who had four times been refused refugee status? 
Hon DAVID CUNLIFFE 
: Quite simply because it is a truism that any person who legally leaves New Zealand is therefore legally allowed to apply for a work permit. It does not mean they will get one. It needs to be decided on the facts. 
Gerry Brownlee 
: I raise a point of order Madam Speaker. It seems to me that in that exchange if I recall comments that have been made in the House around this issue over the many weeks that it has been on the boil it would seem that the role of Mr O’Connor may well have been misrepresented by his ministerial colleague in answers today. I rise simply to make it clear that should Mr O’Connor wish to use the personal explanation process to clear his reputation we would not block that. 
Madam SPEAKER 
: That is a debating matter. It is obviously not a point of order as I am sure the member knows. 
Lebanon—New Zealand Assistance 
9.  
Hon MARIAN HOBBS (Labour—Wellington Central) 
 to the  
Minister for Disarmament and Arms Control 
: Will New Zealand provide assistance with the clearance of landmines and unexploded ordnance in Lebanon following the recent conflict there? 
Hon PHIL GOFF (Minister for Disarmament and Arms Control) 
: 
 Yes. New Zealand has been requested by the United Nations Mine Action Service to deploy a New Zealand Defence Force major to work in the mine and unexploded ordnance clearance area. That officer is currently in Beirut coordinating action to clear landmines and unexploded ordnance. That clearly is a critical job for the prevention of the further loss of human life and for facilitating the delivery of humanitarian aid. A New Zealander David Shearer has also been appointed as the United Nations Humanitarian Coordinator for Lebanon. 
Hon Marian Hobbs 
: Is the Government concerned that cluster bombs have been used in the conflict and will it be registering its opposition to the use of such weapons? 
Hon PHIL GOFF 
: Yes New Zealand has consistently expressed its concern about the use of cluster bombs in urban and civilian areas because of the indiscriminate casualties it causes amongst the civilian population. We express that concern through the inhumane weapons convention and the review conference will take place in November. We have also registered our concern in New York with the United Nations Security Council and in Geneva with the Human Rights Council condemning actions that target civilians and we have supported the Secretary-General’s call for investigation into violations of international humanitarian law. 
Keith Locke 
: Will the Minister go beyond his statement just made expressing concern about the indiscriminate use of cluster munitions and publicly advocate a universal ban on cluster munitions? 
Hon PHIL GOFF 
: However desirable a universal ban may be there is no prospect that that will get through the inhumane weapons convention. We will go for what we realistically think we can achieve and in particular that will target areas such as the fact that many of the cluster bombs do not explode on impact and that they should have a self-destruct mechanism. That is one of the things we think we can gain considerable international support for. Obviously we will be working with other like-minded countries to prevent the use of cluster munitions in civilian areas such as has been the case in the Lebanon where most of the casualties have been civilian not military. 
Keith Locke 
: I raise a point of order Madam Speaker. I am not sure the Minister entirely addressed the question. Although he did talk about some of the practical steps New Zealand is proposing he did not really answer the question of whether New Zealand in principle supported a universal ban on cluster munitions. 
Madam SPEAKER 
: The Minister did at some length address the question. Obviously when a question contains several thoughts as members know happens with supplementary questions the Minister is required to answer only one but I see the Minister is anxious to elaborate. 
Hon PHIL GOFF 
: Just to remind the member I started by answering his question directly saying that no matter how desirable it was to have an outright ban that was unlikely to be achieved. Therefore New Zealand in its usual tradition will go for objectives that it thinks will take the world forward and that it can achieve. 
Hon Marian Hobbs 
: What are the predominant problems caused by the use of such cluster munitions? 
Hon PHIL GOFF 
: The first problem I have referred to already—that is these cluster munitions will have the greatest effect on civilians when they are used in urban areas as they have been. Secondly the difficulty we have with cluster munitions is that about 10 percent of them do not actually explode on the ground on impact. Therefore what happens is that these cluster munitions which are about the size of a tennis ball or a Coke can will lie on the ground. They will be picked up and played with by kids. The main casualties are kids and 25 years after they were first used in the Lebanon back in the late 1970s and the 1980s there are still fatalities being caused amongst the civilian population by these weapons. Now they have a whole new generation of weapons left on the ground by the latest conflict which will continue to kill kids and unarmed civilians. 
Health Expenditure—Priorities 
10.  
Hon TONY RYALL (National—Bay of Plenty) 
 to the  
Minister of Health 
: Is he satisfied that health expenditure is being prioritised appropriately; if so why? 
Hon PETE HODGSON (Minister of Health) 
: 
 The Government has undertaken a historic reinvestment in our public health system and yes I am satisfied that on the whole it is being prioritised appropriately. 
Hon Tony Ryall 
: Is it the Government’s priority to fund race-based health programmes like this programme which asks: “Are you male? Are you Maori? Are you aged 35 to 45? Would you like subsidised gym membership?” and how does he square that with this Government’s undertaking to treat all New Zealanders fairly rather than on the basis of their race? [ 
Interruption 
] 
Madam SPEAKER 
: All members would like to hear the answer I am sure. 
Hon PETE HODGSON 
: I presume the member is referring to a programme near his own home town of Tauranga which is run out of the Western Bay of Plenty primary health organisation. The main cause of death in that district health board’s area is cardiovascular disease. It is the leading cause of death amongst Maori men. The primary health organisation is doing precisely what primary health organisations were set up to do which is to reach into the population find the people who are most at risk and start to deal to them. 
Hon Members 
: What about the Pakeha? 
Hon PETE HODGSON 
: And what is more the idea of having a free gym membership is of course no more than a thing called a Green Prescription an idea that began under National when the member’s mate three to the left of where he is sitting now was Minister of Health. The member needs to become a student of history as well as a student of the portfolio. 
Barbara Stewart 
: What funds from the health budget are spent annually on migrant health screening and the treatment of conditions exposed by screening; has that figure increased over the past 6 years? 
Hon PETE HODGSON 
: I cannot give the member a precise answer to the question without notice I am sorry. But I can tell the member that funding to better integrate migrant communities was disbursed by my predecessor the Hon Annette King about a year and a bit ago. The whole reason for doing that was to make sure that migrants especially those from sub-Saharan Africa were integrated into our health system as early as possible. 
Hon Tony Ryall 
: Why when before the election this Government promised to do away with race-based funding do the many thousands of other New Zealanders who are at risk from heart disease in the region not qualify for subsidised gym memberships free lifestyle coaching support and weight loss programmes; is that because they are the wrong colour under this Government? 
Madam SPEAKER 
: No I will not call the Minister until all members can hear the reply. 
Hon PETE HODGSON 
: It is a matter of fact that New Zealanders of Maori descent die around 7 years younger than New Zealanders of Pakeha descent. That is something that I find shameful. I am delighted that a primary health organisation in the member’s own electorate is keen to do something about that. I am delighted about that and I would say to the member that this is not race-based funding. It self-evidently is needs-based. And as long as there is a need to pay special attention to Maori health in this or that area—or Pacific Island health or male health or female health—we will do so and do so proudly. 
Hon Dr Michael Cullen 
: Is it correct that in the example the member has referred to there are three identifiers—age sex and race—and has he understood why so far the member has picked on only race and appears not to worry about age and sex? 
Hon PETE HODGSON 
: I could draw the obvious conclusion but it would be of course unparliamentary to do so. 
Peter Brown 
: Does the Minister believe that the humanitarian policy announced today which has the potential to increase the prevalence of AIDS in New Zealand residents by almost 10 percent and cost the health system $3 million extra per year will be viewed by the public as an appropriate prioritisation of health expenditure; if he agrees with that could he please explain why? 
Hon PETE HODGSON 
: Not only do I agree with it but I warmly endorse it. I say to the member straightforwardly that by taking this step we do not increase the prevalence of HIV in this country; we of course decrease it. We decrease it because this virus always flourishes wherever there is denial and cover-up. Whenever one shines a light on it is open and goes for early diagnosis one will always get better control. That is the history of HIV throughout the world and it is time the member got his head around that. 
Heather Roy 
: Does the Minister think the $3.9 million of taxpayer money spent over 6 years on the Health Workforce Advisory Committee was well-prioritised health expenditure when it produced nothing of any benefit at all to assist workforce shortages; would that money not have been better spent on 312 hip replacements or 1700 grommet operations for children with hearing difficulties? 
Hon PETE HODGSON 
: When the Health Workforce Advisory Committee was set up by my—[ 
Interruption 
] I wonder whether the member would like to listen given that she asked the question. [ 
Interruption 
] When the member is ready I will answer the question. 
Madam SPEAKER 
: Would the Minister please be seated. Would members please lower the chit-chat across the Chamber so that we can hear the answer. 
Hon PETE HODGSON 
: When my predecessor the Hon Annette King established the Health Workforce Advisory Committee New Zealand was coming out of a period when it was believed that there was no need to have a health workforce debate and that somehow the market would take care of the situation. That is why this country has well insufficient dental therapists for example; it is why we ran out of radiation therapists for example. You see the market left to its own devices does not work. The Health Workforce Advisory Committee has done this country an absolute favour by getting the health workforce on the agenda to the point where even the ACT party is now asking about it. 
Sue Moroney 
: Is the Minister satisfied that there is a broad appreciation of how to best balance competing priorities for health expenditure? 
Hon PETE HODGSON 
: Sadly I am not. I have heard calls to relieve the pressure on elective services by cutting primary health spending which would of course make the pressure on elective services worse. I have heard calls to cut taxes but at the same time to provide more health services—go figure! I have heard calls to prevent disease followed by calls to stop spending money on anti-smoking programmes. Today we have heard remarks like: “Let’s make sure we don’t deal to the most needy in our society.” All of those calls came from Tony Ryall. The more Labour does in health the more bitter and strange that member becomes. 
Madam SPEAKER 
: Those last comments were unnecessary. Would the member please be seated. This House is trying very hard to comply with the Standing Orders. Would the Minister please withdraw those comments. 
Hon PETE HODGSON 
: I am happy to withdraw Madam Speaker. 
Hon Tony Ryall 
: Why is the Government continuing to fund race-based programmes when before the election it promised they would be stopped; will he tell primary health organisations and district health boards that they should stop dividing their areas on the basis of race and treat their patients on the basis of their need? 
Hon PETE HODGSON 
: All personal health is done on the basis of need and all population health is done on the basis of what the population needs. The member really does need to begin to understand health policy. 
Hon Tony Ryall 
: If the Minister is so keen that these programmes be based on race can he explain why this programme targets not the most at-risk racial group in the region which is in fact Indians; can he also explain why the Government is pursuing the race-based funding of primary health organisations when Mr Mallard before the election said that these programmes would be stopped yet after the election Helen Clark and the Labour Party are back to their old tricks of dividing New Zealanders on the basis of race? 
Hon PETE HODGSON 
: The Bay of Plenty District Health Board has identified cardiovascular disease diabetes cancer and renal disease as its highest-priority chronic conditions and has begun integrated programmes of care for all of those conditions for the four priority populations. They are children and young people Maori older people and people with disabilities. If the situation for Indians in the Bay of Plenty has been overlooked by the district health board then I am sure a very good local member would draw that to the attention of the district health board. 
Dr Jackie Blue 
: Does the Minister agree that the Western Bay of Plenty’s race and gender-based initiative to reduce cardiovascular disease which targets 35 to 45-year-olds is in fact targeting the wrong group when it is a well-known fact that here and now the people at greatest risk of dying of heart disease—and that includes Maori men—are those aged 45 to 64? 
Hon PETE HODGSON 
: I myself do not make clinical decisions but I am delighted that the member has decided that she should take a population-based approach to health. She should ask National’s health spokesperson to follow suit. 
Hon Tony Ryall 
: I seek leave to table two documents from before the election: first a Cabinet paper that resolves that the Ministry of Health will be instructed to remove race-based funding from primary health organisations and second a report from the  
Dominion Post  
of before the election in which the Minister Mr Mallard announces that race-based programmes are to be removed. 
Madam SPEAKER 
: Leave is sought to table those documents. Is there any objection? There is objection. 
Heather Roy 
: I seek leave of the House to table question for written answer No. 7868 from 2006 showing that the Health Workforce Advisory Committee was funded to the tune of $3.9 million despite the fact that it achieved absolutely nothing in its 6 years of existence. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Welcome Home Loan Scheme—Criteria 
11.  
RUSSELL FAIRBROTHER (Labour) 
 to the  
Minister of Housing 
: What changes did the Government recently announce to the Welcome Home Loan scheme which assists New Zealand families to buy their first home? 
Hon CHRIS CARTER (Minister of Housing) 
: 
 Changes to the Housing New Zealand Corporation’s Welcome Home Loan scheme from this month will enable eligible families to buy a $200000 home on no deposit or a home worth up to $280000 on a reduced deposit. These changes reflect the Labour-led Government’s commitment to assisting modest and middle income families to purchase their own homes. 
Russell Fairbrother 
: What reports has the Minister seen on reactions to these changes to the Welcome Home Loan scheme? 
Hon CHRIS CARTER 
: I have seen many glowing reports from regional New Zealand where we expect there will be great take-up of the Welcome Home Loan scheme. For example Palmerston North mortgage broker Lee Johnson said it was exciting and would give people on the cusp of affording a house an opportunity. I have also seen a bizarre comment accusing the Government of encouraging young people into debt. This was from National’s Phil Heatley who cannot produce a single case of anyone defaulting on a Welcome Home Loan. Over 1800 individuals or couples have already taken advantage of the scheme. Does National not support homeownership? 
Pita Paraone 
: Tena koe Madam Speaker. Will the Government increase the borrowing and income limits in line with both general and house price inflation to ensure the Welcome Home Loan scheme remains relevant to the market; if so how often will the limits be revised? 
Hon CHRIS CARTER 
: Our recent adjustment to the scheme reflects our continued monitoring of house prices. We have also announced of course that we are looking at new products like shared equity schemes to assist people to buy their own homes in a higher-cost housing market. 
Phil Heatley 
: When exactly will this Parliament see the details of the Minister’s shared equity scheme which was first announced in July 2003 announced again in April 2004 then announced again in July 2005 as an election promise of an up to fifty-fifty equity deal then announced yet again recently and mentioned today in this House; when will we finally see the details of this silver bullet—now 3 years on? 
Hon CHRIS CARTER 
: The Government has not announced a shared equity scheme yet. What we have foreshadowed is that we will be announcing one before the next Budget. 
Phil Heatley 
: I seek leave to table a range of documents outlining the announcement of the shared equity scheme. One in— 
Madam SPEAKER 
: Do members—from both sides of the House—wish to remain in the House? This is your last warning. There are little pockets of members with penetrating voices. So would you please not make any comment during points of order. 
Phil Heatley 
: I seek leave to table a range of documents announcing the shared equity scheme: one dated July 2003 one dated 2004 another dated 2005 and one dated 2006. We are yet to see the details but I would like to table these announcements. 
Madam SPEAKER 
: Leave is sought to table those documents. Is there any objection? There is objection. 
Hon CHRIS CARTER 
: I seek leave to table an editorial from the  
Nelson Mail 
 dated Tuesday 15 August 2006 that states among things: “Welcome Home then provides a necessary step up on to the first rung of the home ownership ladder.” 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection. There is objection. 
Hon CHRIS CARTER 
: I seek leave to table an article from the  
Manawatu Standard  
dated 16 August stating “easier foot in the door for homeowners” about the Government’s announced homeownership scheme. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Phil Heatley 
: I seek leave to table an article entitled “Government help for home buyers likely” which states the home equity scheme announced here in March 2005 will be rolled out in April 2005. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Hon CHRIS CARTER 
: I seek leave to table a document from the  
Hawke’s Bay Today 
— 
Madam SPEAKER 
: Paula Bennett I am sorry but I specifically issued a warning about interjections during points of order. Would you please leave the Chamber. 
Paula Bennett withdrew from the Chamber. 
Hon CHRIS CARTER 
: I seek leave to table a document from the  
Hawke’s Bay Today 
 newspaper dated 15 August praising the Welcome Home Loan scheme and saying that plenty of $200000 houses are available in Hawke’s Bay. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Hon CHRIS CARTER 
: I seek leave to table an article from the  
Greymouth Evening Star  
dated 15 August praising the home loan scheme and stating that there are plenty of houses on the West Coast in the price range and that the home loan scheme will not push up prices. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? Yes there is objection. 
Question No. 5 to Minister 
TARIANA TURIA (Co-Leader—Maori Party) 
: 
 I seek leave to table the roster for Wanganui Hospital in the next fortnight that demonstrates that for 5 days there is no paediatrician cover at all and patchy locum cover at best. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Standards New Zealand—Approval Process 
12.  
Hon Dr NICK SMITH (National—Nelson) 
 to the  
Minister of Commerce 
: Does she stand by her reply to question for written answer 9163 (2006) about Standards New Zealand and in particular her statement: “The Committee will make every attempt to achieve full consensus. In rare circumstances however a standard may be published without full consensus provided 80% of the committee members vote in favour of publication.”? 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 Yes. 
Hon Dr Nick Smith 
: Does the Minister consider it acceptable for the Standards Committee considering a lowering of timber treatment standards to in May have two members vote against the change; then in June have those two members sacked off the committee following industry lobbying; only to have in August the vote re-put and passed; and why would homeowners and builders have any confidence in standards adopted by that sort of process? 
Hon LIANNE DALZIEL 
: That is not the advice that I have. 
Hon Dr Nick Smith 
: I seek leave of the House to table the letter with regard to representations on the New Zealand standard 3640 committee in which Mr Neil Mora from AgriQuality and Mr Paul Oliver a timber treatment specialist were sacked from the committee after voting against the change. 
Document not tabled. 
Hon Dr Nick Smith 
: Has the Minister seen the statement made by the Department of Building and Housing in which after the standard was adopted it stated that it was not able to confirm that there is compliance with the building code; and if the Department of Building and Housing has no confidence in Standards New Zealand why should anybody else? 
Hon LIANNE DALZIEL 
: I am aware of that particular statement. I also have a statement made by Standards New Zealand explaining its position on the matter. If the member has any questions about citing the standard in the code they should be directed to the appropriate Minister. 
Shane Jones 
: Does she have confidence in the standards development process operating in New Zealand? 
Hon LIANNE DALZIEL 
: Yes I do have confidence in the process and I believe that the consensus-based approach is one that works best. As the Minister for Building Issues said on Monday in the  
New Zealand Herald 
 a hands-off approach is not the answer to lifting standards; the approach created the problems in the first place. The deregulation of the sector in the 1990s meant there were almost no rules; and we know which Government was in place when that happened. 
Hon Dr Nick Smith 
: Has she seen the statement made by the New Zealand Certified Builders Association saying it is “infuriated” that two Government agencies are now telling builders different rules on how houses are to be constructed; and can she today clarify the matter and tell us whether builders should follow the instructions of Standards New Zealand or the instructions of the Department of Building and Housing? 
Hon LIANNE DALZIEL 
: I am aware because I have read the newspaper reports of those claiming confusion about the New Zealand building industry. I understand that Standards New Zealand and the Department of Building and Housing are working together to quickly provide clear guidance to the industry. 
Hon Dr Nick Smith 
: Does the Minister believe that it is appropriate that the very same industry people who made the change a decade ago—to do away with timber treatment for framing—are now the same ones who have recommended and changed the standard in 2003 to water down those standards; and does she think this will satisfy New Zealanders living in rotting leaking homes that the lessons have been learnt? 
Hon LIANNE DALZIEL 
: The statement made by Standards New Zealand which perhaps the member has not seen makes it very clear that there is support for the greater use of boron treatment which is the issue at stake here; and that concern has been expressed about practical issues relating to the use of treated timber in houses such as compatibility of treated timber with wallboard adhesives and building underlay. These issues are related not just to boron treatment but to a wide range of timber treatments and they are not within the scope of the timber treatment standard. The member does not understand the issues he raises. 
Hon Dr Nick Smith 
: How can the Minister describe the process as one of obtaining a consensus when the members who voted against the watering down of the timber treatment standard were dumped off the committee so a consensus could be obtained? 
Hon LIANNE DALZIEL 
: As I said in an earlier answer that is not the advice I have. 
Hon Dr Nick Smith 
: I seek the leave of the House to table from the Department of Building and Housing its statement that it does not accept the change from New Zealand Standards regarding the watering down of timber treatment standards. 
Document by leave laid on the Table of the House. 
Hon Dr Nick Smith 
: I seek leave to table the statement made by the Certified Builders Association of New Zealand saying it is infuriated that we have a Government where two different agencies are telling builders different things about how they should build homes safely. 
Document by leave laid on the Table of the House. 
Hon LIANNE DALZIEL 
: I seek leave to table the Standards New Zealand statement which states that the timber treatment standard is technically sound and looks to finding some solutions to the matters that have been raised. 
Document by leave laid on the Table of the House. 
General Debate 
Hon ANNETTE KING (Minister of State Services) 
: 
 I move  
That the House take note of miscellaneous business 
. In a strong democracy the Government proposes policy; the Opposition opposes it and proposes some of its own. In 7 years this Government has proposed and implemented far-reaching policies to transform our economy to support our families and to build national identity and pride. In 7 years the National Opposition has opposed opposed and opposed and there has been little sign of it proposing any policy or even a constructive debate on policy in this House. In fact it has not been able to propose a full policy at any time in those 7 years. 
Let us take National’s flagship policy at the last election—tax cuts. That was its flagship policy but even then it was not a full policy because National refused to tell the people of New Zealand what it would cut to give tax cuts to New Zealanders. It refused to tell the people of New Zealand whether it would cut our health services our education services the services to our elderly people. National is so confused on its own tax policy that last night it even voted against a modest tax cut in the KiwiSaver! So one day National is for tax cuts; the next day it votes against one. This is a one-sided Opposition. It knocks and knocks and knocks it pulls things down it gives misinformation and half-truths and it engages in shadowy dealings. 
Today I want to give this House two examples of how this Government’s policies have worked over the past 7 years. I start with older New Zealanders because older New Zealanders are important to this Government. We have put a lot of effort into ensuring that we look out for our senior citizens. Where did we start? We started right back at the formation of this Government when we reversed the National Government ’s cuts on superannuation. We then went on to increase superannuation for all the older people of New Zealand. They had had shabby treatment for 9 years under a National Government. We then said we would phase out asset testing; something that was brought in by Ruth Richardson and something the National Party was still supporting at the last election. We then said we would bring in—and we have brought in—cheaper doctors’ visits for our older folk and cheaper prescriptions. They were among the first to get those cheaper visits. We increased the number of knee and hip operations by around 20000 because we know that those people are the people who need them most. We brought in income-related rents for those old folk who could not afford the rents they were paying. We have introduced a rates rebate for older New Zealanders—up to $500 off their rates. We made changes to their drivers’ licences and we are making communities safer. Those are things we have done for older New Zealanders in quite a short time. 
Let us look at another area: rebuilding the infrastructure of this country. This includes not only capital assets but the human assets as well: hospitals from Invercargill to Kaitaia; police stations in small places such as Te Kaha; or the big police station at the Counties-Manukau hub. We have built more houses. We have put huge investment into road and rail. We even bought back Air New Zealand so we could keep a national airline. We bought back the rail so there could be a rail corridor. 
We have invested in the people of New Zealand. We have invested in more nurses more doctors more radiation therapists and more dental therapists. Let us just talk about dental therapists for one moment. Tony Ryall told New Zealanders that we do not have enough of them—we do not have enough dental therapists to do our children’s teeth. Why do we not have enough? National closed all the training schools in the 1990s so there were no dental therapists being trained. We have restored that. 
We have more teachers more people on border control more front-line caseworkers more corrections workers and so on. The National Party criticises that investment into human capital. The people of New Zealand said they wanted that investment and we have put it in. I would like to compare that with the National Party and the things that it has done over the last 7 years: its members oppose spend their time in Parliament accusing everybody else of dirt sleaze and corruption but forget about their own actions. 
SUE BRADFORD (Green) 
: 
 I want to talk today about one of the biggest rip-offs that has occurred in New Zealand for some time. The rip-off is so large that to coin a phrase no one seems to want to talk about the elephant in the room. It has seen thousands of New Zealanders lose a significant amount of money. It has placed the jobs of hundreds of New Zealand workers at risk. It threatens an iconic New Zealand manufacturer. In the 7 years I have been here I have heard a number of speeches about how beneficiaries and the poor are ripping off the system. A number of MPs in this House get on their high horses at times and attempt to expose the wickedness of beneficiaries for failing to report overpayments from Work and Income of a few thousand or even a few hundred dollars as a scandal of national significance. So why are we all pretending that the $200 million ripped off New Zealand shareholders and workers by Credit Suisse First Boston Asian Merchant Partners did not happen? Two hundred million dollars is the figure that a number of reputable business journalists have calculated has been expropriated from Feltex before during and after its 2004 initial public offering. Credit Suisse First Boston Asian Merchant Partners based in Delaware paid $19.5 million for Feltex in 1997 when it bought the company from the British-based firm BTR Nylex. BTR Nylex had bought Feltex from the statutory manager of Equiticorp in 1989—remember them? 
Most of us do remember that Feltex was raided by Equiticorp in the 1980s and that the head of Equiticorp Allan Hawkins was eventually convicted and jailed for fraud. Credit Suisse then created 120 million shares in 2004 which it subsequently floated in the initial public offering at between $1.70 and $1.95 a share. Now trading for only 10c to 12c a share these shares are worth less than $15 million. So around $200 million has disappeared expropriated from mum dad and institutional shareholders and from Feltex workers—those who created the wealth in the first place. Most of what has been expropriated was taken by faceless merchant bankers from Zurich and their Delaware subsidiary. How did this happen? How can we stop it happening again? Who is accountable for this expropriation and what are the consequences for those firms and individuals? In New Zealand we have a Securities Commission. It tells us that its vision is “that investors can have confidence in New Zealand’s securities markets so that the markets increasingly attract investment from New Zealand and overseas.” 
I wrote a letter to the Securities Commission on 9 August to ask it what had happened and asked it to undertake an investigation. On 25 August the commission released a statement saying that it found “no breaches of the securities laws in the prospectus” and that “no further action will be taken in regard to these matters.” What a whitewash! So now for the second time in recent years the proud iconic Kiwi-made company of Feltex has been ripped off by the merchant bankers. But no one wants to know. 
So what happens now? I know that shareholders are determined to seek redress for this rip-off. We in this House should do what we can to help them but we also need to be concerned about the future of Feltex too. We know that there are currently two bids in for the purchase of Feltex. There is a risk that the green light could be given to a foreign takeover bid for this company without anyone in the chain of approval comparing the merits of an alternative locally owned rescue offer. Both the Australian firm Godfrey Hirst and the Turner brothers Craig and Graeme who own Sleepyhead have made bids for Feltex and shareholders are expected to consider the Hirst offer in late September. I am told that the Hirst bid is also required to go to the Overseas Investment Commission for approval. But I am also told that the Overseas Investment Commission can only consider the alleged net benefits to New Zealand of the Hirst takeover in isolation and cannot seek to assess whether the rival offer from the Turners delivers greater net benefits to New Zealand. 
My own reading of the Overseas Investment Commission guidelines suggests that if there were a will the Overseas Investment Commission could find a way to judge the net benefit of the rival bids. Dr Cullen’s 1 August 2005 ministerial directive lists among the objectives that the Overseas Investment Commission can use that it should assess the benefits received from overseas investment applications on the basis of benefit to New Zealand as a whole. Also the Overseas Investment Commission must ensure that the value of sensitive New Zealand assets is recognised and enhanced by an overseas owner. The Green Party believes that it is essential that at some point in the process the foreign bid is put on the table and weighed against the merits of the locally owned counteroffer. 
