Volume 644 Week 64 - Tuesday 11 December 2007 (continued on Thursday 13 December 2007) 
Volume 644 Week 64 - Tuesday 11 December 2007 (continued on Thursday 13 December 2007) 
[Volume:644;Page:13879] 
Tuesday 11 December 2007 
( 
continued on Thursday 13 December 2007 
) 
Waka Umanga (Maori Corporations) Bill 
First Reading 
Debate resumed. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 I raise a point of order Mr Speaker. Would you mind if I asked Dr Pita Sharples to start the day with a karakia? 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Well it is most unusual but is there any objection to that? There is objection. 
CHRISTOPHER FINLAYSON (National) 
: 
 When I was concluding my 1 minute 20 second contribution last night I said that an important question we should always ask ourselves as legislators is whether the legislation is necessary. But it seems that in this case as in many other cases the Labour Ministers have not stopped to ask this basic question or to ask themselves the question about whether the issue they are seeking to address is already covered by a statute. They have to be seen to be doing something whether it is proposing a review or having an inquiry. They always look to control to regulate and to prescribe. Indeed it seems they are never happier than when they are here in the Chamber introducing prescriptive legislation like this crummy effort. 
The National Party says that the need for the legislation has not been demonstrated. We do not subscribe to the theory that Parliament can legislate and then we can all try to work out what the law is and why we need it. The Minister said there was a pressing need for the bill but he really gave us no compelling reasons. Instead we had his usual recitation of words like “Well there is a clear need.” or “There is a pressing need.” But repetition of phrases like that like a mantra does not prove indeed that there is a need. As I said last night when I quoted from what Mr Peters said when he was Minister of Maori Affairs—and I emphasise what he said—“Maoridom statutory organisations trust boards community development committees Maori incorporations and the Maori Congress do not need to be inundated with a further 50 incorporated runanga or possibly 72 quasi-governmental authorities disbursing funds from the taxpayer.” That is what he said on 19 December 1990 in the context of the Runanga Iwi Act Repeal Bill. What he said then applies with equal force to this particular legislation. 
That highlights the difference between the National Party and Labour. Labour likes control and regulation. Its members like to pass unintelligible legislation so that they can try to keep control and we can see that with the disgusting Electoral Finance Bill. Our view of course is quite different. Why not let Maori choose whatever structure they like—whatever structure they think is appropriate and will work? I have not seen any evidence that iwi have been demanding or requesting the establishment of a body like a waka umanga. So where is the demonstrated need? We say it is simply not there. 
Secondly as one of my colleagues said last night this is a structure proposed by the Law Commission and then further developed by bureaucrats in Wellington and sent out to iwi. It is so typical of this know-all Labour Government. It believes it knows what Maori want. It says to iwi “Look we’re here to help.” but we all know that the most terrifying sentence in the English language is “I’m from the Government and I’m here to help.” Why cannot Maori decide for themselves how they will manage their affairs? If legislative intervention is required to assist a particular iwi then Parliament can help out. That is the way Te Runanga o Ngai Tahu Act 1996 was developed.  
But let us look at what is proposed here. Once a waka has been recognised by the Maori Land Court if the Crown intends to settle historic grievances with iwi then it has to do so through this Government-imposed waka structure not with the body Maori choose for themselves. I refer members to clause 11(1) which states: “If a waka pu is the legitimate representative of a tribal group for the purpose of entering into negotiations to settle a Treaty of Waitangi claim with the Crown the Crown must not negotiate or settle with any other person or body claiming to represent the tribal group in relation to that claim except as authorised by the waka pu in accordance with its charter.” I also note as an aside Clause 11(2) which provides that “To avoid doubt nothing in this Act requires—(a) the Crown to negotiate in relation to or settle a Treaty of Waitangi claim;”. 
I should not have thought that that was going to be necessary at least in relation to this Government because the Government does not know how to negotiate or settle claims. Its record over the last 8 years has been disgusting and no belated flurry of activity in the 9th and final year of its term will be of any moment whatsoever. The arrogance and superciliousness of this Government is best exemplified by a statement from its solicitors the Law Commission in its paper on waka umanga. “Registration under the proposed Act provides tribes and general-Maori groups with a stamp of approval;”. Well why should Maori require some kind of official stamp of approval from that lot? Maori do not need a stamp of approval from the Government. They know that. As Mr Henare said last night their social organisations have been around for thousands of years. It is only this Government that thinks that some kind of stamp of approval is required. 
So National will not be supporting this bill. Let me make the position of the National Party clear beyond doubt: iwi should be free to develop their own structures with their own administrative procedures and measures of performance so that iwi can make their own decisions about what is important to them. National considers that iwi must be independent of the Government. Maori should be in control of their own future. They should not be subjected to a paternalistic Government whose Government-knows-best approach is rooted in colonial times. So for these reasons National intends to oppose the first reading of this bill. 
Hon JUDITH TIZARD (Minister of Consumer Affairs) 
: 
 After that supercilious and patronising speech I will just place it on the record that the Government and I as an individual member of Parliament for Auckland Central think that this Waka Umanga (Maori Corporations) Bill is a very good bill. The bill gives options for Maori who as business groups have been ignored and often sneered at by members opposite. I endorse the work of this Minister and I look forward to this bill being well debated and well discussed at the select committee by Maori and by other New Zealanders. It is a good bill and I commend it to the House. 
A party vote was called for on the question  
That the Waka Umanga (Maori Corporations) Bill be now read a first time. 
Ayes 72 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; ACT New Zealand 2; Progressive 1; Independent: Field. 
Noes 49 
New Zealand National 48; Independent: Copeland. 
Bill read a first time. 
Hon PAREKURA HOROMIA (Minister of Maori Affairs) 
: 
 I move  
That the Waka Umanga (Maori Corporations) Bill be considered by the Maori Affairs Committee 
 and that the committee have authority to meet at any time while the House is sitting except during oral questions despite Standing Order 195(1)(b). 
Motion agreed to. 
Affordable Housing: Enabling Territorial Authorities Bill 
First Reading 
Hon MARYAN STREET (Minister of Housing) 
: 
 I move  
That the Affordable Housing: Enabling Territorial Authorities Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be considered by the Local Government and Environment Committee. The Affordable Housing: Enabling Territorial Authorities Bill enables territorial authorities as it says to promote the provision of affordable housing to low and moderate income households in a way that encourages mixed communities. The bill will provide new powers to local authorities to help solve affordability problems.  
Housing is becoming increasingly unaffordable. More working households are locked out of the housing market because of escalating house prices in relation to household incomes. In Auckland alone the number of working households unable to buy a modest house that meets their needs rose from 20400 in 1996 to 54900 in 2006—an increase of 169 percent. At the same time starter homes are not being built in new developments. Houses are increasingly getting bigger with more modern amenities making them too expensive for first-time home buyers. In addition more people are renting. Renters have become a more diverse group including households with children and older renters who will increasingly out-compete single-parent and single-person households that have traditionally relied on the rental sector. Without affordable rental options households are spending too much on rent and less is left for other essential living costs including saving a deposit to buy their own home.  
A lack of suitably located affordable houses has economic and social consequences. People live further away from work and have to spend extra hours commuting at a cost to families and to the environment. Without a range of house types within neighbourhoods people have to move out of their community if their housing needs change. Homeownership has significant social and economic benefits. It can promote greater family stability improve the connections with communities and create continuity of education as well as community stability. Homeownership also provides long-term security and a buffer against poverty before and after retirement.  
This bill gives territorial authorities the ability—not the compulsion—to require some affordable housing to be built in new developments or to contribute money or land towards affordable housing being built elsewhere. Territorial authorities have been asking for this legal clarity and this mandate for some time. The Affordable Housing: Enabling Territorial Authorities Bill is enabling rather than prescriptive and provides a robust and transparent process for any territorial authority wanting to use the new powers.  
Only those territorial authorities that want to do so need to develop an affordable housing policy. The bill requires territorial authorities to carry out a housing needs assessment so that they have a clear picture of housing need in their areas. Based on this assessment territorial authorities can develop an affordable housing policy that sets out how they will respond to the housing need. The territorial authority must consult with its community before adopting any housing policy. An affordable housing policy will form part of the territorial authority’s long-term council community plan and will therefore be a public document. It will state what is required of developments how any contributions will be collected and used and what models the territorial authority may put in place to make sure any resulting housing continues to be affordable for future community needs and this is a very important provision in the bill.  
Territorial authorities can choose how they keep housing affordable. A territorial authority could for example vest a house in a community housing trust that sets up a shared ownership scheme or rents the house to a moderate-income household. Alternatively a house may have a deed restriction that preserves its affordability over the long term. Territorial authorities will also need to consider what incentives they can provide to developments that are contributing affordable housing. The bill permits territorial authorities to use a range of incentives to offset the costs of providing affordable housing. For developers this is an opportunity to target housing at a growing segment of the housing market. The bill is designed to encourage affordable housing not deter development.  
Safeguards will be put in place to ensure that any affordable housing contributions are considered reasonable by the community. Territorial authorities will have to consult with their communities before adopting an affordable housing policy and that policy can be appealed to the Environment Court.  
The bill will also prevent the use of covenants on land titles that aim to exclude social and affordable housing. These covenants which are used in urban areas in particular unfairly discriminate against some of our most vulnerable people such as older people children and people who require assisted living such as people with intellectual disabilities. The use of such covenants is a small but growing issue. The bill does not aim to address building costs. Nor is it the purpose of the bill to address land supply or land price issues although it may have a positive effect on these in the future.  
This bill is one of a number of tools that will be necessary to address the housing affordability problem. It is only one tool but it is an essential one. The Affordable Housing: Enabling Territorial Authorities Bill balances the need of the community for affordable housing—and what is wrong with that—with developers’ needs for consistent and predictable planning guidelines. The bill promotes housing choice through ensuring that a range of housing type tenure and cost to meet the needs of moderate-income households is being built into new developments. I commend the Affordable Housing: Enabling Territorial Authorities Bill to the House. 
PHIL HEATLEY (National—Whangarei) 
: 
 The National Party will not be supporting this legislation quite simply because it does nothing that matters in a climate where for the last 5 or 6 years property prices for both land and buildings have got out of reach for tens of thousands more New Zealanders. Many of them are young New Zealanders but the Minister ignores the fact that many of them are also older New Zealanders entering retirement who would love some sort of accommodation stability. In a climate where housing is getting out of reach for more and more New Zealanders the Government has tabled legislation that it heralds as its magic bullet but all it does is give district councils more and more work to do at the expense of their ratepayers and give builders and developers more and more paperwork and regulatory hoops to jump through costing them more. Quite simply they will pass those costs right back to the first-home buyer. The question the National Party has is why the Government does not do something that matters. There are lots of things it could do to address the appalling housing affordability problem that would actually do something for first-home buyers. 
First of all we found out through the housing affordability inquiry which the National Party called in front of the Commerce Committee—and which the Prime Minister and the Minister of Housing at the time said was not necessary—that developers builders first-home buyers consultants university representatives those in the Department of Building and Housing and all sorts of others say it is the cost of land that is driving up property prices more so than the cost of building. Are building costs driving up property prices? Yes absolutely over and above the cost of inflation but their effect is nothing like the cost of land in driving up property prices overall. When I say “property prices” I mean the cost of building and the cost of the land underneath. So the land component is driving up property prices much more than anything else. 
The Government says we need to free up more land for development so that the supply-demand equation is met. That is land on the outskirts of cities and new land and land within city boundaries. At the moment if a couple say an elderly couple want to split their section into two or four sections which would supply more housing for those in the market the lengths they have to go through the hoops they have to jump through in terms of local council regulations or of legislation that this Government has given councils mean that it is all too hard. Why would a couple within the city boundaries of Auckland want to split their property in half? It would take 2 or 3 years and cost tens of thousands of dollars. They would have to consult with someone in Bluff if the local council wanted them to because through the Resource Management Act anyone can object to anything anywhere! That is the first thing. Why does the Government not make sure that more land is freed up for subdivision? 
After 8 years of this Government and 15 years of the Resource Management Act everyone up and down the country on the front line not just to do with housing but also to do with electricity generation and transmission road building telecommunications you name it—anything to do with infrastructure—is saying that the Resource Management Act needs to be streamlined. This Government has ignored that call for 10 years. How can it be that a subdivision in Whangarei can be objected to by someone living in Invercargill? How absurd is that! The hoops one has to jump through quite simply have to be fixed so that builders and developers are not paying $10000 to $30000 per section to get their applications through the Resource Management Act process. When they have to pay $10000 to $30000 through that process they slap it on the price of the section and the first-home buyer ultimately pays it. But this Government ignores calls to streamline the Resource Management Act. 
We have seen two or three pieces of amending legislation to the Building Act brought before the Parliament in the last 3 or 4 years. Has the Government made it easier to build better houses? No it has not. If builders want to shift a window 3 inches to the right they have to submit more plans to the council get more consent and have more visits from an inspector. Does that make the house any less leaky? No but it certainly slaps another five or 10 grand on top of the price of housing for first-home buyers—just another bill they have to pick up. 
Lastly housing affordability is made up of two components. Firstly skyrocketing property prices have occurred over the last 5 or 6 years because supply has not met demand. Secondly take-home pay has not kept up with those prices and interest rates have gone through the roof to a point where they are the highest in the developed world—at roughly 9 to 10.5 percent.  
Let us take the interest rate component first before we look at take-home pay. Interest rates have skyrocketed in the last few years simply because of the Government’s poor management of the economy and its unproductive spending. It is unproductive spending to pour billions of dollars into health but not provide for more doctors nurses and operations. It is unproductive spending to pour billions more into health and billions more into the bureaucracy but not provide for more operations more doctors or more nurses. Unproductive spending drives up the costs in the economy. This Government will pour money into the Ministry of Education but it will not provide for more teachers or for teaching more children. Unproductive spending has driven up interest rates in this country and first-home buyers pay the bill. 
The second aspect is take-home pay. If only this Government would recognise that a significant tax cut to those young families who are trying to pay off a mortgage would make all the difference in the world.  
Hon Members 
: Ah! 
PHIL HEATLEY 
: Labour members mock me. The Government has railed against tax cuts for 7 years but with an election looming—less than 12 months away—and people across the country saying they are sick of the Government wasting taxpayers’ money Michael Cullen has done a U-turn and said: “We’ll do tax cuts.” But the country does not believe that Labour will give tax cuts because it is so reluctant. The Government does not want to do it. I tell the Government that a difference in take-home pay—a tax cut for young families—would make all the difference in the world when it comes to being able to service a mortgage. 
National opposes this legislation because it is so convoluted; it will not help first-home buyers—certainly not today. Councils that pick this up have to do a study in their districts which will take 12 months and then they have to include it in their long-term community plans. That is just lovely! That will take another couple of years. So 3 years down the track if councils want to they can invoke this. The interesting thing is that Queenstown Lakes District Council is doing this at the moment without this shoddy legislation. Unbelievable! How is it that we are having to pass the first reading of this legislation in the debating chamber today yet the Queenstown Lakes District Council is doing this at the moment without this legislation? National will not be supporting this bill. 
DAVID BENSON-POPE (Labour—Dunedin South) 
: 
 I am pleased to take a brief call in support of the Affordable Housing: Enabling Territorial Authorities Bill. Before I begin I observe that we have just heard a most extraordinary contribution from a member of a previous Government that gave us leaky homes and of course the Resource Management Act; but those discussions I will keep for another day. 
I am pleased to speak in support of this legislation. I refer Mr Heatley and his colleagues to the bill’s title. This is another example of a pattern of behaviour that Labour has demonstrated since 1999—of working with local government to achieve solutions that it is happy with. The solutions that happen in each area will be determined by local communities not by people who rely on the free hand of the market to mess up most things. 
I compliment my colleague the Hon Maryan Street on the introduction of the bill. It meets and will begin to address some of the challenges that this Government and this community face. The first challenge in the wider housing area was the assault by the previous Government on the State housing stock. The community has not forgotten that members opposite who are bleating right now tried to cover with a most unsuccessful smokescreen the fact that National sold over 13000 State houses. The other pattern of behaviour that has contributed to some of the difficulties that we all acknowledge in our community in this area right now is the interesting and extraordinary behaviour of the banking and non-banking financial sector. Clearly people who have not been required to put equity into loans have unfortunately exposed themselves more than prudent investors would have done in terms of the housing market. 
As the Minister said earlier this bill is one part of a palette of initiatives that will address those challenges. First of all we have the work that the Housing New Zealand Corporation is doing right now in our communities in terms of replacing reconfiguring and restoring our housing stock; secondly we have the initiative around the Welcome Home Loan scheme; and thirdly we have the very very great success of KiwiSaver enrolments. Members will be aware that we were expecting KiwiSaver enrolments to be at 300000 at this point. Well they are already at 316000 so the end-of-year target has been well exceeded. That will be very good news for a large number of New Zealanders when it comes to moving into their own affordable housing. This involves work with local government in order to enable what is appropriate for its communities. 
As the Minister said in her first reading speech this bill is one of a number of tools that will lead to further productive collaboration with local communities and it will help New Zealanders to build their communities in the shape in which they want them to be built. I am pleased to commend the bill to the House. 
Dr WAYNE MAPP (National—North Shore) 
: 
 The disappointing issue about this Affordable Housing: Enabling Territorial Authorities Bill is that after 8 years all the Labour Government can promise is a survey. I have heard and I have read that the new Minister of Housing Maryan Street is quite promising but her first initiative is to promise a survey. She tried to say to the National Party that we should not be too worried about this bill because it is not prescriptive that no one has to do anything and that no territorial local authority will force anyone to do anything.  
You know in some respects that is our fundamental complaint is it not? This particular response is pathetic. The best that her hard-working department and her hard-working Cabinet team can come up with today is a survey and the ability I guess to make a few by-laws—an ability not for the Government but for local authorities.  
I guess she will go out next year to the voters of New Zealand and say: “Vote for Labour because we are going to fix your housing problem with a survey. That is our solution and in fact we did such a good job of it that we sought to pass the legislation through urgency because that is how important the survey is.” I have to say to the Minister that it is simply pathetic.  