GERRY BROWNLEE (Deputy Leader—National) 
: 
 Today is the day Helen Clark lost control of the Labour Party and the Labour caucus. Today is the day she got rolled over by those in that caucus who are sick of her dictatorial ways. Today is the day she decided even though the public of this country know she has a member in her caucus who should not be in this House that she has to tough it out if she wants to hold on. Last night Mr Field was going—gone for all money. In this morning’s paper the Pacific Island division of the Labour Party were backing him on the one hand as an individual but on the other hand saying he had to go because his behaviour was unacceptable. 
What happened in the few hours between the printing of this morning’s paper and the time we came into the House this afternoon? Well I think that the chairman of the group of Labour MPs known to be on the managed exit list met with Mr Field and said: “Let’s tough it out—let’s draw a line in the sand and let’s force this Prime Minister to accept that she cannot dictatorially remove any one of us from Parliament.” So Mr Fairbrother calling on all of his legal skills advised Mr Field that although it was patently clear that Mr Field had been up to no good and that the whole country believed he was not fit to be in Parliament he should defy the Prime Minister and force her to back him. That is what we saw today—the humiliation of Helen Clark and the end of her formidable ability to ride over the top of issues. That is the end of the Labour Government; that is the chink in the armour that will see it all unpeel and go out the back door. I cannot believe that Labour members are going to go back into the electorates around the public speaking circuit and look New Zealanders in the eye and say that Mr Field is not a problem that Mr Field has done nothing wrong and that Mr Field has every right to be in Parliament. 
I have one question for the Government: how many other members in this House have had the Parliamentary Service turn up at their office and stick up signs telling constituents that they do not need to pay for services? Come on let us have a hands up. Let members put their hands up. Let us see who else in this Parliament has had the Parliamentary Service come in and post posters around the office that state that constituents do not need to pay for services. The question is why that happened in Mr Field’s case. What was it as far back as 2003 that forced the Parliamentary Service to take that most unusual step? What the Parliamentary Service Helen Clark and all of the Labour members know is that Mr Field has had his hand out and has been lining his pocket at the expense of his constituents for a very long time. For Helen Clark to stand up today and say that he has done nothing wrong is a total disgrace—but it is nothing we should not expect of her given her long record of disrespect for the law of this country. 
We have seen Mr Field put out this extraordinary press release. He has sat down with the spin merchants from the ninth floor and decided he will just deny everything. Today in the House my colleague Dr the Hon Lockwood Smith managed to get David Cunliffe the Minister of Immigration to accept that Mr Field sought a Samoan work permit for Sunan Siriwan in February 2005 but that he told the Ingram inquiry he knew nothing of this until some time later in May 2005. We see today in this junky little press release the delusion that Mr Field is still operating under. This man should not be in Parliament. He will break the Labour Party. He has broken Helen Clark. 
Hon PAREKURA HOROMIA (Minister of Maori Affairs) 
: 
 We have listened to some wayward prattle about the leadership of the Labour Government. Helen Clark will go down in history as being one of the finest and most decisive leaders and as leading a party that knows who its leader is. There is no guessing and no ballot-box running on who should be the leader. There is no ballot-box pool as National members play. I see one two three four National members: it is the Don and Gerry show the John and Bill show—they are all vying for the leadership. That tells us that the National Party is wayward. 
That tells us that National members are grasping at straws when they try to dominate these sessions and prattle on about race-based funding. They need lessons in history. In the 1990s who brought in race-based funding? Who wrote and developed the weightings about Maori specifically? The National Government did. It put a lot of time into ensuring there was a race-based focus. 
 This Government is quite clear. We are going to address issues like obesity and smoking and whatever else. And some of us have to try harder! I remind members that this Government along with Maori is dramatically moving people from dependency to simple development—and there is a difference. Our tax incentives are about remembering that there are all sorts of levels of people in this country—in different income-band levels and in different situations. Some of them are poor and some are more well-off. The incentives that Sue was talking about are created by those people. What is that about? It is about recognising Maori potential. It is building talents knowledge and skills so that we do compete. 
It is clear that Maori are strong in their culture and in their tikanga and the nation watched that last week with the passing of our Arikinui. People watched that and saw there was a strong continuum of the culture they bought into it and they recognised the window of opportunity to be serious about national identity. They saw the opportunity of understanding that this country does have a culture that belongs to it. We have listened to some redneck nonsense trying to put people agin people when this Government is serious about getting Maori going forward. It is about knowledge and it is about better use of their asset base. A lot of Pakeha companies and other people understand that Maori do have money and are getting better at managing their assets and those people want to be in. 
This is critical and the Government has been serious about a whole lot of issues. Unemployment is at its lowest in 24 years. When we came into office after the 1990s Maori unemployment was 26 percent. It is now running at 11 percent. Is that not a difference? Maori men and women are living on average an extra 8 years. Is that not progress? The Government certainly cannot lay claim to that. But in relation to schools we have put thousands of teachers into the education system while we have been in Government in the last 6 years. Adding 455 extra teachers next year is no mean feat. Building the police force is no mean feat. There are a whole lot of issues that Maori are alongside. 
There is no doubt that Maori are a renewed people. The contribution that Maori make to New Zealand and internationally is substantial. That some people want to scratch a bad itch and try to put people against people is a real sad state of affairs. 
Gerry Brownlee 
: Where did the member get that hat? 
Hon PAREKURA HOROMIA 
: I remind the member that a Labour-led Government as it continues over the next 5 to 10 years will be here pushing and developing because New Zealanders are living what this Government is doing with them. They are living that and they are very very clear on it. They are not trying to pitch people against people and take extreme positions in the sense of families young and old. What is that about—families young and old? We have different demographics we have Treaty settlements coming through and we have people trying to put communities agin each other as we have heard today. We heard Mr Brownlee accusing Mr Field of all sorts of things. There are members opposite who have pushed people down stairs and who have done naughty things and they never got sorted out until the allegations were proved. 
GERRY BROWNLEE (Deputy Leader—National) 
: 
 I raise a point of order Mr Speaker. I just wanted to let the House know that should Mr Parekura Horomia wish to take some extra time to give his support to the honourable Taito Phillip Field we would not object. 
Mr DEPUTY SPEAKER 
: That is not a point of order. 
Gerry Brownlee 
: Oh sorry. 
Mr DEPUTY SPEAKER 
: Thank you for raising it. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 Today Helen Clark has led Labour to an absolutely new low in standards. Today she told New Zealand that it is an acceptable standard for Labour members in this Parliament not to tell the truth to the immigration authorities of another country or not to tell the truth to an official inquiry set up by the Prime Minister of this country. Taito Phillip Field lied either to the authorities of the Samoan Government or to the Ingram inquiry. It cannot be both ways. He cannot have told the truth to both of them. He must have been dishonest to one or the other yet that is acceptable to Helen Clark and her Labour Government here in New Zealand. This Labour Government will wallow in the stench of corruption over the next few months as it clings to its one-vote majority in this Parliament. It is prepared to tolerate any corrupt practice in order to hang on to that one-vote majority. 
The statement released by Taito Phillip Field today is a stunning statement. It insults the intelligence of New Zealanders. In the statement that he released today Taito Phillip Field says that he never paid below what he understood to be fair market rates for work. He states: “I contracted the work and paid what I understood to be fair market rates for the work.” At 51 Church Street—a property owned by Mr Field—Ingram found that he paid less than a third of the market rate for the work done there. At 2A Prangley Avenue which was the address of another house that Mr Field owned he paid a quarter of the market rate for the work that was done. 
Phillip Field goes on to state: “Dr Ingram’s report makes no adverse finding against my honesty and integrity.” What a joke! Despite Dr Ingram spending months and months on his inquiry—being paid almost half a million dollars in taxpayers’ money—he was unable to find out who painted the entire interior of Taito Phillip Field’s house at 51 Church Street in 2004. One would think that if Taito Phillip Field was being honest he would tell Noel Ingram who painted the entire interior of his house. Would that not be the honest thing to do? But despite months of inquiry Noel Ingram could not find out who painted the interior of the house. Taito Phillip Field told Noel Ingram that he might have done it. I can accept that a person cannot remember all of the details after a period of say 18 months about exactly when and on what days a painting job might have been done. But having done a wee bit of painting myself I know there is no way in the world a human being with an IQ above 10 could possibly forget whether he or she had painted the entire interior of a house. It is not possible. Phillip Field simply was dishonest with Noel Ingram. 
Noel Ingram could not find out who painted 73 Blake Road—another house owned by Taito Phillip Field—in 2004. Why could he not find that out? It was because Taito Phillip Field would not tell him who had painted it. Is that honest? That is the standard that Labour believes is acceptable for Labour MPs. They can lie to the immigration authorities in Samoa and tell them that an applicant for a work visa will work for them then claim to an inquiry set up by the New Zealand Government that no no the applicant was not working for them at all. They can refuse to tell Noel Ingram who is undertaking an official inquiry who painted their house. 
It gets worse though in this Labour Government. When it comes to Taito Phillip Field’s claim that he never sent Mr Siriwan to Samoa to work on his house it is just fascinating. Obviously Sunan Siriwan is an unusual man—he takes his tile-cutting equipment with him when he goes on holiday. When he arrived in Samoa he had his tile-cutting equipment with him! Taito expects us to believe that kind of dishonesty. 
To demonstrate to the House the level of honesty that Labour now expects of its members of Parliament I wish to table an email sent from Taito Phillip Field’s ministerial secretary to his electorate office requiring a new employee in his electorate office to share her salary with Maxine Field Phillip Field’s wife and when queried by Mr Field’s electorate office about that order a further email saying: “Oh well it’s as requested by MP.” 
Mr DEPUTY SPEAKER 
: It is clear you are wishing to table. You did not need the lead-in words. Leave has been sought to table that document. Is there any objection? There is. 
Hon HARRY DUYNHOVEN (Minister for Transport Safety) 
: 
 Thank you for the opportunity to speak in this debate today. It is actually rather interesting to follow Dr the Hon—as he insists on being called which is an unusual title in this House—Lockwood Smith. 
Dr the Hon Lockwood Smith 
: No he doesn’t at all. He is very happy to be just called Lockwood Smith. 
Hon HARRY DUYNHOVEN 
: No no. He is the only doctor in this House who insists on being called Dr the Hon. Everybody else is called the Hon Dr. However the issue is not about Dr Smith’s title; the issue is about integrity. He has been raising it. Well let us look at integrity. Let us think back just a little to 1990. I was a member of Parliament in 1990—unfortunately not in 1991 as I am sure Dr Smith is about to remind me. I fought an election campaign where blatant lies were being told where the Opposition of the day including Dr Smith gave absolute guarantees that things— 
Hon Mark Burton 
: No ifs no buts. 
Hon HARRY DUYNHOVEN 
: “No ifs no buts no maybes”—cast-iron guarantees written in blood. 
Gerry Brownlee 
: I seek leave to table a document showing that the stated surplus of the Government in 1990 was $59 million. I also seek leave to table a document showing in 1991 that that was a complete lie told by the then Labour Minister of Finance David Caygill and the Prime Minister at the time Mr Mike Moore. 
Mr DEPUTY SPEAKER 
: The member should not interrupt the speaker for that purpose but leave has been sought to table two documents. Is there any objection? There is. 
Hon HARRY DUYNHOVEN 
: I say to the member that some of us could also cast our minds back to the shambles that Labour inherited in 1984 when it came in after a National Government. It was an absolutely deceptive mess left for the incoming Labour Government in 1984. We inherited that mess but moved the country along from it. 
I look at issues like integrity. Dr Smith interrupted me when I said that some of us had to fight an election campaign where impossible promises were being made. We were actually fighting a campaign where students had been told there would be no fees where students had been told there were absolute cast-iron guarantees and where we had a whole bunch of issues that were plainly lies—and we said so at the time—and then later were proven to be untrue. We had to fight a campaign where we challenged the issues. Our ads were taken off television because there was no proof then that what was being promised would not happen. We are in a similar situation now I suspect where an Opposition that does not have policy has its members out there saying National will do this or that etc. etc. and contradicting each other and doing all sorts of on-the-hoof policy making. We are now in the position where there is no policy from the Opposition. It has had 7 years. 
Gerry Brownlee 
: One example. 
Hon HARRY DUYNHOVEN 
: There are lots of examples but let us have a look at the flip-flop on mainstreaming for instance prior to the last election where we had Dr Brash on one occasion saying something about mainstream people and Mr Brownlee on another occasion saying something completely different. So these are issues that we as Government MPs— 
Gerry Brownlee 
: Stop telling lies. 
Mr DEPUTY SPEAKER 
: Mr Brownlee you are not to imply that another member is telling lies. 
Hon HARRY DUYNHOVEN 
: Certainly I am prepared to table the quote if Mr Brownlee would like me to but let us go on. Let us talk about what is actually happening. 
Let us look at some of the achievements. KiwiSaver—we said we would do it; we are doing it. The bill is before the House and it will provide long-term savings for New Zealanders—they will develop long-term saving habits—and build on our existing efforts to better prepare the country for the challenges of an ageing population. Every financial commentator says it is a good idea. 
Gerry Brownlee 
: No they don’t. 
Hon HARRY DUYNHOVEN 
: Certainly the vast majority think it is a marvellous idea. There is great commentary on the lack of savings in New Zealand and on how this country is moving ahead now. 
I move to education and primary school teachers. Let us look at the number of new primary teachers in schools. We have 455 additional teachers; we are enabling schools to actually put in place 455 additional teachers from next year. That builds on the over 3000 additional teachers we have already put into the system since 1999. That is over and above those required for roll growth. That has to be good for the kids of New Zealand because it lowers class ratios boosts quality and allows individual attention to be given to our young New Zealanders. 
We have made real progress on student interest loans write-off which was greatly welcomed. We have stopped all future interest charges. That is encouraging people to stay in New Zealand in order to contribute to our economy and society. It gives them more opportunity to get ahead and reduces the burden of their debt. 
Last night I was at the Australasian Institute of Mining and Metallurgy conference in Waihi. I had representatives of companies telling me that they are getting New Zealanders returning to work in New Zealand for the lifestyle and good income they are getting here which is a really good situation. This is a real turn-round from where we have been for years and years under a National administration. 
JUDITH COLLINS (National—Clevedon) 
: 
 Helen Clark has a favourite saying: “It is time we moved on.” That is her favourite saying. When we had “paintergate” it was time to move on. When we had her speeding across the South Canterbury plains for which her driver and police officers took the rap it was time to move on. When we had Lianne Dalziel telling one thing to the media and another thing to everyone else it was time to move on. When we had Mr Benson-Pope having very serious problems with his memory it was time to move on. 
Effectively the Prime Minister has told us today that in relation to Taito Phillip Field and the allegations of very serious corruption it is time to move on. Well I have news for her—it is not time to move on. The reason is that she set up the Ingram inquiry with very very narrow terms of reference. She set up that inquiry so there would be a whitewash. She thought it would be a great way of diverting the public’s attention away from the scandal and to something where the inquiry would take in her words 9 days. It took 9 months. The inquiry did not exonerate Mr Field as the Labour Government has claimed it did. It did nothing of the sort. It left more questions unanswered than answered. 
The great villainous act of this situation is that it has besmirched the name of Pacific New Zealanders throughout the country. In my role I come across and have a lot to do with Pacific Island New Zealanders. They are heartily embarrassed at the way in which their culture and their name have been besmirched by these allegations of corruption. They do not understand why Helen Clark would have us believe that it does not really matter because that is the way Pacific New Zealanders behave that is the way they do things in Samoa and that is the way it happens so one cannot expect anything else. 
Well we can and must expect something else because the people who suffer from these allegations of corruption the handing over of cash under the table - type behaviour are the poorest New Zealanders. In fact in many cases they are poor New Zealand citizens and also poor people who are overstayers who are the most vulnerable people in this country. They suffer because of what has happened—or certainly has been alleged to have happened—in Mr Field’s case. 
Helen Clark had the cheek to come here today and effectively say to us that it does not really matter and that it is time to move on. Yesterday Mr Field was toast. Yesterday Mr Field was “outski”. She had someone lined up to take that Mangere seat—that so-called safe Labour seat. She had someone ready to go in there someone with better church connections someone who could move in there for Labour. What has changed? 
The change is that Pacific people know Helen Clark set up a dud inquiry in the first place. She knew that nothing would ever exonerate Mr Field. She knew there would be questions left unanswered. She wanted to taint him if she could and at the same time she did not want to have to deal with a by-election. She got what she wanted. She has destroyed him politically and she has gone on to destroy Pacific New Zealanders politically and socially. 
All Pacific New Zealanders have now been tarred with the brush of corruption—just as MPs in this House have been tarred by that brush. That is what she has done. Helen Clark has taken the votes of Pacific New Zealanders for years. She has treated Pacific New Zealanders as less than first class. She has said that is all right for them because it is all they can expect. I am here to tell her that is not what Pacific New Zealanders should expect. 
In the Pacific we as New Zealanders are always going over to Pacific countries telling them how to get rid of corruption. Well let us start right here in this Parliament where we should be able to be proud of ourselves. We should be able to be proud of the job we do. But has that been good enough for Helen Clark? No. 
So what has changed in the last 24 hours? How about a Pacific party. That is what has changed. The thought of that has been too much for Helen Clark. She knows she cannot afford for it to happen. 
HEATHER ROY (Deputy Leader—ACT) 
: 
 Community laboratory services have hit the headlines in many areas of New Zealand over the past 12 months. Most recently two areas have been affected in the Wellington region. Capital and Coast District Health Board and the Hutt Valley District Health Board have looked at their contracting processes and have decided they will keep the contract where it is with the community laboratory service that has provided a very good and reliable service to the people of the Hutt Valley and Wellington regions for the last 70 years. But as a result the district health boards jointly have written recently to doctors in the regions saying that as of 1 November this year patients will have to pay for any laboratory tests ordered by private specialists. This will have the bizarre effect of widening the gap for New Zealanders even further and building up an even greater barrier than currently exists between the private and public sector in health care when in fact the Government should be breaking down that barrier and looking for quality services at the best price in the best time for patients. 
The other area that has recently been affected and that has been in the news a lot in Auckland is the Auckland combined district health boards’ decision to take the contract from Diagnostic Medlab a community laboratory service that has provided community laboratory services to the people of the Auckland region for the past 70 years—and a very good quality service it has been too—and give it to Labtests Auckland which currently has no laboratory no staff and no equipment. Yet apparently it will be up and running on 1 July 2007 ready to provide what it claims will be an equivalent service to that currently provided to the good people of Auckland. The main reason this has happened is that the district health boards claim there will be a $15 million saving but there is a bit of misleading information in that figure. The truth of the matter is that there would be a $15 million saving on what is spent this year but Diagnostic Medlab has contracted to undercut its current budget so the actual saving to the board by awarding the contract to Labtests Auckland would be a saving of $8 million. 
There are several other worrying points with regard to the contract. Many of those who need these services are elderly and do not have the capacity to travel as much as younger members of the population. Collection points will be halved so in effect that will put extra pressure on general practitioners who are already burdened to take blood samples. The Government just this week announced an extra $43 million to help struggling primary health organisations keep their heads above water but it is happy for even more work to be imposed on those same organisations. That is hardly fair I would have thought. 
The people of Auckland are very worried. They are so worried that 70000 have signed a petition saying they do not want the service to change. That is 70000 signatures. Anybody who has tried to collect signatures for a petition will know exactly how difficult that is. That is 10000 more signatures than Annette King the previous Minister of Health and Helen Clark managed to collect to save PlunketLine when they were in Opposition in 1998. It is interesting how things change. Suddenly now they are in Government PlunketLine is no longer needed or relevant. It seems that parents of preschool children should be consulted only when Labour is in Opposition. 
The staff of Diagnostic Medlab say they are not going anywhere. Labtests Auckland seems to think it will pick up all the staff as well as the building. That is not the case; the staff say they will not work for Labtests Auckland. Many of the pathologists say that rather than work for Labtests Auckland they will leave the country which would create even more difficulty in relation to the huge current shortage of pathologists in New Zealand. 
Medical staff in the Auckland region are also very concerned. I have been contacted personally by many doctors general practitioners hospital specialists and nurses who work in the area. They are very worried. They are the experts in this area and I would think that the district health boards and the Minister of Health should be very worried that they are voicing their concerns very loudly. 
The Minister cannot continue to ignore all of these worries. They are valid. What he needs to take an interest in too is the process. Was it fair? There has been a great deal of questioning around the involvement of the chief executive of Labtests Auckland who I think although he says he absented himself from discussions did have a conflict of interest when he was on the Auckland District Health Board and was asked for opinions on where the contract should go and what services should be provided. 
MARYAN STREET (Labour) 
: 
 It is my pleasure to contribute to the debate this afternoon; I would like to get back to the business of governing and leading this country and improving the lives of its ordinary citizens because that is what this Labour-led Government has been doing. Despite whatever kinds of sideshows members opposite wish to entertain the business of governing leading and improving the lot of people in this country is what we on this side of the House are about. 
I would like to illustrate that by drawing the House’s attention to a number of announcements that have occurred recently in the last month or two that have been of initiatives that are either about to happen or about to give effect to some mechanisms that impact on many ordinary New Zealanders. For example we have recently announced the Welcome Home Loans scheme. From September it will reach double the proportion of the national housing market accessible to people without a deposit. That decision is part of the Labour-Progressive Government’s broader exploration of new ways to help reverse the decline in homeownership rates—to keep the front door open for first-time buyers. 
The Welcome Home Loans scheme underwrites private lenders to give home loans to people on the margins of traditional mortgage criteria. Although it has always been aimed at helping people looking at the lower rungs of the housing market the scheme’s usefulness has been cramped previously by a 55 percent rise in the lower quartile price of residential properties since it originally came into play. So in order to combat that we are increasing the limit for lending with no deposit from $150000 to $200000 and we are changing the minimum deposit required for lending over $200000 from 5 percent of the total loan value to 15 percent of that portion of the loan above the 100 percent lending limit. This means that a household can borrow $200000 without a deposit and can borrow up to $280000 in total under this scheme. That is hugely important to those people who aim to buy their first house to invest in their future and the future of their family and to stay committed to New Zealand society and to its development. 
On the same theme I tell members that we are approaching later today I think the third reading of the KiwiSaver Bill. Making the KiwiSaver scheme even more attractive for workers and employers is the aim of the changes to the KiwiSaver Bill announced this week. Under the voluntary KiwiSaver scheme employees contribute 4 percent or 8 percent of their gross salary for long-term savings and to kick-start returns for savers the Government is providing a $1000 contribution and paying some scheme fees. Employers will find the scheme easy to implement with extra Government support and compliance costs kept to a minimum. The scheme also provides for $5000 for each KiwiSaver to buy his or her first home. So we see a recurring theme. But more than that this KiwiSaver scheme aims to improve the long-term savings habits of New Zealanders and builds on our efforts to better prepare the country for the challenges of an ageing population. 
A couple of other things have been announced recently that are part of the business of Government. They are to do with the business tax review that is currently out in the public domain. It is a discussion document seeking the views of the business community on the rate of company tax and on ways of reducing compliance costs. In tandem with that we also have the quality regulation review. Again we are engaging with members of the business community to draw on their expertise and ideas for improving and streamlining the regulatory environment within which their businesses are conducted. 
A number of other things have happened recently that go back to the heart of what this Labour-led Government is about. We have increased the minimum wage. We have also improved the rates rebate scheme to take effect from the middle of this year—as of 1 July—and households that are eligible will then be able to receive a $500 rebate. 
SHANE ARDERN (National—Taranaki-King Country) 
: 
 We have listened to a number of speeches from Labour members today and I say to them there is no doubt in my mind that Helen Clark and the core of their Government are political activists—and they have been for at least 30 years. They are very experienced political activists. To achieve their single-minded goal of becoming Government members on the Treasury benches they have achieved new levels of spin the likes of which this country has never seen before. They have achieved levels of spin never previously obtainable in politics in New Zealand. To use the Prime Minister’s own words the Wellington beltway or the beltway as she described it—that is the political commentators and suchlike around this country—would describe her as a very strong political manager. 
But the question that needs to be asked in this House today is does that make it right? When members are elected to this place they are elected not only to lead but also to do what is right. When we look at what has happened in recent events with regard to Taito Phillip Field we see no way that any fair-minded person could describe what we have seen unfold in this Parliament recently as being right. It is clearly wrong it is politically bankrupt and the Prime Minister should take account of what has happened. When Helen Clark was elected as Prime Minister she said she wanted to set new standards. Well I say to the Prime Minister that she should be careful in what she wishes for because she has achieved it. She has set a new all-time low standard with this recent case; it is lower than this Parliament has ever seen in its history. The spin and the media management of this process are nothing short of disgusting. 
When we look at the Prime Minister’s track record we see we have had “paintergate” we have had “corngate” we have had “speedgate” we have had “pledge card - gate” and we have had “election spending - gate”—the list goes on and on. The Prime Minister needs to come down to the House today and explain to us why not one single member of her caucus who has spoken in this general debate has come to the aid of his or her beleaguered colleague. The reason is obvious: not one of them would be game enough to do so—yet she allows this matter to go on. Well I can say to this Prime Minister that the beltway as she describes it has been overlooked in this regard and the stench from this issue has reached right out into wider New Zealand. It has reached right over the top of the beltway. People out there are now starting to know what goes on in this Government and they do not like it. The stench can be smelt from the Opposition side of the House. 
I say to Government members that when we line up the list of ex-Ministers—the Ministers who have been dumped for various misdemeanours while in this Government—there is no precedent for it. There has never been such a long list of ex-Ministers under any Government or under any leadership ever before in this country. This latest and last example of Taito Phillip Field is probably the best example I have ever seen in terms of the way this Government has tried to spin itself out of the situation. 
Winston Churchill once said: “You make a living by what you get you make a life by what you give.” Well there is no doubt that this Prime Minister and her Government have single-mindedly dedicated their lives to political activism. There is no question about that. Some could say that is something one can be proud of—but at what cost to New Zealand? What price has New Zealand paid for that single-minded ability of a group of people who have decided they are above the law and above the boundaries that normal New Zealanders have to live within? People who have been put in place to lead this country have led us into a position where we are now reaching an all-time low standard. 
I have to ask again whether that is right. And the answer is absolutely not. There is not a single member of this Parliament who does not know that and there is not a single member of this Parliament who would stand up and defend the actions of Taito Phillip Field. The Prime Minister knows that; she knows she is washing her hands of this matter. She knows she is doing the best she can to defend the undefendable and is on the rocks on this issue. 
SHANE JONES (Labour) 
: 
 We have two very different pathways forward one of which is driven by stigmatisation victimisation and mistruth a la the Opposition. Rather than focus on the big issues—where those members cannot match members on this side of the House—and rather than provide a vision and a long-term view that will actually lift and add to the buoyancy of the country they are going further into the gutter. Not only have we had investigations and followed processes but those members still continue aided and abetted by underworked and rather foolish members of the media to look for an agenda. What a concoction—what a mixture! 
But they cannot deter us from the big picture. Number one is that we are addressing those issues and matters that have hobbled us economically. What members of the Opposition do not like about it is that we do have the power and the authority to put our programme into place because at the end of the day that is what will count. That is not only the legacy that the next election will be fought on but also the legacy that many years out we will look back to with fantastically fond memories. 
Let us just deal firstly with the question of thinking about those who need to be taken care of in retirement. Fortunately for the entirety of the country later on this afternoon we will go to the third reading of the KiwiSaver Bill—I will say more on that very shortly. The Cullen fund KiwiSaver and a variety of changes to the tax system bed down a legacy that will outstrip the very venal short-sighted and incredibly negative rhetoric we have heard in this House from those diminished members on the Opposition benches. 