If a survey is Labour’s response to the front-page article in the  
New Zealand Herald  
today that shows an increasing gap of wealth between Australians and New Zealanders in housing affordability frankly it is not surprising that more and more New Zealanders are making the choice to go to Australia. Last year 40000 New Zealanders moved to Australia; 40000 New Zealanders made a vote of no confidence in the Government. That is the truth of it. New Zealanders are moving to Australia because they are sick and tired of this Government and its lacklustre response to all sorts of problems.  
The Government could have done a whole raft of things. My colleague Mr Phil Heatley pointed those out: more land availability and fewer prescriptive building regulations. I just point out to the Minister—she may not know this you see—that in Wellington City according to the council as a result of the Government’s building legislation people now have to provide 300 pages of documentation and 12 A3-sized plans just to build an ordinary house. We are not making this up; these are Wellington City Council’s own figures. That is a tenfold increase from just 4 years ago. I know there has been a leaky buildings crisis and I know that things had to be done to fix that up but multiplying the paperwork tenfold is not a solution.  
Earlier this year I went to a forum in Auckland run by Arthur Grimes. He identified the most critical issue for housing affordability as the lack of urban land for subdivision. He specifically identified metropolitan urban limits as driving up land prices and he had a huge amount of data on that. My colleague Mr Phil Heatley was also there. We read that material. I want to share something with members: not a single Labour person was at that meeting. This is important research. Arthur Grimes is a highly respected economist and there were hundreds of people at that meeting but not one member of the Government was there.  
Arthur Grimes identified the critical problem as being lack of land availability and because the metropolitan urban limits have not shifted for well over a decade. What has this Government done about that? It has done absolutely nothing.  
David Benson-Pope 
: What did the National Government do about infrastructure for Auckland? 
Dr WAYNE MAPP 
: We did do things actually. I say to that member that we had the economy growing. This Government is simply missing the big picture. It does not understand that the real causes of the housing issue are problems such as lack of land availability.  
The second point I might add is clearly stated on the front page of the  
New Zealand Herald  
today. New Zealanders are too poor— 
Hon Judith Tizard 
: Oh well it must be true. 
Dr WAYNE MAPP 
: Do members hear that? Labour hates the  
New Zealand Herald  
at the moment. The Prime Minister is saying: “We hate the Herald. The Herald is unprofessional and does not know how to do journalism.” That is Labour’s approach and the Minister of Housing has joined her plaintive voice to that chorus as well. “We hate the Herald.” is Labour’s mantra. I guess we will hear a bit more today in a certain third reading about how Labour hates the  
New Zealand Herald 
. Why do Government members not go and read the  
New Zealand Herald  
and read the data that says New Zealanders are poorer than Australians?  
There are some key reasons for that. One of the fundamental reasons is the tax situation. Labour has not given a tax cut on rates or thresholds for nearly a decade. In fact its only response was to increase taxes in 1999. In the last election Labour promised to change the thresholds. Do members know what it has done now? It has broken that promise. It has broken that promise to New Zealanders and National will be reminding them of that.  
Today New Zealanders are paying more in tax than Labour’s promise indicated and they are doing so because Labour broke that promise. If it had kept that promise then there would be more money in the hands of New Zealanders. That is actually how people pay for housing. I know that is a startling revelation but if people have more money in their pockets then they can pay bigger mortgages they can buy properties and we can actually solve the housing crisis. But Labour ignores those obvious steps.  
After 8 years in office Labour’s best approach is to have a survey. If that party is saying: “Well National is concerned about housing affordability”—we are—“therefore it should be voting for this bill.” then we say no. We say no because it is simply the wrong solution. Actually it is not even a solution at all. Why call it the wrong solution? It is no solution to go out to the public and say that the approach to this issue is to have a survey and to perhaps just give the option to local authorities to have a little bit of affordable housing here and there.  
Labour will ignore the real issues of course. It will ignore the Resource Management Act it will ignore Arthur Grimes it will ignore metropolitan urban limits and it will ignore reducing taxes. It will ignore all of the things that matter. It will ignore all of the things that would reduce the cost of housing and make housing more affordable for hard-working New Zealand families.  
New Zealanders know that. They have seen this Government in action now for 8 years. They know the Government has failed and frankly young New Zealanders are voting with their feet. This Government should be alarmed by that article in the  
New Zealand Herald  
today. Actually the Minister was alarmed but the Government has no solutions. It has alarm but no solutions. And when the new Minister comes up with her magnificent solution under urgency it is to have a survey. National will not vote for a survey. We are voting against this bill. 
RON MARK (NZ First) 
: 
 I rise to take hopefully just a short call. It is interesting is it not? I actually enjoy listening to my colleague over there Dr—Captain—Wayne Mapp. But I have to say that I get tired of these Maoris who cannot pronounce English who are all the time standing up and talking about “New Zillun”. Mr Mapp had me wondering for a while which country he was referring to. Here in New Zealand we have had— 
Dr Wayne Mapp 
: Blame my Kiwi accent. 
RON MARK 
: I am sorry Mr Mapp is not Maori—that is right. Not being able to pronounce the Queen’s English properly is the sort of mistake that we often get accused of. 
I guess the fact that we are talking about affordable housing here in New Zealand says a lot in itself. Many of us simply want to focus on ensuring that those vulnerable New Zealanders have housing. Affordability has become the issue because of a range of things that have happened in this country. We must remind ourselves where these things started from: they go back to the 1980s. There was a time in New Zealand when people considered that it was part of the great Kiwi dream—it was a right—for every New Zealander to aspire to owning his or her own home. That was something that we just took as read. It was not taken for granted; it was the way it was in this country. I remember very very clearly as a young boy growing up in Pahiatua that New Zealand was known as the country of the quarter acre section pavlova and the flagon of beer. We proudly talked and joked about New Zealand being the home of rugby racing beer and homeownership. That was the way it was.  
I remember a great leader of this nation a man whom many of us admired. Having lived in the Waimakariri for so long and in Canterbury on and off for 30-odd years and having campaigned in Kaiapoi I am very familiar with that great man Norman Kirk. When I came into this House I actually quoted one of Norm’s statements. His words—and I hope I get them exactly right—were: “People don’t ask for much. They simply want somewhere to live somewhere to work someone to love and something to hope for.” That pretty much summed it up did it not? That is the Kiwi dream. In a nation that has always prided itself on being very egalitarian classless and very conscious of its obligations socially to those less advantaged housing was always key to that.  
I guess what is sad is that in the argy-bargy that goes on between the two old parties Labour and National both seem to forget a couple of things. The reason that Labour is in this position of trying to do something to make housing affordable and therefore available to those who have been priced out of the market is largely due to the economic reforms of the 1980s and the way in which philosophically the Government of the day—in fact there were two of those Governments one after the other—moved towards user-pays and a businesslike approach through all of the social agencies. 
Sue Bradford 
: That’s right. 
RON MARK 
: Sue Bradford agrees with me.  
It is interesting that the National Opposition of the day railed against many of these changes. It debated and campaigned and told the whole of the nation that Labour was a horrible nasty Government that had forgotten its roots had forgotten where it came from and had forgotten what it stood for. Then National got into power in 1990 and by crikey it ramped things up. It set to and sold State homes from one end of this country to another and none of us will forget the fact that certain members of Parliament within the National caucus profited out of that. They took advantage; they bought some of those State homes. That is the history; that is the background.  
Then of course to compound the problem we had these two Governments which one after the other opened up the doors to rampant uncontrolled immigration and we got the consequential effects of that. When I got to Parliament in 1996 I opened up my electorate office and started taking in work as a list MP—we all do that and some people tend to forget that list MPs actually do constituency work particularly in constituencies where the constituency MP is lazy or is not particularly liked; one gets a heck of a lot of work out of those MPs and one quickly comes to know who those MPs are. One of the things that really annoyed me was finding New Zealanders citizens of this nation who had paid taxes worked hard and strived to bring up their children who were in desperate situations—like a matrimonial break-up or a mum with two kiddies—and were quickly trying to get into a home only to find that there were no emergency homes available in Christchurch because they were chock-a-block full of refugees asylum seekers and other people who had been brought into this country and given priority over New Zealanders.  
New Zealand First members shake their heads. Pita Paraone has asked the previous Minister of Housing Mr Chris Carter so many times why it is that the prioritisation of housing allocation in this country does not go to New Zealand citizens. Why is it that we have all these foreigners who are given the privilege of residency and of coming into our land to take up employment and who get here on the basis that they have the means and the wherewithal to support themselves being given a Housing New Zealand Corporation house while a whole bunch of New Zealand citizens who were born and bred here end up on a waiting list unable to get one? New Zealand First is absolutely unashamedly for putting New Zealanders first not foreigners who have been given the privilege of residency and who are allowed to come here and work.  
That is one of our great disappointments when we look at the Labour benches and at the Labour Government members particularly Chris Carter. He just did not get it did he? He still does not get it. It is not a question of saying to those residents who have been given that privilege that honour of coming to our land and starting afresh that they will get some assistance. We have given them the assistance; we have let them come here. They said in their applications that they had a job to come to they had qualifications they fitted all the criteria and they had the money to support themselves and to look after themselves. But then hello somewhere along the line they get a Housing New Zealand Corporation house. Then we wonder why we have a housing issue for New Zealanders—citizens of this land.  
New Zealand First will support this bill going through to the select committee because we are interested in hearing the debate. We have heard some good arguments put up by Phil Heatley and we have heard the counterarguments on the other side of the House. Those arguments are best played out in the select committee so let us hear them. Let us not delude ourselves: the reason we are in this situation is that there has been faulty flawed foreign investment and a faulty flawed immigration policy and we have no understanding of the pressures that we create in the real estate market when we allow people to come into this country and simply buy up what they want then move offshore and manage what they have bought from offshore. We have no care and no concern about the impact on low-income or moderate-income families who simply want one thing: somewhere to live someone to love and somewhere to work. They want that Kiwi dream and the right to own their own home and we need to remember that when we manipulate the economy and start talking about market forces because the losers are always the vulnerable. 
SUE BRADFORD (Green) 
: 
 The Green Party is pleased to be supporting the first reading of the Affordable Housing: Enabling Territorial Authorities Bill which is in front of us this morning. As I think every political party in this House realises and accepts barriers to homeownership are huge at present and the percentage of people in this country owning rather than renting their housing is dropping all the time.  
Like other members here I am sitting on the Commerce Committee’s affordable housing inquiry at present where we are hearing a large number of excellent submissions all stressing the enormity of the problem we face and the complexity and range of possible solutions. I find it very ironic that Mr Heatley and Dr Mapp from the National Party are opposing this bill given that National actually called for the housing affordability inquiry and like the rest of us it has been hearing the realities of what is going on out there. This bill at least presents us with one small and rather tentative part of the answer.  
In respect of this I am glad that the Minister and the Government have seen fit to change the name of the bill to more accurately reflect the limited scope of what it seeks to achieve. In its original form the bill was labelled the Affordable Housing Bill. One of my main objections at that point was to the fact that the name was rather grandiose in the context of legislation that attempts to achieve only a very small incremental and non-binding improvement to one aspect of a much larger crisis. I was concerned that somehow the Government was conveying the impression that it could sort out the housing affordability problem with just one bill perhaps for political or tactical reasons but I am sure that this would have backfired when people realised its limitations. So I commend the Minister and the Government’s common sense in bringing the title back to a more realistic reflection of what the bill might hope to achieve.  
The Green Party certainly supports the underlying purpose of this bill which is to enable local authorities to develop and implement affordable housing policies in relation to new developments. I have been aware for some years now of the sterling efforts being made in the Queenstown district by its local council and others in the community there to try to turn back the tide on its becoming simply an enclave for the wealthy. That district has had a crisis for decades with the shortage of affordable and available accommodation for workers and their families. For example a recent study found that someone on the average income in the Queenstown Lakes district of around $63000 or $1227 a week would spend about $900 a week servicing an interest-only mortgage on a low-end house in the area—with “low-end” being around the $500000 mark. With tax as well the homebuyer would have only a few dollars left to live on.  
In response to this situation the council is working hard at strategies to help homebuyers both through the council’s partnering with a local housing trust and the Housing New Zealand Corporation to work on a new affordable housing scheme and through plans to add new rules definitions and incentives to develop affordable housing for over 2000 households by 2016. I commend the Queenstown Lakes District Council for its progressive and far-sighted efforts.  
I contrast these with the attitude of the new Auckland City Council which seems to have the opposite approach despite Auckland also having one of the biggest problems with unaffordable housing in the country. A meeting is happening in Auckland today I believe that will evidently decide whether to break an affordable housing contract that the council signed up to earlier this year when it formed a partnership with the New Zealand Housing Foundation to build about a hundred affordable homes over the next 5 years. This is trifling compared with what Queenstown is attempting to achieve but even this small worthy progressive first step by Auckland City may be doomed because of John Banks’ apparent commitment to reverse any socially responsible policies now that he is in charge again. And this is despite the fact that although Auckland prices might not be quite as bad as Queenstown’s it does take nearly a whole average wage to pay off an average mortgage on an average house in the Auckland region.  
I understand that one of the motivating factors for the Government in bringing forward this bill at this time is that the Queenstown Lakes District Council may have run into some legal and technical difficulties in being able to do anything about requiring developers to include affordable housing in their plans. I think it is great that this bill aims to break the deadlock over this and that where a council has a will it will be able to go through with its planning once this bill goes through. Councils will have legal certainty about pushing forward with planning which is so important.  
At the moment it is apparent that the regulatory tools available to councils including the Local Government Act 2002 do not directly address the issue of affordable housing. This bill will allow those territorial authorities who choose to do so to develop an affordable housing policy that specifies what actions a developer may be required to undertake on the one hand and what the council must do on the other hand to help compensate the developer—for example through excusing payment of development contributions having rates remission policies providing direct funding assistance or applying things like a density bonus. Before a council can do any of that it has carry out a housing needs assessment and consult the community about the development of an affordable housing policy.  
The Green Party thinks that all this is grand. Our only problem with it is that it is completely optional and that only some councils will choose to go down this path. I am sure Queenstown will take the lead and I hope it will be followed quickly by places like Wellington and Christchurch which seem to have a comparatively progressive attitude towards accepting that there is a council role in helping to house the local citizenry. However in places like Auckland City Rodney Northland and others I fear we might see quite a different approach despite a very high housing need among low and middle income earners in those districts.  
The Green Party believes that housing is a fundamental social good and that it is a basic human right for all citizens and residents not just for some. We believe that not only central government but also local government must play a leading role in developing policies that ensure that everyone has their basic housing needs met through either renting or buying their homes. Therefore although we will be supporting this aspect of the bill as far as it goes we would prefer it if the Government were to go a lot further.  
We believe that all local councils should develop affordable housing policies after undertaking needs assessments and consulting well with all stakeholders. All councils where a housing need is identified should be required to put together policies that require developers to facilitate the provision of affordable housing as per the trade-offs allowed for in this bill. All councils should also be willing to facilitate the release of surplus land to help with future land supply for community and State sector housing and where need exists they should also be actively building more housing themselves and supporting community sector social housing initiatives. Thus our main problem with this bill is not with what it sets out to do but with the fact that it does not go anywhere near far enough.  
One further aspect of this bill that I have not mentioned so far is the element that brings to an end restrictive covenants on developments that attempt to exclude any or all affordable housing from those developments. This tool has been used with increasing frequency in the Auckland region. I am not sure about other areas but it is certainly a feature in our part of the world. Such covenants prevent the Housing New Zealand Corporation and other social housing providers from buying or leasing properties within a development. This means from the developers’ point of view of course that covenants are keeping property values high while keeping low and middle income people out. But from a social justice perspective they are increasing and rigidifying the gap between the haves and have-nots that sadly is already increasing in this country as it is in many parts of the world.  
In a small way this provision within the bill is a microcosm for a decision about which way we want Aotearoa to go. Do we want a future where the rich live safely within their gated communities and secure compounds and no riff-raff are allowed within the walls? Or do we want a country that still has some notion of social equity and a fair go for all? The Green Party totally supports the removal of the power to place exclusionary covenants on developments and I congratulate the Minister and the Government on taking this step. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Tena koe Mr Assistant Speaker. Tena tatou katoa e te Whare. The link between decent housing and good health is well established. Indeed for centuries the saying “A man’s home is his castle” has represented the concept of a man’s home reflecting his identity and character. Even in te Ao Maori we say something similar: He matua pou whare e rokohia ana; he matua tangata e kore e rokohia—the main ridge pole of a house will always stand but not so a person.  
For far too many citizens of Aotearoa New Zealand and in particular for more and more Maori and Pasifika the problems of housing affordability are rapidly eroding these longstanding values. This bill seeks to remedy these problems by providing councils with the tools to address housing and rental affordability. But for many of our whanau the low level of incomes and the fact that many Maori whanau have young children and larger families poses real challenges for suitable housing options.  
On top of that developers are building larger and more expensive homes the starter-home market is shrinking a property price boom has seen the rate of homeownership plummet in recent years and today hardly any low to medium income whanau can even consider buying a home.  
I will share with the House some staggering statistics on housing affordability and homeownership that show that fewer than 30 percent of Maori own or even partly own their own homes compared with 65 percent of non-Maori. Of those who do own or partly own their own homes only 6.7 percent are Maori. Of those who rent their homes 67 percent are Maori compared with only 44 percent of non-Maori. And with rentals of $275 a week in Auckland and $211 a week in Wellington dramatically eroding the standard of living for far too many of our people even rental affordability is becoming a major issue for the future.  
I would like the House to consider the critical state of available housing options in this country particularly in light of a national forum held at Te Papa Tongawera less than 10 days ago. There we learnt that homelessness is becoming a significant and growing problem for people moving between temporary forms of shelter for people living in boarding houses or other inadequate housing and for people forced to sleep rough in parks streets deserted buildings and so on.  
Dr Guy Johnson from the Australian Housing and Urban Research Institute has analysed the frightening reality of the homeless population. He told us that 75 percent of homeless youths become homeless adults that 30 percent of all homeless people were first homeless in their youth and that there is a growing population of people who have been homeless for much of their life. The effects of this are apparent in a life characterised by a lack of continuity and certainty anxiety about the constant search for where to go next; the disruption to education or employment prospects and the increasing likelihood of exposure to violence discrimination and exploitation. As a consequence of such a lifestyle physical and mental health decline and the impacts of isolation and alienation are profound. In the land of plenty these increasing levels of homelessness are an indictment on our society and a condemnation of this Government’s current housing policies.  
I also refer the Minister to the very valuable resource published last August by the Family Centre social policy research unit and the research centre for Maori health and development at Massey University. The study— 
Maori Housing Experiences: Emerging Trends and Issues 
 by Charles Waldegrave Peter King Tangihaere Walker and Eljon Fitzgerald—confirms the fall in Maori homeownership rates and catalogues the issues of overcrowding inadequate heating and substandard housing as critical factors in any discussion on the status of Maori health.  
We know that the economic conditions we have regularly profiled in this House have also had a massive and adverse effect on the ability of whanau to afford adequate housing. We note that this bill enables but does not require councils to assess the level of affordable housing in their districts. Given the dire circumstances surrounding Maori housing and the access to appropriate housing in Aotearoa we are keen to know why such an assessment is not a core part of the business of local bodies.  
The Maori Party commends those councils for pushing for legislation to help resolve the desperate housing crisis we are in and encourages local bodies—particularly those in and around Auckland and other high-growth areas—to respond positively to the lack of affordable housing in their regions. The Maori Party urges the Minister of Housing and her ministry to consider the vital need for policies that will help to house the homeless and prevent homelessness. The Maori Party urges the Minister to ensure that Maori will be involved in further developing Maori housing policy—particularly around design and location and the conditions pertaining to Maori whanau.  
This bill is worth supporting if it will genuinely promote the provision of affordable housing to low and moderate income earners. We will support it as part of our efforts to work with councils and any other agencies to develop affordable housing policies that can be taken up throughout Aotearoa New Zealand. Tena koe Mr Assistant Speaker. 
JUDY TURNER (Deputy Leader—United Future) 
: 
 I rise on behalf of United Future to speak to the first reading of the Affordable Housing: Enabling Territorial Authorities Bill. United Future will be supporting this first reading because affordable housing is an issue that we are passionate about. But I will signal at this first reading stage that we have some concerns. We are not sure that this legislation is the solution but it certainly is an opportunity to hear from the wider public particularly those with a vested interest in the housing industry. Over the last few years members from United Future have had some very interesting discussions around the issue of affordable housing. I remember very acutely some of the issues that came up at the affordable housing summit in Wellington that we attended. 
We are concerned that this bill is an opportunity wasted and that there could be more helpful things included in it. The bill enables but does not require territorial authorities to assess the level of affordable housing in their districts and following that assessment it allows a territorial authority to develop an affordable housing policy and to implement it. 
The bill says that the implementation of that policy includes enabling territorial authorities to require developers to facilitate the provision of affordable housing and it says in clause 12 that an affordable housing policy must state how territorial authorities might assist those developers who are facilitating the provision of affordable housing. Territorial authorities will be asked under clause 11(2) to consider in their policy development a requirement of a developer to include a proportion of affordable housing in a development. That is an area that concerns us because there will have to be some fairly good incentives in there for developers to factor that into their thinking. I guess a territorial authority could include in its own plan an intention to free up appropriate land specifically for affordable housing. This would mean that when people were purchasing land for development they would understand what the intention of the territorial authority was. We are a little bit concerned that people who have invested in land for development will then discover after the fact that they have all sorts of requirements slapped on them in a way that I think could be extremely “business unfriendly” and unfair. 
One of the things I am acutely aware of is a discussion I had with one of the leaders of the Registered Master Builders Federation who talked about the federation’s estimates around the issue of compliance costs. It figured allowing for reasonable and fair compliance on a residential property that New Zealand homeowners could save up to $30000 per average house if there were more sensible compliance regulations around housing. The fear being expressed at the time was that in the wake of the weathertight homes issue the industry had become so risk-averse that it had a level of compliance around the building of houses that was unreasonable and that added to the problem of making houses unaffordable for middle to low income New Zealanders. 
We recommend to the Government and to the committee that they look at some of the very fine work that has been done by the social policy unit of the Salvation Army which has some fantastic recommendations about the way we could be making greater progress on the issue of affordable housing. We are not completely convinced that this bill reflects the kinds of suggestions that the unit has thoughtfully put forward and that is of concern to us. [ 
Interruption 
] The Green member is quite right: there are some positive things in this bill. I am not trying to say that this bill is not worth the paper it is written on; I think there are some interesting and positive provisions. I guess our fear is that those provisions do not go far enough and that they have some heavy-handed ways of approaching affordable housing that penalise the wrong people and do little for the people who are in need of affordable housing. But we are very happy to support the bill’s first reading because this is a discussion that must be had. United Future wants to reassure the House that we are supporting this first reading. 
MARK BLUMSKY (National) 
: 
 I rise to speak to the Affordable Housing: Enabling Territorial Authorities Bill. “My house my castle” is a term that is well used when people talk about their houses. I suggest that with this bill that may not be the case anymore. Under this legislation it could be that when people want to sell their houses they will sell at prices that are not the prices they want to sell them for or the prices they would expect because in this legislation there is a caveat that will be placed to ensure that people’s houses when sold will be affordable. 
Normally people would want to be able to sell their houses for what they are worth. With this legislation they will not be able to. Other people will decide what their houses can be sold for. If a person gets one of these affordable houses that is fine but when that person sells it he or she will not be able to sell it for the price that it may well worth—someone else will decide the price. 
People in this situation may say: “OK fine I bought my house cheaply; therefore maybe there should be an obligation to sell it cheaply to keep the affordable housing stock at a certain level.” But I ask members not to forget that if a house is bought cheaply initially it is because it was made cheaply. It either had a smaller floor plan one garage less or maybe not such ritzy fittings inside the house. A house bought cheaply as part of a bigger development will have some characteristics about it that make it cheaper. People will say: “Fair enough I bought it cheaply it should be sold cheaply.”  
But the problem is that when Kiwis own their own house no matter what price they bought it at many have a pride in it. It is their castle. They make adjustments to it they develop it they put on an extra room they make the garden bigger they add to it they built on—it is the Kiwi way. It is DIY and it is what we do as Kiwis. They add value to the house because they love their house. But what will happen with one of these houses is that the owners ain’t going to be able to get the value for their efforts in the house because someone else will decide what price they can sell it for because affordability needs to be retained.  
So why would people bother? If they get one of these affordable houses why would they then bother adding value to it? Why would they put in the effort? There is no upside. At the end of the day they will have probably the worst house in the best street because they will not bother. Their neighbours will love it when the person next door has the worst house in the best street. What could well have started as a pretty swanky smart development with 20 houses—a couple of them being affordable and all of them looking pretty sharp at the start—will at the end of the day be dragged down. It is the old story: the worst house in the street drags down the rest of the street. My goodness there are a lot of people who have put their life-savings into investing in houses and that investment will be impacted on.  
It is sad that the Labour-led Government when it wants to make housing affordable and talks affordable housing immediately picks on the developer to fix that. Why should it pick on the developer? It is because developers are a very easy target. There are not very many of them so there are not too many lost votes. It is a bit like deciding: “Right affordable housing—let’s make the developers do the work. Let’s blame them; let’s make them carry the can.” To use an analogy it is a bit like deciding that kids need to be healthier. To make kids healthier we think they need to eat more apples so we pass legislation that forces greengrocers to sell two apples every day to every customer. But the problem is that not everyone will want to buy those apples. Yet if there is legislation forcing the greengrocer to give away green apples to the kids they will be given away—they will not be sold. And who will carry the cost of those apples? I can tell members now that it will certainly not be the greengrocer; it will be every other customer who will carry the cost. There is no difference in what this legislation is doing.  
In the last 24 hours I have managed to speak to a couple of significant property developers who build a lot of housing in New Zealand. I have to say they all endorsed the concept of affordable housing. There is no doubt that these people would love to see more affordable housing in New Zealand. But none of them felt that this bill and what it is trying to do is in fact the answer.  
It was thrown at me—and I thought it was a very good point—that when cars were first manufactured Henry Ford decided he wanted cars to be available for the masses to be cheaper so he developed the Model T. He developed an affordable car for the world to drive. He did it because he manufactured a lot of the same car. So it makes one wonder—as it was thrown at me yesterday—why we do not encourage one or two manufacturers to make the Model T of houses and develop and produce a range of houses that are all very similar bulk produced and available to be put on the land that becomes free. I thought there was some real merit to that. The only difference is that we would probably not want all the houses to be painted black as the Model T was—the cars were any colour a person wanted but they had to be black. By definition if houses are mass produced in that way they will be cheaper.  
Then the issue just comes down to land availability and that is when councils can play their role in this crusade on making sure there is affordable housing. A council can and does have a huge role in making sure that land is available. Councils can revisit their city boundaries. They can revisit the containment line that they put around cities currently beyond which development cannot go. Land on the other side of that fence could become available for housing which it currently is not. I know Wellington City for example actually puts the containment line around Wellington City to force housing development to go to infill. We are suggesting that maybe that containment line should disappear to make land available for housing. The other thing that could happen is that councils instead of selling land could make land available for affordable housing and charge just a lease—a rental of say 5 percent return on the leased property; a subsidised mortgage. A council could own the land and lease it to the housing owner on a perpetual lease. By having that subsidised mortgage the land costs become a lot more affordable.  
One has to wonder just how much difference this bill will really make. In a 20-storey apartment building with 120 apartments 12 of those might be made to be affordable. If there were 100 of those 20-storey apartment buildings there would be 120 of those apartments that may be affordable. At the end of the day what difference will that make? I say that because in San Francisco which is often used as an example of a place where there is good affordable housing in the last 10 years 278 affordable houses a year have been developed using the type of concept suggested in this bill—that is 278 houses a year in a city of 7 million people. So we have to wonder whether this is the solution.  
The bigger picture is the bigger answer and that is to make sure that personal tax cuts are delivered—and the National Party will do that. The bigger answer is to enable people to have more money in their pockets to sharpen up the regulatory regime to keep interest rates lower and to reform the development rules and make sure the Resource Management Act behaves—because it certainly does not behave—to make it easier to build a house. The bigger picture is the answer not picking on developers and suggesting that that is the way to answer the problem—it is not. 
MARTIN GALLAGHER (Labour—Hamilton West) 
: 
 I want to take a brief call on the Affordable Housing: Enabling Territorial Authorities Bill. I certainly want to commend the Minister for her excellent introductory speech. I also take this opportunity to observe that even in Hamilton in the Waikato the issue of affordable housing is very important. I want to make a couple of brief observations.  
To those people who say that all we need to do is create more greenfield sites and that it is purely an issue of supply and demand I ask them to have a look at Hamilton. The city has grown literally by about one-third or more in the last decade or two with new greenfield sites. Have we had affordable housing sections in those new greenfield sites? No absolutely not! So obviously legislation is going to be required to have some impact in order to create those affordable housing projects.  
The other week the Minister visited Habitat for Humanity in the Waikato and met Mr John Gallagher the chairman and also Pete North. It was a fantastic meeting and I have to say I was exceptionally impressed as was the Minister with the wonderful work that Habitat is doing. I am hoping as a result of this bill that that will be one of the organisations that will be a partner in this context. We visited one of the residents of a Habitat property who is moving to own her own property and she said: This is not just about the bricks and the mortar—the structure—it is about having a home and a house that realises our dreams and aspirations and lets us get on with our life journey.” 
That was a very very fantastic day. As the member for Hamilton West I give credit to that organisation. [ 
Interruption 
] The difference between Labour members and Opposition members is that they talk and we do. 
JOHN CARTER (National—Northland) 
: 
 What a laugh that is! 
Hon Dr Michael Cullen 
: Is he still here? 
JOHN CARTER 
: Here I am again and I will be here a hell of a lot longer believe you me. 
The problem with the Affordable Housing: Enabling Territorial Authorities Bill and why I want to speak on it is that when we read this legislation we see that it does nothing. That is the sad part about it. I listened carefully to the speeches made by my friend and colleague Ron Mark and also to those of Sue Bradford and Hone Harawira. I was interested in Sue Bradford’s speech because it was quite negative about the bill and its likely outcomes. Ron Mark raised some serious questions about the bill. Hone Harawira raised issues about the need for affordable housing and then asked whether this bill would achieve it. 
This bill is just typical of a Government that is failing which brings this sort of legislation into an election year as window dressing. It is disappointing to think that the smaller parties might support this bill not because of what its intention is but because of what it will actually do. When we study it carefully we see that it will achieve nothing at all other than to put significant costs on to the ratepayers of this country. 
That is the issue that concerns me because we know this Government has put huge costs into local government over the time it has been in Government. This Government has passed 69 different pieces of legislation that have caused costs to local government and to ratepayers and that have caused a rates revolt. The Government has had to have a study on the issue of rating but quite honestly it has done nothing with regard to that at all. But here they are passing more legalisation; if there is a cost at all—and there will be—it will be imposed on the ratepayers of New Zealand. 
Let me take the House through the way that will happen and what this bill is going to achieve. My view is that the end result will achieve nothing. The bill basically says that if there is to be affordable housing the first step that has to happen is that the local authority has to do some research to find out whether there is a need for affordable housing. That is strange. In the area that Hone Harawira and I represent for instance we both know there is a need for affordable housing so I ask the House why we need legislation that asks that question and that says to local authorities “You have to go and research to see whether the area that you represent needs affordable housing.” We do not need a law to find that out; local authorities already have the ability to go and find that out and some of them do. We do not need to pass more legislation under urgency to do that. We do not need legislation that tells them to go and do that—if they want to.  
The second thing is the research which will cause costs bureaucracy— 
Dr Wayne Mapp 
: Rates. 
JOHN CARTER 
: Of course it will hit ratepayers. What happens then? For local authorities if they find out much to their surprise that they need the ability to do something in regard to affordable housing the next step is that they have to put that into their long-term council community plans. We know what that process means. It means that it goes into the books it means there are rounds and rounds of consultation and it means there are discussions and opportunities to object and to debate and to have meetings. So we will have not just 1 year of research but probably at least another 2 years after that of going through the long-term council community plans of the local authorities. 
If this bill passes and goes through in 2008 and we have not done anything about it by 2011 all we have found out is that maybe there is a need for some affordable housing—well hello! Do we not know that already? If it is done by 2011 and gets through the councils’ long-term council community plans they will say “Yes we are going to address the issue.” The issue then will be that we will have done nothing other than cost ratepayers a lot of money discover something we probably already knew and spend 3 years finding that out. I say that that is a waste of this Parliament’s time a waste of ratepayers’ time and a waste for the people who actually needed some help. That is the first thing. 
We must also remember that we are talking about costs to ratepayers because the Government is putting nothing at all into this affordable housing bill—not a sausage; it is totally the responsibility of local government. I ask those members on that side of the House what consultation they have done with local authorities on this bill. I ask the small parties whether they have asked that question. I ask Ron Mark of New Zealand First whether that party has asked the Government whether it has actually consulted with local government on this. I can tell members the answer as to that consultation; the answer is “Not a stitch.” Local authorities are bemused by yet another cost. I ask Sue Bradford whether she asked the Government about what research it was doing with local authorities. I can tell members that the answer is “None.” Local authorities are not happy with that because they know that the bill will put more cost on them. 
We have got to the stage where we have put the whole thing through research and we have done at least a couple of years of long-term council community plans so now we have to go through the audit process. The audit process costs local government and ratepayers a whole lot more money. So far then we have caused a whole lot of bureaucracy and cost to ratepayers for research and we have had to go through the consultation of the long-term council community plans at the cost of ratepayers and a whole lot of time and bureaucracy and now that we are going through the audit process—at more cost to the ratepayers—the Government still has not put a stitch in. Michael Cullen is sitting there with his pockets bulging with money but not one stitch of a dollar is going to address the issue of affordable housing. He is happy to make sure that the ratepayers of this country pay when they are already stretched. Then having done all that someone will say they are not happy with the legislation and it had better be taken to the Environment Court. That will mean more cost. By the year 2011 and going maybe into 2012 or longer the Government will still not have paid one stitch—not put in a cent or a penny.  
The poor ratepayers of this country will have been asked to address an issue but no one will have a house. Not one house will have been built at this time. All these people who need affordable housing will still be hanging in saying “In 2008 the Government put up a window-dressing bill trying to garner some support. But it is just a political ploy.” And Government members will be going out and saying “Aren’t we lovely; we are worried about you. We have got a bill called affordable housing”—that is what they’ll say—“we have passed all this legislation to help you because you need an affordable home.” They will not tell people they will have to hang on 4 or 5 years and continue living in their tents and caravans. The Government will not tell people that it is not putting money in but is expecting the ratepayers of this country to provide the funding. The Government will not tell people that it might never happen. The Government will say: “We are a good Government and we are making affordable housing affordable. We have passed a bill. We know you have a need. We don’t care if it costs the ratepayers of this country a whole lot of money.” 
This bill is good for the Labour Government because it will stand on the stage and say that it is doing something. Well that is a joke and it will be exposed. I hope the small parties change their minds about supporting this bill. 
A party vote was called for on the question  
That the Affordable Housing: Enabling Territorial Authorities Bill be now read a first time. 
Ayes 70 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Noes 51 
New Zealand National 48; ACT New Zealand 2; Independent: Copeland. 
Bill read a first time. 
Dog Control Amendment Bill (No 2) 
First Reading 
Hon RICK BARKER (Minister of Internal Affairs) 
 on behalf of the  
Minister of Local Government 
: I move  
That the Dog Control Amendment Bill (No 2) be now read a first time 
. I intend to move at the appropriate time that the bill be referred to the Local Government and Environment Committee for consideration. 
Ensuring safety around dogs depends on a combination of four principles: good law effective enforcement by local councils community support for the councils’ work and responsible dog ownership. Good law alone is not enough to stop dog attacks and this law and the principles it embodies need to be supported by the community. 
The Government has made a number of changes to the dog control law and is looking to outlaw further lists of dogs in the future. In short though this bill requires councils to include in their dog policies any additional matters that are specified in regulations. 
The bill changes the way in which the law deals with menacing dogs. It requires a mandatory neutering of dogs that are classified as menacing on the basis of their belonging to a breed or being a type of dog listed in schedule 4 of the Act. The bill simplifies the process for adding further breeds and types of dogs to that schedule. 