In addition to that there is identity. Well if any New Zealander ever had a doubt as to where National members stand on the question of identity then Tony Ryall spelt it out today. He is completely uninterested in seeking outcomes that give parity and equity for people such as Maori families in rural New Zealand. Perish the thought that any of them would be so misconceived to ever vote for him! No there was a small issue that he brought to this House—in fact he ran the risk of bringing this House into disrepute—and he proved that the day our friends from the Maori Party ever go anywhere near Tony Ryall will be the day that the entirety of the Maori seats are back in our kete for a long long time. I look forward to that. 
Tony Ryall continued what Don Brash sought to do through the entirety of the last election campaign and he will continue to do so save for the fact that my whanaunga Tau Henare challenges him. One cannot run the country on the basis of stigmatisation and of constantly marginalising members of the Maori community as Mr Ryall sought to do today. But Mr Ryall has actually been bettered by Mr Clarkson. Mr Clarkson is somewhat confused as to whether he has a habit whether a nun wears a habit or whether a special habitat has been created for him. I have no doubt in my mind based on what I am hearing as feedback from his colleagues that they have a very very peculiar habitat that they hope to consign Mr Clarkson to in the very near future. But of course he will not go. He intends to stand again and he intends to be a loose unit. He believes he has number one the wealth to fund his looseness and number two the ideas to distinguish himself amidst the very grey anonymous collection of figures who surround him. So not only do we have Mr Ryall raising levels of intolerance in the area of the Bay of Plenty not very far from the township known as Whakatane we also have Mr Clarkson from Tauranga. 
Let me continue with a host of other fantastic things the Government is doing which is why we will not be deterred and why the very venal and thoughtless things that have been said about one of our colleagues will not eclipse the great deeds that characterise this Government. In the area of old people not only are we thinking ahead in terms of retirement savings but we have a programme that has been taken up with great gusto up and down the country to help people alleviate the burdens they face in relation to their rates bills. How did those bills arise? They arose through long-term deficits from the other side of the House. 
CHRIS AUCHINVOLE (National) 
: 
 To be given a speaking opportunity in the general debate is something that first-year MPs vie for. But today I speak from a sense of obligation and I take little pleasure in having to raise unanswered questions that are still in the mind of Parliament and the public mind concerning the Taito Phillip Field affair. The questions need to be answered. We are all tainted in the way this matter has been handled. As practising politicians we are each obliged to carry a measure of the shame. No matter what the eventual fate of Mr Field is the cloud of shame will not dissipate until those questions are answered. 
The Labour-led Government has put huge effort into answer avoidance. The procedure at question time each day means we can ask questions only to Ministers at present holding the relevant portfolios not to those members who held portfolios at the time the events occurred. This means that questions are just being addressed as they call it but those questions in fact need to be answered. The public is concerned because those questions are not being answered. Past Ministers in the immigration and associated portfolios are looking inept at best corrupt at worst. That is not fair and not something that any of us would wish to have happened to those who are parliamentary colleagues regardless of where they sit in the House but it is a consequence emerging from those questions not being answered. 
Let us try then in the general debate to raise some questions afresh and see whether those concerned will take a call and provide answers to them or at least be prepared to make a personal explanation. This is not to provide a challenge; it is to provide a chance—an opportunity to do it right and to allow the questions to be answered. The questions I have are to the previous Associate Minister of Immigration the Hon Damien O’Connor the member for the West Coast-Tasman electorate in which we both live. People down there are concerned and need to be reassured. 
Over recent weeks we have heard questions being addressed to but not answered by the present Minister of Immigration the Hon Mr Cunliffe. The questions have been about the flow of information from the Immigration Service to Mr O’Connor’s office while Mr O’Connor was the Associate Minister of Immigration. They asked whether Mr O’Connor received information concerning Mr Field’s activities that had been sent to him by six different divisions and sections of the Immigration Service. Those questions have not been answered so they remain—they will not go away. It is uncomfortable having to watch a man shake his head as questions about him are addressed on his behalf but not answered. The questions need to be answered. 
We have heard that people from various levels of the Immigration Service phoned Mr O’Connor’s office to tell him what he needed to know about the applicants involved in the Taito Phillip Field affair. We were told that the department emailed Mr O’Connor with the information he needed to know. The present Minister Mr Cunliffe has indicated that the messages may have reached the office or the secretary of Mr O’Connor but he has not answered beyond that point. 
At least five questions need to be answered immediately. Did six divisions of the Department of Labour fail to give Mr O’Connor the basic information it had or if it did give him that information why did he ignore it? What or who convinced Mr O’Connor to reverse his decision of 15 March 2005 declining Mr Field’s submission about Mr Siriwan? Did the Hon Mr Swain or the Hon Mr Goff discuss Mr Field’s submission on behalf of Mr Siriwan with Mr O’Connor after Messrs Swain and Goff visited Mr Field’s house in Samoa? Did Mr Ross Robertson MP—the champion of parliamentary standards—discuss Mr Field’s submission on behalf of Mr Siriwan with Mr O’Connor after Mr Robertson stayed with Mr Field and Mr Siriwan in Mr Field’s house in Samoa? Why when Mr O’Connor knew in June that the Thais were employed by Mr Field did he do nothing until the Cabinet meeting of 19 September when the Prime Minister informed him there was to be an inquiry and after which he put a flag on the case? 
Conclusions that can result from the questions not being answered are that Mr O’Connor unfortunately will be regarded as inept and lacking in good judgment yet he has been in Parliament for no little while. Considered inept yet in a ministerial role? Considered inept after 3 terms? I do not think so. Perhaps he was aware of the problem and chose not to do anything to prevent it on the basis that it did not look as bad then as it now clearly was. In that case we should be told that that was what had happened. 
I guess without answers to the questions and an explanation from Mr O’Connor we are all worried that anybody can suggest he was complicit in Mr Field’s scheme. These are not nice choices and the questions should be answered. 
The debate having concluded the motion lapsed. 
KiwiSaver Bill 
Third Reading 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I move  
That the KiwiSaver Bill be now read a third time 
. This bill is a landmark in social and economic legislation in New Zealand. It is the culmination of a set of measures this Government has put in place since 1999 to put financial security in retirement within the reach of every New Zealander. 
The first move was to restore the cuts made by the National Government in 1999 when it slashed the level of New Zealand superannuation contrary to the multiparty accord on New Zealand superannuation. We restored the level to 65 percent of the average wage for married couples as the minimum rate and that rate would be preserved into the future. Everybody thought that rate had already been secured before 1999 but National knew nothing in terms of its desperation to fund tax cuts that proved to be unaffordable. 
Secondly we moved to create the New Zealand Superannuation Fund which provides long-term stability for the basic State pension by partially pre-funding the scheme. That fund was attacked by the National Party as being smoke and mirrors and was specifically rejected by Dr Don Brash. The fund is now supported by the National Party; indeed last night during the Committee stage the fund was almost claimed as its own work in order to secure the future of New Zealand superannuation. Thirdly we showed some leadership as an employer in providing workplace savings options by introducing the State Sector Retirements Savings Scheme a voluntary savings scheme aimed at State sector employees. 
KiwiSaver completes this foundation in terms of security in retirement by providing easy access for all employees to a long-term savings scheme. It will encourage a long-term savings culture and will provide the impetus and opportunity for New Zealanders to begin saving early and regularly for their retirement. It does not rely on compulsion; it relies on the fact that people are compulsorily enrolled in the scheme then have to choose to exit from it. It is a relatively simple mechanism and one we believe will work. This initiative has important implications for every employer every employee and every business in the savings and investment sector. It has undergone intense scrutiny through the select committee process and elsewhere. 
 The Government will be supporting this scheme through meeting the cost of administration offering a $1000 start-up contribution to each new KiwiSaver member and providing a capped scheme free contribution as well as support for first-home purchasing. We will also be providing as a response to feedback from stakeholders a specific tax concession in relation to specified superannuation contribution withholding tax on up to 4 percent of contributions by employers—4 percent of wages. That will now be exempt from the specified superannuation contribution withholding tax in KiwiSaver schemes. The scheme’s date has been moved to 1 July next year to ensure that all procedures will be ready and the providers will be ready to make sure it goes smoothly. 
Amendments made in the Finance and Expenditure Committee mean that deductions will occur from day one. That will mean again that inertia will work on the side of staying in the scheme rather than exiting from the scheme making it much less likely that new employees will miss the money that otherwise they would miss if they started paying at one rate then had KiwiSaver occurring further down the track. New employees will be given an information pack when they start a job. Changes to the bill provide greater clarity on the information they receive. Also changes made in the select committee have reduced compliance costs for employers which have been a major concern for the Government and I am sure the House right the way through the development of the scheme. 
One key feature that has remained relatively unchanged is the two standard contribution rates of 4 percent and 8 percent. The optional rate is 8 percent of income. The 8 percent contribution rate is really designed for people who are saving for their first home and for people in later life who are approaching retirement and are trying to build up greater savings in the period when they have paid down the mortgage on their property. We recognise that some would prefer 2 percent but 2 percent is a very low level of contribution for many people and would create problems in terms of the scheme design in relation to very small balances being accumulated. But through a change in the select committee if employers contribute 2 percent then the employee has to contribute only 2 percent as well to meet the 4 percent minimum. 
That change was partly the reason for the change being made to the specified superannuation contribution withholding tax because if the specified superannuation contribution withholding tax was applied to the 2 percent employer contribution the total contribution would not have been 4 percent; it would have been 3.33 percent because of a loss on taxation. That led to further work and thinking around the issue of a limited tax concession in relation to this. 
Yesterday the bill passed its Committee stage with a relatively perfunctory examination by some members of the House. National Opposition members seemed to be obsessed with the insertion of a mortgage diversion scheme. They were obsessed with it because they did not understand it. They based their arguments on their belief that mortgage diversion could apply to all the employee’s contribution. But as Mr Copeland pointed out to Mr Key privately yesterday that is not the case. Only half can be diverted and Mr Key had to admit to Mr Copeland that he had not recognised that fact and got it wrong. That of course did not change the arguments the National Party continued to put forward for the rest of the day—never let the facts get in the way of an argument. 
That argument reached absurdity when Mr Key said that because we were allowing some limited diversion for mortgage purposes the next thing to happen would be for people to take their money out of the scheme for “the lawnmower man the guy who cuts the hedges the gardener the housekeeper the pool boy and anybody else who comes to work anywhere around the house”—an army of people; an army of Cossacks. I have to tell Mr Key that the target of KiwiSaver is not people who employ a hedge cutter a gardener a lawnmower man a housekeeper and a pool boy. I tend to assume that those people are probably adequately well off and able to save for themselves without the help of a Government scheme. And when challenged as to who has pool boys he said: “dozens of people have pool boys”. There are 4 million people in this country and very few of them have pool boys. In fact most people in New Zealand do not have pools let alone pool boys. But that I think showed the slackness the laziness and the shallowness of the National Opposition arguments. 
Let me take the silly argument that mortgage diversion will mean that people will lift their mortgages. Let us take a person on $50000 a year with a $150000 mortgage which is by no means untypical in a New Zealand situation. At the moment the KiwiSaver contribution is $2000 a year. People can divert $1000 of that to paying off their mortgage. Their mortgage repayment is probably in the order of $14000 or $15000 a year—and Mr Key is trying to tell the country that allowing $1000 to be diverted towards that $14000 or $15000 will lead the borrower to increasing the mortgage. That might be what he would do in some kind of highly leveraged financial market activity but it is not what average non - pool boy employing Kiwis will do faced with a desire to reduce their mortgage and set themselves up for retirement. What happens is that people with equity in their home because they have sufficiently reduced their mortgage do have a tendency when house prices go up to lift that mortgage to create spending power. But that is not the same thing as what National was trying to argue. 
The fact is that National cannot tell us what its position is. It voted against it then said it probably would not change it if it became the Government. Indeed Mr Key wants to turn the scheme into a compulsory scheme. He has made it pretty clear every time the issue has been raised that he wants to do that but he cannot convince Dr Brash that there should be a compulsory superannuation scheme. I just warn people that compulsion in Australia was accompanied by the introduction of a very strict income and assets test on the state pension. That has been the result of compulsion in Australia. 
There are still many people of limited means who will depend primarily on New Zealand superannuation and this Government stands also for a strong floor on New Zealand superannuation. The people whom Mrs Turia raised questions about in the House yesterday or the day before are people who cannot save much and for whom New Zealand superannuation will be their overwhelming retirement income. Preserving that is also important. That is why the Government restored the level of New Zealand superannuation; that is why we put in place the superannuation fund to secure the future of New Zealand superannuation. Now we are moving to address a broad range of middle-income earners in New Zealand and helping them get into lifetime retirement income savings. Again the Government is addressing the big picture while the Opposition wallows in its day-to-day issues. 
JOHN KEY (National—Helensville) 
: 
 So often our Minister of Finance lives in a state of denial and we heard in that speech another example of the state of denial he lives in. He took the moment of his speech when he diverted from the notes written for him by Treasury to say that New Zealanders would not increase their mortgage if they had the opportunity to do so. This is the Minister of Finance who came into office in 1999 when New Zealanders owed $80 billion. Well today I hate to tell the Minister of Finance the debt owed by New Zealanders is $140 billion. In the last 7 years they have racked up $60 billion worth of debt and in the last 3 years they have racked up $40 billion worth of debt. If Michael Cullen does not think that New Zealanders when they have the opportunity to increase their mortgage because they have paid some down will do so then he lives in a world that does not understand basic banking tenets in the modern world and he does not understand just how easy it is. 
There is probably one point on which National agrees with Labour at least in some form—that is New Zealand does face some savings issues in my view. I think New Zealanders do have a concentration of assets that are held mainly in their home and unless they diversify their assets into financial assets they will inevitably have to eat their home in retirement—and many New Zealanders will. That said the question is whether KiwiSaver will do the job. 
The Government bases its entire premise at this point around the view that inertia is the reason New Zealanders do not save. In fact there is little evidence to prove that inertia is the reason they are not saving. There are many reasons why they are not one being that they are over-taxed and another being that they do not earn enough. I refer to those New Zealanders who the Minister of Finance seems to claim will all of a sudden become participants in KiwiSaver. If that is to be the case then it is rather remarkable that the Government earns around about $550 million a year from the specified superannuation contribution withholding tax yet believes that those who undertake KiwiSaver will have a fiscal cost of only $35 million. 
 Something just does not add up. If so many people are going to flock to KiwiSaver if so many people are going to use this scheme and they are genuine New Zealanders who are not saving today then one would have expected the changes to specified superannuation contribution withholding tax which the Minister of Finance announced a few hours before the bill was released for its second reading would have been much greater. The truth is that the Minister of Finance knows that before he made any changes to specified superannuation contribution withholding tax the scheme was hopelessly flawed and would never have worked. 
Despite the fact that he said the Finance and Expenditure Committee had done its process he knows as well as I know and as well as every member on the committee knows that in fact they did not do their work. In fact we heard a great many submissions and not one of them was about mortgage diversion because no one had had the opportunity to discuss mortgage diversion because even Labour members on the committee had decided that it was not a good idea. When Gordon Copeland introduced it about 30 minutes before the end of the whole session Labour members agreed with me when I told them that I had had a look at that option around the Central Provident Fund in Singapore. 
Michael Cullen knows full well that when there is mortgage diversion a savings account is turned into a chequing account. That is a fact of life and if Michael Cullen does not know that he had better get up to Singapore and have a look at how much is sitting in the accounts for which there is mortgage diversion. He knows as well as I know that in fact the number is zero. Money flushes through the account and goes out the other end. 
I do believe that New Zealand has some savings issues and in that regard he is right about one thing and I do not entirely agree with Roger Kerr of the Business Roundtable who says that the only issue is national savings. I personally think household savings do matter. If national savings is the only calculation that has to be worried about the assumption always has to be that New Zealanders will be able to rely on the Government to pay for anything they want; they will not and we know that and there should be some behavioural changes and we agree with that. 
But there are many problems within KiwiSaver. There are many unanswered questions and National will not be voting for it for very good reasons. The first is that while a workplace scheme is likely to achieve change one of the questions that has to be asked is why the deduction or the benefit that has been given under specified superannuation contribution withholding tax is applicable only to KiwiSaver. Today we saw a press release from Jill Spooner the vice-president of the Association of Superannuation Funds of New Zealand who made the point—I think quite correctly—that those New Zealanders who saved for years in the 1990s who stuck with their workplace schemes and who loyally contributed when there was no incentive to do so are now finding out from the Minster that they are somehow left out in the cold.  
Secondly inevitably we will see more and more schemes become KiwiSaver-compliant. Why is this? Because they will want to have the benefit of the reduced specified superannuation contribution withholding tax. But what we will see in effect in my view is that many people who are saving in existing schemes will exit those schemes as they transition into a new KiwiSaver scheme. As we heard from AXA New Zealand today—interestingly enough—around about 20 to 40 percent of all money that is able to be transferred from one scheme to another never gets re-invested; that is a reasonably interesting point.  
I also make a point around mortgage diversion: if it was such a good idea and it was going to work and provide the incentives then why was it not introduced much earlier on? What was the magical process that occurred after the select committee had heard the submissions and long after they had had the opportunity to listen to them? What happened that changed the Minister’s mind? What happened to the position that Michael Cullen had adopted for the better part of 10 years that savings incentives would not work in any form whatsoever? That position went out of the window as the Government scrambled to try to change KiwiSaver. They knew the architecture might have been all right but the basic process would never have worked in any form whatsoever and they decided at the last minute that they had no option.  
This is a Government with its back to the wall and facing plummeting internal poll ratings. Today I was interested to hear someone who had seen an even more up-to-date poll by Labour. Interestingly enough that person told me that the gap between Labour and National now is not as wide as it was on  
Agenda 
 on Saturday morning when we saw National leading Labour by 4 ½ points. But in fact the gap is even wider. We know that this is a Government that thought it could get away with stealing $882000 to buy an election and thought it could prop up a member of Parliament whom even its own Prime Minister does not believe in. That is the reason we have seen tax changes. Michael Cullen has written out a cheque on behalf of the people of New Zealand—a far bigger cheque than the one Labour wrote out on behalf of the taxpayers to steal an election. It wrote out that cheque in desperation to try to get some good news. That is the reason we saw the changes. Michael Cullen knows that and he was blushing not just his normal pinky self when he was in front of the KiwiSaver billboard the other day; he was blushing with embarrassment. Even he had to say when asked what had changed his mind about saving incentives: “Let’s just suck it and see.” They are hardly the words of a man of great conviction. 
National will not support KiwiSaver. We do not think it will work enormously in its current form. There are many things that could have been done to make KiwiSaver work. If the Minister of Finance had not been so lazy he could have gone and had a look at what President Bush did. He would have learnt from the US Treasury that the real thing that drives savings is the real thing that has driven their 401 (k) plans and their individual savings accounts—reduced taxation treatment on the savings of those funds. That is where the exponential grunt is and that is the thing that has been driving great economic growth in the US as Treasury knows. The Minister of Finance knows he has tackled the completely wrong place. He has made no difference to employers. There is no incentive on employers to encourage this scheme and the Minister of Finance has once again—as he so often does—got it horribly wrong. 
SHANE JONES (Labour) 
: 
 Kia ora Mr Assistant Speaker. At some point in the future when there is great efflorescence the KiwiSaver scheme and the speeches we give this afternoon will be reviewed. Unlike the previous speech from John Key the speeches made by the Minister of Finance and the chairman of the Finance and Expenditure Committee will be regarded as very temperate accounts and very thoughtful statements as to what went into this scheme and why this legislation the KiwiSaver Bill is well and truly overdue. 
Before I embark any further I take this opportunity to repeat what I said earlier—that is to pay a vote of thanks to officials from Treasury and the Ministry of Economic Development and the formidable team from the Inland Revenue Department for the work they provided to the select committee. They answered all manner of questions from both sides of our committee because we were dealing not only with an area where policy has been very scarce but where there are also a host of technical possibly elegant solutions on an evolving basis. So I say kia kaha and thank you to those officials. 
Underlying this bill is a question to which I certainly believe the answer is self-evident—that is the fall in household savings. Various ideologists came before the select committee. I am not sure whether a number of them improved upon what the National members asked but they were clearly of the view that household savings had not fallen. I presume they arrived at that conclusion by identifying the fact that many New Zealanders have their wealth—such as it is—tied up in houses. House prices have risen so in a stock sense there has been a growth in wealth dimensions. However we on the Government side of the House believe that household savings have faltered and that this legislation in terms of securing more reassurance for retirees represents a very sensible step forward. 
 What are we actually doing? We are providing a scheme that has the additional benefit of a modest tax incentive but it will also modify behaviour in a positive way. That is the first thing. Secondly it does not represent additional compliance problems. It is a savings scheme that enables people at the point at which they sign on to a job to begin to save. But it is not a compulsory scheme; it gives them an option of opting-out. 
The extent to which employees can challenge their own inertia is really not for this House to determine—political inertia on the other side of the House notwithstanding. It is an option that lies before the individual saver. Not only do employees have that option but they will also receive the $1000. In addition to overcome the flagging homeownership statistics that Mr Key has just referred to there is an additional $5000 available. So in that sense it is a very generous start. But like all of these things as we no doubt go forward and celebrate a fourth fifth and possibly sixth term the scheme will be capable of being refined and improved as we learn about how people actually behave under the new scheme. 
I want to repeat what the Minister said in this very temperate fashion. First this represents a culmination; a variety of measures have been introduced and the Government has been driven to do something that the community up and down Aotearoa are looking for—that is added security in retirement—and to ensure that New Zealanders are able to create a buffer in regard to our State pension scheme. Not only did we change and improve the “super” rate that our oldies are receiving but earlier in the course of this Government we created the Cullen fund. When we add those three things together it is hard to imagine what another Government could have or has done for a long period of time. This was an area that has remained as an outstanding issue. 
We did not really hear and I have not heard from Mr Key or anyone else what National would do as an alternative other than slash taxes indiscriminately and leave the vast majority of New Zealanders in “Strugglers’ Gully” possibly eking out an existence on a pension scheme which many of them are already telling us they believe they will need more of in the future. So this scheme will do that. In respect of what it does in relation to the foundation of the economy we really do believe that it will deepen and enhance the pool of available savings. 
We have heard chapter and verse about how the Aussies have sprinted ahead because they have easier access to funding. Indeed we had in another context Jenny Morel speak to us about how much easier it will be to mobilise capital to find investors for venture capitalists to operate etc. Before she was rudely interrupted by someone from the other side of the House I am sure she was on the verge of referring to the funds that will flow as a consequence of the KiwiSaver initiative because what it is really doing is attempting to generate a change in the long-term behaviour of savers. 
All long-term journeys need to start on a sure footing. Savers have been promised a great deal by the National Opposition but—unfortunately for National—they just need to look at the 1990s the 1980s and the 1970s and they are now breathing an inordinately high sigh of relief. I am sure that savers will be acclaiming the KiwiSaver scheme well into the future once it kicks in. 
The point has been made as to whether submitters had an opportunity to test their ideas fully and to engage with us. I can assure the House that a whole variety of submitters came before the select committee. A host of them had contacted the committee because they felt that their particular points were not being addressed and every time members of the Opposition sought reassurance from the chair that individuals would have an opportunity to have their particular issue if it warranted additional attention teased through with the officials never were they declined. 
In relation to mortgage division the commentary on the bill actually stated that time was passing by and that the technical challenge represented by introducing such a scheme in the very narrow window of opportunity the legislation stayed with our committee was such that we could not deal with it then but that it did deserve further attention. Somewhere in the governmental ether a fantastic initiative has emerged and of course this will have the twin effect of not only growing the available pool of savings but also improving upon the flagging homeownership rate. 
In addition to homeownership we have made a point with the passage of this bill in terms of improving financial literacy and providing information to those who may be somewhat confused as to which direction they should go. Employers I have no doubt in my mind will respond positively once they have schemes become part of schemes or are capable of identifying schemes for their workers that are compliant and those employers will receive the benefit of the recent tax change. 
I am very disappointed that we hear time and time again a parched and barren view about the attitudes of employers. The employers I talk to think that any scheme that grows the available level of savings that can continue to deepen and expand the productive sector of the economy is an idea whose time has come. Anyone arguing against that is scoring cheap political points when deep down they know that as a consequence of us embedding this scheme it is here for a long time to come and great efflorescence will surround it in the future. Kia ora tatou. 
CRAIG FOSS (National—Tukituki) 
: 
 I rise to speak to the third reading of the KiwiSaver Bill. First I want to thank the members of the Finance and Expenditure Committee from both sides of the House and the officials too. They look as fresh now as they did late last night when members were debating—or racing through—the Committee stage of the bill. Secondly I also want to acknowledge the previous speaker’s list-ranking speech. It has been noticeable that the only Labour members speaking to the bill are list MPs. In fact Mr Jones has been the only speaker from the Labour Party other than the Minister in the chair at the time. Mr Jones is the chairman of the select committee and is a list MP. 
In his speech Mr Jones revealed something interesting when he talked about mortgage diversion. I will come back to that issue but I am sure he said something like: “From the dark hole suddenly there appeared a mortgage scheme.” That says it all! That says he did not know about the provision. In the Committee stage we said time and time again that Mr Jones had no idea in advance. We could probably bet dollars to doughnuts that National members knew in advance of Labour members what Mr Cullen had announced and negotiated with Mr Copeland who is sitting over there in the corner. One day we will get to the bottom of it. Perhaps the Official Information Act requests I have put in will be quite revealing. I am looking into the time frame around the various emails between Ministers. 
The bill was introduced in February. The select committee spent many many months studying it with officials submitters and representatives and notably when the bill was in its original form or slightly drafted form. We spent a long time and I thank submitters for the time they spent on it. The purpose of the bill is to try to address New Zealand’s retirement savings deficit. That is fair enough; it is a nice intention. I would like to correct the Minister of Finance. National is not voting against the intentions of the bill but against its execution and implementation and the environment and distortions it will create. We should remember that it goes hand in hand with the taxation legislation before the Finance and Expenditure Committee right now. 
 We acknowledge that there is a retirement savings deficit in New Zealand but it is only part of the problem or perhaps it could be part of the solution. Like all good socialists Mr Cullen started out with wonderful intentions but of course all socialist execution is totally lousy and hopeless as evidenced by all the other failed States behind the Iron Curtain—perhaps they are trying to resurrect one here! 
In preparation for this third reading speech I looked at the first reading of the bill. In fact I went to Mr Cullen’s introductory first reading speech and the speech that he just gave I could have given myself because most of it was verbatim from that speech at least the introductory part. But he raised six points. He noted that the bill has six features so I would like to go over those again and give them a tick a cross or a “perhaps try harder”. 
The first feature he noted was that the scheme tilts the playing field towards establishing a long-term savings habit. Well perhaps when it was first introduced yes that may have been true. But in fact as Mr John Key pointed out and as members will see as we go through our speeches that is not necessarily so. As many submitters noted it will move savings; it will not necessarily create savings. Mr Cullen’s second point was that the bill locked in savings for use in retirement. No that is no longer true. He went on to talk about the hardship provisions. Well actually the hardship provisions etc. have been softened quite radically and we are still to see further detail. It will be interesting to see how the Inland Revenue Department will interpret those. 
The third point Mr Cullen made was that KiwiSaver will provide members with choice regarding how their savings will be managed. OK perhaps but what he does not address is the first mover advantage around the somewhat shonky process of the default provider scheme which is mentioned in the commentary on the bill and on which we spoke last night. The fourth feature that Mr Cullen pointed out was that the scheme minimises compliance costs to employers employees and providers. Well when Mr Cullen mentioned that my good friend and colleague Mr Tremain almost fell out of his chair. Having been involved in many small businesses he knows exactly what it is like on the ground. I tell Mr Jones that those small businesses are private enterprises not the public sector version. 