The bill continues the Government’s work of keeping dog laws under review and constantly improving them for the security of our communities. This bill is part of that ongoing process and I therefore commend it to the House. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I rise to speak to the bill. National will support the Dog Control Amendment Bill (No 2) being referred to the select committee because this issue is of concern to New Zealanders. But sadly this is a poor excuse for a bill. It is all of 4 pages and is simply window dressing to give the appearance of doing something. There has been no real problem analysis so all we have ever seen in respect of dog policy is constant tinkering and nothing really substantive to deal with irresponsible dog owners. That is whom we need to be dealing with—irresponsible dog owners. The Minister talked about good law. He is the very Minister who in talking about changes to the New Zealand Fire Service could not even do the financial analysis to support any recommendations for change. The Minister is only tinkering with the issues and putting out yet another discussion document. There are to be lots more talkfests and another review but nothing substantive that will make a difference.  
This issue is about irresponsible dog owners. They are the people who will never register their dog and they expect everybody else to pick up the tab for that. It is the irresponsible dog owners those who do not register their dogs whose dogs are the majority of the animals found wandering on the streets and we do not want them to be there. But everybody else bears the cost for those people who think they have a right to have a dog and who get off scot-free when it comes to the cost of policing their dogs.  
What does the bill really do? Essentially the bill provides for three things: policy to be done through regulation the schedule of breeds of banned dogs to be done by Order in Council—and that can be done by the Minister—and councils to adopt policy within 12 months of the regulation having been made. Let us look at the first one: policy by regulation. This is where the Government has failed to do any real problem analysis. It still does not understand the issues and has put out yet another review consultation document in respect of the Dog Control Act. How many changes have there been under this current Government since it has been in office in respect of that Act? I would suggest that there have been more than enough for the Government to finally understand what the issues are. But hang on! The Prime Minister needs to look good so that is why this bill is here. It is 4 pages long and it does not really do very much at all. Although this bill is about amending the Act to allow for policy to be done by regulation there is no real policy to go with it. The Government has put up a 4-page bill in order to make whatever changes it wants through regulation without the openness and transparency that a full legislative process has to offer.  
I will give members a classic example of a situation where openness and transparency have been abused through the regulatory process—that is legislation by stealth in respect of the Animal Welfare (Restriction on Docking of Dogs’ Tails) Bill. That bill which was introduced to Parliament by Dianne Yates was dropped because there was no support for it. There was no majority support and no public support for the bill so it was dropped canned trashed or discharged—whatever we want to call it. Nobody wanted a bar of it so that bill disappeared. And what happened? The Minister went along and talked to the National Animal Welfare Advisory Committee. The committee has now included in an animal welfare code for dogs the ban on the docking of dogs’ tails. That is a back-door method; it is not a case of openness and transparency. It does not provide the full public input that should be provided and that is what happens when we try to do something through regulation. It is a back-door method. That is exactly what has happened with regard to the ban on the docking of dogs’ tails. It has gone through the back door because the Government could not get it through the front door.  
I turn to the second aspect of the bill—the power of the Minister to add to the schedule of banned breeds by Order in Council. There is some evidence that the breeds currently listed in the schedule as banned breeds are part of a significant number of the dog attacks that occur in America so they are part of our banned breeds schedule here in New Zealand. However other breeds have not been identified in the same way as those breeds. The breeds on the banned list in the schedule are fine but other breeds have not been identified in the same way as them. One of the biggest problems we have with regard to this issue is identifying the actual breed of a dog. There are many cross-breeds in this country and it is very very difficult to identify them. Vets do not want to do that; dog owners do not want to do that. We can call the dog concerned a mongrel. Why would we add more breeds to the schedule? The use of DNA testing to establish the actual breed of a dog is plain silly.  
Let us face it; it does not matter what sort of breed a dog is. Any dog has the potential to attack a person—any dog has that potential. For the Prime Minister to say that if certain dog breeds are banned then dogs will stop attacking people is absolute nonsense. It is simply nonsense; it makes no common sense at all. Actually common sense saw Annette King coming here with her Electoral Finance Bill. It was smothered in her bosomy embrace and in that instance it is unlikely to see the light of day for some time. However in spite of that common sense will not die even though it is taking an incredibly severe beating at the hands of the current Government.  
I now want to talk about the third aspect of the bill whereby councils are required to adopt a policy no later than 12 months after a regulation has been made. Councils must use the special consultative process and that actually comes at a cost to councils. I just wonder whether it would have been better to allow councils to adopt the policy at their earliest possible convenience. That could have allowed them maybe to piggyback that consultative process on the back of that for some other issues thereby reducing the cost of having to adopt policy that is instigated through regulation within 12 months of the regulation having been adopted. I think some consideration needs to be given to the costs on councils. I do not see any consideration of that in the bill.  
But as I said previously there is no policy to speak of within this bill. Here we are 7 years down the track under the current Government and it has still failed to identify the issues substantively address them and deal with them by targeting irresponsible dog owners and in some way trying to recognise the cost to councils of dog control. But no the Government has failed to do that. If we look at the bill we see that there is some confusion around one of the issues in relation to the neutering of dogs. The explanatory note of the bill talks about neutering being compulsory—as I understood it when I read it—but the bill talks about neutering being at the discretion of the local authority. So even with just a simple 4-page bill this current Government still cannot get it right. Government members talk on and on about doing something but they have come up with a bill of about 4 pages with nothing substantial in it at all to deal with irresponsible dog owners. They have completely missed that point and that is something we need to deal with.  
We need to deal to the irresponsible dog owners—those people who do not contain their dogs properly do not look after their dogs properly and do not socialise them properly. We need to make sure that they bear the brunt and the cost of dog control so that it does not fall so much on the shoulders of all the responsible dog owners. We need to go a lot further than this bill which really is appalling. I take issue with the Minister when he talks about good law because this Government does not know what good law is. 
MARTIN GALLAGHER (Labour—Hamilton West) 
: 
 The previous speaker very much reminded me of the notion of the glass being half full or half empty. That member always sees a glass that is half empty. Are those members supporting the bill or not supporting it in its first reading and referral to the select committee? After that speech I have to say I do not know. How about that member for once in her political life on behalf of the people of Coromandel being a little bit positive? The people of Coromandel want a positive member. Just for once in that member’s life could she be a little bit positive?  
She knows as we all do that dog safety is achieved through good law that is kept under review in the light of experience good enforcement by local authorities community support for local enforcement and responsible dog ownership. As that member knows in her heart of hearts there is no one magic solution or magic bullet for the myriad of issues surrounding responsible dog management and dog control. That member may find that it would be very very good for her health if she was positive. As it is the Christmas season and all that it would be really good for that member just once in her life to say there are good things in this legislation.  
Let us get down at the select committee and get through the bill. That is positive leadership. Without further ado I commend this bill because I am a positive member and I wish the members of the select committee well in their consideration of this bill. 
Gerry Brownlee 
: Bye bye! 
MARTIN GALLAGHER 
: I say bye bye to that member and to those members’ negativism. 
Hon Dr NICK SMITH (National—Nelson) 
: 
 Is it not extraordinary that on the last day of the parliamentary year on which we are under urgency the Government’s great moment to address the issues of the nation is by way of the Dog Control Amendment Bill (No 2)? I have to tell members of the Government that when they are taxing New Zealanders to death when we are dropping in the OECD when people are dying in Wellington because of failures in our health system and when there are 5000 kids who are not at school I do not think that the Dog Control Amendment Bill (No 2) under urgency will save the Government’s bacon. This bill is pathetically small. I question the Government on having the House in urgency to argue a measure that is of such little consequence.  
Let us just recite the history of what has occurred in respect of dog control. We had the awful tragedy involving Carolina Anderson from Auckland. The Government’s great answer was that we had to have microchipping of dogs. If only we had microchipping of dogs then dog attacks would stop! Well since then each year there has been a tragedy. I know that in Gerry Brownlee’s electorate there was an awful tragedy this year. So the Government once again brings in more regulation. More laws is the answer and somehow this bill will solve the problem that the Government told us was solved in 2002 solved in 2005 and here we are in 2007— 
Anne Tolley 
: In urgency. 
Hon Dr NICK SMITH 
: —in urgency.  
I look at the detail of the bill and I say: “God bless Brian Neeson.” In 1997 members of this House will recall Brian Neeson brought to this House a bill to ban particular dog breeds. I checked on that. What did the Labour members say in 1997 when Brian Neeson proposed a ban on particular dog breeds? 
John Carter 
: What was it? 
Hon Dr NICK SMITH 
: Labour members said it would not work. In fact they vigorously opposed Brian Neeson’s bill. I was somewhat gobsmacked I have to say to the members opposite to read in the Dog Control Amendment Bill (No 2) 10 years later that Brian Neeson’s idea has been resurrected.  
Gerry Brownlee 
: Under urgency. 
Hon Dr NICK SMITH 
: Under urgency. Do members know what I think is really extraordinary? I think that Labour members in the 8 years Labour has been in office have become so bereft of any ideas about where to take our country that they thought they would check out the old books dredge through the history and see whether they could find an idea anywhere. They came across Brian Neeson’s idea and they said: “Let’s make it look like we’re doing something. Let’s pick up Brian Neeson’s 1997 bill about banning particular dog breeds and bring that into the House. Perhaps that might save our electoral bacon.” Well it will not. This bill will make as much difference to protecting children from dog attacks as did the changes they made in 2002 and in 2005 which equally were failures.  
I want to draw the attention of the House to just how minor the provisions in this bill are. It is not as though there is not provision in the existing law to ban particular dog breeds. All this bill does is make a minor change to the procedure by which we can ban particular dog breeds. There are some minor changes in respect of the policies that councils need to have in respect of dog control. I have to say to members opposite that if there is an issue that will change the votes of New Zealanders next year it will be the one of extra costs on ratepayers. Every single time this Parliament passes laws that impose additional costs on councils those costs go straight bang on to the cost of rates. After the last 8 years of this Labour Government we have seen rate increases running at more than double the rate of inflation. In my area rates today are 50 percent higher than they were when Labour came to Government. When I met with some leaders from local government this morning—[ 
Interruption 
] I tell Mr Barker that they said they have had a gutsful of the Government passing law after law— 
John Carter 
: 69 pieces. 
Hon Dr NICK SMITH 
: As my colleague John Carter National’s spokesperson on local government and a champion for ratepayers says 69 laws have been passed by this Government that impose additional costs on ratepayers through this sort of legislation. So when this bill goes to the select committee the question that will be on the lips of National Party members is what the additional bill for the ratepayer will be. Does Darren Hughes know what it is? How much will this cost the ratepayers in his electorate? 
John Carter 
: He didn’t think to ask. He didn’t even think about it. 
Hon Dr NICK SMITH 
: He did not even think to ask those sorts of things. You see whether it is this bill or the preceding bill the Government always has a plan and a strategy. The Government thinks: “If only we passed a law that made every council have a policy on home affordability then somehow houses would be more affordable. If only we passed a law that required every council to have a policy on dogs then somehow we would reduce dog attacks.”  
I say to the members opposite that the Government’s obsession with bureaucracy and strategies and all this muck makes little difference—as we see by their previous record on dog attacks. National says it is time to start thinking about the ratepayers. It is time to start thinking about practical measures. I would love to hear the next speaker from the Labour Party talk about the success of Labour’s policy of requiring the microchipping of dogs. That was the last great saviour of the people of New Zealand. Has that been a great success? 
Moana Mackey 
: John Carter thought it was a fantastic idea. 
Hon Dr NICK SMITH 
: I ask Miss Mackey whether dog microchipping has been a great success.  
Moana Mackey 
: John Carter thought it was a great idea. 
Hon Dr NICK SMITH 
: No she does not want to answer. You see what Labour did was pass a bill requiring the microchipping of dogs which has made not an iota of difference. It has increased the costs for dog owners. It has increased the compliance costs for our councils. Here we are on the last day of Parliament under urgency again debating legislation dealing with dog control. We say this bill is incredibly weak and incredibly minor and it will not make a difference.  
In respect of dog control we should actually give councils less bureaucracy and more freedom to get on with their business. The penalties for instance that we apply to people who are involved in dangerous dog attacks are pathetic. Increasing penalties would be a low-cost way to make some of the irresponsible dog owners responsible. When I looked at this bill I thought that maybe the Government had finally had a dose of common sense and will impose some tough penalties on people whose dangerous dogs maliciously attack innocent New Zealanders. I looked at all of the clauses—it is not a long bill; it has only nine clauses—but not one of them addressed the issue of penalties which I think most New Zealanders want. I think most New Zealanders want tougher penalties for those people who have irresponsible dangerous dogs.  
I say to the members opposite that if they want to have law that will address the issue of dangerous dogs then they should punish those who are irresponsible get off the backs of the responsible dog owners and stop applying additional costs on councils which is making the job of our elected mayors and councillors so difficult. You see what this bill really says is that Labour has learnt absolutely nothing. For all that we spent on the inquiry into rates Labour is continuing to ignore the fact that every time this Parliament passes laws that increase the compliance and bureaucracy of our councils all we do is add to rates bills. This bill is not an answer to the issues of dangerous dog attacks; it is just more bureaucracy from a dying Labour Government that is bereft of ideas on how to take this country forward. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I listened with interest to the member Nick Smith. He took his full call and I am none the wiser about whether he will support the Dog Control Amendment Bill (No 2). I am absolutely clueless as to what he is going to do. He went all round the bushes and back again and could not even tell the House whether he will support the bill. 
Martin Gallagher 
: He doesn’t know. 
PETER BROWN 
: He does not know. I would not mind betting that National will support it. I think it will support the bill. National members are totally negative but they will support it. 
Gerry Brownlee 
: Pay the money back to the taxpayer. 
PETER BROWN 
: There he is. There is old Gerry Brownlee. He is awake after his night on the town. He is awake.  
The Dog Control Amendment Bill (No 2) is a very simple bill. It is very straightforward. It does not attempt to replace the Dog Control Act 1996 at all. It is not designed to do that. It simply amends that Act to address I suggest to the members over there if they read it two key areas. One it poses a “Duty of territorial authorities to adopt policy on dogs”—I am reading that; it is a heading to clause 4. And two clause 5 inserts a new section 33E headed “Effect of classification as menacing dog”. A dog that can be determined as a menacing dog has to be neutered if not immediately then in due course. In the fullness of time that will reduce considerably the number of menacing dogs; if not down to zero it will reduce them considerably over time. 
Gerry Brownlee 
: How? 
PETER BROWN 
: If the member cannot work that out then he should not be here.  
This is a very simple bill. It is obvious the public has some concern about menacing dogs out there. I think it is very straightforward. New Zealand First will support it going to select committee. Thank you. 
SUE BRADFORD (Green) 
: 
 I commend the previous speaker Peter Brown for his commendable brevity. I will do likewise.  
Despite previous difficulties over bills dealing with dog control measures the Green Party will be supporting the referral of the Dog Control Amendment Bill (No 2) to the select committee. It seems on the face of it to be a sensible little bill allowing councils more scope flexibility and control over what they can do about dog dangers in their local areas.  
I have to say that I for one certainly believe that in many ways details of animal control do more logically lie within the purview of local government rather than taking up extensive time in this Parliament and its select committee process as has happened in recent times.  
I am pleased to see this bill going forward. Unlike the National Party but like New Zealand First we are very happy to make our position clear. We will be supporting this bill and we just hope it goes through with some speed. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Kia ora Mr Deputy Speaker. Kia ora tatou katoa. I am pleased to take a call on the Dog Control Amendment Bill (No 2). I greet Mr Gerry Brownlee this morning. I know he had a bit of a “wuff” night last night. 
Hon Members 
: Ha ha! 
TE URUROA FLAVELL 
: I just thought I would cheer him up this morning. I will tell a story. In the heart of the Waiariki electorate about an hour’s drive south-east of Rotorua there is a small township with “wuffly” 2000 people in it. 
Hon Members 
: Oh! 
TE URUROA FLAVELL 
: Let me continue. The township is the doorway to a region full of beautiful bush rivers forests and farmland. Within this rohe are the marae of Moewhare Tipapa Rangitahi and Painoaiho. This is the tribal nation of Ngati Manawa ia. Beside them is the nation of Ngati Whare who act as kaitiaki of the lush natural forests of Whirinaki Te Whaiti Nui a Toi and Te Urewera. There is also the legendary Te Kura Kaupapa Motuhake o Tawhiuau. The township I am talking about is Murupara. It would be good for members to go and see that town. It is an awesome little town and there are great people there. The downside of course is that in April of this year Murupara was known for only one thing. On 21 April Virginia Ohlsen lost her life there after being attacked by a pit bull and Staffordshire cross belonging to her nephew. The country watched in horror as the story unfolded about how it came to be that a 56-year-old mother was mauled to death by an unregistered dog literally in her own backyard. But it did not stop there. Two days later an 85-year-old Auckland woman was bitten on the face by a Rottweiler in a supermarket car-park and exactly 1 week after the fatal attack in Murupara 8-year-old Jackson Williams and 15-year-old Te Aroha Pukuivi were attacked by two pit bulls in Auckland leaving the youngest hospitalised.  
These attacks reinforce the need for owners to register their dogs and keep them fenced and under control. In all of the April attacks it was unregistered dogs that caused the problem. If there are any positives about this whole situation there is only one. The owners of the dogs that were the cause of the mauling in Murupara and South Auckland did stand up and take responsibility. They were prepared to take the consequences of the dog attacks.  
This bill makes it clear that the responsibility for the control of menacing dogs is a collective responsibility. The bill will establish new opportunities for central government to work proactively with local government to discuss dog policy matters. It requires each council to take the initiative in adopting a policy relating to dogs. It also establishes a new classification that makes it utterly clear that a dog owner must not allow a dog classified as a menacing dog to roam at large without being muzzled.  
The Maori Party appreciates the fact that the bill takes into account the need for transitional provisions. We believe that the capacity for owners to make the appropriate adjustments within the 6-month time frame is a reasonable measure and we hope that it will assist compliance with this bill.  
I am not going to take too much more time than is necessary to express our support for this bill to go to the select committee but I do want to end on a positive note by referring to a document entitled  
Murupara Dreaming 
 which reflects the current initiatives across this community to make a difference. The document I am talking about refers to a community of “determination passion people stepping up and leading people who can be bothered and people who truly care. This is because through this process we have seen ways to lift our community we have seen the opportunities for ourselves and for our moko taiohi and whanau and we’ve realised that no one can change things as much as we can change things for ourselves.”  
These words are from Jacob Te Kurapa of the Whakatane District Council and they reinforce for me the potential that all of our communities have to take leadership amongst their people and make progress across all areas. For me this is reflected in Te Kura Kaupapa Motuhake o Tawhiuau a special character school in Murupara where celebrating Ngati Manawatanga is a way of life. Te Reo Irirangi o Tawhiuau 99.7FM based at that kura is their link into that community and broadcasts every day because of the volunteers and community spirit. Actually the students of the school are the backbone of the station using te reo Maori throughout the day.  
The enthusiasm reflected in Murupara and expressed in the community report I referred to earlier is indeed a positive context for this reading of the Dog Control Amendment Bill (No 2) and gives us all the confidence we need to know that local solutions can and are the best approach for local problems. Kia ora tatou. 
Hon PETER DUNNE (Leader—United Future) 
: 
 I want to take a brief call on the Dog Control Amendment Bill (No 2) to make just two broad points. The first is that I have always had a strong view that we should be moving towards the compulsory neutering of dangerous dogs. That has been reinforced by a number of incidents that we have seen over the years and I think the most particular and recent of those was the incident in Christchurch when parents were innocently in a park with their children and a dog actually broke out from a neighbouring property to savage one of those children. People should not be under that risk when they are in a public place. So the bill’s provisions that go some way down the path of providing for the compulsory neutering of what are called menacing dogs is welcome in that respect. Those dogs are listed in schedule 4 of the legislation. But there has to be a question remaining as to whether that schedule is complete. That is a matter that I think will be judged over the period of time.  
The second point I want to make is the more substantive one. I support the moves that are contained in this bill to require local authorities that say they want to take a more active role to in fact have a more active role in respect of dog control policy. But there is one glaring omission in the legislation that will make it difficult for that role to be effective and until that omission is addressed it will put some measure of doubt upon the credibility of our overall approach to dog control policy.  
I want to quote from the Government’s own Cabinet paper on this issue. That Cabinet paper warned: “There is little systematic information collected or monitored on the incidence and characteristics of dog bites or attacks.” The paper states further: “It is therefore difficult to build an overall picture of the effectiveness of the dog control regime.” The Government’s response to that pretty trenchant criticism from officials was to indicate that it is prepared to look at ways to improve data collection. But that is a very woolly and vague statement. I will not attempt to pick up the phrase used by the previous speaker but I think he would describe it as “wuffly”—it means absolutely nothing. Until we have a compulsory data collection regime administered by local authorities whereby we know precisely the incidence of attacks the impact of those attacks on children and other persons and the types of breeds that are responsible for those attacks our dog control policy will continue to be ineffectual. This bill fails to go that far. It is a welcome first step but it is not going to deal with the fundamental issue and we are still going to continue to find incidents occurring where the safety of the public is put at risk. 
Although we support the introduction of this bill as a step towards an ultimate policy we note that in fact it really sets up a consultation process and until that process has been completed and more definitive steps have been put in place we have to conclude that the proposals contained in this bill will be of limited value only. 
HEATHER ROY (Deputy Leader—ACT) 
: 
 I rise on behalf of the ACT party to speak to this first reading of the Dog Control Amendment Bill (No 2). We will be opposing this bill. Why? Because it will have absolutely no effect at all. How many times have we seen dog control bills come before Parliament and enacted into law and nothing happens? Children keep being bitten.  
The first point I want to address is why this bill—a very simple bill we have been told by many members in this House—is being considered as part of this urgency motion. Is it really a matter of such urgency for the country that everybody sitting at home listening to this debate with bated breath is waiting for this bill to be enacted? I think not! So like the microchipping legislation we are going to pass this bill off to a select committee today to impose more rules and regulations around the issue of dog control that will have absolutely no effect. The issue should not be addressed in this forum—in urgency. Actually it should not have been put forward at all but given that it has it should have been put forward in the normal course of events and debated in that manner.  
The dogs of course are not the issue. The responsibility lies with the owners—something that is completely overlooked in this legislation. Neutering dogs will not solve anything. The responsible owners of so-called dangerous dogs will go ahead as they are required to by law and have their dogs registered have their dogs microchipped and have their dogs neutered. The problem owners—those who train their dogs to fight—have not had their dogs microchipped and have not had them registered so why does anybody in his or her right mind think that they will have them neutered?  
This is just a further example of a knee-jerk reaction and how many times particularly with dog control laws have we seen this happen? Far too many. There is a terrible event that gets a lot of media attention so the Government rushes to develop new legislation in a knee-jerk response that will achieve absolutely nothing but will make it seem to the public as if the matter is being taken care of and being taken very seriously. ACT is proud to be the only party that has consistently opposed dog microchipping which is a cost to responsible dog owners and a further driving underground of irresponsible and sometimes criminal dog owners.  
Dog laws—and this point was raised by a member from the National Party who I heard talking on the radio—just add more compliance costs for the law abiding. New dog laws will add just more regulation as I have already outlined more costs and more fines for the law-abiding dog owners who go ahead and do the right thing.  
Very few of the dogs that have been registered actually ever attack anyone. It is the unregistered dogs that create the problems. That points out just how ludicrous this legislation is. In fact it is a fantasy to think that those who do not microchip or register their dogs will go ahead and neuter them when this law says they have to. It is such a fantasy that we should include with this legislation the muzzling of dragons and the putting of leashes on unicorns. That would be about as much use as this particular bill.  
Dog rangers say that the real problem dogs are owned by lawless owners and we have seen that time and time again. The worst culprits are the gangs that train dogs to fight and attack and do not register them in the first place. These new laws will have absolutely no effect on the lawless. The fact is that the problem has never been a lack of laws. They are already in place as everybody in this House knows but there is a lack of targeted enforcement against criminals who own these dogs.  
So what would we do? That is what everybody always wants to know. What would the ACT party do? We oppose this bill but what would we do? I have beaten Darren Hughes to it. He really wanted to stand to speak on this bill and ask that question so I will answer it for him. Rather than impose knee-jerk legislation ACT would impose sanctions where the responsibility lies—with the dog owner. I invite somebody from the Government to stand up and tell me how many convictions and imprisonments have resulted from serious dog attacks on children. What happens instead is that the dogs are put down and the irresponsible dog owners—many of them being patched gang members training their dogs to fight in filmed exhibitions—simply get a new dog and start the same process all over again. If people train their dogs to be a weapon they should be punished accordingly if that weapon then harms someone. That is something that this House should think about. Given that I presume this bill will go forward to a select committee I hope that those things will be taken into consideration when submitters are heard and the amendments made at Committee stage.  
ACT will oppose this legislation. We like to see sensible legislation put forward—laws that will have some teeth and can do something rather than useless laws that will achieve nothing but will lull people into a false sense of security to make them think that matters are being taken seriously. That is not the case with this legislation and we will be opposing it for that very reason. 
JOHN CARTER (National—Northland) 
: 
 When Peter Brown from New Zealand First spoke he accused members in the House of sleeping. He is the only member I have found who can actually stand up and speak while still asleep! I think he is amazing how he does that. 
Simon Power 
: A talented member! 
JOHN CARTER 
: Absolutely—multitasking and a male to boot! That is saying something.  
I want to take a call on the bill before us for the very reason that yet again it is a bill about giving Labour members an opportunity next year in 2008 which is election year folks to stand up and say “Look what we’re doing! We’re doing something about dog control.” This is just a political publicity stunt.  
John Hayes 
: A gimmick! 
JOHN CARTER 
: It is a gimmick just like the bill that we had before about affordable housing. It is just another opportunity for Government members to say: “Aren’t we a good Government. We are worried about affordable housing. Look what we are doing. We have introduced this bill.” The fact is of course that bill puts huge costs on to local government and ratepayers and this bill is in exactly the same category.  
Let me put before members the reasons that the other parties in the House should be concerned about this bill. The first thing the bill does apart from giving the Government the opportunity to get out there and say “We are really concerned about dog control and dogs biting people.” is to take away from the public the right to have an input into how dog control in this country runs. When we read this bill we see that it shifts the ability of Parliament to debate legislation and changes to regulation. The consequence of that of course is that the Government will then go and sneak behind closed doors and make all sorts of changes that suit it and are to its advantage just as it is doing with the Electoral Finance Bill and the public will not know about it until they run against it. That is the reason this bill is here.  
Let us be very clear that there are two things that this Parliament and the public of this nation should be concerned about with this bill. Firstly there is the fact that the Government will give itself the power and the opportunity to make regulations. This is the Labour socialist Government that wants to nanny manage everything in this society. Well here is another example of its hands-on control: “We won’t tell anyone. We’re merely going to make the decisions for you. You don’t have to worry we’ll take the bite out of this country.” Well actually that will not happen at all. Rules and regulations will be made that affect the public affect the dog owners of this nation affect the kennel clubs and affect the people who care about dogs—and they will not know. That is what this Government does. That is what it is about. It is about managing everyone’s lives for them rather than people taking responsibility. Added to that is the question of who will pay. Is it local government the ratepayers— 
John Hayes 
: The dog owners? 
JOHN CARTER 
: Hang on a minute; it will not be just dog owners. It will be ratepayers and local government too. Of course dog owners will pay. There is no question about that. They will pay through their fees and regulations but local government has to administer this in conjunction with the other 69 such bills this Government has passed since coming into office. Actually it will be 71 bills because we have the affordable housing legislation as well as this bill and there are two or three other such bills in the pipeline. Just about every day local government and ratepayers end up having to pay more because this Government says so. This bill will end up putting more costs on to dog owners and ratepayers. There will be more bureaucracy and more local authority staff and as a consequence the costs to ratepayers will continue to increase.  
We know in this nation that there is already a rates revolt. In fact the Government was so concerned that last year it had a rates review. Some of us remember that. The Government asked for a rates review to be done. I have to say that the review came out with some dopey stuff but it also came out with some very good stuff. I ask the Government this question: which one of the recommendations made in the rates review has been implemented? 
John Hayes 
: None! 
JOHN CARTER 
: Really? That is astonishing. Can I just ask this question then: what was the purpose of the rates review? 
John Hayes 
: Box-ticking! Mindless bureaucracy! 
JOHN CARTER 
: And shifting the focus off the Labour Government so that the Government would not be blamed. It was just to shift the focus and take the heat out of the issue—to do anything that moves it.  
That is exactly what this bill is for. It is exactly the same thing. It is merely there so that the next time someone is bitten by a dog the Government can say: “Hang on a minute hold it don’t worry I know your bum is hurting where the dog bit it I know the stitches are not good but don’t worry here is a bit of a paper called the Dog Control Amendment Act. That will make your bum feel better.” Actually it will not at all. It will not do anything and that is the problem.  
It seriously worries me that this nanny State Government continually wants to control the lives—the destiny—of everyone in this nation. This bill is more window dressing and it will merely cost money. It will cost dog owners money and it will cost ratepayers money. It will cause more bureaucracy and it will achieve nothing. If National thought this bill could make some difference any difference at all we would say it was worth supporting through all stages.  
One interesting thing is that this bill will add to the list of banned breeds. Although this is a silly bill and will add costs National is interested to see what the public think and for that reason we will support the bill’s referral to the select committee. But let me be very clear that in the select committee the Government will have to convince us that this bill is worth continuing with. Unless there is an advantage to the public and to the people we represent why would our party and other parties in this House support the bill? One of the things that has always worried me in this Parliament is our tendency to put through more and more legislation more rules and regulations more control more costs more—[ 
Interruption 
]  
Peter Brown 
: Does the member support the bill? 
JOHN CARTER 
: There he goes! I have just told the House that we will support the bill’s referral to the select committee. Sandra Goudie said we will support it to the select committee Nick Smith said we will support it to the select committee and I said that just 15 seconds ago. Never mind; poor Mr Brown is tired and he has dozed off. But that is OK. As I said he is the only member who can stand speak and be asleep—all at the same time. We have just proven that.  
The problem with the bill is that there will be more costs. There will be more compliance costs and more costs on ratepayers. In fact this year ratepayers will face huge rate increases across the country. The cost will be close to double figures and in some cases it will be well in excess. The average increase is likely to be 7 or 8 percent all because this Government has imposed costs on local government. This bill is another example of that. It will add to the worries and problems of this Government and when the public look at legislation like the Dog Control Amendment Bill (No 2) and the housing affordability legislation we have just put through its first stage they will realise why they have high rates bills.  
MOANA MACKEY (Labour) 
: 
 I am happy to take a call on the first reading of the Dog Control Amendment Bill (No 2) which will be going to the Local Government and Environment Committee and we look forward to a robust debate there. I say to the member who has just resumed his seat that that was a “bob each way” speech. He spent the entire time opposing the bill and opposing the Dog Control Act and just before sitting down he said: “By the way we’re going to support it.” Labour knows that whenever something happens in this country to do with dangerous dogs National members leap to their feet and ask what the Government has done and what it is doing to control dangerous dogs. Well the Government is constantly looking at the current laws the tools provided to local government to deal with dangerous dogs. We have only to look across to Australia which has had microchipping. I noted that the honourable John Carter did not mention the very good speech he gave in this House when he was a Minister in the National Government. He was not the Minister responsible for that legislation but he was a Minister and he supported the microchipping of dogs and said he looked forward to a bill coming into this House because microchipping was a cost-effective and simple way of keeping track of dogs. I agree with that member even if he has done a 180-degree about-face—a flip-flop—on that issue. 
We have found that countries like ours that have gone with microchipping have been able to record the behaviour of a dog in a way that we have not done before—say a dog that has shown menacing behaviour. Without that it is very easy to move that dog to another territorial authority where it has no record of that dog’s previous behaviour or to swap owners. With a dog that is microchipped its behaviour will be recorded so even if the owner tries to change the dog’s location or change its name that local authority will know that it is a dangerous dog and that dog can be destroyed before we see another tragedy like we have had. So it is typical of National members to say that because some people may not comply with the current law we should not do anything at all to make sure that our laws are as strong as possible. 
This is another classic example of the Labour-led Government and the parties that support this bill taking an approach that will prevent dog attacks and give local authorities the ability to track these dangerous dogs and destroy them before they attack a child. We will never know how many attacks we manage to prevent; that is what happens when we look to prevent attacks rather than simply clean up the mess or be the ambulance at the bottom of the cliff. 
I look forward to this bill going to the Local Government and Environment Committee. I am sure we will have a robust debate on it as with the previous Dog Control Amendment Bill in the last term of Parliament. I look forward to the bill providing local government people with more measures to be able to deal with the dogs they have to deal with every single day and being able to give those people the powers to do what they need to do to take these dogs off our streets. I am sure that another speaker from the National Party will stand and absolutely oppose everything about this bill and in the last 30 seconds say that National will vote for it. I am very happy to commend the bill to the House. 
JACQUI DEAN (National—Otago) 
: 
 The National Party will support the Dog Control Amendment Bill (No 2) going to select committee.  
Moana Mackey 
: Ha ha! 
JACQUI DEAN 
: I will say it again because the Government does not seem to hear the message. The National Party will support the Dog Control Amendment Bill (No 2) going to select committee—and only to the select committee. We want to make some points about the bill at the select committee. I will cover some of those points today.  
We all support dog control. Of course we all support dog control. Everybody in this House and most thinking people in this country support dog control—just like we all support affordable housing. Of course we support affordable housing. We in the National Party just take a different point of view from the Government’s view that we need to apply a huge cost upon local government. It might sound a bit like a broken record for me to say this—but I do believe it—the real effect of bills such as this dog control legislation and the Affordable Housing: Enabling Territorial Authorities Bill which was just debated in this House is to impose cost on local government.  
It sounds boring I know but when I was involved in local government time after time we were dealing with legislation—this micromanaging of the Labour Government coming down to local government—that we were required to turn into a by-law at huge cost and with huge time pressure. At the Waitaki District Council where I was deputy mayor we were sitting in a costly council meeting talking about some by-law we had to put into effect and we started doing a count of the number of pieces of legislation that were being handed down. At that time I think we got to 69. There were 69 pieces of legislation that we were compelled to do something about in the Waitaki District Council. So we said to the local member of Parliament at the time David Parker that the Government is imposing cost on local government. Do members know what the former Otago MP said to us? He denied it was happening because Labour Government members cannot see what is right in front of their faces. That is the effect that legislation such as this dog control bill is having on the sector. We ask to what effect. I think that is the debate we will have in the select committee.  
This bill which National will support going to select committee is all about a Government under urgency trying to look as if it is doing something. This bill under urgency is about the Government’s desperate need to look like it is actually doing something. It is a bit like the affordable housing legislation. It thinks it is doing something about affordable housing. Well actually the Government is not doing anything about affordable housing because so many years will go by until the policy comes into effect that today’s people who desperately need housing in places like Central Otago and Queenstown will have moved on. It is bureaucratic legislation.  
If we look at the general policy statement and the intention of this bill—which of course National supports—we see that the bill will “make it mandatory for dogs classified as menacing by virtue of belonging to a breed or type listed in Schedule 4 of the Act to be neutered.” We support that going to select committee. But the next sentence says: “Also the process for the addition of a breed or type of dog to Schedule 4 of the Act will be simplified.” Aha! So here we get to the nub of this bill; it is the process. The process is the problem with this bill. You know it sounds good—it sounds fantastic—but as with many bills the devil is in the detail. Once again this bill dumps on local government. On the one hand it is dumping on local government—yet again for the 72nd time in recent history; but on the other hand—and here we get to it—the bill is making the real decisions on dog control by stealth regulation and Order in Council.  
I turn to various parts of this very small bill which we are debating under urgency. Clause 4 of Part 1 is entitled: “Duty of territorial authorities to adopt policy on dogs”. Does that not just reek of ratepayer money? Does that not just reek of councils sitting for days on end and officers writing yet more reports because of this amendment bill? Does that not just reek of an increase in the general rate? Have we not just had the strongest message from local authorities from local government about the unaffordability of rates? Has this Labour Government listened? No. This Labour Government continues to foist upon us bills like the Dog Control Amendment Bill (No 2) and the Affordable Housing: Enabling Territorial Authorities Bill which was debated just shortly before this bill. It just reeks of putting cost on local government.  
This bill spells it out even further. This Government just loves tying up local government in red tape. Clause 4(2) inserts new subsection 5A into the principal Act and states that territorial authorities must fulfil the requirement to include any matters prescribed in regulations in their policy “using the special consultative procedure.” Oh no! Do members know how much cost is involved in that and how much timeliness? And what will it achieve?  