The fifth feature Mr Cullen announced was that the bill provides prudential oversights of schemes and allows existing fund managers to join. Perhaps OK. The jury is out on that feature. The sixth and final feature Mr Cullen noted in his first reading speech on the bill in its original form back in February was that it includes a mechanism to encourage homeownership as an important element in long-term financial security. Well here we go let us just look. Because as my other colleague Phil Heatley discovered today during question time the other programmes and schemes to help homeownership that have been talked about and talked about are still on the shelf with very very little action and loads of talk. What the bill does not address is why homes are so expensive in the first place and on the other side of the balance sheet is the affordability or lack of affordability of houses in New Zealand. 
The haste in which this bill has been introduced pushed through and bulldozed through Parliament particularly in the last few days and the haste in which the last two major amendments were brought in last Thursday could well be its undoing. Many submitters and officials expressed a lot of concern about the tight time frame within which they are supposed to implement this bill and get their back office etc. ready because it makes quite fundamental changes. That was before the mortgage diversion facility and the specified superannuation contribution withholding tax exemption as announced last Thursday were even talked about. Everyone involved perhaps with the exception of Mr Copeland was under the impression that those measures would not be introduced. 
This bill is being rammed through in haste to perhaps get some good headlines over the weekend to try to counter some of the appalling polling that Labour is getting at the moment. Look at the press release I have here from the Association of Superannuation Funds of New Zealand—“The KiwiSaver Bill—an SOS call”. It states that those who are on the ground in the superannuation industry are calling on the finance Minister with an SOS because its members are struggling in the wake of his announcements last Thursday that “tax concessions are to be made available in respect of certain employer contributions to KiwiSaver schemes”—that is they have been left out in the cold. That is absolutely appalling. There are people on the ground and they are struggling. They have been in the industry for a long time and they have been left out. 
When I looked at Mr Cullen’s first reading speech there was no mention whatsoever of the policy of the mortgage diversion facility. There was no mention whatsoever of any exemption or the specified superannuation contribution withholding tax exemption scheme—none whatsoever. I almost fell off my chair when he said earlier that the Finance and Expenditure Committee had given the bill close and intense scrutiny. We did not because we did not even know about those two quite fundamental changes to the bill. 
Mr Cullen in his first reading speech spoke about the default provider process and he was worried that this would be running in parallel and he was worried about the constitutional objections. He was quite keen to point out that everything was above board. Then last Thursday he whipped out Supplementary Order Paper 52 which again fundamentally changes the scheme. KiwiSaver and the taxation legislation go hand in hand. They are supposed to create savings but they actually create contradictions. Here is an example: a Council of Trade Unions member on $50000 decides to invest 4 percent of that money into a new KiwiSaver scheme and the fund invests in United States shares. Well he will be taxed on the dividends and 85 percent of the capital gain times his marginal tax of whatever those shares move by. Yet if he goes and invests directly he will be taxed only on the dividends. The taxation legislation is totally contradictory to the KiwiSaver Bill. How on earth will that provide an incentive for that person to save for his future retirement? 
I would just like to end with a quote from the Council of Trade Unions which really addresses what we need with courage boldness vision and perhaps even a bit of brashness as we find a vision and get New Zealand going again. The quote from the Council of Trade Unions member whose name slips my mind at the moment states on KiwiSaver: “It is vitally important that in addition to employer contributions we see a continuation of wage rises so workers are better able to afford workplace savings.” That says it all in an absolute nutshell. The problem is not savings the problem is income and earnings. I seek leave to table the press release from the Association of Superannuation Funds of New Zealand which sends an SOS out to the Minister of Finance to reconsider some of the changes he announced last Thursday. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Is there any objection to that course of action being taken? There is. 
R DOUG WOOLERTON (NZ First) 
: 
 New Zealand First supports the KiwiSaver scheme. We say that right upfront. In doing so I would like to congratulate the chair of the Finance and Expenditure Committee on the way in which he conducted the meetings. I give due credit to my colleagues on both sides of the table and most of all to our officials who guided us through and helped us with the tricky bits. 
Before I came to the Chamber I congratulated Mr John Key on his statesmanlike address. He was far less cheeky and far more serious today than he was last night. I congratulated him on that. He said: “Doug do a return favour and say something nice about the National Party for a change.” In actual fact I say a lot of nice things about the National Party but I will give John Key a hand up and say that he and the National Party—whenever they come to the Treasury benches however long that may take—will retain the KiwiSaver scheme. They may enhance it they may change it but they will retain the KiwiSaver scheme. That is my favour to Mr John Key because he is bursting and wanting to tell the people of New Zealand that but he cannot. He cannot because he is being whipped along a certain line. He has a monetarist for a leader and he cannot deviate from the cold heartless path of National Party monetarism. But he would love to. He knows that National has to get those critical votes in the centre-left to win. So I will do it for him. Mr Key will retain the KiwiSaver scheme when he is in a position to do so forever and ever and ever. 
 New Zealand First believes in taxation incentives and we are pleased to see them in this bill—albeit they were put in late and albeit they were put in as the National Party members correctly say without discussion in the select committee. New Zealand First supports this bill because we believe that the Government should lead savings regimes. It should lead them in a responsible manner and give the message to the public. 
It is sad that we have lost our savings culture in this country. I believe that we know when that happened—it happened with the changes that both Labour and National indulged in in the early 1980s. Back then the market prevailed and the market was going to supply everything. Unfortunately the market did not give the message to the average person that he or she should save and put a bit aside for the future and that the Government would help with that. So savings in this country dropped. The KiwiSaver scheme recognises that fact acknowledges it and goes out to do something about it. We applaud that the Government has taken a leadership role and we endorse this bill enthusiastically. 
This is not a matter of having a situation where we hope everything will work; this is a clearly thought-out bill that has certain objectives and will provide certain outcomes. One of the objectives is to involve people in the financial markets—to involve people in saving and to get them in the door of the financial institutions. One would think that National members would applaud that as many of them are involved in these institutions. One would think that they would say that it is a good thing. Mr Key actually does think that but he cannot say so today. It is a good thing to involve people in finance and to help them with financial literacy. We think that the default providers will be basically the big firms. We tried in this bill to involve some smaller firms and I joined with the National Party in saying that we had some concerns that the more entrepreneurial people as we saw it perhaps would not be involved and that it would be left to the big old firms to administer this scheme. However providers have told us that they will use this scheme as a door and go after the people who come in that door and that they will perhaps add other enhancements to the scheme—insurance additional payments or whatever. 
This bill helps people to become economically literate and we in New Zealand First see that as a big part of this bill. Saving is a habit saving is a culture and saving is something that one has to start young to have the full benefits of it in later life—or even in middle life. I can see that mums and dads all over the country will encourage their children to become involved in this scheme—especially mums because they are usually the tough ones in the family. Fathers usually take a more laid-back attitude to these things in my experience—certainly unfortunately I have done so. 
This bill has an opt-out clause not an opt-in clause. People will automatically be a part of this scheme when they sign up to work. If they change their mind and they want to opt out they have to make a conscious decision after 2 weeks of employment to do so. I would suggest that there is something wonderful about this. Let us consider for example a young man who goes home after work. His mum looks at his pay packet and asks: “How is the savings going son? How is the job going?”. The son answers: “Mum I just opted out of the KiwiSaver scheme.” There would be hell to pay in that household. Mum would be on the case—she would tell junior to get back to work and sign himself up and get back into the race. It is not until we reach middle age that we really understand the wisdom of what our mum or grandma told us which was to be cautious with our money to save for the future to live cleanly and to do all of the sorts of things I have done. We have a situation that makes it harder for people to get out of the scheme and New Zealand First applauds that. We think that that will go a huge way towards making the scheme a success. 
I know and the Opposition has pointed out and the Government clearly understands that there will never be the take-up that everybody would wish. It is a pipedream to expect every New Zealander to participate in this and hang on to it forever as they should. But it is certainly a responsibility of us all to make sure that people understand the need for saving and the value of the scheme and to do everything we can—by word of mouth by encouraging our family by advertisements and by other means at our disposal—to make sure that young Kiwis especially stay in this scheme because it is in their interest to do so. 
One of the things that has interested me—and it is one of the differences between both sides of the table—is that National members God bless their souls have continued to come from the perspective of dare I say it being rather more sophisticated financial operators than the rest of the country are. I know that they could probably give better advice on where to put one’s money if they were advising their own family but this is not necessarily a scheme for financial sophisticates. This is for the average person in New Zealand and I for one and New Zealand First for one party believe that it is a pretty good attempt. It gets us back to a place we should never have left years and years ago with the Government strongly encouraging savings amongst its citizens. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Tena koe Mr Assistant Speaker. Tena tatou te Whare. I start off by mihi-ing to the chairman of the Finance and Expenditure Committee Mr Shane Jones because he told me to. 
Last week I spoke about the importance of having an “IwiSaver Bill” because as the independent Maori voice in Parliament the Maori Party is committed to saving iwi saving hapu and saving whanau. When I think of saving whanau I naturally think of saving the children because there are about 200000 Maori children in Aotearoa and nearly half of them live in families that are not eligible to be part of the KiwiSaver package. Mind you some 80000 Pakeha kids and another 50000 Pasifika and other kids will not be eligible to be part of the package either. That is nearly a quarter of a million kids living in severe and significant hardship right here in Godzone. There are 226000 Kiwi kids living in homes without heating going without fresh fruit and vegetables and too poor to pay for their medicine. 
That cannot help but make me think that calling this bill the KiwiSaver Bill is a cruel test of faith for just as our national icon the kiwi is under siege so too are our national treasures our children. If anyone needs saving it is our Kiwi kids particularly our Maori and Pasifika children. Here is the real parallel: it is the brown kiwi apparently that is classified as being in serious decline because of the threat of savage predators and dangerous habitats. How true the comparison is. The predators in this bill may not be stoats and cats but make no mistake they are creating conditions that threaten the very survival of our Kiwi kids. 
The New Zealand Institute noted that although there is a healthy national fiscal position and strong corporate profitability clearly there are still many blocks to a savings culture. Despite the 17 percent growth in the economy Maori are still unemployed at a rate three times higher than that of Pakeha and are still overrepresented amongst the working poor. Clearly the fruits of economic prosperity have not been shared equally. That makes the recommendation of the Finance and Expenditure Committee to extend the scheme to cover Government workers overseas but still not to provide support for our most vulnerable—the brown Kiwi—a little hard to take. It seems the exotic brands will get the birdseed while the brown Kiwi goes hungry. 
We are also disappointed at the select committee decision not to have a lower contribution rate for those on low incomes because it might lead to lower rates of savings for KiwiSaver members. So instead of making positive steps towards expanding the savings culture as proposed by the Green Party’s 2 percent entry point once more decisions are being made that will work against the poor brown Kiwi. 
The National Council of Women said a family’s ability to save depended on the amount of spare cash that the family had and it asked Parliament to take into account the rising cost of energy fuel phone charges rates and the massive debt being created by easy access to loans. The New Zealand Public Service Association also noted that 30 percent to 40 percent of Kiwis on low incomes were unlikely to have spare cash for savings. That is a big group of Kiwis who will miss out. The Royal Forest and Bird Protection Society tells us that the threat facing kiwis is urgent and that all mainland species of kiwi are threatened with extinction unless the causes of decline are addressed immediately. In much the same way this bill misses the point that unless we create the conditions for a secure future for the most vulnerable sector of our population its future will be under threat as well. 
One of the main elements working against a successful savings culture is the fact that people cannot see the rewards the incentives or why they should even think of giving up their hard-won cash. The independent actuary Mr Kelvin Prisk said the $1000 initial incentive was too low compared with tax incentives in other areas. He also said the lack of ongoing incentives and the failure to provide for employer subsidies would make it hard for the scheme to succeed. Industry Retirement and Insurance Services and many other financial service agencies unions and employers also recommended a lower entry point than the 4 percent noted in the bill. 
The KiwiSaver Bill is a concept that the Maori Party desperately wants to support because of our commitment to investing in whanau reducing child poverty and securing long-term prosperity for everyone. But we cannot just ignore the fact that while some Kiwi kids will benefit from having their parents in a job a lot of other brown Kiwi kids will miss out. Ten years ago in speaking out against National’s decision to restrict the child tax credit Annette King the then Opposition MP said: “It isolates beneficiaries from other families. It treats them like lepers and worst of all it treats their children differently. What is different between a child from a beneficiary’s family and a child from a family in which someone is working. … Does that child look different when he or she goes to school?”. How quickly politicians forget the fire of their own rhetoric when they get into power. For just as on one hand this Government is calling for long-term savings and financial independence on the other hand families on benefits are being marginalised and excluded from the benefits of this scheme. 
Nearly 2 million people in Aotearoa live on less than $25000 a year. How will those Kiwis manage a 4 percent cut on an already too thin pay packet? How will Kiwis on the minimum wage get by? A 4 percent cut in an income of $306 a week leaves those people with a take-home pay of $290—the price of a Bordeaux according to my colleague Mr Gordon Copeland. Another point raised by the Child Poverty Action Group was that taxpayers had to carry all the risk. There is no Crown guarantee for KiwiSaver schemes which makes all the talk about the Government’s commitment to the security and financial stability of New Zealand families ring just a little hollow. The real worry though with the swept up KiwiSaver promo is that low-income families will get sucked into the scheme thereby sacrificing basic essentials like kai power or paying off the dreaded loan shark just because they want to get into a savings scheme only to find out that by ignoring the essentials they have sacrificed their family’s health and well-being. 
I heard a story about a young woman who told us about how as a little girl she asked her mum for some money to get some bread for breakfast and for lunches for her five brothers and sisters. Her mum said: “Nothing miss. We’ll have to wait till tomorrow.” The Maori Party supports the growth of a savings culture. We want a secure stable and hopefully prosperous tomorrow for our people just like everybody else. But like those Maori kids I just spoke of we do not want to have to wait until tomorrow either. We want toast for breakfast sandwiches for lunch and bread pudding for tea—or at least the choice to have those things—as well as the ability to buy some flour for a rainy day. 
That is why we really like the thinking behind Ngai Tahu’s iwi saver proposal. Its Whai Rawa scheme is a long-term savings plan to support whanau independence by increasing personal wealth. It is not about separating people whereby the brown Kiwis get locked out of KiwiSaver because their parents may or may not have a job. Whai Rawa is about encouraging Ngai Tahu to be breadwinners for today and tomorrow. Their vision is mo tatou a mo ka uri a muri ake nei—for us and our children after us. The Maori Party applauds Ngai Tahu’s initiative and indeed all other whanau hapu and iwi with the insight and the initiative to take care of the long-term issues affecting the well-being of their members. We know we can do it. 
The Maori Party celebrates the success of Maori participating in and succeeding in a modern technologically advanced and highly globalised economy. We celebrate our sports figures our broadcasters our business pioneers and our iwi innovators. We celebrate the revival of our language the power of our kapahaka and the growth of Maori education. We celebrate bold new initiatives like the one taken by Ngai Tahu to ensure that our people will not only survive but also will flourish. 
Maori have a proud history as a culture of savings. Through our pataka kai—our storehouses—rahui to protect the resources of the seas and the forests grandad keeping his pension under the mattress and right down to my colleague Mr Shane Jones pinching his brother’s pennies so he could buy comics later Maori have a proud history in savings and conservation. We spoke strongly against aspects of this bill during its first two readings so that people would know of the depth of our concern for our people. But we will support this bill at its third reading because promoting the idea of savings is a worthy ideal warts and all. Kia ora tatou. 
GORDON COPELAND (United Future) 
: 
 I would like to start my remarks in the third reading of the KiwiSaver Bill on behalf of United Future by thanking the officials for all of their hard work. I must confess to a splitting headache one night after I had managed to drag myself through more than 200 pages of highly detailed and technical responses to the many submissions we had received. I was a bit disappointed afterwards to find that I had needed to do only about 40 pages because that was all that the Finance and Expenditure Committee got through on the first day. We took it in stages right through the process until as Shane Jones has said we began to run out of time. 
This bill of course is about private savings for retirement and encouraging that goal. I have not been convinced by some of the macro-level advice to the select committee which attempted to demonstrate that New Zealand does not have a retirement savings problem. In my view that was a very very simplistic analysis from both a quantitative and a qualitative perception. It is true that the Crown has been saving a great deal of money in recent times. It is also true that the Earthquake Commission has billions of dollars invested that the Accident Compensation Corporation has billions of dollars invested and that we have a growing New Zealand Superannuation Fund all of which come into the definition at the macro-level of national savings. But the people who advocate that there is no problem fail to realise or fail to explain that those funds are all already effectively earmarked to cover future liabilities and that none of them is available at all to assist with accumulating private savings by New Zealanders in order to subsidise and assist their standard of living in retirement. We are aiming to provide something over and above New Zealand superannuation through the KiwiSaver scheme. 
A similar comment applies to housing. It may be true that on a per household per capita level we now have a lot of money saved in housing but that is cold comfort to those who are renting and sadly they are an increasing proportion of New Zealanders. One of the things this bill also endeavours to contribute to is reversing that trend and going back to New Zealand again being in a world-leading position in terms of the number of family-owned homes. Ideally United Future would like to see every family living in their own home for that of course provides enormous security in itself in retirement. 
 I will now talk about the quality of the savings investment. Evidence was presented to the Finance and Expenditure Committee today by the big fund managers of this country that we are actually moving backwards right now. People are withdrawing more money from managed funds right now than they are putting in. Where is that money going? It is going partly into housing—mainly into an increased number of rental properties—and also would you believe it into second-tier finance company bonds or in other words junk bonds. That is tragic for New Zealand. The whole situation we are in at the moment from a savings perspective is simply tragic. We are actually on the road not to prosperity but to poverty. The KiwiSaver Bill is the first step in beginning to change that around for the benefit of New Zealanders and for their future. 
The second step comes in the form of the tax bill now before the Finance and Expenditure Committee. It will revolutionise the taxation framework around savings particularly those through managed funds or what are now called portfolio investment entities. It is my hope and dream that those two things together will see New Zealanders begin to save. I do not think we are any different from anyone else in the world. All we need are the right climate the right incentives and the right signals from the Government and I think we will see savings happen. 
I would like to ask members today to think about this. Let us hope that in 10 years’ time private savings by New Zealanders may be let us say $100 billion. That is not impossible. Australia has just broken through the $1 trillion mark. That is the route we need to go down so that we have capital markets here that are robust and enable companies to begin to expand both domestically and internationally. As I have said earlier I hope that the level of private homeownership will also again begin to increase so that we reverse the negative trend that we have got ourselves into and go back to the ideal of a home for every family. 
There are a few things about the KiwiSaver scheme and United Future’s contribution to it that I would like to put on the record. The first thing I say is that in our bid to the Government leading up to the 2005 Budget we asked: “in the event that a workplace savings scheme is introduced that provision be made to allow holders of workplace savings schemes to make a withdrawal for the purpose of purchasing a home.” I am delighted that the Government saw fit to adopt that United Future suggestion and that this bill enables people to withdraw their funds to buy a first home. In addition of course the Government has enhanced that ability by offering a subsidy of up to $5000 per saver—$10000 for a couple—to people who qualify for it. The subsidy will be relatively small in its scope but nevertheless it will also make a very very worthwhile contribution. 
That leads me directly to the mortgage diversion proposal which has also now wisely been adopted by the Government. John Key said it had emerged as if by magic; Shane Jones said it had emerged from the ether. Well I learn things about my colleagues every day because I did not know John Key was a practitioner of the black arts and I did not know Shane Jones was an anaesthetist. But I want to tell members that it was simply the magic of common sense and it was also common sense that broke through the ether and just simply brought to the Government a well-thought-through scheme which it wisely accepted. Someone once said the only things that really surprise most politicians are straightforward dealings. It is as simple as that. There was no magic and no ether—nothing of that sort—but just straightforward dealings and a good idea whose time had arrived. Of course it will enable people to put aside money for their retirement and at the same time assist them to reduce their mortgage liabilities. And we all know that most New Zealand families today are mortgaged to the eyeballs and beyond. We need to see some real good change come about regarding that. 
The third thing I would like to mention which was in our 2005 Budget bid to the Government in relation to the introduction of workplace savings schemes is that we asked the Government to remove employee contributions from the assessment of taxable income—in other words to make employee contributions tax free. The Government has not adopted that suggestion but it has as we now know decided to make employer contributions tax free. I think that is also a marvellous enhancement to KiwiSaver. Some people seem to think—and I have seen a couple of comments in the media—this will somehow put pressure on employers to for example settle wage demands partly through an increase in wages and partly through a contribution to KiwiSaver. I have no doubt that will happen and I think it is an excellent thing to happen. Furthermore I expect that employers will be enthusiastic about it because the fact is that being a good employer is good business. That is how one builds a strong business—one values one’s staff. They are a business’s most important asset. 
I will tell the House without any fear of contradiction that I know enough about New Zealand business to know that a lot of employees will go to employers and ask them to please put 1 percent of their pay rise into the KiwiSaver scheme because they will get that tax free whereas if the employer gives it to them in salary they will have to pay tax on it at the rate of 19.5c 33c or 39c in the dollar. And most employers will say yes because they want their staff to be happy and highly motivated to be involved in the business. It is at no cost to the employer—none whatsoever; there is no compliance cost—nothing. Of course employers will do that and of course it will boost the amount going into KiwiSaver. I have no doubt about that. 
Finally I want to express my disappointment in National’s position. I was quite shocked when John Key told the House yesterday that the continuance of KiwiSaver could not be guaranteed if there is a change of Government in 2008—that National does not guarantee continuing the KiwiSaver scheme. I am really disappointed in that because I had hoped that for once we might have a non-partisan approach on this. I just hope and pray that National will not go down the road that Muldoon went down in 1975 because I regard that as probably the single worst decision by any Government during my lifetime. I think New Zealand has paid a huge price for it and I again express the hope that National will rethink its position and give New Zealanders an assurance that this new scheme will continue indefinitely. If National wants to enhance it when it is on the Treasury benches—if it gets there—we are prepared to help it to do that. But National should not for goodness’ sake make this issue into a political football. 
CHRIS TREMAIN (National—Napier) 
: 
 Jill Spooner vice-chairperson of the Association of Superannuation Funds of New Zealand today confirmed the warning that was delivered by my colleague John Key following last week’s last-minute announcement of changes to the KiwiSaver Bill. That warning is fourfold. Firstly it is that the specified superannuation contribution withholding tax changes advantage the new KiwiSaver programme at the expense of those hard-working Kiwis who have been diligently—I repeat diligently—taking personal responsibility for their own retirement. I suggest that there are many constituents of members on both sides of the House in that respect who have been taking personal responsibility for their own retirement and who have been squirreling away their hard-earned dollars in numerous superannuation schemes already in operation around this great nation. 
Secondly unless even further changes are made to the KiwiSaver Bill—as if there had not been enough already—to accommodate those existing savers with a similar tax advantage then we can expect closures of existing superannuation schemes with funds being distributed to beneficiaries. Thirdly mortgage diversion—that much-loved product of Mr Gordon Copeland—coupled with specified superannuation contribution withholding tax will ensure that KiwiSaver accounts are used simply as pass-through checking accounts to ensure that the specified superannuation contribution withholding tax break is received and that current savings habits for retirement such as buying one’s own home are not changed but continue unabated. Fourthly the on-the-hoof policy decision to implement a specified superannuation contribution withholding tax incentive and a mortgage diversion option which are both designed to encourage savings—as quite clearly put by Mr Shane Jones coming from the deep dark ether—could in fact reduce the net wealth of New Zealanders. 
It is somewhat ironic then that these statements are being made at the ninth hour of this legislation when those concerns—plus many others—were raised at the Finance and Expenditure Committee by various submitters many many months ago. To be honest most submissions were broadly supportive of the purpose of the bill but that was where it finished—at the purpose which is to encourage a long-term savings habit. The likes of the Financial Services Institute of Australasia Aon and Business New Zealand were supportive of the intent of the bill and considered it to be a “laudable objective”. The likes of BNZ and Fidelity Life were supportive of “the need for a culture change and the development of a long-term savings habit.” Despite this by far the majority of the submissions to the Finance and Expenditure Committee expressed either reservations or more so considerable reservations about the success of KiwiSaver. The Public Service Association expressed that “even with KiwiSaver many people will still under-save.” The Investment Savings and Insurance Association said that KiwiSaver was “not bold enough to prompt a long-term change in savings habits.” AMP said that it “would not address the magnitude of the issue” and the Retirement Policy and Research Centre said that “the purpose of this scheme is unclear and will not change long-term economic performance.” ING Mutual Fund Ltd and ANZ said that “the home loan assistance provisions are inconsistent with the objectives of the bill.” Most telling was the Association of Superannuation Funds which initially said: “The scheme’s objectives will not be achieved but considerable expense will be involved.” Today in light of the recent last-minute changes by Dr Cullen to the specified superannuation contribution withholding tax the Association of Superannuation Funds is crying foul after its members have been left high and dry. KiwiSaver participants will now receive a last-minute tax break on the specified superannuation contribution withholding tax while hard-working Kiwis who have been saving for years have been left out in the cold. 
In particular I would like to take up the issue raised by the Retirement Policy and Research Centre which said: “KiwiSaver will not prepare New Zealand for an ageing population as economic growth is the only practical method to alleviate this pressure.” Where do we sit in regard to economic growth? Well we are going backwards. We all know the statistics. In 1970 New Zealand sat neck and neck with Australia. Over the next 20-year period we grew at an average of 1 percent per annum. The innovative and visionary changes of the late 1980s and early 1990s allowed this nation to grow at a significantly higher rate averaging 3 percent per annum up until last year. The current Labour Government has sat back and taken credit for the economic growth when it knows full well that its own policy agenda has been one of social transformation as opposed to an increase in the income and wealth of hard-working Kiwis. Right now we face a period of high inflation—inflation is topping 4 percent at the moment—coupled with much lower economic growth projections which are well below what we have achieved in the last 15 years. 
That outlook will increasingly pull us further away from the incomes achieved by our closest neighbour it will continue to send more and more Kiwis overseas and it is a recipe for making an increase in savings even more difficult. It does not matter how good KiwiSaver is if hard-working Kiwis are not earning enough money to pay for the basics in life—as was so adequately pointed out by my colleague Hone Harawira. While inflation is eating away any increase in Kiwis’ wages they will find it difficult to save. 
I would now like to focus on KiwiSaver and its impact on small businesses. Recent changes have focused purely on the benefits to employees. There are now incentives to join the scheme—the $1000 after the first year the specified superannuation contribution withholding tax break and of course the mortgage diversion. Quite frankly employees would be silly not to take up the opportunity to use KiwiSaver as a pass-through account to get the tax break and to pay it off their own mortgage. The opportunity costs of carrying a mortgage with a higher interest rate than that being earned in KiwSaver makes it illogical not to use KiwiSaver as a pass-through account while one still has a mortgage on one’s house. 
Employers become the conduits for a tax break via a complex pass-through account. They are expected to act in good faith towards this scheme when I know that it will add significant costs to their organisations. Mr Jones had the cheek to say that there would be no compliance costs to businesses involved in this scheme when he knows well that there will be significant costs in terms of the advice on the scheme that employers will be expected to provide and the processing of refunds for those who opt out. Employers will be advising existing employees and helping them opt into the scheme dealing with the small refunds from the Inland Revenue Department and then passing them on to the employee dealing with changes of rates and changes in the scheme for employees who change their mind and dealing with temporary employees who wish to be KiwiSaver members. There will be significant compliance costs. 