I turn to the new subsection 33E which is entitled: “Effect of classification as menacing dog”. It sounds good. Subsection (1) states: “If a dog is classified as a menacing dog under section 33A or 33C the owner of the dog must not allow the dog to be at large or in any public place or in any private way without being muzzled …”. It sounds good but then we get to subsection (2) which states: “Subsection (1) does not apply if—(a) the dog is completely confined within a vehicle or cage;”. That is OK but then we get to paragraph (b) which states that subsection (1) does not apply if “in respect of any dog or class of dog a territorial authority considers that it need not be muzzled in any specified circumstances …”.  
So what does this mean? It means that it is the responsibility of a territorial local authority to decide whether a dangerous dog as classified under schedule 4 needs to be muzzled. That decision lies with the territorial local authority. That is not a decision that should have to be made by a bunch of councillors living in a community. How will it pan out? What will the local authorities do with this particular provision? The provision states that a dog need not be muzzled if “in respect of any dog or class of dog a territorial authority considers that it need not be muzzled in any specific circumstances …”. What does that mean? Does it mean that the territorial local authority will have a hearing? Will it have a special council meeting? Will it have a public meeting? Will it have a submission process? What does this mean for the local authority? How will it be handled when some dog owner who has a registered dangerous dog says: “Oh well no I don’t think my dangerous dog under schedule 4 should have to be muzzled in public because it likes to go for a walk in the park on a Sunday morning. I promise it won’t bite anyone Mr Mayor.”? How is a territorial local authority meant to handle a decision like that?  
I move on to new subsection 33E(3) which states the requirement for an owner of a menacing dog to “produce to the territorial authority a certificate issued by a veterinarian …”. Is the Government kidding? In reality the dangerous dogs in our society in the main do not go to veterinarians.  
I turn now to new section 78A which is inserted by clause 7 of the bill. The section is entitled: “Regulations amending Schedule 4”. Here we get to it: “The Governor-General may by Order in Council made on the recommendation of the Minister amend Schedule 4 …”. This should be the decision of Parliament. That is why we are here. I am elected as the member for the Otago electorate to take issues like this back to my electorate take soundings from the people I represent and bring those opinions back to the Chamber to debate. That is what we are here for as MPs.  
I look forward to this bill going to the Local Government and Environment Committee where we will have the opportunity to debate these issues and to tell this Government to stop offloading on local government and stop trying to look as if it is actually doing something. We support this bill going to select committee with reservations. 
A party vote was called for on the question  
That the Dog Control Amendment Bill (No 2) be now read a first time. 
Ayes 119 
New Zealand Labour 49; New Zealand National 48; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1; Independents: Copeland Field. 
Noes 2 
ACT New Zealand 2. 
Bill read a first time. 
Companies (Minority Buy-out Rights) Amendment Bill 
First Reading 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I move  
That the Companies (Minority Buy-out Rights) Amendment Bill be now read a first time. 
 It is my intention to refer the bill to the Commerce Committee.  
The purpose of the bill is to amend the minority buy-out provisions in the Companies Act 1993 in accordance with the recommendations set out in the Law Commission report  
Minority Buy-Outs 
 which was written as a result of Justice Doogue’s decision in  
Natural Gas Corporation Holdings Ltd v Infratil 1998 Ltd 
. That case concluded that the provisions could do with some further clarity in order to make the minority buy-out rights more beneficial and workable. The case highlighted the fact that the law did not provide a basis upon which the shares at issue were to be dealt with at the time the company was required to pay the shareholder. 
The amendments to the minority buy-out provisions include providing clarity surrounding the value of the shares to be purchased from a shareholder to ensure that the value is an honest estimate. To achieve this the bill requires that the share offer to the shareholder be accompanied by a statement outlining for the shareholder how a fair value for the shares was determined. The amendments also provide that the price of the shares in a minority buy-out be calculated from the date the company gives the shareholder notice agreeing to buy back the shares but that the calculation of the value of the shares must not take into account any fluctuations that have occurred due to the triggering event except in times when a shareholder is being eliminated against the shareholder’s will. Thirdly the amendments clarify and expand the powers of the arbitrator to determine the share price in a minority buy-out. 
The company has three options at a time a shareholder invokes the minority buy-out provisions. It can agree to the purchase of the shares apply to the court for an exemption from the requirement to purchase the shares or arrange to have rescinded the special resolution that led to the minority buy-out provisions being exercised. Currently only in times of an amalgamation is the company obliged to send to each shareholder of a company a statement setting out the rights of the shareholder in the amalgamation. This bill extends that obligation to any situation where there is a special resolution. 
The bill also clarifies for the parties involved the time of the transfer of shares from the shareholder to the company. The legal title of the shares and the voting rights attaching to them remain with the shareholder until such time as the price is ascertained and paid in full. However after an original offer has been made and the company has paid the shareholder a provisional payment any purported disposition of the shares of the shareholder except in favour of the company will be of no effect. 
To conclude I tell the House that the bill establishes a much more clear and transparent process for calculating the price of shares in a minority buy-out situation and addresses the particular issues raised in the Infratil case. I commend the bill to the House. 
GERRY BROWNLEE (National—Ilam) 
: 
 I welcome the Companies (Minority Buy-out Rights) Amendment Bill being referred to the Commerce Committee and National will most certainly give it the attention that it deserves. But anyone listening to that speech by the Minister in charge of the bill Lianne Dalziel factual and accurate though it was could well ask himself or herself what on earth this is all about. Although the Minister talked about the appropriately stated movements that occur in these situations I do not think she gave a fair outline of the circumstances this provision may trigger or for that matter what it is all about. So I will take some time in the House this morning to explain exactly how all this works.  
It is interesting that yesterday the House passed the provisions for the KiwiSaver legislation and the idea of that is to encourage more New Zealanders to save and to invest for their future. Many of those accumulated funds will end up being invested in companies that are domiciled both in New Zealand and overseas. When the companies are domiciled in New Zealand these laws will apply to shareholdings in those companies. The Companies (Minority Buy-out Rights) Amendment Bill is about giving shareholders or the representatives of shareholders an opportunity to exercise their judgment about the wisdom of holding shares where there might be a transaction inside the company that they have disagreed with.  
The provisions of the Companies Act say that shareholders have a specific right to engage in a discussion and then have a vote over major transactions within the company—over mergers and acquisitions inside the company and over a range of activities that are inside the normal activities of the company. These provisions are there to try to give the shareholders the right to determine what happens to that company. For example they can decide whether to liquidate the company. Those are rights that are held by the shareholders as opposed to the executive of the company and they are there to protect the investment that New Zealanders make in any particular entity.  
So how do these provisions kick in? Let us say that Company A decides it is going to expand by making an acquisition of Company B. The first company would be required to go to its shareholders to get a resolution empowering it to go into that particular transaction. Some of the shareholders might say no. They may then find themselves in a minority. So Company A goes ahead and acquires Company B. Those who had disagreed with that might say that this acquisition will cost them that the value of their investment will decline because of the move and that therefore they have the right to require the company to buy them out.  
We could give plenty of examples of such situations occurring where a big company has decided to take over another one because it might be in trouble—struggling just a little bit—and because it looked like a good acquisition at the time and as though there was a profit down the line somewhere if the big company could get it to go. I will not mention names but one only needs to look at the airline industry to see numerous examples of this sort of situation occurring. In a number of cases—and for various reasons I will not mention names—those companies fail and the investment by the shareholders is of course in that circumstance completely lost.  
This legislation protects those who have disagreed with that activity right at the start of the new entity coming together. They are able to say to the company: “I want to be bought out.”  
Hon Lianne Dalziel 
: That’s before the amalgamation. 
GERRY BROWNLEE 
: Yes that is right. The Minister actually knows a bit about this and I appreciate her nodding and affirming that what I am saying is absolutely correct. 
Hon Lianne Dalziel 
: Before the amalgamation. 
GERRY BROWNLEE 
: Well of course “before” Minister. [ 
Interruption 
] “Of course Minister. Yes Minister. Yes Minister.” That is what they say all the way through the Beehive all the time. The officials over there just say “Yes Minister.” even though they are not particularly happy with the current Government because the way it treats State servants is quite unbelievable. The Labour Government has no respect for State servants so its Ministers are just getting the “Yes Minister.” treatment from the public servants—and so they should.  
The decision is made by the shareholder who says: “I don’t want to be part of this. Buy me out.” This bill puts in place a number of technical measures for determining the value of those shares and then for the way in which the transactions between the exiting shareholder and the company are to be purported. It does as the Minister said come from the Infratil case and I think it is worth considering what the judge said in that case which was heard by the courts in the year 2000. He said: “It is common ground that the minority buy-out rights sections are defective.” So the judge identified that there was a problem with our current law that led to this new law coming on. He made a number of points about the rights of minority shareholders in these circumstances and continued: “However here there is a relatively substantial sum of money involved.”—there always is in these cases—“In other cases there could be a substantial number of shareholders involved.”—there usually is—“While the Law Commission and the legislature may have been wise to avoid the complexity of some of the North American legislation it would seem essential that if the minority buy-out rights sections are to be effective they should be urgently reconsidered.”  
The judge’s advice is to urgently reconsider things. That is why we have the legislation in front of us today but it is interesting to consider this idea that we should have done something urgently. In the judge’s conclusion to his judgment he refers to a statutory vacuum and said: “I regard the section as substantially flawed …” He is talking about the Companies Act and minority buy-out provisions as they existed. 
Hon Lianne Dalziel 
: 1993—who was the Government then? 
GERRY BROWNLEE 
: Interestingly the Minister over there is giving a bit of a commentary and I appreciate that. If only she had used up her 10 minutes she could have had so much more to say. The judge said: “If the minority buy-out rights sections are to be beneficial and workable they should”—as already indicated—“be urgently reconsidered.”  
This is how the Labour Government deals with small investors in this country. We are now under urgency urgently dealing with this matter 8 years after the judge said it would be a good idea. Unbelievable! What is more we had to look at dog control legislation first and consider that before we got to this. I think that indicates the priority that the current Government put on business in this country. We welcome this bill coming before the select committee because I think we will have to do some work around some of those calculation provisions. It is obvious that if there are a large number of people particularly in the executive of any particular business recommending a course of action to shareholders they will put as much gloss on that as they possibly can. It seems to us that to then have the right to subsequently value shares for the purpose of the minority buy-out is a little bit on the offside.  
One thing that worries me is that quite often these acquisitions are financed—[ 
Interruption 
] The Minister keeps shaking her head. I know it is difficult for her to understand. Goodness me I am trying to make it as easy as I can for her. Clearly those officials up in her office whom she and the rest of that Labour Government have brassed off have simply nodded at her and said “Yes Minister!” and told her she was right when she had got it wrong. But a lot of those acquisitions will be financed by some pretty heavy borrowing and what is really a concern here is how far those agreeing shareholders will have to agree to an extra level of debt in order to be able to cover the buy-out of those who have said no. That is a perfectly reasonable thing; the Minister can think about that. If 20 percent of the company says “No I don’t want to be in this.” and the company offers $100 for that company over there it will cost it $120 actually to go through with the acquisition we would assume.  
That issue is something we need to get much more clearly defined in the bill because shareholders expect the executive of their company to give them a good deal. That is why they hold the investment in the first place; they want to get a return on it. But I wonder where the requirement is in the bill—I cannot see it from the first reading that I have given the bill—that all shareholders are told the real cost of the acquisition and the buy-out costs. That provision does not seem to be there I tell the Minister but she should not worry: National will come to her rescue.  
National will be looking at this legislation very positively in the Commerce Committee. I think we will probably have to bring in some independent advisers on this one. I can see us bringing in some independent advisers because it is a very complex bill and I am distressed that the Minister does not understand it all. 
MARTIN GALLAGHER (Labour—Hamilton West) 
: 
 That was a bit of a worrying speech actually—particularly as I understand that the speaker apparently is the chair of the Commerce Committee. But I certainly hope that the Minister Lianne Dalziel will be instructing officials to give the committee a full briefing— 
Hon Lianne Dalziel 
: Oh no! They need an in-depth briefing after listening to that. 
MARTIN GALLAGHER 
: Well I want the Minister to make sure she gives the select committee every assistance. That is very important. Having said that I tell members that I do appreciate the member opposite. He is chair of the Commerce Committee and I am sure that he tries to do a very good job. I hope he does. But again I sense a degree of frustration because at least we now have a Minister who is addressing quite an important issue. I want to make the point—and I think in fairness the previous speaker did make this point—that the provisions of the Companies Act 1993 require currently that the company offers a fair and reasonable price to the shareholder for the shares but provide no guidance as to how a fair and reasonable price is calculated. Indeed the current law does not require that the company give any information to the shareholder on the basis of its valuation for the buy-out.  
The good thing about this legislation is that it will provide for a fairer and more transparent transaction process for the minority shareholder and it strengthens their minority buy-out rights. I am looking forward to the select committee looking at this bill clause by clause and line by line.  
I will make one other point: this is another good move for what I call the mum and dad shareholders. If we can improve this law around the rights of the minority in a company that will encourage people actually to invest. We so need to build a savings culture and an investment culture in this country. This legislation will encourage people to invest in companies in this country and I think that anything we can do to encourage ordinary people to invest in our economy particularly by way of purchasing shares and to improve and strengthen their particular rights in these particular cases is to be encouraged.  
I commend this bill and look forward— 
Gerry Brownlee 
: Why? The man doesn’t even know what’s in it. 
MARTIN GALLAGHER 
: Well actually I think I know a heck of a lot more of what is in it than the chair of the Commerce Committee—he should be afraid; he should be very afraid. But I am not going to take any more time now. The Minister has given this Parliament an assurance that she will make her officials fully available to the select committee on what I think is a very positive bill. Thank you. 
SIMON POWER (National—Rangitikei) 
: 
 Well I thank the member Martin Gallagher for that analysis of company law and minority share buy-outs. I am sure that in the fullness of time he will take the opportunity to come to the Commerce Committee when we are considering this bill and share his wisdom with the rest of us—and with those independent advisers whom Mr Brownlee has spoken about—in his own airy sort of way.  
In actual fact the Companies (Minority Buy-Out Rights) Amendment Bill is serious legislation. This bill amends the 1993 Act to clarify the buy-out provisions for dissenting shareholders in times of a special resolution. The key objective is to improve the practical operations of that minority buy-out regime in order to ensure it functions efficiently cost-effectively appropriately and without flatulence.  
The major difficulty with this particular legislation is that unfortunately it has not come about because of a technical issue that proved difficult for a one-off minority buy-out; it has come about of course as a result of the Infratil - Natural Gas case and a decision by Justice Doogue in July 2000. In fact I think I am right in saying that it was Justice Doogue who was on the bench the day I was admitted as a barrister and solicitor. I am pretty sure it was Justice Doogue and what a fine fellow he was. He congratulated me. I could be wrong but I am pretty sure it was Justice Doogue.  
The difficulty of course is that it leads to a wider question a question that I have raised in this House on a number of occasions which concerns the fact that the Government’s response to Law Commission recommendations is nothing if not consistent—that is whatever the Law Commission recommends the Government puts into legislation within a certain period of time. Of course that begs the question that is on everybody’s minds today: what do the Ministry of Economic Development and the commerce unit do and more particularly what is the Ministry of Justice doing while the Commerce Commission continues to make that huge number of references by way of legislative change? 
However in this particular case the Minister of Commerce is right to move this bill to the House. In fact National as my colleague Gerry Brownlee has said will support the passage of this bill through its first reading and pending the advice the select committee receives no doubt—in my opinion anyway—for its second and third readings as well.  
You see the intention of the minority buy-out provisions is to provide an exit regime for those shareholders who are dissenting and who have unsuccessfully opposed a fundamental change to the structure or operation of the company. In amongst Mr Brownlee’s contribution where he talked about some of the practical examples where this regime may have assisted he was dead right when he talked about the borrowing implications for the company once the dissenting shareholders had exited the company following the transaction. He questioned whether that increased borrowing would be incorporated in the valuation of shares post or pre - minority buy-out and what effect that would have on the dividend return to those remaining shareholders.  
Of course balancing up the rights of the minority shareholders who look to exit on a dissenting transaction presents one of the most complex and difficult matters for directors of a company. It concerns their duty to shareholders as opposed to their duty to the company. Those are two quite different things. The fundamental duty is to the company but the secondary or less significant duty is to the shareholder. Not all directors understand the difference between those particular transactions and if it is the matter of the health of the company and indeed of its remaining shareholders because of the borrowings-to-asset ratios remaining following a minority buy-out dissenting view then that creates a really interesting paradigm for directors to make these decisions in.  
It is hoped that this bill will assist those directors in making a decision that will work for the health of the company. Of course—as the Hon Paul Swain will know—the last thing the health of any company needs is a group of dissenting shareholders who do not want to be party to a major or indeed a significant transaction. But at the same time the rights of the remaining shareholders in a secondary sense will have to be balanced against that fundamental duty of directors. 
Hon Paul Swain 
: As long as it clarifies it. 
SIMON POWER 
: The Hon Paul Swain who has had a bit of experience in this area as a Minister for State Owned Enterprises is dead right when he says that as long as the legislation clarifies that point that will help. We do not want directors to be put into a position where the minority buy-out regime complicates and makes more convoluted the series of duties that the directors have to weigh up when considering the implications of a buy-out for dissenting shareholders in a time of a special resolution.  
Now I know my colleague Judith Collins who was a company lawyer in a previous life will have a firm understanding of the technical issues surrounding this matter and I welcome her 17½ minute contribution to the debate on this bill because I think it would be worth hearing. I was only fortunate enough to be practising for a very short time and of course I feel a little humble in the presence of those who practised in a much more technical area than me. I have offered only a general overview. The extent of my knowledge of these matters pales compared with the contribution made by the member from Hamilton West Martin Gallagher. But nevertheless his contribution was valuable because it provided a springboard for a more detailed discussion on some of these issues. He brushed over it in a general sense but his understanding of the more complex innuendoes surrounding the conflicting duties was apparent in some of the language he used during the course of his contribution.  
As the bill says the important thing here—and this is echoed by the chipping contributions of the Hon Paul Swain—is to simplify and clarify the regime. The minority buy-out provision should have the following key features. I am sure the House will indulge me as I work my way through page 2 of the explanatory note. The first key feature is: “an obligation on the company of a minority buy-out to send to each shareholder of the company a statement setting out the rights of shareholders”. That is fine; that makes good sense. In fact I would be very surprised if that was not followed today under the existing regime. The second point is: “that the share offer for a minority buy-out be accompanied by a statement outlining for the shareholder how a fair value for the shares was determined:” We should remember that that particular statement should also perhaps include—in my opinion—a statement to remaining shareholders about what the increased borrowing means for their shareholding value and potential dividend stream once the buy-out occurs. The third point states: “the valuation of the shares … should be calculated as … on the date the company gives notice”. There is no problem with that.  
The fourth point states that the valuation “should be adjusted to leave out of account any change in the valuation attributable to the event”. Well this is the key point that Mr Brownlee drew our attention to during the course of his contribution—at what point does that consequent liability get married in or weighed in as part of the remaining valuation of those shares? We need to say that in determining the valuation the adjustment needs to leave out of account the effect of a triggering event and if the shareholder and company cannot come to an agreement the price will be determined by arbitration.  
Those last few clauses are pretty standard stuff really. We know—and I say this particularly to New Zealand First and my colleague over there Peter Brown—that this is not without its complications. I hope Peter Brown’s contribution to the House acknowledges the fact that although the House appears to be waving this legislation through to a select committee these are important matters of commercial and company law that should not be underestimated in terms of any potential conflict and application of duties that may arise in the public company or State-owned enterprise environment.  
I have to say the only thing that worries me is that if Mr Brownlee as chairman of the Commerce Committee moves to make the Law Commission its independent adviser we may not get the answer to some of those questions. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I am very pleased to follow that member Simon Power because in large measure he outlined in some detail the concerns as he saw them about this bill. 
Pansy Wong 
: Oh. 
PETER BROWN 
: No he did. He did quite a good job. It must be the morning for complimenting National members because I actually thought Gerry Brownlee started off very well when he opened up and gave the public who might well be listening to this some background on what it is all about. But he got into the frivolous stuff towards the end.  
I am not sure that I understood Simon Power on this issue. He will probably tell me whether I have understood but he seemed to put a lot of emphasis on the concern he has in regard to the directors of a company. I do not want to undermine the directors of a company who have huge responsibilities when it comes to minority shareholder buy-out but my concern and New Zealand First’s principal concern is for the minority shareholders. I think this bill goes quite some way towards addressing those concerns. Simon Power started to read the eight bullet points from page 2; he started to go through them one by one. That was in fact my intention also but he stole my thunder and I will not bother. But I will touch on one or two points.  
There is an obligation here for the company involved in a minority buy-out to communicate with the shareholders and to tell them their rights—what they are entitled to and what have you. There is also an obligation to tell the shareholders how the value of the share was determined. Those are very important points. This bill is based around the case  
Natural Gas Corporation Holdings Ltd v Infratil 1988 Ltd 
 but I recall that when BNZ was sold some years ago a number of minority shareholders did not think they were getting a fair deal. They held out and in the end they got a pittance and were not listened to; as I understand it they just got cheques in the mail. Of course we all know what happened to BNZ after that.  
So those are the two factors—first to communicate with shareholders and to tell them their rights which is an important innovation and secondly to tell the shareholder how the value of the share was arrived at. The final point which Simon Power touched on is to explain to the shareholders that they have got the right to go to arbitration if they cannot reach an agreement. As I say there are eight points here. Some of them are very technical and would take a longer time to explain to the House than I have. This is a bill that I think is— 
Paula Bennett 
: Is Tauranga rebelling? 
PETER BROWN 
: Is the member asking me a question? Because I am prepared to answer it. 
Paula Bennett 
: Yeah how does your Tauranga electorate feel about the Electoral Finance Bill? 
PETER BROWN 
: Oh the Tauranga electorate totally supports it. I just digress; I actually went to a public meeting held in the Tauranga electorate on Monday. The people asked all the questions about the bill that they were concerned about and they were totally supportive when I was there. I understand that Winston not only had been there before me but has given an interview to Audrey Young explaining all of the differences. I have not read that article but I had it reported back to me and I have to say that the way in which Audrey has printed it is quite different from what Winston told her. I say there could well be a suggestion of a lack of media ethics in the way that issue is reported.  
I can tell members that I spoke to the Tauranga chairman this morning about another matter and he is quite content. He said the issues that concerned him—and some concerns were raised with him—have all been addressed. Is the member happy with that explanation? I am running out of time.  
Coming back to this bill I say that we think that those three factors in the list of eight on page 2 of the explanatory note are very important. The last one I touched on was the ability of the minority shareholder to go to arbitration if he or she is not happy with the situation. We think this bill is worthy of support and New Zealand First will support it going to a select committee. 
JUDITH COLLINS (National—Clevedon) 
: 
 I am grateful for the opportunity to speak in support of the Companies (Minority Buy-out Rights) Amendment Bill. Unfortunately like much of the legislation in the dying days of the Labour Government it is too little too late. As the contributions from the National side of the House have shown we in the National Party take seriously the rights of minority shareholders. One reason we do that is the headlines—for instance this one in the  
New Zealand Herald  
today: “Mortgage worries … fewer people taking loans as the housing market cools.” This could be considered a good thing except for the fact that the sharemarket has not been a place of safety for many investors—many mum and dad investors—in New Zealand. After 8 long years of a Labour Government the sharemarket is still not a place of safety. This Labour Government has spent an awful lot of time castigating people who buy more than one house which is very interesting because Chris Carter the former Minister of Housing has several houses. The Government spends a lot of time saying to people: “You shouldn’t be buying up houses and renting them out to people. You shouldn’t be doing these things. You should invest in other things.” Well what are the other things? Mum and dad investors with $40000 or $100000 to invest have to look not at commercial buildings because they cannot afford those but at a place like the sharemarket. 
Those investors should be able to rely on the sharemarket regulated by this Government and also by the New Zealand Exchange as a place where they can have a modicum of safety for their investment. But the fact is—and it is a sad fact—that votes are what count. In the sharemarket a person who has more money in shares will have more of a say. It is not untrue and it is not an exaggeration to say that most of the shares in the New Zealand sharemarket would be controlled by either big investment companies like AMP or by other private equity funders and shareholders. Those are the people who effectively control much of the wealth in the sharemarket. Yes we have lots of mum and dad investors lots of people out there with their life savings extra to their house in the sharemarket but those people effectively do not get much of a say except for the one meeting they get in the form of an AGM each year. 
What happens is that some of the company directors are appointed as independent directors. I would like to deal with the fiction that I see around the issue of independent directors. I ask members to just look at this example of an independent director: John Maasland who was chair of the airport company. John Maasland was acting as the independent director making decisions he felt were in the best interests of the company so instantly he was given the word that he would be shifted on because the big shareholders—the Manukau City Council and others—would make sure that he is not the independent chairman. That is obviously a right; it is allowed under the law. But why do we put so much faith in a situation that is effectively fictional because the independent directors like all other directors are in fact elected at the AGM? They are elected by the shareholders and if the shareholder voting power is with a great big investment company the great big investment company will decide whether that director stays the next year. So we put an awful lot of pressure onto our independent directors without actually giving them the ability to be truly independent without the fear that they are going to lose their positions. I pay tribute to some of the independent directors whom I have worked with and whom I have seen over the years make decisions that have been truly in the best interests of the company even if a particular majority shareholder or a very powerful shareholder did not like those decisions because they were not necessarily in the interests of that shareholder. 
It is very important for us to understand that we will not become a wealthy country until we have a sharemarket that the people of New Zealand can have true and total faith in and we will never have that if we consistently think that just because something is legal then it is OK. Well it is not always OK. In fact we find over the years that many minority shareholders have felt that they have had very little voice. I welcome the attempts of the Government to do something about that—around the valuation of minority shares and the buy-up provisions. But I would also say to the Government that we can say all we like about going off to arbitration and about taking court actions to protect one’s interests as a minority shareholder but the vast majority of our minority shareholders are mum and dad investors who are aged 65-plus and who will never go off to take complicated expensive and very very tiresome legal action to protect their rights. It is important that we start to address the culture that has allowed some companies—in my opinion—not to do the right thing by minority shareholders. Of course democracy is one of those things that are great when they work for one and not so great when they do not. For some minority shareholders the democracy of the share voting power can have very disastrous consequences. 
I am very concerned that the Government in its last dying days is now talking about minority shareholders rights. Having said that I ask what it is doing about the agencies that were set up to protect some of these people—that is the Serious Fraud Office and others? It has brought the Serious Fraud Office back into the Ministry of Justice—a ministry that has shown itself to be completely in with the police. The Ministry of Justice shows itself so completely incapable of coming up with any policy that it now relies on Sir Geoffrey Palmer at the Law Commission to put forward all its policy. That seems to me to be an indication that we need to go significantly further than the provisions that people are talking about in this bill. 
I also take the opportunity to acknowledge the work of some of our commentators in this shareholding area—the work of people like Bryant Gaynor for instance in the  
New Zealand Herald  
who has— 
Hon Paul Swain 
: Brian. 
JUDITH COLLINS 
: I did say Brian did I not? I did say Bryant. I am sorry I meant to say Brian. I thank Mr Swain. Brian Gaynor has spent a huge amount of time and effort looking at companies in many cases from the minority shareholder point of view. Over the years as a company director Mr Gaynor has been extremely irritating at times but the fact is that the work he does is extremely helpful to many independent and small investors who have had to look at the  
New Zealand Herald  
to get a view as to whether they should be investing. Sometimes unfortunately with the way in which initial public offerings are handled through sharebroking companies and through the financial markets the commissions that are paid and the deals that are done mean that the independent advice tends to come from people like Brian Gaynor—and I should say from the work of people like Bruce Sheppard from the New Zealand Shareholders’ Association. People like him have been willing to come out and sometimes make a bit of a stunt in the old AGM and carry on in some way that certainly gets some notice. But behind all the stunts and the rhetoric these people are with others standing up for the rights of minority shareholders. I know it is not always a view that is particularly popular around the board tables but I believe it is extremely important that New Zealand get rid of its cowboy reputation in relation to its companies. 
I do not believe that this Government will necessarily regulate a change in attitude but I do not think we need to look too far to see that there have been a lot of people not only in the sharemarket area but in the finance company area who have made a lot of money out of a lot of very small investors and who are not held to account. They are certainly not held to account anywhere except in the court of public opinion. When we look at why New Zealanders have so much faith in investing in property I think we do not need to look very far to see that a lot of it is to do with a lack of faith in the way in which some few—I say “some” because it is certainly not all—few people have manipulated minority shareholders for their own ends. 
This is a bill that is well overdue. However it is only a very small attempt at a very late stage by this Government to do anything for minority shareholders. National will certainly support the bill going to a select committee. We will hope to see something better come through after that process; we will certainly be putting big efforts into that. 
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 Tena koe Madam Assistant Speaker; tena tatou katoa. The Maori Party comes to this bill aware that many of our whanau hapu and iwi are taking up the company structure as laid out in the Companies Act 1993. Whale Watch Kaikoura Maori active-wear brand Kia Kaha Clothing Mai Media Ltd and Shotover Jet Ltd are all examples of Maori organisations that have been attracted to the company structure as a mechanism for their commercial operations. These international market leaders see the provisions of the Companies Act as providing them with a robust structure for economic benefits to be realised for the capital growth of their assets and to ensure financial benefits go to individual shareholders.  
However we do realise that the company structure may not be appropriate for hapu or iwi whose objectives are solely or primarily political social or cultural. The company structure may not be suitable to meet the non-commercial objectives of whanau hapu and iwi and we recognise that as one of the limitations of the current companies legislation. We take all of these factors and interests into mind when we consider the amendments mooted in this Companies (Minority Buy-out Rights) Amendment Bill.  
This bill seeks to improve buy-out regimes when minority shareholders have elected to have their shares purchased by the company. The current legislation has made it easier to operate as a company with particular attention having been given to decreasing the set-up costs and making name approvals available almost immediately. But issues are still apparent particularly around the concept of minority shareholding.  
From the outset we know that the concept of minority shareholding has always been one of those issues that has turned whanau hapu and iwi off the company structure in the first place. The requirement that those with interests must hold shares has created practical difficulties for hapu and iwi due to the complexity of identifying all the persons to whom the shares should be issued. This bill assumes that hapu and iwi have worked through all of those issues and have come out the other end. In other words in the situation of a dissenting vote minority shareholders have willingly elected to have their shares purchased by the company and the process of this bill is necessary to ensure their shares are valued fairly.  
In general terms the minority buy-out regime is triggered in response to a dissenting vote—that is where the shareholder exercises the votes pertaining to that shareholder's shares against a proposal and that proposal is agreed to by the required majority of shareholders that shareholder is entitled to require the company to purchase those shares in accordance with section 111 of the Companies Act 1993. Both the Law Commission and Justice Doogue concluded that the Companies Act 1993 was actually defective in its failure to set out a workable method when such a situation occurred. Therefore the challenge for this bill is all around how to value minority shareholding when a minority shareholder has elected to have his or her shares purchased by the company under section 111 of the Act. In fact Justice Doogue was so convinced of the failings of this particular legislation that he referred in his 2000 report to a “statutory vacuum” and stated the specific section was “substantially flawed”. We in the Maori Party are therefore pleased to receive this legislation to ensure that the minority buy-out rights are to be both beneficial and workable.  
We do not have a great deal more to add to this debate other than to note with depressing consistency that this bill appears to be another bill before the House in which there has been little if any consultation with Maori. We were unable to confirm what the nature of the consultation with Maori companies or Maori company directors had been in the Law Commission review or if there had been any consultation with Maori in the drafting of this bill. Our experience to date would tell us there has been none. However we will support this bill going to a select committee and we hope that this will provide an opportunity for the independent voice of Maori to be heard. Thank you. 
Hon PAUL SWAIN (Labour—Rimutaka) 
: 
 I would like to address a couple of points made by Judith Collins and also Simon Power who I thought made quite a useful contribution. But the first thing I would like to know is why the National Party is filibustering on this kind of legislation. I hear that it is supporting it and what I am interested to know— 
Gerry Brownlee 
: I accept the questions that Mr Swain is asking us and I seek the leave of the House to take 2 minutes to answer them. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member has sought leave for that purpose. Is there any objection? There is objection. 
Hon PAUL SWAIN 
: A very simple answer to the question would easily suffice here. It may be because those members had a bit of trouble at the post-media do last night. There was a bit of grumpiness and now they are trying to take a bit of utu; that is what it might be about. I wonder whether National Party members know the saying “Cutting off one’s nose to spite one’s face” and over there is a particularly large nose and not a very pretty face. 
Gerry Brownlee 
: That is what Doctor Cullen has done; silly man! He should have talked to us before he talked to Vernon. 
Hon PAUL SWAIN 
: Was this because of last night? That is the only thing I can think of. 
Gerry Brownlee 
: No it’s nothing to do with last night. 
Hon PAUL SWAIN 
: Well I take the member’s word that it is nothing to do with last night because he is an honourable member. I presume the National Party is going to be supporting this legislation because it is good legislation.  
I want to take up the first point that Judith Collins made. She said that the Government has not done much in this area until now. Of course that is completely not the case. When the Labour Government came in in 1999 I had the privilege and honour to be the Minister of Commerce and one of the things we looked at was the problem we had not only with company law but also with the rights of minority shareholders. We got to work putting into place the Takeovers Code that the National Party had agreed to in Government but had decided not to implement because of pressure from the Business Roundtable. We got it under way straight away to give minority shareholders rights at a time of takeovers.  
Then there was a whole lot to do with insider trading to make sure that the torch went on to insider trading and exposed it in order to protect minority shareholders. Now we are bringing forward the Companies (Minority Buy-out Rights) Amendment Bill. It is more really good progressive business legislation— 
Gerry Brownlee 
: It’s 8 years late! 
Hon PAUL SWAIN 
: Well this has been a very very busy Government. We have had lots of legislation to bring through not only in this area but also in transport health and education. There is so much to do in so little time which is why we need to be able to continue on for the next 3 years as the programmes and projects are not yet finished.  
Simon Power raised what I thought was quite a reasonable point. He essentially said that in the case of a company director or company directors trying to make a decision about where the company should go they not only need to take into account the health of the company but also need to take into account what is potentially the outcome for some minority shareholders who for example are opposed to a decision to amalgamate and then decide that they want the buy-out rights. That has to be factored into the decision. I think what this bill is trying to do is clarify the rights of minority shareholders who are in that position.  
It is not just on the question of amalgamation; it is also to do with times of special resolution because that is not specifically mentioned in the legislation. If there is a special resolution it clarifies for example what the rights are in the case of a company’s constitution being imposed or removing a restriction on a company’s activities. Someone might be opposed to that and want to buy out. It may be a major transaction that the minority shareholders might not be keen on or as I said before an amalgamation proposal. At the moment the old legislation says they do have rights but it does not really clarify what those rights are. I think the most important piece of clarification is to say that at the time of the opportunity for the minority shareholders to buy out there firstly needs to be clarity around the value of the shares to be purchased from a shareholder to ensure the value is an honest estimate. What is an honest estimate? That is a fair point.  
The second point is that the price of the shares at that moment in a minority buy-out will be calculated from the date the company gives the shareholder notice agreeing to buy back the shares. That is fair enough. But of course there could be some fluctuations around that time as always happens when this kind of activity goes on. The legislation says that the calculation of the value of the shares must not take into account those fluctuations. Of course thirdly if an arbitrator is in place then it clarifies and expands the powers of the arbitrator to determine the share price in a minority buy-out situation.  
So this is a good situation. I come back to Simon Power’s point which was that we need to have some certainty and some clarification so that for example directors do not get themselves into the position where they do not take a positive step in the interests of the company because they are concerned about the impact potentially of those who are opposed to it and then exercise their minority buy-out rights.  
I think where Simon Power got to in the end was that provided there was clarity in the legislation he would support it. I think it does provide that clarity. Of course the opportunity with this legislation is that it will go to a select committee—the Commerce Committee I presume chaired by Gerry Brownlee—[ 
Interruption 
] No I actually think he does not do a bad job to be perfectly frank. A good meeting is a quick meeting as I have always said. I hold to that particular principle. Of course it is an electronic committee so some members have struggled but it is a very good committee. Gerry Brownlee seems to have mastered the new technology— 
Hon Darren Hughes 
: He’s always logging off. 