There are no benefits to employers from this scheme. Should an employer choose to put in an employer contribution there is no difference to the employer as his or her contribution stays the same—totally tax deductible—whereas the employee will benefit to the tune of specified superannuation contribution withholding tax. No the employer will be expected to shoulder the costs of sign-up and sign-off credibility of the scheme education and change. I wonder whether the Minister of Finance has taken that fully into account and I suggest that perhaps this is the reason for the last-minute changes to the bill—the last-minute incentives to try to overcome the issues identified by submitters at the select committee hearing. 
I will close with a quick summary of the submissions compiled by officials at the select committee hearing: firstly KiwiSaver does not go far enough to increase savings rates; secondly the homeownership assistance is inconsistent with the purpose of encouraging saving for retirement; thirdly KiwiSaver is expensive and there has not been enough research on whether it will increase saving; fourthly and finally KiwiSaver will not prepare New Zealand for an ageing population. The policies that focus on growing New Zealand’s economic pie and on growing wages for all New Zealanders will be the key to asset accumulation and to long-term savings. 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 It is certainly very gratifying to speak in the third reading of the KiwiSaver Bill and to see it finally passed through the House. I am very disappointed that the National Party has decided not to support this legislation because it represents such an important step towards helping to create an environment where all New Zealanders can save for their future well-being. 
I was particularly disappointed to note that the Opposition spokesperson on finance spent most of his speaking time talking about the Minister of Finance. I think there is an element of jealously there. Twenty-three times he mentioned the Minister’s name in the course of his speech. I do not think he managed to mention the word “KiwiSaver” as many times but I am sure I will make up for it by saying to this House and to anyone else who is listening that I believe this is a special day in our nation’s history because it represents such an important change from the way in which things have happened in the past. 
We will make the change by facilitating workplace-based savings with deductions from salary and wages at source. Making deductions at source is the simplest and most effective way for people to overcome their inertia and to start to develop a savings habit. I am surprised that members opposite want to deny people that opportunity when we know that workplace-based savings schemes have been stagnating for some time. I think others have made that comment in the House this afternoon. 
New Zealand is a very different place from what it was just a few years ago and today the average worker will have many different jobs with many different employers during the course of his or her career rather than stay with the same employer for more than 40 years as used to be the case. I think some of our parents probably experienced long-term employment with one employer over their lifetime and left with a gold watch. It does not happen so much today. Many work-based superannuation schemes are dated from those old days and they have not changed with the times or with the workforce. KiwiSaver is an important step in reigniting the savings habit and enabling New Zealanders to start to build some security for their futures. The way the initiative is structured should make it easier for workers and others interested in saving for their retirement to make a start. 
Because the bill facilitates savings in private KiwiSaver superannuation schemes it both supports and builds on the current base of superannuation products we have in New Zealand. That also means that existing superannuation schemes will be able to adapt to participate in the KiwiSaver environment thus minimising the potential for scheme wind-up and the release of superannuation funds out of savings. 
The work-based focus of KiwiSaver means it is inevitable that employers will have some obligations under the legislation. Those obligations have the potential to impose costs on employers. However the legislation has been designed to minimise those costs through directing information and funds through the Inland Revenue Department. This is an important issue for me both as Minister of Commerce and as Minister for Small Business. I am pleased we have been able to be responsive to the concerns of stakeholders and employers including those of small business by making some significant changes to the scheme. 
The original proposed start date for KiwiSaver of 1 April 2007 was raised as a matter of concern by many submitters. Once again the Government demonstrated its responsiveness and extended the start date to 1 July 2007. The new implementation date gives employers and potential KiwiSaver scheme providers more time to prepare and will help to ensure that the implementation of KiwiSaver goes as smoothly as possible for all involved. 
Amendments to the automatic enrolment process mean that new employees will have the deduction of KiwiSaver contributions start from their first pay. That will make it less likely that new employees will miss the money they will be saving for their retirement. I was very keen on that provision; I wanted people to see what their pay packet would look like straight away. If new employees do decide to opt out because they cannot afford to stay in the scheme then any KiwiSaver deductions will be refunded as expediently as possible. 
The period during which new employees can decide to opt out has also changed. It now begins at the end of week 2 after a new employee starts his or her job and runs until the end of week 8. That change allows employers to report to the Inland Revenue Department just once a month and therefore reduces compliance costs. Because the department will not be advised of new employees until later that longer opt-out period is needed. The new opt-out period also gives employees more time to consider whether to remain in KiwiSaver and to seek advice from a financial adviser if that is desired. All of those provisions are important; we have made it very clear that it is not the responsibility of employers to provide financial advice. 
In conclusion I say that I am delighted to be part of a Government that has worked hard since 1999 to put financial security in retirement within the reach of every New Zealander. KiwiSaver is an outstanding and momentous initiative that will help to foster a savings culture in New Zealand and will enhance the financial security of its members in retirement. Through the relatively simple mechanism of automatic enrolment organised in the workplace KiwiSaver allows for deductions at source provides benefits of economies of scale and reaches a high proportion of the population who are able to save. That aspect of KiwiSaver has already earned it international accolades and we are confident that KiwiSaver will earn the accolades of employers employees and the savings and investment sector throughout New Zealand. 
Others have spoken of the 1975 National Government that destroyed New Zealand’s first workplace-based superannuation scheme by using totally misleading advertising. I recall as a 15-year-old seeing the Cossacks dancing across the screen and seeing the other cartoons National used as well to drive racial wedges through our society. Superannuation has been a political football ever since. Over the past 6 years this Labour-led Government has restored confidence in New Zealand superannuation by reversing the cuts imposed by a National Government to pay for the tax cuts in the 1990s and by establishing the New Zealand Superannuation Fund to smooth payments into the future thereby guaranteeing the universality of New Zealand superannuation—and now KiwiSaver. I am a proud New Zealander today as the KiwiSaver Bill becomes law. 
A party vote was called for on the question  
That the KiwiSaver Bill be now read a third time. 
Ayes 71 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; United Future 3; Progressive 1. 
Noes 48 
New Zealand National 48. 
Bill read a third time. 
Employment Relations Amendment Bill 
Second Reading 
Hon LIANNE DALZIEL (Acting Minister of Labour) 
: I move  
That the Employment Relations Amendment Bill be now read a second time 
. This bill ensures that our most vulnerable employees will receive the additional protection they deserve in restructuring situations. It is when a business restructures that these employees are at risk of their employment conditions being undermined. The Employment Relations Amendment Bill will stop that from occurring. Specific groups of employees such as cleaners and food service workers across a wide range of commercial arrangements will now have additional protection and as a former secretary of the Canterbury Hotel and Hospital Workers Union I am delighted to be able to contribute to the second reading debate this afternoon. 
It is pleasing to see the bill return to the House with a small number of technical amendments that ensure the bill clearly sets out how protection will apply in every circumstance. I have great gratitude to the members of the Transport and Industrial Relations Committee who worked tirelessly over this legislation and have returned it in such good form. These amendments make sure that the bill will finally deliver on the original policy intent of the 2004 amendment to the Employment Relations Act and I do thank the Transport and Industrial Relations Committee for its fine-tuning of the bill. 
This bill ensures that if a vulnerable employee is to be affected when his or her employer loses a contract for services the employee will have the right to choose to transfer to the business that takes over that work. The bill rectifies the loophole identified by the Employment Court in 2005 when the court found that the protection provided to vulnerable employees did not extend to subsequent contracting situations. This bill does not represent a change in the Government’s policies with regard to vulnerable employees. It is about ensuring that Part 6A of the Employment Relations Act delivers on the original policy intent and that the intended protection cannot be circumvented in certain types of commercial arrangements. 
The amendments recommended by the committee will provide more certainty about the way Part 6A will apply in practice. Amendments recommended by the committee clarify for example that the Employment Relations Authority has the jurisdiction to impose a penalty if a vulnerable employee is not notified of when and how he or she can choose to transfer to a new employer. The bill as introduced provided that in certain situations employees had a right to bargain for redundancy entitlements if their new employer proposed making employees redundant as a result of the transfer of employees. In response to concerns about consistency with the common law and the risk of the drafting being too narrow the committee recommended amending the bill to reflect that this right to bargain for redundancy entitlements arises if the new employer proposes making employees redundant because of circumstances or reasons arising from the transfer of employees. I agree with the committee’s recommended amendment and I will also be recommending a further amendment to clarify that where employment agreements have dealt with redundancy entitlements in those specific situations those agreements will prevail. 
This bill provides that annual holidays and other employment-related entitlements are carried over and cannot be paid out by the previous employer. The committee identified that it may not be clear where the responsibilities of the new employer begin and the responsibilities of the former employer end with regard to these entitlements. The committee has recommended amending the bill so that different employers’ responsibilities in this regard are clear. 
Concerns were expressed by submitters that this bill will mean that when businesses take over a contract for services they may be required to take on underperforming employees. That is not the intent of the bill. The additional rights are provided at the time of transfer and do not provide vulnerable employees with a job for life. If an employer has concerns about an employee’s performance the employer should deal with the performance issues in a constructive manner by acting in good faith informing the employee of any weaknesses and providing the employee with the support and training necessary to improve his or her performance. Following those principles will assist businesses to perform efficiently and effectively. In the long term implementing this kind of practice will lead to New Zealand having more high-performing and productive workplaces. 
I have heard suggestions that small and medium-sized businesses should be exempt from the provisions to protect vulnerable employees. I wholeheartedly reject that suggestion. As Minister for Small Business I say that letting employers off the hook in terms of treating people well and in good faith is not good enough. It is not good enough for employers because their businesses will not grow if they do not learn how to treat people properly. New Zealand’s employment framework is based on the key concept of one law for all employers regardless of size. It is important that we do not change this policy and exempt some employers from good behaviour. The employees affected have been singled out for additional protection because they are particularly at risk during restructurings. Those employees are vulnerable regardless of the size of their employer. Exempting small and medium-sized businesses would result in some vulnerable employees losing their additional protection. This bill is about ensuring that protection is extended to all vulnerable employees as was intended in 2004; it is not about reducing protection. 
Two Supplementary Order Papers are being released alongside the revised bill. The first will provide for a review of how the revised Part 6A of the Employment Relations Act is operating 3 years after its commencement. The Government supports this Supplementary Order Paper because it is consistent with our commitment to regulate fairly and effectively. Regulation works best when it is monitored and measured to establish what impact the new and revised regulation is having in practice and to confirm that it is both fair and effective or to make changes accordingly. Nobody in the Opposition could disagree with having a review to see how the revised regulation is working in practice. 
The second Supplementary Order Paper concerns the disclosure of information on the labour costs of the employees who would be affected by restructuring. I have heard the concerns businesses have expressed that they will be required to take on extra costs they may be unaware of when they take over work in the sectors to which the additional protection applies. For example a business may tender for a food catering contract at a price that will not allow it to sustain the payment of the transferred employees’ terms and conditions. In the long term this could result in the vulnerable employees being adversely affected because they are more at risk of being made redundant following the transfer. Job losses could be more likely if the new employer was not aware of the total cost of the obligations it would be required to take on if its tender offer was accepted. 
To reduce the risk of such an outcome and thereby increasing the protection provided to vulnerable employees the second Supplementary Order Paper provides that in a proposed restructuring situation the current employer must disclose the total labour costs of the affected employees when that information is requested by potential new employers. The information will be provided in an aggregated format. Providing for the disclosure of aggregated information strikes a balance between issues such as commercial sensitivity of labour costs privacy of individuals and providing businesses with the information necessary to make an informed decision about whether to restructure or enter into a restructuring. 
The second benefit of this new requirement is to business. A transparent process for tendering or any other change of contract situation will ease pressures on business. Without this requirement businesses were concerned that they would have to tender blind. Now businesses will be aware of any additional costs and can work those costs into any proposals to take on new work that are subject to the additional protection provided to vulnerable employees. 
I am confident this bill closes the loophole on protection to be provided to vulnerable employees that was exposed last year. The revised bill is about clarifying the application of Part 6A of the Employment Relations Act and delivering on the original policy intent. This bill balances the need to allow businesses to grow and contribute to New Zealand’s economic transformation with the need to provide protection to specified employees who are particularly disadvantaged when businesses restructure. Once again I thank both the Transport and Industrial Relations Committee for its report and those who made submissions. The additional clarifications will ensure that Part 6A of the Employment Relations Act finally provides the protection we intended it to give. I commend the Employment Relations Amendment Bill 2006 to the House. 
PAULA BENNETT (National) 
: 
 The Employment Relations Amendment Bill is simply not necessary. It is largely motivated by the practice of some district health boards successively tendering out their cleaning operations. Frequently the new contractor would take on the existing workforce but on reduced conditions. We heard evidence in the Transport and Industrial Relations Committee that some cleaners in a single hospital had had as many as six contractors in succession. We are not without sympathy for those vulnerable workers who saw themselves being moved from contract to contract—not at all. The Government has simply chosen a blunt instrument to fix this particular and relatively narrow issue. 
Large companies providing vulnerable services are likely to be the least affected as many are covered by multi-employer agreements in their respective sectors. When work done by such a company is contracted to a company that is covered by the same agreement the affected employees will receive the kinds of provisions envisaged in the proposed changes. No law change would be necessary. This amendment bill is not necessary and could in fact have dire consequences for the very workers whom Labour is supposedly trying to protect. 
I was appalled to hear the Minister say that the bill would not affect small businesses and that it was the vulnerable employees working for those small businesses who deserved to be protected. Without a doubt it is the very vulnerable workers who will be most at risk under those sorts of changes. One needs to think just of the family-owned business that contracts for services and wins a contract. That family-owned business may have two or three employees whom they have had for some time have been looking after and have been giving the kinds of benefits they know they deserve. When that business contracts for and wins a tender it will not be able to employ those people in that very job; they will under these law changes have to take on the employees who are already working in the job. That is simply not right not correct and not fair to those very vulnerable workers whom Labour is purporting to help through this bill. 
Members need to think about the example of a contractor who is doing a poor job—there are ones who are not doing a good job. We are constantly hearing from Labour that what can happen is that one can dismiss workers or be sure to tell them they are doing a poor job. But the reality is that it is really difficult to get rid of a contract one is under. If contractors were quite clever and thought they would be losing that contract it is quite simple as to what they would do. If contractors really were reaching that conniving level and had a contract they knew they would lose to one of their competitors when it came up for tender they would simply—because the conditions of that employment would go on to the next employer as the Minister stated—put those conditions of employment at such a high level that the next employer would have to take them on so that it would not be beneficial to run the business. 
If those contractors knew the contract would be lost had been told things were not working well and knew that the company they were contracted to was not happy they would simply double the employment conditions of their employees. The employees would be happy; they would be getting twice the money and all of a sudden they would be on 6 weeks’ annual leave. They would be happy because the contractor had put in extended sick leave provisions and provided other conditions. The contractor would lose that contract and another contractor would get it. That contractor would have to take on the same employment conditions that those employees were under. All of a sudden the contractor’s expenses would more than double and all of a sudden the business would be unable to work effectively. The business would go under and those vulnerable employees would go under. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
PAULA BENNETT 
: This bill is in effect interfering with contractual rights. Decisions to contract out work are made for good business reasons and yes employers have an expectation that the work will be done to a level that meets their needs. 
Let us talk for a little bit about the case that brought this amendment to Parliament the Dunedin Kindergarten Association because it is a classic case. The contract had finished. It was not a contract that was being rolled over; nor was it one that was being terminated. The contract had finished. The association then went out to tender because it felt the job that had been done to date had not been satisfactory. It went out to tender because it was not pleased with what had been happening in that kindergarten. In fact even though it had spoken to the cleaners many times about the level of their work it was the belief of the parents and the teachers that the kindergarten was actually being left in an unsanitary and unsuitable state for children to learn in. That was simply not good enough. So the association did what any other good employer would do in terms of business sense even though it was a State-sector employer. It simply went out to tender to see whether it could get contractors that would meet the needs of its business and actually do the work to a level that was satisfactory. It is simply unthinkable that the very people who were not doing their job satisfactorily who were leaving the kindergarten in an unsanitary state would then be working for the next company that won the contract. 
So believe it or not I say to the Labour Government it is not always about money. Sometimes it is about the service and sometimes it is about having an expectation in relation to the quality of work that will be done—standards that everyone actually has a right to be working to. The workers cleaning the kindergarten were not providing a service that was good enough and under this amendment they would be back at work the following week even though the kindergarten had gone out and negotiated a new contract. Our children deserve better. This simply is nonsensical and it is the main reason for us voting against the bill. 
I want to talk a little bit about the National Party’s minority view in the commentary on the bill. I think it is really important to put it on the record as well. We say that the bill is “an unreasonable restriction on the freedom of businesses to manage their operations. It will affect all business whether large or small.” We really believe it will be those small businesses that will suffer most under this amendment and it is those vulnerable employees who are working for those small businesses who will find themselves worse off. If the employer they are currently working for loses a contract and if they wish to continue their employment with the employer then they could certainly find themselves in a position of being redundant and of actually being worse off. 
A classic example is family members who are working in a family business that then take over the contract of another family business and that family is expected to take on the workers of the previous contract. Again it simply is not sensible. The bill will also make it harder for new contractors to improve the quality of the work it does to reorganise the way that work is done and to generally improve its productivity. This Government is constantly talking about productivity but time and time again the employment law it is passing is not fulfilling that main goal that it says it has. Ultimately under this amendment everyone will suffer—the new contracting company the entity that wants to change the contracts and the employees who will be stuck in a declining section of the economy unable to improve that productivity. 
The bill’s provisions will replace the present Part 6A provisions of the Act. The object of preserving the jobs of existing employees in contracting situations is undoubtedly well intended. As I stated earlier it is about the district health boards and about those vulnerable workers who work for those boards. They were seeing themselves being turned over and actually ending up—in my understanding of the submissions and the advisers we heard from—with worse employment conditions than the ones they had when working for the same body. I do not think that anyone who sat on the Transport and Industrial Relations Committee did not see that as an issue and did not want to see it fixed. It is the way we are fixing it that the National Party vehemently opposes. It is yet another case of Big Sister coming in laying down the big hammer and actually taking over when instead smaller amendments and small changes could have been made to contract legislation. This bill will affect small business and we will most certainly not be supporting it for that reason. 
The likely consequences are not quite as clear-cut as may initially have been thought. An immediate effect will be the preservation of existing employees’ jobs at the expense of potential employees who might otherwise have gained employment to say nothing of the possible preservation of the employment of employees whose performance may have actually caused the loss of their employer’s contract. 
The National Party will not be supporting this amendment. Ultimately we believe that everybody will suffer—the new contracting company the entity that wants to change the contract and the employees. If we are serious about protecting vulnerable workers we need to open up the market place more and give those in the larger contracts which we believe are already protected under the law what they need. 
Hon MARK GOSCHE (Labour—Maungakiekie) 
: 
 As chair of the Transport and Industrial Relations Committee I am very pleased to see this bill being reported back and I will be even more pleased when it has its third reading. It always surprises me that when I listen to the Opposition speakers on this matter they just have no concept of what it is about. They probably never will because they do not notice the people who clean their offices after they go home. Paula Bennett said the bill was about only a few hospital workers. Well she should look at it more carefully because it is about the cleaners who clean her office and who clean this building. It is about the people who feed all of us up in the cafeteria or the restaurant. Those people are very low-paid and have for many years suffered under a regime that the National Party supports—a regime of contracting out and taking a chance the next day as to whether they will have jobs. If they do have jobs it is likely to be on lower wages and lesser conditions. But the National Party supports that. I did not hear a proposal from the National Party either in the select committee or tonight that would replace this law. It actually supports that type of thing. 
Let us just consider what this is about. It is about the people at Wellington Hospital who came and submitted to the select committee. They have been working at the hospital for some 15 or 16 years and have had six or seven different employers—some of them the worst ratbags that have ever been in this country who came here and set up to clean cook and do the orderly services in our public hospitals without which our public health system would collapse. Those employers came here on a loss-leader contract and put all those workers’ jobs to the sword. They just up and ran away and said: “We can’t hack this any more. We’ve taken the wage cost as low as we can. We’re still making a loss so see you later.” That is what the National Party supports. That is the sort of law that party put in place when it was in Government. That is not the sort of law that the vast majority of people in this House support. 
This amendment bill makes a simple technical change to the law. The policy is quite clear. The workers it affects are the most vulnerable workers. They are the people who cook and clean and who do the laundry. They are the people who keep our schools universities and polytechs clean. They are the people in the age-related residential care area. They are the people who shift the dead bodies in the hospital system. They are the people who do the dirtiest most unpleasant most lowly paid jobs in this country. I pay credit to them and take pride that this Government and Labour along with the Greens the Maori Party and the New Zealand First Party are prepared to say that those people are special. They do dirty low-paid work. They deserve to be protected. They do not deserve to come to work one day and find that the multinational company that used to employ them has gone into liquidation and said to the public of New Zealand: “Bad luck. We’re not going to clean your hospitals any more.” 
That is what the National Party supports. Its members will get up here and moan and grizzle and they will say: “This law is about the big bad employers. What about the small employers?”. Well they should have opened their ears in the select committee to the woman who came and said that she worked in a medical centre and was employed by a small family business. She was its only cleaner. What happened? She was on an hourly rate of say $11.50. The contract changed and the small family business got turfed out. She did not. She was employed the next day by the bigger company. The big company dealt to the small company by actually paying that worker less. 
David Bennett and Paula Bennett if they had opened their ears and listened to the cleaner who came in and made that submission would have recognised that a lot of small businesses get screwed by such behaviour. They get undercut by the big players who can come along and say: “We’ll clean up much more cheaply than that small New Zealand business we’ll cut the workers’ wages we’ll take away their conditions we’ll make them work harder we’ll cut their hours. You’ll get a cheaper nastier service and then you’ll come along and complain and we’ll sack the worker for you because it’s all their fault.” In her speech Darien Fenton will outline some of the stories that were told by those workers. 
This is not a new problem. I recall when I was secretary of the Hotel Hospital and Restaurant Workers Union when Auckland Hospital used to have one cleaner per ward. In those days we did not have the cross-infection that we have today. We did not have people going into hospital and coming out with a new disease because the hospital was not cleaned properly. No we had one cleaner per ward and— 
Christopher Finlayson 
: Have you ever cleaned anything in your life? 
Hon MARK GOSCHE 
: That young man over there says I have never cleaned in my life. Well that is how naive he is. I have done those jobs unlike him—who has no experience of real workers in this country—sitting down there in his big flash law office and pretending he knows something about it. I have seen those workers in Auckland Hospital go from cleaning one ward in 8 hours to cleaning two wards in 6 hours and people expect the hospitals to be as clean as before. Then they say: “It’s those workers they’re useless they’re lazy. We should contract them to another contractor so we can get rid of all those lazy workers.” It does not work like that. The contractor goes the workers stay the workload goes up and the hourly rate goes down. And the National Party supports that. It absolutely supports that. It loves that and wants to entrench it in our society for ever. That is the absolute bankrupt ideology of the National Party. 
I cannot believe that people like Paula Bennett who says she has been a cleaner and David Bennett who says he cares about low-paid workers can come here and read their research unit notes out with a straight face. They know what they heard at the select committee—real workers telling real stories about the huge workload that they have to try to perform in their miserable 4 or 5 hours for their $10.25 an hour. Then they have the audacity to expect their jobs to be there tomorrow! No the National Party says those workers should not have that expectation; they should be flexible and they should be ready to work for any employer for any amount of money. That is what the Employment Contracts Act was about and the National Party wants to bring that Act back with knobs on. 
At the select committee Maurice Williamson said he wanted the Employment Contracts Act back without the soft bits and he was serious. He said National did not deal to the workers and the unions hard enough last time and Maurice is looking forward to dealing to them again. He reckons that the 90 days’ probation period in Wayne Mapp’s Employment Relations (Probationary Employment) Amendment Bill is no good because a good employer can find out in 9 days. 
Hon Member 
: Drop the zero! 
Hon MARK GOSCHE 
: So he wants to drop the zero on that one. I will give Maurice Williamson credit for that—at least he was honest on that one. But in every other aspect he wants to deal to those workers and deal hard. 
What can be expected from the National Party when they are living in the 1890s? They are living not in the 1990s but in the 1890s. They want to bring that era back. Labour is opposed to that and all sensible members of Parliament in this place are opposed to that. 
I want National members over there to stay up until midnight tonight. I want them to sit in their offices waiting for the cleaners to come to clean up the mess those members make and tell those cleaners: “I don’t support you having job security.” I challenge one of them to do it. At midnight tonight when the cleaners start to arrive I want every one of those National Party members over there voting against this bill to sit in his or her office wait for the cleaner to arrive and say: “I do not care less about you. I voted against the bill today.” Then let us see whether the rubbish bin gets collected. 
SIMON POWER (National—Rangitikei) 
: 
 What a bitter and unhappy member Mark Gosche is. He used to be such a jovial character. I remember reading of his humorous antics when the Employment Contracts Act was in force. He was a member who was far more skilled at enjoying himself in life. What a bitter and twisted member he has become. It is no wonder that union membership is down in New Zealand when members like that are the bastion and the face of unions throughout the country. Workers around New Zealand think: “I might join a union. That could be of some benefit to me.” Then they see Mark Gosche stand up here in the House give a speech about the Employment Relations Amendment Bill and they think: “What a bitter way to get my rights heard. What a strange level of representation that member would bring.” 
The key here is whether this legislation is good law; that is the question. Many members in the House who were here in 2000 working 4 or 5 nights through the night to the wee hours of the morning on the Employment Relations Act will remember that—by my reckoning— 
Darren Hughes 
: The good old days. 
SIMON POWER 
: Those were the good old days before Mr Hughes arrived! This particular legislation is on—at least—its twelfth amendment. What does that tell members of the New Zealand public? It tells them that the legislation was shabbily put together in the first place. The dozen amendments we have seen since then are all designed to turn the screw on workers out there who have decided they are capable of making their own representations to their employers and are capable of negotiating with their employers over their conditions and their workplace arrangements without union hacks getting in the way of what would otherwise be a calm well-thought-out and rational negotiation process. 
If the Employment Relations Act had done what it was supposed to do and was going to fulfil all the expectations of the Labour Party funding arrangements that exist with the unions then two things would have happened. Firstly union membership would have increased—well it has not it has gone down. Secondly if this legislation had been designed to work the Labour Party would have the $450000 it needed to repay the pledge card—that money that it owes the New Zealand taxpayer—but it does not; it does not have that money on hand. The reason is that people are not joining unions because for people of my and the member for Otaki’s generation unions have had very little meaning in the way that we have dealt with our own arrangements and negotiations in the workplace. 
But what is most disturbing about this new legislation is that National members who were on the Transport and Industrial Relations Committee tell me that at every opportunity they tried to get these provisions to not apply to smaller and family businesses which make up about 80 percent of the businesses in New Zealand. But no what happened was that Labour would not exclude small or family businesses from the provisions of this legislation. New Zealand First also refused to take the opportunity to allow smaller and medium-sized businesses the flexibility they need to continue to do business in New Zealand. 
But what disturbs me the most about this legislation is that it is taking us back to the most bizarre workplace environment that one could possibly imagine. Let us take a situation where one contracting tendering service-providing business does a sloppy job and the employer—who funnily enough might want to stay in business to provide people with jobs—decides to shift that contract or tender to a different business entity in order to improve the quality of the business and the opportunity for his or her workers: Well he or she is stuck with the same people who did the appalling job in the first place. 
Paula Bennett 
: It doesn’t make sense. 
SIMON POWER 
: It does not make sense because that just drives the business down. When business is driven down people lose their jobs. The Government has a simplistic view that all it needs to do is create another piece of legislation. This bill ties people into jobs rather than allowing opportunity for those looking for new jobs or new opportunities. The bill locks inefficiency into the business model. It prevents business from employing people and promoting them. It prevents business from paying them bigger salaries and wages and providing better working conditions. 
But that does not matter to Labour because for it the important thing is that its coffers get filled. But this bill will not work because frankly this type of hard-nosed arm-twisting approach to union membership does not work in this century. In fact it did not work in the last century. Things have moved on. Union membership is down and the reason is that unions are nothing but bargaining agents. Let us call them what they are—bargaining agents. What gives that particular bargaining agent the legislative and statutory protection to drag in membership and negotiate collective contracts that other bargaining agents do not have? I will tell this House what it is. It is the financial arrangement between Labour and those unions that provides the difference in treatment between one type of bargaining agent and another. Well I have news for Labour. Time has moved on. The sad little games that used to be played—[ 
Interruption 
] Darien Fenton is here; that is good. Labour has some bright new talent! 
Hon Maurice Williamson 
: What? 
SIMON POWER 
: Labour has some bright new talent and next we will hear about a step back in time to the good old union days. I say to Labour to stop thinking about the unions and start thinking about the workers. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I have to correct the member who has just resumed his seat because somebody out there might have been listening and taking note. I say to the honourable member that he should have used the most recent figures on union membership. The figures I have obtained show that union membership has gone up of recent times. The member usually makes sense but he is wrong on this occasion. If the National Party doubts me it should check with the library. The member might be right on one account: the percentage of the workforce in terms of union membership has gone down slightly but that is because workforce numbers have gone up—something that never happened under National. And try as we might even New Zealand First could not get them up when we were with National. 
When it comes to unions National members are dead scared of collective strength. They want it for themselves but they resent working people having some sort of collective strength. I have another piece of information for members opposite. There is nothing in the Employment Relations Amendment Bill about unions—not a single word! It would not be a bad idea if members opposite read bills from time to time. They should read the bill before they stand up and take a 10-minute call on it. I have to say I am disappointed with Simon Power’s contribution. He is a man of some intelligence; he is a lawyer. He did not say one thing in regard to the bill. 
Let us face a few facts. In the last term of Parliament the Government passed the law that deals with vulnerable workers. In listening to the last National Party spokesperson one would think this amendment bill is new law but the law governing the protection of vulnerable workers is already in existence. But typical of the Labour Government it did not get it right. 
The Government needed some help so we in New Zealand First said to ourselves that there is something not quite right about having a workforce that stays on and does the job but with rotating employers. It is sort of like pooled labour and we were not terribly happy about that. But we have to recognise that 99 percent of the law is already there and is it not right and proper that the law becomes right and proper? We thought there was some merit in getting it completely right. 
This bill has come about only because of the judicial decision on the Gibbs and Crest situation down in Dunedin which was spoken about by many members earlier on. The Government is absolutely keen to offer protection to vulnerable workers. New Zealand First looked at this legislation objectively and fairly. We believe basically in direct employment where the employee goes where the employer goes. We could call it “employment purity”. 
Hon Maurice Williamson 
: What does that mean? 
Paula Bennett 
: Ha ha! [ 
Interruption 
] 
PETER BROWN 
: I tell those members to close their mouths for a minute and listen. Employment purity and fairness can often be complementary. They work together but where there is conflict between employment purity and fairness then Parliament must come out on the side of fairness if we really want a decent society. We will not have a decent society if we bow to employment purity—or fiscal purity; call it what you like—at the expense of fairness. I hope those members opposite have taken note of that. 
Some of us on the Transport and Industrial Relations Committee listened to the cases put forward by vulnerable workers. They were heart-wrenching and brought tears to the eyes if one was listening genuinely. We heard frequently that when there was a change of employer the workload went up or the wages went down and quite often both the workload went up and the wages went down. Worse still staff numbers were reduced so there were fewer people on less pay doing more work. Is that fair? No it is not. 
So New Zealand First decided to rethink this issue. We spoke with the Government. We said that we were not committed to this forever; we said that we wanted a review. I advise the House that Supplementary Order Paper 53 in my name will be on the Table at the Committee stage if it is not there already stating that there will be a review. 
But that was not enough for us. We know of concerns about employers not knowing the liabilities they take on when they buy a contract or re-tender for it. 
Hon Maurice Williamson 
: Are you going to get Noel Ingram to do the review? 
PETER BROWN 
: No I will not. If that member would sit and listen for a while he might learn a little. 
At the insistence of New Zealand First the Government has produced Supplementary Order Paper 54 in order to provide for full disclosure before the tender is handed across. So with respect to what Paula Bennett said there will be no case for doubling the wages and increasing whatever and letting it fall into the lap of the second employer because before employers take on the contract they will know what they are up for. There will be full disclosure both in the public sector and in the private sector. 
Supplementary Order Paper 53 which will be on the Table by the time the bill reaches the Committee stage is a direct reflection of New Zealand First’s input into Government policy. We told the Government that this needed to be done. I want to be fair to the Government—because I have been quite critical of it before and I am likely to be critical of it again. The Government told me that it had the numbers without us. I said: “Well you will not get the principles without us. We want this bill.” The Minister said to me that it would go ahead with the Supplementary Order Paper because we had approached the Government in good faith. So this is another New Zealand First gain for this country and for the employers of this country. 
Much of the National Party assertions and allegations are false and based on academic theory. We are talking about vulnerable workers who need some protection. The current Act protects them to some degree and this completes the picture which is what the Government intended to do last term. This is not new legislation or new political policy; this is completing what the Government intended to do last time. But as a result of New Zealand First’s intervention we are getting full disclosure so that employers who take over a contract will have the full information about what they are taking over. 
I see that National members are laughing with envy. They know when political parties stand in this House and achieve something. We have achieved in the last week more than they have achieved in 9 years and I know that that hurts. There will be a review in 3 years. Employers and employees will have a chance at that point in time to say whether the legislation is working properly or whether it needs a bit of adjustment and the matter will be looked into objectively. 
But I emphasise that New Zealand First claims the credit for these two Supplementary Orders Papers that are going through. Modesty is out the window now; we claim the credit and we think that the Government will give protection to vulnerable workers whether or not we are with it. However what we do have is full disclosure for the employers. We think that that will make a huge difference to this legislation and will be to the advantage of all involved. 
After listening to vulnerable workers when they came before the Transport and Industrial Relations Committee in particular but some have also spoken to us privately I say that there is a case to be addressed. This bill attempts to address the issue and I believe as a result of New Zealand First’s intervention the Employment Relations Act will be all the better for it. 
SUE BRADFORD (Green) 
: 
 The Green Party is pleased to see the Employment Relations Amendment Bill return to the House for its second reading. At the time it was introduced we said that we supported the bill and that we hoped it would work its way quickly through the processes of this House and pass into legislation. I am glad that is what has happened for the sake of all those who are affected. The Green Party does not have membership on the Transport and Industrial Relations Committee so I would like to take this opportunity to thank the members involved for their work in considering this legislation. I know that it was particularly difficult because it deals with complex and technical issues. The Green Party endorses the report of the select committee including its amendments and also the two Supplementary Order Papers that Mr Brown has just referred to. 
During the first reading debate on this bill I stated that its intention was not new. Parliament had already agreed to it in the passing of the amendments to the Employment Relations Act in 2004. It was an unintentional error that gave rise to the need for this amendment to the legislation. It is useful to quickly traverse the background that led to the need for this bill. Parliament has ended up having to take a second cut or in fact a third cut if one counts the original Employment Relations Act in 2000 at the issue of transfer of undertakings because the Employment Court decided in  
Gibbs and others  
v  
Crest Commercial Cleaning Ltd  
that the law as currently written did not apply to that situation. The matter then went to the Employment Court and that was around the issue of workers who had been cleaning premises belonging to the Dunedin Kindergarten Association. The cleaning contract was re-tendered and the previous employer Southern Cleaning Services lost the contract to another firm Crest Commercial. 
As soon as Crest Commercial won the contract it gave notice that it did not intend to employ any of the current cleaners but was going to subcontract to what it called independent franchisees. There is no doubt in my mind that those workers were in the kind of vulnerable situation that we were talking about and trying to deal with in 2004. Their circumstances were similar to those described by many of the submitters to the select committee that heard evidence on that earlier Employment Relations Amendment Bill. I was part of that committee at the time and I believe there was no doubt in the minds of the Labour and the Green Party members present that we thought we had produced a bill that supported vulnerable workers in exactly the situation that applied to those cleaners in Dunedin. This new amending legislation simply reinforces what we thought we were doing when we passed that Act in 2004. 
In the first reading debate on the bill before us tonight I made the observation that the Employment Court case that gave rise to this bill also raised some other issues that had to be addressed. One of those issues was the claim by the new contractor Crest Commercial that it was not going to be employing staff but was going to engage those independent franchisees. I said then that I was concerned about the growing use of these so-called independent subcontractors—a total nonsense—and the way in which corporations and larger employers use them to reduce their costs as Mr Gosche referred to so graphically earlier on tonight. I am therefore pleased to see that since the introduction of this bill the issue is being given further attention through Darien Fenton’s Minimum Wage and Remuneration Amendment Bill which was introduced last week. 
So back to the bill in front of us today. I note that the bill as reported contains some amendments as a result of the consideration of the select committee. The Green Party supports these amendments and believes that they clarify and improve the original bill. It is good that new sections 69C and 69D in clause 4 clarify the definition of a new employer to include a person who does not have or does not intend to have employees. This will ensure that a further loophole is not created this time around so that firms or individuals not currently employing workers or in the case of the Employment Court case that gave rise to this bill a firm claiming to be subcontracting to independent franchisees is still covered by this legislation. We support the amendment in clause 4 that clarifies that the Employment Relations Authority may impose the penalty referred to in new section 69G(4). The amendment to the wording on the date of transfer—section 69I(4)—is sensible and will provide more certainty for both employer and employee. 
The Green Party also supports the intention of section 69J which provides for the service of a worker to be treated as continuous for the purposes of determining leave and parental leave entitlements. We have no problems with the amendments in this section that make it clear as to when the responsibilities of the new employer begin and that the new employer will not be liable for parental leave complaints against the old employer. We endorse as well the widening of the redundancy bargaining provisions in sections 69A and 69N to give workers the right to bargain for redundancy entitlements if they are made redundant because of any situation arising from their transfer. Finally we have no problems either with the technical changes to the transitional provisions. 
Turning to the two Supplementary Order Papers referred to by Mr Brown and the Minister earlier on I reiterate that both of them are supported by the Green Party. We fully back the Supplementary Order Paper that requires in a restructuring situation the disclosure of information on labour costs of employees affected by a restructuring by the current employer to a potential employer at their request. We note that this will be disclosed in an aggregated format and will protect the privacy of individuals. We also support this measure because it will reduce the downward pressure on the terms and conditions of the vulnerable employees that may be caused by an underestimation of the costs a new employer would have to take on following a successful tender. This can only be good for the vulnerable workers concerned. Finally the Green Party will also be voting for the Supplementary Order Paper that provides for a review of how Part 6A of the Act is working 3 years after commencement. This makes for good policy and the Green Party has no problem with that. 
We campaigned to keep the transfer of undertakings provisions of the original Employment Relations Act in 2000 and were sorry that we lost that battle which Mr Power referred to earlier tonight way back then. We supported the inclusion of Part 6A in the amending Act in 2004. Today we continue to stand by the clarification of that legislation so that it achieves what we wanted to do all along from 2000 onwards—that is to provide a whole lot more protection for some of the most vulnerable workers in this country. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Kia ora Madam Speaker. Kia ora tatou te Whare. In considering the Employment Relations Amendment Bill I note that this House has been considering a number of other proposals for better relations with Australia; I thought I would share a little story from over the ditch. 
Late last year 20 construction workers got sacked by D3 General Contracting without wages holiday pay or redundancy. D3 General Contracting was contracting to Northpac a company with sites all over the world. Those 20 workers were Maori. According to the union D3 General Contracting had not paid any of its workers their entitlements or superannuation since April 2005. Northpac however 
continued to build on the site where the workers were laid off but the effects of D3 General Contracting going into receivership were immediate and dramatic. 
One of the workers a whanaunga of mine from up north was evicted from his home and one of his mates a whanaunga of my colleague Mr Te Ururoa Flavell Rawiri Iti—52 years of age with four kids and six mokopuna—got dumped on the scrap heap. Iti later told the media: “ ’cause most of us are Maori we’ve been through it all before in New Zealand back in 1992. We know the effects this has on people and their families both physically and mentally.” 
During the course of the industrial action Northpac offered a one-off payment of $25000—one-tenth of what was owed—and tried to bribe one of the workers with a $5000 payment to move the picket line from in front of the office. 
Union spokesman Steve Keenan said the situation was the same as that caused by the industrial relations policies that had forced his family to leave New Zealand in the first place: “In New Zealand I was getting $19 an hour plus overtime rates but when the laws were changed in 1991 and we went onto individual bargaining contracts I ended up with $9 an hour and no overtime … and that’s after fourteen years’ service!”. 
This story is not just about 20 Maori workers fighting for their rights in Sydney. It should also be a warning to us here at home to be wary of legislation that results in vulnerable workers being threatened: workers made vulnerable when an employer sells or transfers his business; workers who lose a long-term contract to in-house employment; workers who face the loss of terms and conditions and loss of income as a result of changes that arise when a business gets sold. 
These are real problems—problems happening right now as low-paid workers lose their jobs every week. These problems are so current that as we speak unions representing 500 workers in supermarket centres all around the country are in mediation to prevent Progressive Enterprises from bringing in contractors to do the work of the locked out workers. The National Distribution Union and the Engineering Printing and Manufacturing Union are filing on behalf of workers who service up to 150 Countdown Foodtown and Woolworths stores—that is about half of all of our supermarkets. All this is going on despite the fact that engaging other workers to perform the work of union members involved in industrial action is supposed to be illegal under the Employment Relations Act. 
It is a fast and furious world out there and restructuring situations and contracting change-overs are becoming part of our employment reality. This bill aims to make it clear that under the Act workers have a right to transfer their employment terms and conditions. The recent decision of the Employment Court in  
Gibbs and others 
 v 
 Crest Commercial Cleaning  
showed that the provisions of the current Act were not clear enough. Hopefully this bill will tidy that up. 
Without this amendment vulnerable workers can lose their jobs or have changes imposed on them—such as changed hours of work or increased workloads with associated stress—when there is a contract change. The Maori Party believes that this bill will help the many Maori workers and their whanau who are regularly affected by changes in contract relationships. We should not need to be reminded that the impacts of these changes can have serious consequences for workers and their whanau. 
The Service and Food Workers Union reckons that changes in employment conditions impact hugely on workers with low incomes forcing them to juggle a whole series of other balls—like whanau commitments childcare shopping partners’ employment and other jobs. Workers faced with reduced income caused by changes to their employment conditions are being forced to take up more jobs just to pay the bills. Job stability goes on the line and relationships get strained at home and the Service and Food Workers Union says that people lose their jobs just because of the stress of trying to cope. 
Our support for this bill is also in line with our policy of supporting and where necessary improving the Employment Relations Act 2000 to safeguard the rights of workers. One of the recommendations from the select committee process that we took particular note of was the proposal to amend the Act so that employees could have the right to bargain for redundancy entitlements. That would enable workers to negotiate redundancy when the job ends or it is restructured or for other reasons. 
We also accept the proposal from the Transport and Industrial Relations Committee that although entitlements like parental leave and holidays can continue employment complaints should not carry over to a new employer. Workers have to move on and pick up the new job without the old hassles. 
Quite simply this is a sensible bill. It is about ensuring clarity transparency and fairness and on those grounds the Maori Party is happy to support it. 
I make just a little postscript to the story of the boys in Sydney. After 3 months of picketing and the suffering that goes with that the 20 workers won back their full entitlement—more than $250000 in wages holiday pay and severance pay—because the legislation was in place to ensure that their right to bargain for redundancy payments could be enforced. 
What will make an even happier ending to that story though is having the same legislation in place here so that we can ring them up and tell them to come on home because it is all good here in the hood as well. We can say that back home there are plenty of jobs and good employment conditions and the mighty Maori Party is in the House “defending Maori rights and advancing Maori interests for the benefit of the whole nation”. Well one out of three ain’t bad I suppose—a bit more work on the jobs and conditions of employment to go. Kia ora tatou. 
GORDON COPELAND (United Future) 
: 
 As is well known in this House United Future is a centre party. On the one hand we completely support the right of free association of workers. We support workers’ right to enter into collective bargaining arrangements and support all of the other rights that have been established in this country for a very very long time. Some members who do not live in Wellington should walk up Bolton Street on some occasion where they will find on the right-hand side just above the Bolton Hotel what looks like a church building. In it they will find a memorial to the person who established the 40-hour working week in New Zealand many many years ago. So we have a very proud record of retaining the rights of employees. 
However there is another side to the coin so on the other hand United Future also supports free and open markets. We support free and open competition because it is through competition that people are inspired to improve workplace practices the quality of their work and indeed the labour productivity of their employees—something that New Zealand has done very badly on in recent years. Our productivity has risen by people just working longer hours instead of actually working smarter and more skilfully within the time limits they are given. 
Therefore on that second tier United Future has some very real philosophical problems with this bill. This bill states that new employers must become party to any collective agreement that binds employees electing to transfer—that is the bill gives employees the right to transfer to a new company that has taken over a contract that has been terminated on the same terms and conditions as previously and as part of the same collective agreement that binds the transferring employees. 
I would like to give the House some alternative scenarios to the ones that were given earlier by say Mark Gosche. He talked about cleaners so let us suppose for example that some cleaning work was not up to scratch. I have to say in all honesty that I meet nobody of my generation who regards the cleanliness of for example Wellington Hospital as satisfactory. It is not. It is grubby and dirty and it has no relationship to the clean hospitals that I knew a generation ago. We have seen in that whole area a great slide in standards. If the contract of the people who are not maintaining a place to the required standard comes to an end the new contractor has to take on board those workers who were not up to scratch in the first place. United Future can see absolutely no sense in that. That is actually a spiral downwards to a kind of lowest common denominator outcome. 
We believe that the mixture of rights and responsibilities that I mentioned earlier and that we stand for should actually lead in the opposite direction to that. It should lead to the incentivisation of better work standards and better productivity. We should see that it is important if people are not fulfilling a contract’s conditions and if on a performance issue a contract has been ended to bring in people who can improve performance. One will not do that by using exactly the same people as before. 
 So this bill has been a bit of a line-ball call for United Future but we have decided in the end that from our point of view it does cross the line into an area that is intrusive statist “pink-think” and nanny-ish. We do not believe that it is the route towards improving relationships or work standards. We believe that those things should be addressed through the process I have mentioned with a balance between on the one hand the right of employees to free association—to unions to collective bargaining etc. —and on the other hand the right of companies and firms to compete with each other in the interests of better standards. Price is not everything. People are often prepared to pay more for a better quality of work. So the quality of work cannot be left out of the equation and the bill in our view does that. 
I want to add one more thing to that comment. Some of the submissions that we received stated—and indeed the Department of Labour officials themselves agreed—that this bill would impact on small businesses far more than on large companies particularly when it comes to terminating contracts and tendering processes. The lowest level of involvement in business ownership of any sector of New Zealand society is that amongst the Pasifika communities. We believe that this legislation will endanger the survival of fledging Pasifika companies many of which are involved in cleaning contracts and the like. We do not think this legislation will help those businesses; we think it will harm them. We want to see those businesses prosper see small businesses graduate to become bigger businesses and see bigger businesses graduate to become large businesses. That is the pathway to economic success. We think therefore that although this bill is well intentioned it breaks the old maxim that the end does not justify the means. Just because the Government has a good end in mind it still has to find the way to do it and to do it effectively with good outcomes for all. 
We believe that this bill fails that test. Accordingly United Future will not be supporting it. 
DARIEN FENTON (Labour) 
: 
 I am really pleased to be able to speak on this bill which has come back to the House. I am pleased also that it will soon provide the protection that many vulnerable workers have waited a long time for. In the debate tonight we have seen the difference between those who come from relatively privileged backgrounds and those who do not. Some people have no idea what life has been like for those workers who are covered by this bill. 
We received a number of very good submissions on the bill. Gordon Copeland was not there he did not hear the cleaners but I listened to them as did members on this side of the House and our colleagues who are supporting the bill. If anyone has any doubt about why the bill needs to become law they should listen to the cleaners. If members wander along the road some time they might see some cleaners in purple jackets saying they are looking for a Clean Start and this bill is part of that. It is about making sure that the invisible army out there cleaning our factories our hospitals our schools our airports and our universities 24 hours a day 7 days a week are able to have a decent job and decent work. We all know our lives are made easier and better by these workers and we know that the expectation of them is high standards and professional cleaning delivery yet their lives and jobs are marginal. It interests me when cleaners get the blame as they did from the previous speaker for example. 
I want to describe to members one cleaner who came before the Transport and Industrial Relations Committee. She talked about her work as a cleaner at the university. The area for which she is responsible has 30 rubbish bins seven toilets two showers six handbasins one urinal three carpeted flights of stairs a concert hall a library 12 offices two studios a workshop and six practice rooms. All of that has to be cleaned in 4 hours. 
Three-quarters of cleaners in this country work on a part-time or casual basis. Fifty percent earn less than $10000 per annum and 75 percent earn less than $20000 per annum. This is a shamefully low-paid industry—and free wage bargaining and all of the things the previous speaker spoke about have not delivered better pay and better standards—but the productivity is huge. Cleaners in this country are expected to clean between 850 and 1000 square metres per hour which is much higher than the internationally accepted benchmarks and impossible to achieve without compromises to quality. In North America for example the standard rate is 300 to 400 square metres per hour. 
So New Zealand cleaners are more productive than most in the world but what is their reward? It is loss of jobs often at short notice and a competitive tendering process that can be repeated up to four times a year when contractors seek to win contracts by reducing employment pay and conditions. Even when those cleaners are employed by the incoming contractor they often face “take it or leave it” situations of jobs with less pay and more often than not reduced hours of work. Those whose employment is terminated have no claim to redundancy compensation and often no other job to go to. 
Gordon Copeland talked about the standard of cleaning in hospitals. It is interesting to reflect on that because I probably agree with what he said about it but I do not think it is the fault of the cleaners. During the 1990s and the health reforms in 1993 3000 jobs in cleaning and catering were taken out of hospitals in Auckland alone. Those workers are expected to do huge amounts of work in a lot fewer hours. But the funny thing is that cleaners have enormous pride in the work they do. They are frustrated that they are unable to provide the level of service they would like to because they are constantly urged to work harder and faster. Each time the vicious competitive tendering process takes place they face a new employer who seeks to win the business by cutting wages cutting hours and intensifying the work. 
This bill is not only about improving the job security of cleaners; it is about improving quality and standards across a low-paid industry so that services are tendered for on the basis of service delivery and value for money rather than the race to the bottom that we have seen over many years in the cutthroat world of competitive tendering. Everyone wants to see quality services. Why should not cleaners and other workers covered by this bill not have quality jobs? Why should the jobs of cleaners food service workers caretakers and laundry workers be just throwaway jobs? 
With more secure and steady jobs good workers are more likely to be attracted to those jobs and will remain committed to them. This brings increased stability to a very unstable industry—to tenants clients and business. It brings higher standards less turnover trained workers improved occupational health and safety and a minimisation of the risks to property owners. What is so wrong with that? Let me see. National believes that this bill is an unreasonable restriction on the freedom of businesses to manage their operations. What about the unreasonable pressures on the property services industry of vicious underbidding and the never-ending race to provide the cheapest price? When standards drop to substandard the reputation of the industry suffers and it is suffering in our country. That hurts everyone—property owners investors tenants contractors workers and patients. That will end with this bill. The bill will make a huge difference to tens of thousands of low-paid workers many of whom are women Maori Pacific and new migrants. 
I repeat what I said on the first reading of the bill. It is not about preventing contracting out or undermining competitive tendering. It is simply about ensuring that workers have the right to transfer to a new employer while at the same time the new employer has the right to make business decisions in relation to the workforce when the transfer is completed. We on this side of the House made a promise that we would address this inequity in the labour market and provide protection for some of our most vulnerable workers. Unlike some parties Labour is delivering on its promise. We keep our promises. I look forward to this bill becoming law. 
DAVID BENNETT (National—Hamilton East) 
: 
 It is truly a sad day for New Zealand and this Parliament to see this bill progress under the arguments put forward by the Labour Government and its lapdogs in New Zealand First with supporting arguments from the Greens and Maori Party—which had some genuine elements. I must admit that I am deeply disappointed at the way that Labour has tarnished this legislation. There may be genuine concerns out there and they came through at the select committee but this is not the way to argue to do what you are doing now. You are using the concerns of the very people who get you into this Parliament to make legislation for your own benefit. All you are doing is supporting the unions. All you are doing is putting up something that pays back the unions. 
Darren Hughes 
: Point of order— 
The ASSISTANT SPEAKER (Ann Hartley) 
: I know the point you are going to raise. The member brought the Speaker into the debate probably about seven or eight times; it is usually just a couple of times. But he just needs to remember not to do that. 
DAVID BENNETT 
: My apologies. 
This is a case where we are losing the ambition of ordinary New Zealanders. I will give an example. Family A have a cleaning business and they have the contract to clean a large intermediate school. Family A comprises a mother father and their young son who has just left school. He is keen and wants to transform the family cleaning business into a nationwide cleaning business. He has a vision and a passion to succeed. Family B clean at the nearby smaller primary school. Family B comprises a mother and a father. Family A and family B negotiate to transfer one of the contracts. They negotiate that the contract changes. Family A buys the business off family B. 
Darren Hughes 
: This can’t happen. 
DAVID BENNETT 
: It can happen. This is an example of what can happen. Family A can buy the contract off family B. They buy the business because they see real financial gains from having that cleaning contract. The legislation means that specified employees—namely those in family B—must be assured of the right to transfer to the new employer family A under their current terms and conditions of employment. In other words family A who wanted to grow their business now has to incorporate family B into the equation. This means that they will be worse off because if they had stayed with their initial cleaning contract they would not have had to take on those extra people. 
Family A had the incentive and desire to build their business take on that cleaning contract and do it with their three people. They had a real desire to make the most of their opportunities to build a small business into a medium-sized business and to turn that medium-sized business into a nationwide business. That is something they will lose under this legislation because under this legislation they will have to take on family B as staff under their original terms and conditions. 
Why would Labour members do this to their own people? Why would they stifle the ambition hard work and desire of their own people? Well there is a reason. It has to pay the unions back. That is all it is; it is a payback to the unions. 
Let us look at New Zealand First for example. Why is it supporting this bill at this stage? New Zealand First members said they went to Labour and said: “We have an option for you.” The reality is that Labour went to them. Labour wanted New Zealand First’s support because it had to satisfy that union vote. In the first reading of this legislation New Zealand First members said: “New Zealand First will not support this bill because we believe that it could lead to protection of incompetence or less than quality service.” New Zealand First said: “Should they have … an automatic right to job protection—should they have been engaged no matter which company had the main contract? New Zealand First says that no we should not be extending that sort of protection to anybody. We do not extend it to normal occupations so why should we extend it to employees who are not delivering the service …” to that employer. New Zealand First was against the bill at the first reading and suddenly it has changed for a couple of Supplementary Order Papers that are on the Table. 
There is a reason why it has done that. It has been paid off. Labour has got a deal with New Zealand First. I do not know what the deal is. Maybe the deal is to keep Ron Mark in the House. I do not know. Maybe it is to keep Winston’s job open while he is sick. But there is a deal going on there. There is something going on between those two parties on this bill. 
Going back to family A often when one is setting up a business—which Labour members would never know because none of them has ever been in business—the formative years of the business can be quite tense. People make mistakes. They may take on things they did not expect. Family A may take the contract on and buy the business off family B without knowing what this legislation actually means. That is quite likely. They will learn the hard way what this legislation can do. They will see their dreams go down the toilet. They will see their ambitions stifled by this Government and this legislation. That is not fair to ordinary New Zealanders. They are the people who voted that party into this House. They are the people who need our representation. Only the National Party is providing that representation. 
This law will apply in a number of cases. It will apply whether a contract is terminated or expires. It will apply whether or not a contract starts immediately. It will apply to all the things that the members of family A would not have expected. They made a commercial decision to buy that business and have now been stung by this legislation. Essentially the Big Brother arm of Government has applied to family A. Instead of letting them get on with a commercial decision based on profitability and productivity—which is something Labour says it wants to encourage—the decision has been overruled by a Draconian law created out of the major unions and for reasons of political correctness enacted by Labour. 
This law will destroy ambition and keep vulnerable workers in such cleaning roles. It will destroy small businesses. It will mean that vulnerable workers are able to be employed only by major institutions. There will be only three or four major employers in this industry and that cannot be good for vulnerable workers. Vulnerable workers need to be able to build up businesses like any others. 
It is amazing when one sees Mark Gosche and members of the Labour Party come in here and talk about how they are ready and willing to have hard-working Kiwis cleaning their offices and homes. Yet they will not give those same people the opportunity to make a break in life. It is good enough for Labour to have them cleaning their houses but not good enough for Labour to give those people the chance to excel and build a business. What is the logic behind that? Why would Labour want to hold back these people? Well there is a reason. Labour has been holding back everyone in this country. Labour thinks that if people are under its thumb it can control them; that if people are dependent on Labour for their income they will vote for Labour. This is another example of that logic. We have to break that cycle for all New Zealanders. If we break that cycle then all New Zealanders can stand up fight and achieve. 
As we go through this legislation we see Labour’s contempt for ordinary New Zealanders and its failure to give ordinary New Zealanders the start that family A wanted. Family A had a dream—a Kiwi dream. It is a dream we should cherish and support. It is a dream we should not kill by overwrite legislation. It is a dream that should not be destroyed in this House. 
Labour says it knows better than those people. Labour says it knows what those people want. It will not give vulnerable workers the choice. Labour knows better. What right has it got to tell a person what he or she knows? What do the Labour MPs know that the vulnerable worker does not know? I say Labour should have faith in the vulnerable workers and put some trust in them. They are just people like everyone else. They have ambition and drive. Let us support them. Let us back our people. Let us not back a Government that thinks it knows better and wants to make and control all the legislation that goes around. 
It has been a real eye-opener for the New Zealand public to see how Labour has used its political agreement with New Zealand First to turn on the very people it should be supporting. The very people who need a break are held back by this legislation. It will come back to haunt those people in the future. Now they have the opportunity to progress; under this legislation they are stuck in a system that has only a few employers a system where nobody can grow a system where family A—the mother the father and the son or the daughter—cannot achieve their goals. That is the dilemma and the great discomfort of this legislation. 
DARREN HUGHES (Labour—Otaki) 
: 
 At the conclusion of that speech it is the position of the New Zealand Labour Party that we want that member of Parliament David Bennett to have a very long career in politics. We want him to be a National Party MP sitting across the House representing the values of the National Party for decades and decades to come because only then will people get to see what these people really stand for. 
That was a truly pathetic speech about some of the lowest-paid and vulnerable workers in New Zealand. Let me tell members one thing. The member started his speech by talking about family A and giving an example of a cleaning contractor at a school. He is a member of the Transport and Industrial Relations Committee whose report we are debating in this Parliament tonight. If the member had done just 30 seconds of research he would know that the Ministry of Education has a collective agreement for all cleaners at schools whether they are private contractors or contracted by the board of trustees. The example he gave over a 10-minute speech was false and wrong. He got it wrong the whole time. That is the case for every single school in the public education system in New Zealand. 
I cannot speak for schools that are not part of the State system. Maybe the member knows something about schools that are not part of the public education network which Labour members of Parliament do not know about. The only schools I can think of are schools that are a secret organisation or part of a secret sect. Maybe the Exclusive Brethren church might have rules like this for the cleaners at their schools. I am a Labour MP and I do not know but I do know that his speech could have been researched and given completely differently from the way it was given tonight. 
The member got up and spoke about ordinary New Zealanders. National Party members gave those same lines when they opposed the Employment Relations Act in 2000. They said ordinary New Zealanders would lose their jobs. They said the economy would go backwards. They said no one would ever get a pay rise. Here we are 6 years later and we have the lowest unemployment rate in the world. Let me tell the member for Hamilton East about that. Those are the kinds of things we have done after 6½ years of fair industrial law for working people in New Zealand. 
Under the industrial law that we have supported by way of that legislation we have raised the minimum wage six times in 6 years. It was opposed every single time by the National Party and its friends and secret sects like the Exclusive Brethren church. These are the most extraordinary things that they say. Ever since the Exclusive Brethren bought the naming rights to the National Party became its principal sponsor and purchased the New Zealand National Party National has changed its entire view about the way employment policy goes with regard to industrial relations. Now National Party members come to the Chamber believing the Exclusive Brethren view of employment relationships which is that it is a master-servant relationship. There is a big boss and there is a little worker who has to do what he or she is told. National members are proud of that approach but we on this side of the House do not stand for that. 
We stand for employment law that protects the most vulnerable. We stand for saying that there should be laws that make sure nobody is left out because he or she has a job that does not pay much. Here is another difference from National Party members. They talk about hard workers. How do they define hard workers? By the amount of their salary and wages. If they are paid $60000 $70000 or $80000 a year they are hard-working ordinary Kiwis. But if they are paid $11 an hour like the cleaners who will come into this building long after those Tories have gone home tonight they are not hard-working people. They are not people who deserve the protection of this Parliament and this place. That is the disgrace of the speech that we heard tonight. 
Tonight we are talking about cleaners food catering workers laundry workers aged-care workers and residential-care workers. These are the kinds of people who need laws like this from this Parliament. These are the kinds of people whose wages are higher now under a Labour Government than they were when the National Party ran this place. When Labour became Government $7 an hour was the minimum wage. Today it is $10.25. Working with the Greens New Zealand First and the Maori Party we will get it to 12 bucks by the end of this Parliament. That means those vulnerable workers whom we protect tonight will get $200 a week more before tax in their pay packet because of the kind of legislation we pass. 
National Party members can line up with their exclusive friends and their sects and cults and all that sort of thing for as long as they like. We in the New Zealand Labour Party and parties that support this Government and support ordinary people will proudly vote for this bill tonight. I commend it to the House. 
A party vote was called for on the question  
That the amendments recommended by the Transport and Industrial Relations Committee by majority be agreed to. 
Ayes 68 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1. 
Noes 51 
New Zealand National 48; United Future 3. 
Question agreed to. 
A party vote was called for on the question  
That the Employment Relations Amendment Bill be now read a second time. 
Ayes 68 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1. 
Noes 51 
New Zealand National 48; United Future 3. 
Bill read a second time. 
Te Arawa Lakes Settlement Bill 
Second Reading 
Hon MARK BURTON (Minister in charge of Treaty of Waitangi Negotiations) 
: 
 I move  
That the Te Arawa Lakes Settlement Bill be now read a second time 
. The Te Arawa lakes have long been viewed as a national treasure to be enjoyed by New Zealanders. These lakes have long been enjoyed by families by tourists and by recreational fishers alike. But for Te Arawa these lakes have an even greater meaning. Every single lake has a story to tell handed down from generation to generation. The lakes have provided sustenance and a way of life for Te Arawa. Te Arawa has and always will have a cultural and spiritual relationship with these lakes. 
This bill is an important milestone to Te Arawa and to the Crown. It signals the beginning of a new era in the relationship between the Crown and Te Arawa with regard to the lakes. I encourage every member of this House if they have not already done so to read carefully the preamble to this bill. It sets out the path that Te Arawa and the Crown have travelled to get to this point. I acknowledge the work and the commitment by the previous Government in 1997 to make an exception to the Crown’s comprehensive settlement policy in order to allow Te Arawa to negotiate their grievances in relation to the lakes separately from their other grievances. I also acknowledge the decision in 1998 to recognise the mandate of the Te Arawa Maori Trust Board to negotiate this claim on behalf of all Te Arawa. 
This bill sets out the Crown’s acknowledgment and formal apology to Te Arawa for past dealings that breached the Crown’s obligations under the Treaty of Waitangi. Through it the Crown also acknowledges that a number of Crown actions have caused grievances to Te Arawa. For example the Crown acknowledges that the introduction of exotic fish species significantly depleted the indigenous species upon which Te Arawa depended for food for hospitality for trade and for koha. Further the Crown acknowledges that Te Arawa petitioned the Crown for several years concerning the depletion of indigenous species and restricted access to new species. Indeed some of Te Arawa were prosecuted for fishing in the lakes without a licence during that time. The Crown acknowledges that it failed to review the annuity paid to Te Arawa as part of its 1922 agreement regarding the lakes when that annuity materially lost value as a result of inflation over a number of years. This bill will settle all Te Arawa’s historical claims relating to the lakes including any claims relating to that 1922 agreement and the annuity payments pursuant to the 1922 agreement. 
This settlement vests in Te Arawa the fee simple estate of 13 lake beds with the Crown retaining ownership of the water column and airspace above the lake beds. It establishes the Rotorua Lakes Strategy Group as a joint committee under the Local Government Act 2002 to provide advice on the management of the lakes. It records a formal apology to Te Arawa to their ancestors and to their descendants for the Crown’s breaches of the Treaty of Waitangi. It provides a statutory acknowledgment to recognise Te Arawa’s strong spiritual cultural historical economic and traditional association with the lakes. It includes a financial redress of $2.7 million to recognise the economic loss suffered by Te Arawa arising from the Crown’s Treaty breaches and a further $7.3 million to settle any remaining annuity issues. This bill makes it clear that it is a full and final settlement of all historical claims of Te Arawa in relation to 14 lakes. 
The Maori Affairs Committee has considered the bill and submitted its commentary to the House. The committee recommends that the bill be passed unamended and I take this opportunity to thank the committee for its consideration of the bill. The committee received 20 submissions—18 in opposition and two in support. It should be noted however that one of the submissions in support of the bill that of Te Arawa Maori Trust Board was submitted on behalf of its beneficiaries who number over 10000. 
I would like to comment briefly on the issues raised by the committee and submitters relating to the mandate of Te Arawa Maori Trust Board and the post-settlement governance entity. Various submitters opposed to the bill claimed that Te Arawa Maori Trust Board does not hold the mandate to negotiate the settlement on behalf of all Te Arawa. The trust board’s mandate to negotiate on behalf of all of Te Arawa which was recognised by the Crown in 1998 still stands strong today. The Waitangi Tribunal has recently inquired into this matter and has concluded that the trust board’s Te Arawa - wide mandate was appropriate to deal with the complex and overlapping customary interests in the lakes and that it has been well maintained—I think it is important to emphasise that—throughout the negotiation process. 
The process of establishing the post-settlement governance entity was also raised as an issue by the committee and indeed by some of the submitters. The committee and those submitters were concerned that only one governance model was discussed with the people of Te Arawa. In fact that is not correct. However it is imperative that all of Te Arawa are able to be represented by the post-settlement governance entity. Given the large number of iwi and hapu that make up Te Arawa and the varying sizes of these iwi and hapu many models of representation used by other iwi were not appropriate for the lakes settlement. Various representation options were discussed and considered by the trust board and in hui over several years. Those options ranged from a Te Arawa - wide model with representatives appointed by all Te Arawa to various marae and/or hapu-based models. The trust board weighed up the options and in consultation with the people of Te Arawa developed a model that most appropriately reflects the complex interrelationships between the many and varied iwi and hapu of Te Arawa. That model the Te Arawa Lakes Trust was ratified by a convincing majority of those who voted. I am well satisfied that the ratification results confirmed that the structure of the Te Arawa Lakes Trust is an appropriate entity to receive and manage the settlement assets. 
I should also note for the House that during the Committee stage I intend to move two very minor technical amendments to the bill. One is to give clarity to administrative arrangements for the Crown stratum under the Land Act 1948. The other is consequential to changes in terminology enacted recently in the Protected Objects Amendment Act which will come into force on 1 November 2006. 
It has taken many years of challenging negotiations between Te Arawa and the Crown to reach this important point. It began as I have said in 1997—and I want to acknowledge my predecessors the Rt Hon Sir Douglas Graham and the Hon Margaret Wilson for their significant contributions to these negotiations. The Crown considers it is a fair and just settlement the people of Te Arawa have ratified it and both parties now look forward to a more positive future relationship. I acknowledge the people officials Ministers and members of the trust board and especially the people of Te Arawa who are here today—those who have worked hard to bring this settlement to this point. In particular Anaru e te rangatira tena koe; Andrew the chief greetings to you. I urge the House to support this bill. It should proceed without delay. I commend it to the House. 
CHRISTOPHER FINLAYSON (National) 
: 
 National opposes the second reading of the Te Arawa Lakes Settlement Bill. It says insufficient work has been done on it at the select committee stage to persuade the party that it should support what it regards as defective legislation. Much of the bill is unexceptional. In particular the settlement resolves all of Te Arawa’s historical claims relating to 14 lakes and the remaining annuity issues. It removes the jurisdiction of the courts and the Waitangi Tribunal and the benefits of the settlement are to be available to all members of Te Arawa wherever they may live. 
However I do note that there still remain some outstanding mandate issues. Let me say to the Government that mandate issues cannot be legislated away. If the Crown does not get this issue right it will face ongoing litigation and ill feeling. I tell you Mr Deputy Speaker and the House that the Privy Council is shortly to give its decision in a case involving Ngati Apa. That case raises mandate issues that have been hanging around for 17 years and the Ngai Tahu Claims Settlement Act of 1998 did not legislate those issues away. 
A number of other points about this bill raise real concerns. The first is with regard to that elusive phrase “principles of the Treaty of Waitangi” and the second is what I consider to be a dangerous reference in clause 7 to matters of spiritual importance. Of course the Maori Affairs Committee paid no attention to those matters and simply endorsed the bill. So much for the theory that select committees should rigorously examine legislation! Nor has the Minister turned his mind to either of the issues. He simply stood up and read out a speech that ignored key matters and in fact glided over some of the real pitfalls. Probably the issues were beyond the Minister who really is a complete waste of space. His performance in this portfolio is even worse than his performance in the justice portfolio—and that really says something. So the bill has come back to the House and the same defects as were there before are still there. 
I do not intend to spend very much time talking about the first of my concerns. I closely examined the phrase “principles of the Treaty of Waitangi” in my first reading speech and I will take that as read. In that speech I outlined nine key or central principles that have been extracted over the years from various cases and reports of the Waitangi Tribunal and I said that it was not too hard to spell out exactly what one is talking about when one refers to the principles of the Treaty. In my first reading speech I criticised the Government’s lazy drafting and poor workmanship with regard to this bill. The fact that the bill has come back to the House in this defective form illustrates the point that the Government is not interested in addressing those issues but simply wants to be rid of the legislation in some formulaic way. Well we think the principles of the Treaty are important. We think they should have been addressed and we are not supporting the second reading of the bill for that reason. 
And I would be very interested to know the position of the New Zealand First members. They too should be opposing the bill given Mr Woolerton’s important but defective Principles of the Treaty of Waitangi Deletion Bill which is now before the Justice and Electoral Committee. In my first reading speech on that bill I said that although it was lazily and sloppily drafted it addressed some important issues that need to be addressed concerning the meaning of the phrase “principles of the Treaty of Waitangi”. If New Zealand First is to be consistent it too will oppose the Te Arawa Lakes Settlement Bill on those grounds—and I hear my friend Anne Tolley the junior Opposition whip laugh because she knows what consistency is all about with regard to New Zealand First. So much for the principles of the Treaty of Waitangi. 
I will now focus on one particular concern I have that given the discussions and litigation that have occurred over the years makes it simply negligent to include a particular phrase in this settlement bill. I refer to clause 7(1) of this bill which contains the text of the acknowledgments as set out in the deed of settlement. Of course apologies and acknowledgments should not be contained in legislation—that is a mistake in itself—but the acknowledgment itself is also badly drafted. The first acknowledgment is that the Crown recognises that Te Arawa value the Te Arawa lakes and the lakes’ resources as taonga and the Crown acknowledges the spiritual importance to Te Arawa of the lakes and the lakes’ resources. In the Committee stage I will ask the Minister what that means and how it is to be compared with cultural and traditional importance—not that I will be holding my breath while waiting for a coherent answer from the Minister on that topic or indeed on any topic. 
What I find fascinating is that that phrase is included. Why is there an acknowledgment of spiritual importance? I find it strange that the Government is happy to enact that sort of reference yet it goes out of its way to expunge any references to Christianity. In fact this Government has an abiding hostility to Christianity and especially to the part of Western Christianity that still firmly holds to articles of faith and objective standards of right and wrong. We can see that distaste and indeed hatred manifested in the way Government members constantly make extravagant and untrue remarks about a Christian minority—and it happened tonight—some of whose members dared to challenge the Prime Minister. 
Antichristianity is to Labour Party members today what anti-Semitism was to the Nazis. Mind you they do not really like Jews either. 
Hon Mark Burton 
: I raise a point of order Mr Speaker. The member’s personal insults mean nothing to me but I take deep offence at the comment he has just made. He has no idea what the personal faith of members on the Government side of the House is. I personally take deep offence at that accusation. The member should simply address this important piece of legislation and stop indulging himself. 
CHRISTOPHER FINLAYSON 
: The point I am making Mr Deputy Speaker— 
Mr DEPUTY SPEAKER 
: Just withdraw and apologise please and continue. 
CHRISTOPHER FINLAYSON 
: I withdraw and apologise. The point of the matter is that the Government is very concerned to include phrases along the lines of that one to recognise spiritual values but can members imagine what the response would be if Catholic priests were dispatched by the Government all over the world to bless embassies before they were opened or if we asked the Catholic Archbishop of Wellington to conduct an exorcism of Parliament at the time Parliament opened? Actually that would not be a bad idea because I can think of some Government members who would benefit from an exorcism. 
The point I am making is that this Government while it is doing its best to expunge the Christian religion from our society is enacting that sort of phrase. It wants to do away with the reference to Christ in the opening prayer of the House yet it enacts vague references to Maori spirituality. Respect for undefined spirituality can lead in all sorts of directions and I can do no more than quote from an excellent article by Dr David Round who is a law lecturer at the University of Canterbury. 
In an article entitled “Here Be Dragons” Dr Round states the following about phrases like Maori spirituality: “The Hazardous Substances and New Organisms Act 1996 requires all persons exercising powers and functions under it to take into account the principles of the Treaty of Waitangi and also to take into account the relationship of Maori and their culture and their traditions with their traditional lands waters sites wahi tapu valued flora and fauna and other taonga. Acting in accordance with this ERMA”—the Environmental Risk Management Authority—“has established its own Maori advisory committee which maintains that Maori have today and have historically had practices relating to scientific knowledge. The committee has been generally opposed to genetic modification”—it is not alone in that course—“but so far ERMA has declined to accede to its own recommendations.” 
Dr Round gives another example from the present draft of the Aoraki - Mount Cook National Park management plan which proposes to give the Department of Conservation the power to encourage and/or require climbers not to stand on the summit of Mount Cook—the justification being that Mount Cook is the deified ancestor of Ngai Tahu and that standing on the head the most sacred part of the ancestor is disrespectful. 
So vague references to spiritual values can be very dangerous indeed. If phrases like that are to be included—and they should not be—then it should be defined exactly what is being talked about. As Dr Round observed in his article there is a distinct element of condescension in this approach assuming as it does that all Maori still hold to pagan and animist beliefs and that no real Maori could be a Christian. The phrase is inappropriate. 
Why does this Government simply not understand those elementary points? Is there one Labour member who would be prepared to stand up and make a sensible refutation of the points I make? Trevor Mallard was appointed as Coordinating Minister Race Relations to deal with those things but Mr Mallard was just another one of the Prime Minister’s shabby little tricks. She appointed him to do nothing and he succeeded beyond his wildest imagination. Once the election was over the Prime Minister failed to appoint him or anyone else to the coordinating race relations position. 
Those sorts of phrases are unsatisfactory; the situation is unsatisfactory. For those two reasons alone National will oppose this legislation at its second reading. [ 
Interruption 
] 
BRIAN CONNELL (National—Rakaia) 
: 
 I raise a point of order Mr Speaker. I am sure you heard Minister King use unparliamentary language. She called my colleague a liar and I would expect you to ask her to withdraw and apologise. 
Hon ANNETTE KING (Minister of State Services) 
: 
 No I did not call the member a liar; I said: “That is a lie.” Mr Finlayson had said the Labour Party was antichristian. He has no right to decide what our personal beliefs are and then to say we are antichristian. This party has Christians and people who are not Christians in it. For him to say that is unparliamentary. [ 
Interruption 
] 
Mr DEPUTY SPEAKER 
: I do not need any further information or explanations. The member who has just concluded his speech apologised for using exactly those words earlier on so I will leave the matter exactly where it is. 
Hon MITA RIRINUI (Associate Minister in charge of Treaty of Waitangi Negotiations) 
: 
 A kia ora kei te Kaihautu. E tika ana kia whakamihi atu ki te heamana o te poari a Te Arawa e noho nei i roto i tenei Whare. I haere tawhiti mai i te hau kainga ki te tautoko ake i tana pire. No reira kai te rangatira tena koe. 
[ 
Thank you Mr Deputy Speaker. It is appropriate that I should acknowledge the presence of the Te Arawa board chairman seated in this House. He has come some distance from home to support his bill. And so greetings to you. 
] 
Naturally I stand in support of the Te Arawa Lakes Settlement Bill. If I ever had to describe the previous member’s speech I would describe it as something that came out of the mouth of a terrible bigot. 
Eric Roy 
: I raise a point of order Mr Speaker. All members are honourable members. The member on his feet cannot accuse another member of being a bigot—plain and simple. 
Mr DEPUTY SPEAKER 
: The member has taken offence at being called a bigot? 
Hon MITA RIRINUI 
: I withdraw and apologise Mr Deputy Speaker. This bill is not about the religious beliefs of Maori; it is about the settlement of a historic claim over the Te Arawa lakes. If Mr Finlayson who was on his feet prior to leaving the Chamber could identify only the lack of input— 
Eric Roy 
: I raise a point of order Mr Speaker. One cannot refer to the absence of a member from this Chamber. 
Darren Hughes 
: I take the point that Mr Roy makes and my colleague may have erred in that regard. But I suspect he was referring to the convention in Parliament that when members have concluded their speeches they stay to listen to the person who follows them. That is an important tikanga of the Parliament and I suspect that that was what he was meaning. But it would be helpful maybe if he just withdrew and apologised—[ 
Interruption 
] 
Mr DEPUTY SPEAKER 
: We are hearing a point of order. If members want the benches to be cleared they are going the right way about it. When we have disposed of the point of order other members can come back in. I just ask for a withdrawal of that remark please Mr Ririnui. 
Hon MITA RIRINUI 
: I withdraw. The member referred to the lack of work undertaken by the select committee during the consideration and deliberation aspect of the Te Arawa Lakes Settlement Bill. I can say that as far as the National members on the select committee were concerned he is absolutely right. Not only did those members turn up late some of them did not turn up at all. They did not participate in the hearing of submissions at all. The strongest criticism they made was about the length of time it was taking for submitters to get their points across. So if there was a lack of input at the select committee I am sure the member would like to talk to National members who were represented on the committee and to make sure they work a lot harder in future. 
The religious beliefs of the people of Te Arawa is not the issue here. They do have a spiritual association and ancestral connection with the lakes of Te Arawa and it is well known within the Rotorua district that that particular issue is acknowledged. That is why this Government is determined to return the Te Arawa lake beds to the iwi of Te Arawa. 
I want to make reference to some of the points that were made during the submissions process. I did touch on this point at the first reading stage and I thought I had said enough in regard to that matter. We have to acknowledge that the lakes that will be returned to Te Arawa are ill sick and polluted. But there is a misunderstanding that the Te Arawa Lakes Trust will be solely responsible for the clean-up work. Well that is not the case. In fact the board chairperson of Te Arawa Lakes Trust has been in Wellington for a couple of days negotiating those matters with the Minister for the Environment and other Cabinet Ministers. So to make that reference is misleading. It also raises concerns when it does not necessarily have to. 
I also refer to the number of submissions that came through from the various Te Arawa iwi. Unfortunately those representations were made on the basis of having been deliberately misinformed about the Treaty settlements process; about the package; about the compensation; about the ongoing relationships between Te Arawa Lakes Trust and the Rotorua District Council between Te Arawa Lakes Trust and Environment Bay of Plenty and indeed a lot of groups that use the lake area on a day-to-day basis. I want to make this point clear in the House: public access has not been prohibited. The old owners of the lake who now become reconnected with the lake beds are determined that the people of New Zealand will enjoy the pristine areas around those lakes. 
Brian Connell 
: For now. 
Hon MITA RIRINUI 
: There is quite a bit of cynicism across the other side of the House but I do not think that the member can justify that claim when he knows that under previous settlements public access to public areas has never been prohibited. 
David Bennett 
: Yeah right! 
Hon MITA RIRINUI 
: Is that not the member who spoke on the 90-day bill and made a stuff-up of it? As I said the condition of the lakes has been an issue particularly for two submitters—Ngati Whakaue which has quite a significant interest in Lake Rotorua and in a number of other lakes around the area Ngati Pikiao Ngati Makino and a few others. 
As the Minister in charge of Treaty of Waitangi Negotiations highlighted earlier on the settlement will contain a Crown apology and I do hope that Te Arawa as a people will accept the apology. The previous speaker touched on the fact that the principles in this case are not clearly defined. In that respect the Crown did fail to protect the Te Arawa people in relation to those interests and rights. It is the principle of protection we are talking about here. We are also talking about the principle of redress. 
I wonder what principles Chris Finlayson signed up to when he represented Ngai Tahu in the Ngai Tahu Claims Settlement Act. I suggest there is no difference in terms of the approach in relation to the principles. I suggest there is no difference in terms of the relationship Ngai Tahu had with the taonga in particular to pounamu to the high country areas to the maunga to the awa and to the coastline. So what is the difference? Is it a case of having one view when one is a lawyer and having a different view when one is here as a paid member of Parliament? I think there is a name for that but I am not allowed to use it in this House. 
My colleague the Hon Mark Burton outlined the structure of the Te Arawa lakes following the enactment of the settlement legislation. The fact is that the lake beds will be returned to Te Arawa. We are dealing in this case with the historical aspect of Te Arawa lakes claim; we are not talking about the contemporary issues. We are not talking about the water and we are not talking about the air column above the lakes. That is something I have no doubt Te Arawa will want to address in the future. 
Also on the management committee—which has been termed a two-by-two-by-two—Te Arawa will have two seats on the committee that manages the day-to-day affairs of the lakes. I have no doubt the representation from Te Arawa on that body will be quite significant and have a very powerful voice. I am sure the people of Te Arawa will make sure that is the case. This will mean that for the first time in decades Te Arawa will in fact have a legal voice at the table. The leverage relating to lake bed ownership and the property rights that flow from that mean Te Arawa will have a very significant voice going forward. There have been issues around the mandate. I note that Chris Finlayson did touch on mandate. I am not sure what his point was in relation to the process we have used. In this case it is no different from the one his party in Government signed up to with the Ngai Tahu Claims Settlement Act. Once again it is another flip-flop another U-turn. 
Steve Chadwick 
: Hugely embarrassing. 
Hon MITA RIRINUI 
: Yes I think he embarrassed himself when he made those statements. We heard from a number of submitters in Rotorua who expressed concern about that process but going through it and speaking to Office of Treaty Settlements officials and also to representatives of Te Arawa Maori Trust Board certainly every endeavour to ensure that the communication and consultation with iwi interested in the lakes was undertaken in a very thorough manner. But of course it is very hard to please all the people all the time. We are more than happy that Te Arawa Maori Trust Board has represented the views of more than 10000 of its registered members in a very robust manner. It is with their support that I am happy to join them in progressing the claim to this stage today. 
There are some issues that I am sure other parties will want to raise about the specifics of the settlement. We can address those matters during the Committee stage of the bill. I join my colleague Mark Burton in commending the Te Arawa negotiators whose commitment and passion has enabled them to reach this stage of the settlement process. It has been a very very longstanding matter. 
I will be sorry to see the Te Arawa Maori Trust Board fade into history but the Te Arawa Lakes Trust will be enacted at the time of settlement and I am sure it will represent the views of Te Arawa people in relation to the lakes in a very robust manner. I feel sad about the trust board fading into history. My great-great-grandfather Teuara Timi Waata Horne was a founding member of the Te Arawa Maori Trust Board. So was my grandfather and three of his sons. I will not get that opportunity because it will not be there any more—not that I was ever likely to be asked. 
But the commitment shown by the negotiators and by the representatives of the various iwi with interests in the lakes is certainly something we can appreciate and commend them for. So without having too much more to say I commend this bill to the House. 
ERIC ROY (National—Invercargill) 
: 
 Thank you Mr Deputy Speaker. It is something of an interesting challenge for me to respond in the second reading of the Te Arawa Lakes Settlement Bill. I have spent a fascinating afternoon—or a good portion of it—having a look at the issues that surround this particular settlement: the relevance of the grievance the appropriateness of the process the bill itself and whether the bill will resolve the issues that this House should resolve. My colleague Chris Finlayson spoke about an issue of vagueness that is of concern to the National Party. Let me make a few “givens” right at the start. Should we as a Parliament be dealing with grievances? Yes we should. Given that these are issues of significant importance what should some of the principles that enshrine them be? Probably the greatest one is that they should be a full and final settlement they should be just and they need to be durable. 
Following on from that some significant processes need to be engaged in. We need to know that there is a high degree of acceptance within the iwi. We need to have buy-in from both parties. These are pretty simple principles; they are not rocket science. So after spending a good portion of the afternoon looking at the process and at what has happened here I have some serious concerns. That is why National is not supporting the second reading. 
Let me make it clear again. Is there a grievance in the case of the Te Arawa people? Yes there is—undeniably so. Will this be a full and final settlement? I suspect not and I wish to address some of those matters as we go through them in the next few moments. The bill itself recognises the need for an annuity and I have no truck with the specified amount. If we bulk it up it is $10 million and in light of other settlements that have occurred around the place it seems to be a relevant figure. I think the National Party would be happy to vote on that and support it but there are some other issues that do concern us. 
This is an issue that was first registered as a treaty claim in 1989. It is not as if this has just come out of the woodwork. We have had time to deal with this and to find some satisfactory answers. The models that I spoke about earlier and the principles established by Bolger and Graham when we settled significant and difficult claims before were not dissimilar in such things as structure of the iwi. We came up with some solutions that I believe are durable and that are full and final. 
Let me address the matter of voting. When the Minister the Hon Mark Burton spoke first on the second reading he said that the trust board represents 10000 people. From my reading of the papers the figure is 9000 but I am not going to quibble about the 1000. Yet there were 40000 people registered at the last census of Te Arawa iwi whakapapa to whom this applies. So we have some 9000 people—10000 if the Minister is more accurate than me—who are members of the trust board and who have a pertinent vote on it. When we look at the numbers that voted my figures tell me—and I invite someone to get up and say they are not correct—that there were 4000 people out of the 9000 or 10000 who voted. Yes there was a 97 percent affirmative vote but when we start looking at the overall iwi of 40000 we should ask how durable this process has actually been. 
The Minister kind of downplayed the submission process. He said there were 20 submissions and 18 were against and two were for but then one of them was the trust board of some 10000-odd people. I guess that is right but I have some concerns about the submission process. If it is a reflection of what is in the iwi then I have some serious misgivings about the durability and suitability of what actually happened. 
Let us go back and have a look at the first attempt because we have to learn from history here. The first attempt to make a full and final settlement was in 1922. Was it full and final? At the time it was thought to be but it was not. If members look at the process at that time two lawyers—one from Auckland and one from Wellington—met with Sir Apirana Ngata a significant luminary of the Te Arawa people whom I presume had in place networks to represent their view but I could not find out too much about how that worked and a full and final settlement was drafted in 1922. Was it durable? No it was not. Yes there is a grievance and yes there needs to be an apology. Yes there needs to be an annuity paid and yes there needs to be a process that will be durable and will be full and final. 
My colleague Chris Finlayson spoke a great deal about the impreciseness that is included in the Te Arawa Lakes Settlement Bill and he mentioned the principles of the Treaty of Waitangi. There are a number of things that give me some concern about whether we all have a clear understanding of exactly what this means. In the preamble to the bill in the report back from the Maori Affairs Committee it talks about the form of protocols in the deed and states that the Minister of Conservation the Minister of Fisheries the Minister for Arts Culture and Heritage and the Minister for the Environment are empowered to issue protocols. Why are these not worked out now? Why do we not have a clear understanding of exactly what this means? There are two parties in this—we have to accept that there are two sides. What happens if we do not agree on the protocols that are still to be worked out and we have delegated that responsibility to Ministers? To me this is recipe to be back here to have another go at this and that is of significant concern to me. I do not know what the form of those protocols is and here we have a delegated responsibility. It seems to me to be a most unusual step to take in something as important as settling a longstanding grievance that is holding back both sides of this situation. That is simply not good enough. 
Why do I think we need to spell these things out? There is a myriad of illustrations where even when we have tried to be precise and time moves us on we actually see different interpretations coming in—and that is when we have tried to be precise. Let me give members an example. I am quite familiar with fisheries legislation. If members go back and have a look at what we did there to accommodate the needs of iwi they will see that we set up things like tai-a-pure and mataitai reserves. Now a mataitai reserve is something that we all had a clear understanding about at the time. It referred to a traditional fishing ground. It could be a rock a reef a bay a river mouth or whatever. But right now some 12 or 14 years on we have applications for mataitai reserves as big as the whole of the Bay of Plenty or the whole of the south coast of the South Island. They are huge areas that simply do not fit if members look in  
Hansard 
 and 
at what the legislation states with what was said at the time—and that is when we were being absolutely specific. 
So what does all this mean in terms of the protocols that are out there? We currently have the Government working on an access formula because issues for New Zealanders to have access to mahinga kai for everybody—trout fishing or whatever—is something we see as a birthright. Yet in a significant area of the central North Island we now have charging for access to fishing. Now members might well argue in a semantic argument that there is not any charge to fish but if there is a charge for access there is a charge to fish. Introduced species are mentioned here and the Minister himself said that this is an important and significant place for all New Zealanders to go and do their outdoor recreation. When these protocols come into place further down the track are we again going to see something that has an implication for the access of all New Zealanders? It is not spelt out; we have delegated the responsibility of setting up these protocols. 
There is a desire to solve this issue and to do it in a way that is durable and in a way that is fair. Pay the money give the apology but let us get the detail right. I have a serious concern that this is not a durable settlement. Therefore National will not be supporting the second reading. 
PITA PARAONE (NZ First) 
: 
 A tena koe Mr Deputy Speaker tena tatou o te Whare. Engari he wahi poto tenei mihi atu ki a koutou mai i te waka o Te Arawa koutou nga kaikawe o te kaupapa nei. Na reira tena koutou tena ano tatou. 
[ 
Greetings to you Mr Deputy Speaker and to us of this House. This is but a brief moment to acknowledge you the canoe of Te Arawa the bearers of this bill. Therefore greetings to you and to us as well. 
] 
First of all although I may not agree with what they have said I acknowledge those fine Maori speakers from the National Party. I find it very interesting that its two speakers thus far were not members of the Maori Affairs Committee yet those of their colleagues who are members are not taking a call. I find that rather astounding. 
Secondly those National speakers criticised the rules under which this Te Arawa lakes settlement process is taking place yet a former National Minister actually set the format for the process that we are now enjoying and he was responsible for this format. On top of that the previous National Government gave him a knighthood—and here we are tonight hearing those people criticising the process! I find that rather amazing. 
I also note that reference was made to a law lecturer from Canterbury but Mr Finlayson omitted to tell this House that he referred to that particular law professor because he was a National Party candidate. So I can understand why Mr Finlayson was supporting the comments the professor made. However I do acknowledge those two fine Maori speakers and no doubt they will be ably supported by the Maori Party. 
This is the eighth Treaty of Waitangi settlement since 2000. It is an indication of the contribution being made towards seeing the issue of Treaty settlements through to a suitable conclusion. The Te Arawa Lakes Settlement Bill gives effect to the deed of settlement signed in December 2004 in order to settle all of the historical claims of the Te Arawa in relation to 14 lakes in the Rotorua district. In the select committee process we heard that one or two lakes were not included. The reason was that they were not part of the original agreement between the Crown and Te Arawa. 
The lakes are those subject to the agreement made between Te Arawa and the Crown that was given effect by the Native Land Amendment and Native Land Claims Adjustment Act 1922. I will name those 14 lakes: Ngahewa; Ngapouri also known as Opouri; Okareka; Okaro also known as Ngakaro; Okataina; Rerewhakaaitu; Rotoehu; Rotoiti; Rotoma; Rotomahana; Rotorua; Tarawera; Tikitapu; and Tutaeinanga. Along with the ownership of those 14 lakes the iwi will receive $2.7 million and an apology plus $7.3 million to buy out the annuity paid to the Te Arawa Maori Trust Board. 
For me this settlement clarifies Te Arawa’s rights and limits its liabilities. It is important that we should be aware for example that the iwi will not be liable for weed control or contamination unless it has caused the problem. Existing structures on the lake beds can be maintained or removed without their owners having to seek the trust’s permission and without charge. The rights of public use existing commercial activities and public utilities are enshrined in this bill. 
The select committee hearing into the bill revealed a “rift” in Te Arawa which New Zealand First found quite disturbing. This “rift” was manifested by the fact that of the 20 submissions received 18 opposed the bill notwithstanding a comment made by the second speaker from the Government that many of those who objected did so as a result of misinformation. Several hapu told the committee they wanted the bill suspended or mention of their names removed from the legislation which mentions only three Te Arawa ancestors. 
The Te Arawa Maori Trust Board which negotiated the settlement claimed to have the support of a large majority of its members. Te Arawa is the confederation of iwi and hapu with about 40000 members. It is important that they are all represented in this claim and that they all feel included in the process. New Zealand First was concerned that the consultation process was compromised by the fact that some participants felt that the process was dominated by the trust board’s recommendations and were therefore predetermined to a large degree. 
Some also disputed the mandate of the Te Arawa Maori Trust Board and its right to represent them. Amongst these were Ngati Whaoa Ngati Makino and Ngati Rangitihi. In the case of Ngati Whaoa the inclusion of Lake Opouri in this claim without their mandate ran counter to their own claim to this lake. Unfortunately for Ngati Whaoa the application for an early hearing of their claim was declined by the Waitangi Tribunal on 23 June 2006—a decision based on the review of evidence relevant minutes and judgments of the Maori Land Court and a tribunal-commissioned report known as the Melvin report. The presiding judge was convinced that the trust board’s mandate to represent Te Arawa had been collectively determined and well maintained. I am obliged to say at this juncture that the issue of mandate is a common feature of the settlements that have come to this House thus far. 
New Zealand First was also concerned that the discussions about a post-settlement governance and entity were limited in that it was confined to one model. We feel that this issue could have been more comprehensively dealt with which would have allayed the concerns of many submitters. The committee was advised by the Office of Treaty Settlements that the 2-year review process of the intended governance structure and operations will provide an avenue for further discussion on the structure of and representation on the trust. I am led to understand that the post-settlement group intends to allow for local management—that is hapu management—of the respective lakes so as to allow for local involvement. The 2-year review would also present an opportunity to address issues expressed by members of Ngati Whaoa with regard to the ownership of Lake Opouri. 
The high percentage of submissions opposed to the bill illustrates the fact that this settlement has not been without some concerns. However I am hopeful that the processes put in place for a review will see a willingness by all parties to make a concerted effort to see this settlement as a successful one. For getting to this point represents a historic milestone and it acknowledges that the lakes are inextricably bound with Te Arawa while also allowing for continued public access. It also resolves outstanding annuity issues. 
I support the previous speaker who said that any settlement notwithstanding this one should be just and durable. New Zealand First believes that this will be a just and durable one. For those reasons I am happy to support this legislation on behalf of New Zealand First. Kia ora. 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 The Greens are supporting the Te Arawa Lakes Settlement Bill and congratulate Te Arawa on negotiating a successful conclusion after such a longstanding grievance. We recognise that there are always issues with treaty settlements as a result of the Crown’s insistence on negotiating only with large natural groupings which always leaves the possibility of some groups feeling disadvantaged and brings into question the size of the mandate that has been achieved. There are some issues relating to the bill which my colleague Metiria Turei wants to raise and she will be doing that during the Committee stage. So at this stage I will simply express our support for the legislation. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Deputy Speaker. Tena tatou katoa i te Whare i te po nei. Koutou i hara mai i te kainga e koro Anaru tena koe Roku koutou. Kia ora rawa atu koutou. Huri noa i te Whare kia ora tatau. 
[ 
Greetings to you Mr Deputy Speaker and to us all in the House tonight and to you especially from home koro Anaru greeting to you Roku and to you others. Greetings indeed to you all. Throughout the House greetings to us all. 
] 
In his submission to the Waitangi Tribunal in June 2003 Professor Hirini Moko Mead of Ngati Awa raised the concept of te whakahoki whenua—the return of land. He suggested that the removal of the ringa kaha—the forceful occupation by another people—and the restoration of ancestral rights can be achieved either by defeating the group holding the ringa kaha or by arranging to have the land and therefore the mana over it restored. He raised as an example the retaking of Maketu by the hapu of Te Arawa thereby restoring the ancestral rights of Te Arawa over that area some 200 years after Ngaiterangi seized the land by conquest. 
Tonight we bear witness in this House to the actions of the ringa kaha those who represent the imposed treaty settlement process of the Crown those who have threatened kotahitanga o te waka o Te Arawa—the unity of Te Arawa—in making monumental decisions about the large tracts of lakes waterways and lands encompassed in this bill. The question that the Maori Party brings to this debate is how sufficient the provisions within this bill are in restoring the ancestral rights of Te Arawa over our cherished lakes and lands. How is our rangatiratanga protected or is it our fate to be eternally grateful for the breadcrumbs thrown to our people? 
At the Maori Affairs Committee hearings submission after submission recorded the dissatisfaction of submitters challenging the Crown that the financial compensation and responsibility for cleaning the lakes were insufficient. The Te Arawa Federation of Maori Authorities made an impassioned call to suspend this bill until more appropriate compensation and redress were available. It stated: “Continuation of this settlement is irresponsible. We cannot recover from the deliberate barbaric efforts of Government to delay provision of maps and survey materials which would have enabled our ancestors to present themselves prepared for the demands of the native Land Court. We cannot understand why we were prosecuted for fishing in our own lakes. Our lakes and waterways are now devastated with unforgiving pollutants. Let us have the opportunity to reform an alliance which will not jeopardise our mana as a great tribe.” 
It was a theme that was reinforced throughout the overwhelming majority of submissions each one of them speaking of the threats that have been endured by te ahi ka roa—those who keep the fires burning at home. The rights of ahi ka roa emerge from the mana and the freedom to enjoy the benefits of tino rangatiratanga over their home whenua. The question of those who can assert mana whenua—literally those who have mana political control and authority over the land—is a highly contentious issue within this bill. Ngati Wahiao demanded that all reference to Lakes Opouri/Ngapouri Ngahewa Tutaeinanga and Okaro be deleted from the bill because they believe they never gave a mandate to any organisation to act on their behalf and particularly in this lakes settlement. They have never had a seat on the Te Arawa Maori Trust Board and additionally Ngati Wahiao lands which include the lakes are subject to current Waitangi Tribunal claims. It is disappointing that we have a settlement when the issues of ownership over these lands and lakes is still to be clarified. 
Richard Charters in a separate submission searched Archives New Zealand for the 1915 minute book relevant to the sale of the Rotomahana Parekarangi land. He reviewed the research reports leading to the 1922 settlement and right through to the hui of 1997 for Te Arawa beneficiaries. From this basis he concluded that there was no mandate given by the people of Lake Opouri there was no ratification of the settlement by those owners and in fact the people were excluded from voting on the settlement. 
Then there is Ngati Makino who claim that the bill does nothing to provide for the spiritual relationship between Ngati Makino and their ancestral lands lakes and fisheries—their tribal identity. Ngati Makino are strongly opposed. They believe: “ … the net effects of clauses 13 15 and 16 deny the descendants of Te Arawa proper and just restitution of their taonga.” 
Then there was Pua Miria Maka of Ngati Pikaio who stated that the financial compensation offered is an insult and that the social and financial liability for the desecration of the lakes is not adequately addressed. Maka’s submission—and others from Kiri Potaka-Dewes of Ngati Rangiteaorere from Maru Tapsell of Waitaha and from Michelle Beckett of Ngati Whakaue—has given particular emphasis to describing the proposed settlement as inconsistent with the tikanga of Te Arawa and Te Tiriti o Waitangi. It states: “The separation of the mana and authority of the beds of our lakes from the waters of our lakes and all other taonga within is inconsistent with the cultural and spiritual integrity of the lakes themselves and Te Arawa kawa and tikanga.” 
The submission of Te Ariki Morehu for and on behalf of Ngati Hinekura talked about his position as an elder of Te Arawa having been attained through his upbringing at Otara marae and over half a century of intense involvement in Te Arawa affairs. Te Ariki expanded upon the metaphysical or spiritual relationship of Te Arawa with our lakes which he referred to as sacred and regarded as a taonga since the discovery by our ancestor Ihenga. He explored the significance of Te Arawa holding mana whenua and rangatiratanga over these lakes since the time of Ihenga—our customary role as owners and kaitiaki of the lakes. He explained how these rights and responsibilities have been transmitted from generation to generation in Te Arawa waiata and karakia—their use governed by Te Arawa tikanga. The lakes waterways streams rivers swamps and springs were a vital food source and a medicinal resource as well as being part of an extensive communications network. He spoke about them being essential to the spiritual and cultural well-being of Te Arawa with the waters from the various parts often used in ritual and ceremony. He said: “For Te Arawa their lakes and waterways are not inert lifeless objects. In a very real sense the lakes are regarded as tupuna awa tupuna moana; living taonga of Te Arawa … the full names of Lakes Rotorua and Lake Rotoiti are Rotorua nui a Kahumatamomoe and te Roto iti i kitea ai e Ihenga; Te Arawa ancestors who came on the Arawa canoe.” Malcolm Short on behalf of Pukeroa-Oruawhata Trust extended this further to note that Lake Rotorua is not just a taonga for all of Te Arawa but also a national treasure for all New Zealanders. 
Against the context of our most precious taonga the despoliation of the waters and the disruption of the relationship of Te Arawa peoples to their lakes is seen as a catastrophic breach of Te Tiriti. Te ahi ka roa o Maketu explained the ways in which people have fought for decades against what was described as “the blankets of bureaucracy that have smothered our people” and “the erosion of the whanau and hapu integrity of tangata whenua.” They said: “ … this is the yardstick that I use when I state unreservedly that we are being ripped off.” 
The rip-off of the Crown’s policies and actions was given contemporary relevance with the submission of Colleen Skerrett-White who advised that the Crown’s failure to protect the exploitation of Te Arawa culture tikanga and kawa from the growing ravages of the tourism industry alongside its actions with regard to the lands lakes and geothermal interests has effectively denied Te Arawa the opportunity to use and develop their assets to move from a subsistence to a cash economy. 
The debates in this House tonight form part of the history that following generations will revisit. Indeed the submission from David Wickliffe lays this challenge: “The Rotorua Lakes Bill is simply history repeating itself which we now know has not been in the best interests of Ngati Tamakari.” It has been my intention tonight to do the best I can to represent the interests and aspirations of my constituency. I have attempted to present their korero to the House tonight for the esteemed representatives here to consider their heartfelt call for justice. 
Don Morrison who can whakapapa to a number of tribes spoke—as in turn did his father and his father and his mother and her father Hemi Te Tuparoa. He stood to remind the Crown of what he called its deliberate discrimination that comes from appropriation and a position of power against Te Arawa. He said: “ … it is stated the Crown profoundly regrets that past Crown actions have had a negative impact on Te Arawa’s rangatiratanga … and you the Crown go further to ‘begin the process of healing’. Am I to be overcome with humility and gratitude and accept with thanks those words of fine gesture? I will tell my children’s children what I am about to tell you.” 
The challenge for all members of this House tonight is whether we can live with what we will tell our children’s children. Is the apology a sincere apology? Is the redress appropriate to the rangatiratanga of Te Arawa? Is this the price of citizenship we should accept with thanks? We have a whakatauaki that I think is appropriate at this time: Kia mate ururoa kei mate wheke—it is better to fight like a shark than to give in like an octopus. Kia ora tatou. 
JUDY TURNER (Deputy Leader—United Future) 
: 
 I stand on behalf of United Future to speak in support of the second reading of the Te Arawa Lakes Settlement Bill. My contribution will be brief as I have laryngitis. 
I will focus very briefly on the fact that we are reminding ourselves tonight of the Crown’s presumption of legal title and how that dispossessed Te Arawa. As a consequence Te Arawa endured in terms of the lakes that were precious to them the introduction of exotic fishes without their permission the issuing of fines for fishing without a licence and perhaps more devastatingly the release of sewage into those lakes. Tonight we continue the process by which that title is received back by Te Arawa in the mess that we have allowed the lakes to become. So in this brief call I just remind the House that we have an ongoing responsibility for the cleaning up of those lakes. We also need to concern ourselves with and keep mindful of the fact that there are some smaller interests within this claim who feel that their voice has not been heard. We need to make sure particularly in the Committee stage that those issues are relooked at. United Future is very happy to support the second reading of this bill. 
STEVE CHADWICK (Labour—Rotorua) 
: 
 I am pleased to be able to take a call at the second reading of this very very significant bill. I also congratulate Te Ururoa Flavell on one thing: he actually got it on record how significant culturally and spiritually these lakes are to the people of Te Arawa and the people of Rotorua. 
I felt incredibly saddened tonight listening to the diatribe about Christianity by the member opposite Chris Finlayson. I was sitting in the gallery earlier tonight and I looked down at the members in the Chamber with huge embarrassment when they trivialised something that this tribe has sought to put right since 1922. We have to ask ourselves where Chris Finlayson was coming from with his deeply bitter diatribe about Christianity. I could see that the member was earning his money tonight when I looked across and saw members of the Exclusive Brethren in the gallery. I do not believe for a minute that the member believed what he said tonight and I felt saddened as a colleague and a member of Parliament that something so deeply spiritual and cultural to Te Arawa has been trivialised for such precious little gain for the Opposition. 
The process of how we seek redress for treaty settlements which are always complex was set up by a member of the National Government Sir Doug Graham. That is the process that was followed in the bill and it is the process that Chris Finlayson criticised so roundly tonight. 
I want the members opposite to know that one of the advisers called in by Don Brash during the last election was Don Stafford. He was an adviser asked to teach the Leader of the Opposition about issues Maori. Don Stafford put on the record the settlement history of the Te Arawa lakes—the story of the layers and layers of redress that the tribe deserves in terms of the lakes. Yet National members have not listened to the very iwi adviser they sought out. He would be deeply offended tonight as would Bishop Manu Bennett who is now deceased but who held deep spiritual beliefs about the value of the lakes to the Te Arawa people. I put on record that he would have been appalled to hear Chris Finlayson in the House tonight. 
I am also sorry to see that there are people at home who have been disaffected during the settlement process. It has been divisive. I acknowledge up to the Gods tonight Anaru Rangiheuea and Roku Mihinui who in spite of some dissatisfaction from some groups in Te Arawa have continued to lead the settlement process. I congratulate them on that leadership. Once this bill is through—and there is no doubt that it will be passed with the support of the sensible members in this House—the leadership on the post-settlement management group will be a huge responsibility. I have every confidence that the old members of Te Arawa Maori Trust Board in this new post-settlement management group will undertake the job of rebuilding with those disaffected who have felt alienated by the process. Treaty settlements are never easy. 
I conclude by reminding the member opposite who has so deeply upset me personally tonight—and I took offence—that in his maiden speech he said of Winnie Laban: “Unlike many politicians she debates the issues but does not get personal.” I commend her example and I hope that Chris Finlayson follows that example himself in the future. I would not want to see him ever given the responsibility of being involved in the treaty settlement process. 
I congratulate Mark Burton on his leadership here. In his quiet and steadfast way he has led the negotiation through his office with the negotiators who have respected this Government’s approach to leading through some very sticky phases of this bill. We are here tonight and I congratulate the Minister. 
I am sure we are going to get there; then we will have the job of rebuilding. I am sure that when we rebuild those who are dissatisfied will come on board and accept that the package would never be enough. How do we quantify the intrinsic value of the lakes in dollar terms? It is quite wrong to have trivialised matters and to have told people that this amount is not enough for Te Arawa to reassert their ownership over the lakes. It is not about the amount. It is about the process the settlement and the apology. There is rebuilding to be done after the debate in the House tonight. 
A party vote was called for on the question  
That the Te Arawa Lakes Settlement Bill be now read a second time. 
Ayes 69 
New Zealand Labour 50; New Zealand First 7; Green Party 6; Maori Party 2 (Sharples Turia); United Future 3; Progressive 1. 
Noes 48 
New Zealand National 48. 
Abstentions 2 
Maori Party 2 (Harawira Flavell). 
Bill read a second time. 
Standards and Conformance Bill 
Second Reading 
Hon MARK BURTON (Minister of Justice) 
 on behalf of the Minister of Commerce 
: 
 I move  
That the Standards and Conformance Bill be now read a second time 
. I would like to take this opportunity to thank all those organisations from a range of sectors that made submissions to the Commerce Committee on this bill. Generally the submitters were supportive of the amendments to the Standards Act 1988 and the Testing Laboratory Registration Act 1972 both of which are contained in this bill. I would also like to thank members of the select committee who having carefully considered the submissions reported the bill back to the House without amendment. 
As I said when introducing this bill to the House the standards and conformance infrastructure supports the New Zealand economy in many important ways. Customers here and overseas increasingly require products or services that comply with standards of quality and performance and they are looking for independent verification that they comply. The importance of the independence of that verification cannot be overstated. New Zealand’s standards and conformance infrastructure is well respected internationally and maintaining the confidence of our trading partners is of course a key purpose of the bill. 
The international norms and practices in standards and conformance have evolved since the Standards Act 1988 and the Testing Laboratory Registration Act 1972 were last amended. It is important that New Zealand’s infrastructure remains up to date with these developments and those overseas. The provisions of the bill are also designed to ensure that the efficiency and effectiveness of the Standards Council and the Testing Laboratory Registration Council are both maintained and improved. 
Although submissions to the select committee were supportive of the technical amendments contained in the bill several raised a concern about the age of the  
New Zealand Standards Catalogue 
. That is not an issue that can be addressed through legislation. However the Government is considering this and a number of other issues in the context of a review of New Zealand’s standards and conformance infrastructure that is currently being undertaken by the Ministry of Economic Development. I expect to see the release of a discussion document relating to the review that seeks submissions from the public on those issues in the near future. The review of standards and conformance will also dovetail with the Quality Regulation Review announced by the Minister recently. 
This bill represents an important first step towards improving New Zealand’s standards and conformance system. 
Debate interrupted. 
The House adjourned at 10 p.m.