Hon PAUL SWAIN 
: Yes logging off and on when the time suits. I think the important thing is that this bill will go to the Commerce Committee. I expect there will be quite a lot of submissions from the business community and rightly so. I think it will be really interesting to hear whether what is in the bill before us will meet the needs of shareholders. I am sure that people will come up and say “You’ve forgotten about this. You should do this. What about that?”. I am sure that under the leadership of Gerry Brownlee and with the hard-working and conscientious members of that select committee we will come back to the House with possibly a new and improved proposal.  
It is with great pleasure that I support this legislation. It is another arrow in the quiver of important business legislation that this very busy and business-friendly Government has introduced into the House. That is another reason why we need to be able to continue with our work after the next election because there is so much more to do. With that I commend this bill to the House. 
KEITH LOCKE (Green) 
: 
 The Green Party will be supporting the Companies (Minority Buy-out Rights) Amendment Bill. We listened with rapt attention to the very profound comments from the previous speaker Paul Swain and from Gerry Brownlee. We are most upset that we are not represented on the Commerce Committee that this legislation will be going to and that we will not be able to hear the wisdom of not only the members and the chairperson but also the many presenters. 
Gerry Brownlee 
: You can seek leave. We would love to have you there. 
KEITH LOCKE 
: Thank you for that invitation. We will look closely at taking it up. 
I am sure that the interests of the minority shareholders will be protected. However I listened very closely to Pita Sharples’ speech and there is a lot of work to be done to make sure that this legislation is applicable to Maori trusts and the like. Thank you. 
PANSY WONG (National) 
: 
 It is a pleasure to take a call on this bill. Personally I am supporting this bill to the Commerce Committee only because of the brilliant chairmanship of Mr Gerry Brownlee. I have confidence only in him and because he is supported by our brilliant Simon Power the legal brain. I think this bill has to go through a close scrutiny. I point out that it is no wonder the Hon Paul Swain who was previously the Minister of Commerce did not bring any changes to the minority buy-out section because from the content of his speech we are quite sure he was not sure what was being proposed and the way it was going to change.  
First of all I would like to tackle two issues. One is the technical valuation of the shares. I contrast the statement that this bill is going to give a practical and constructive method for the valuation of the shares for a company upon request by the minority shareholder that wants its shares to be purchased by the company. Under the Companies Act 1993 upon receiving that notice the directors would have to nominate a fair and reasonable price for the shares to be acquired. But in the proposed changes the bill says that that price must be an honest estimate of the value on the day etc. I hope the excellent chairman Gerry Brownlee during the select committee deliberations will ask the officials to provide some evidence of dishonest estimates that have been proven to have happened in regard to all these minority shares bought out throughout this period without these amendments.  
We all know that lawyers love to spend time challenging and debating a new word or new phrase whenever they have been introduced into legislation. I am sure every commercial lawyer in the country is now sharpening his or her pencil and starting to interpret what the politicians who are trying to pass the first reading of this important bill mean. This bill is part of the urgency motion. They must have meant something given that in the present Act all it says is that the director has to give an estimate of the fair valuation of the shares but now we are inserting a clause stating that the price must be an honest estimate. How does one define “honest”? Should the directors immediately go external seeking an independent estimate of that? Have the directors up until now or before the bill is to be passed demonstrated that they have not been giving an honest estimate of the value?  
It seems to me that apart from this word “honest” the bill also specifies a couple of days regarding when the valuation has to be given; it specifies some parameters and says that first of all we have to ascertain the value of the total shares in each class and then each class will be adjusted to exclude some fluctuation before and after the event.  
I personally think that these three additional amendments that have been brought into this new bill will not give much direction to the valuation of the shares to be bought out from those minority shareholders. I am looking forward to the diligent National members on the Commerce Committee getting a detailed briefing from the officials and asking for an explanation step by step of how that would actually help the practical and efficient way of valuing shares.” As one of the three qualified accountants in the House I have long been resigned to the fact that the valuation of shares is really an art and not a science. We could go outside and get a valuation of what they call a “going concern” selling the business if it is to continue or we can get a replacement value or historical value which nobody believes is fair. Therefore I hardly believe that what is contained in the new bill will achieve that workability and efficiency etc. As I say the only saving grace is that the bill is being referred to the Commerce Committee which happens to be chaired by the brilliant Gerry Brownlee. The members on the National side I am sure will ask those hard questions.  
The other subject I want to touch on is that of minority buy-outs. Quite interestingly in the case of a public company situation or even a medium-sized company nowadays I really wonder at the meaning of the word “minority”. A 10 percent shareholder in a public company can be a cornerstone shareholder and in effect one would hardly describe that person as a minority shareholder. He or she probably has as a representative one or two of the board members. So I want to know whether in those circumstances those board members would excuse themselves or whether they are collectively still able to come up with what we would call an honest estimate.  
When we think of a minority shareholder in the traditional sense we think about shareholders who are helpless and may be subject to the tyranny of large-parcel shareholders. But in the current day minority shareholders themselves can be quite influential and substantial shareholders who may not agree or indeed may even stand up to the other shareholders who are actually true minority shareholders because of the small parcels of shares they hold.  
This bill in my mind has not quite addressed or really come up to the play with the modern scenario of what a minority shareholder can be. What I am alluding to is that I do not believe there is a practical framework to work out the value of shares. If we consider the current definition of a minority shareholder we see that the shareholder can actually be quite substantial in a company and invariably that situation will lead to litigation. It will also lead to arbitration.  
So as we look at this bill we are not sure that in fact it will bring efficiency or effectiveness. The reason is that Parliament tends to be quite slow. We tend to be reactive as was demonstrated by the former Minister of Commerce Paul Swain. He acknowledged there was a problem with minority shareholders’ buy-out rights 8 years ago and what did Labour do? The outgoing dying Labour Government has introduced 8 years later under urgency a solution to fix it. That solution might have been fine 8 years ago but 8 years later things have moved on. Therefore the solution here really will not in my mind contribute to a lot of difference. Ultimately if it is a lot easier for a listed company to look at the valuation of the shares—and I thought that might be one of the practical suggestions to save on litigation etc.—I wonder whether the select committee can look into the practical suggestion of having an independent valuation triggered early on in the piece rather than having the board of directors going away and trying to interpret how and in what circumstances they can prove to others that they have given an honest estimate of the value of those shares. Maybe they should just agree on a framework as to how they can appoint an independent valuer for those shares. I have lots of doubts and my only confidence is in the supreme chairmanship of the committee. 
DAVE HEREORA (Labour) 
: 
 I take this opportunity to take a short call on the Companies (Minority Buy-out Rights) Amendment Bill. I stand in support of this bill. As a member of the Commerce Committee I take a particular interest in the buy-out provisions and the application of these provisions and I compare that to the debate we had on the Waka Umanga (Maori Corporations) Bill last evening on the issues surrounding iwi structures and trying to marry that up with other legal identities in order to give them the opportunity to be able to compete in today’s economy. So as a member of the committee I will be taking a particular interest in those comparisons and I look forward to a robust analysis of this draft and to supporting the committee’s recommendations to the House. 
Dr RICHARD WORTH (National) 
: 
 I join with those members of the House from both sides who have praised the wisdom of the chairman of the Commerce Committee to which committee this bill is to be referred. It is invidious to deal with the issue at length but I certainly recognise his artful insight his scintillating contribution to chairmanship of the committee and his dogged determination to do right by those who appear before the select committee. 
The Companies (Minority Buy-out Rights) Amendment Bill is interesting legislation but it is certainly not without complexity. That is why National supports its referral to the select committee. We think though that in the context of the submissions that will likely be received changes to the bill will be necessary and it is appropriate to enter that caution at this particular point. Some philosophical issues underpin minority buy-out rights legislation. But in essence the position is that if the goalposts are moved despite the shareholder’s opposition he or she is entitled to decide that he or she no longer wishes to be a player and is also entitled to be protected from losing financially by reason of his or her decision to leave the field. 
The intended functioning of buy-out provisions has been described in a number of ways by a number of academic writers and I simply cite an article that appeared in the 1997  
Columbia Business Law Review 
 by that well-known commentator Alexander Khutorsky. In an article under the subject heading “Coming in from the cold: reforming shareholders’ appraisal rights in freeze-out transactions” he stated: “In theory the existence of appraisal statutes has a two-pronged effect on merger transactions. First the appraisal remedy is supposed to guarantee that dissenting shareholders get a fair price for their equity stakes. This prong of the appraisal statute is embodied by a procedural scheme whose end result is a judicial valuation of the minority stake in the target with attendant money damages where appropriate. Perhaps more important than the actual exercise of the remedy is the ex ante effect which the mere existence of the remedy is supposed to produce. This second prong works by inhibiting the incentives of majority owners to act strategically by providing for the possibility of a threat of litigation and uncertain damage awards. The corporate planner’s assumed preference for certainty coupled with potential cash-flow constraints in meeting potentially sizable judicial awards should encourage the planner majority owner to offer fair consideration in freeze-out transactions.” 
In a New Zealand context the inadequacy of our current regime emerged a number of years ago when the Natural Gas Corporation and Infratil were locked in litigation in 2000. In very general terms what happened was that Infratil was the first minority shareholder to invoke the minority buy-out provisions to force the Natural Gas Company to buy its 6.7 percent stake in the Natural Gas Company after it opposed the $824 million takeover of energy retailer TransAlta. Infratil was unhappy with the $1.30 provisional price set by the Natural Gas Company but after the company sought a declaratory judgement to get control of the Infratil shares Infratil was forced to hand over title to those shares and the price was later set at $1.68 after protracted arbitration.  
The current statutory regime is easily explained. The broad scheme of the New Zealand Statute as far as it is relevant to matters that arise on this bill is that the shareholder must give notice of an intention to invoke the procedure within 10 working days of the passing of the resolution. The board within 20 days of receiving the shareholder’s notice must then elect one of a number of courses of action and notify the shareholder of its election. Those courses of action are: first to back away from the resolution that has triggered the shareholder’s notice; second to agree to buy the shareholder’s shares or procure a third party to do so; and third to seek an exemption under section 114 or 115 of the Act. In very general terms those sections empower the High Court to excuse compliance by the company on financial or just and equitable grounds.  
So if the company agrees to buy within 5 working days of notifying its election it must notify the shareholder of the price it is prepared to pay. If that price is unacceptable to the shareholder the company must be notified forthwith whereupon the issue of the price must be referred to arbitration and within 5 days the company must pay the price it has nominated. Each side is bound by the decision of the arbitrator. If the price is fixed by the arbitrator at more than the company’s proposal then the company must pay the shortfall. If the arbitrator fixes the price at less than the company originally offered then the amount paid in excess of that amount is recovered by the company from the shareholder and the arbitrator has the power to award interest. 
These deficiencies in the legislation were very clearly laid out in the Infratil case. In a comment that is often made in connection with buy-out rights the lack of detail was trenchantly criticised in the existing regime. The judge said in the course of that judgment—I am referring to paragraph 4 of the judgment—“It is common ground that the minority buy-out rights sections are defective. Although they provide for the company to nominate a fair and reasonable price for the shares to be acquired they do not state at what date that price is to be ascertained. Nor do the sections make any provision for the company in nominating the fair and reasonable price to give any information to the minority shareholder of the basis of the valuation. Nor do the sections provide any mechanism for the completion of transactions falling within them. As already noted section 112(4) is silent as to the basis upon which the shares at issue are to be dealt with at the time when the company is required to pay the provisional price. Nor has the arbitrator power to make orders in respect of the completion of the transaction following the arbitration. Having created minority buy-out rights the Act fails to provide for important features of the transactions that can arise under them. In the context of the Act as a whole and its history that is understandable. However here there is a relatively substantial sum of money involved. In other cases there could be a substantial number of shareholders involved.”  
Against the background of that decision the issue went off to the Law Commission and after what others have described as a substantial period of delay now comes to this House in terms of the Companies (Minority Buy-out Rights) Amendment Bill. The bill contains a helpful explanatory— 
Gerry Brownlee 
: I raise a point of order Madam Speaker— 
Hon Dr Michael Cullen 
: I raise a point of order Madam Speaker. 
The ASSISTANT SPEAKER (Ann Hartley) 
: Dr Michael Cullen. 
Gerry Brownlee 
: That is outrageous! I have never seen anything so biased in all my life. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member is to withdraw that remark please. 
Gerry Brownlee 
: What are the rules around here? I raised a point of order on the bell. I was clearly the first person to raise a point of order; the audiotape will demonstrate that perfectly clearly. The videotape of it will also show that very clearly. You looked my way then immediately turned to Dr Cullen. It would appear now that the Chair is totally complicit in the Government’s determination to jackboot all over the democracy and conventions of this county. I will not apologise for saying that.  
The ASSISTANT SPEAKER (Ann Hartley) 
: Mr Brownlee the call is mine as I have explained to you several times. 
Gerry Brownlee 
: I raise a point of order Madam Speaker. Let us be clear on what the sequence of events has been here. I sought a point of order and you chose not to accept it but instead turned deliberately to Dr Cullen and took his point of order. I have now expressed my disappointment about the biased nature in which the Chair has operated in this particular case and I have further alleged that the Chair is complicit with the Government in trying to expedite a piece of business for the Government that will see the democratic rights of New Zealanders trampled all over. Now apparently you are simply saying that you have told me the rules before that there are really no consequences to what I said and that we are going to hear from Dr Cullen because we have some time limits here that we need to address. Madam Assistant Speaker you are in a very difficult position because you either have to take some pernicious action against me or effectively revisit the way in which the House operates when circumstances like this arise. This will be precedent setting. 
Hon Dr Michael Cullen 
: The member seems to think there is some sort of strange complicity to achieve some device. Far from raising a point of order to expedite business I was raising the point of order to slightly delay some business of the House. I was going to seek leave—I will do that in a moment and explain why—for the next item of business which is the Mauao Historic Reserve Vesting Bill’s first reading to begin at 2 o’clock. I understand that some people are still on their way and that more people can probably be here at 2 o’clock than are here at the moment. I know that Opposition members are very sensitive about the  
New Zealand Herald  
editorial this morning and feel they have to beat their chests but the Government intends that the House carry on in urgency to complete first readings and that we will come back next week because most of us are going to be here anyway.  
I now seek leave for the House to rise for luncheon then to begin again at 2 o’clock for the first reading of the Mauao Historic Reserve Vesting Bill. 
The ASSISTANT SPEAKER (Ann Hartley) 
: Before we do that because the point of order was raised before the question had been put on the previous bill and the speaker had finished I will put that question first.  
Gerry Brownlee 
: I raise a point of order Madam Speaker. You cannot put the question because Mr Worth has not finished his allotted time. I raised a point of order—which was ignored—on the bell meaning that he still has 2 minutes to speak. 
The ASSISTANT SPEAKER (Ann Hartley) 
: I thought he had finished. OK; we will do that. 
Hon Dr Michael Cullen 
: If Mr Worth wishes to carry on speaking for 2 minutes then I am very happy for him to do so. I am fascinated by his erudite explanation of this bill which I trust will be noted fully in the next  
New Zealand Herald  
editorial. 
The ASSISTANT SPEAKER (Ann Hartley) 
: I would just like to say as I relayed to Mr Brownlee before that it is my decision about the call. As well if the member wants to criticise the Chair then he knows the proper procedure for doing so. 
Dr RICHARD WORTH 
: I am grateful for the opportunity of continuing this speech on the Companies (Minority Buy-out Rights) Amendment Bill. I was just about to turn to the substance of the bill in the short time I had remaining having made comments to set a broad contextual framework for what that position might be. 
One of the issues that will be looked at when the bill comes to the select committee will be the appointment of advisers. This is the type of legislation where I believe that independent advisers should be engaged. The reason for that without in any way criticising those officials who will be drafted into the task of providing support and assistance on the bill is that there needs to be a hard-headed commercial look at this legislation. The issues are easily identified but their solutions perhaps are not so easily identified.  
Certainly the following key features need to be considered. First of all there needs to be an obligation on the company of a minority buy-out to send to each shareholder of the company a statement setting out the rights of shareholders when a special resolution triggers the minority buy-out provisions in the Act.  
Sitting suspended from 1 p.m. to 2 p.m. 
Bill read a first time.  
Bill referred to the Commerce Committee. 
Mauao Historic Reserve Vesting Bill 
First Reading 
Hon PAREKURA HOROMIA (Minister of Maori Affairs) 
: 
 I move  
That the Mauao Historic Reserve Vesting Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be considered by the Maori Affairs Committee that the committee report back to the House on or before 27 March 2008 and that the committee have the authority to meet at any time while the House is sitting except during oral questions during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 192 and 195(1)(b) and (c).  
This bill transfers ownership of the fee simple estate in the Mauao historic reserve generally referred to as Mount Maunganui to the iwi of Tauranga Moana—Ngai Te Rangi Ngati Ranginui and Ngati Pukenga—in recognition of the significant cultural traditional historical and spiritual importance of Mauao to them. It also recognises the relationship between Waitaha and Mauao and the importance of Mauao to the wider public.  
I would like to acknowledge the initiative of Kiri Toha Tangitu in the mid-1990s who started discussions on Tauranga Moana and with my colleague the Hon Mita Ririnui regarding Mauao. Mike O’Brien and Wi Parera Te Kani who have both since passed over should also be mentioned because of their energy in progressing the proposal on behalf of iwi for the Crown to consider returning Mauao to the ownership of tangata whenua.  
I would also like to recognise the kaumatua of Tauranga Moana Iwi and the trustees of the Mauao Trust who have demonstrated considerable patience while the technical aspects of the bill have been finalised. I recall meeting the trustees and iwi representatives on 11 August 2007 in Tauranga when we signed an agreement to introduce this bill. That in itself was a significant milestone after many many months of discussion negotiation and finalising the finer points of the transfer proposals to return Mauao to the iwi.  
The bill transfers the fee simple estate to iwi. Like other maunga tapu the hapu and iwi of Tauranga Moana are bound to their ancestral mountain Mauao. The whakatauki “Ko Mauao te maunga ko Tauranga te moana” reflects the central part of Mauao in their collective identity from times gone by and into the future. This bill gives effect to the agreement that was signed by the Crown Tauranga Moana Iwi the trustees and Waitaha representatives on 11 August 2007 to introduce vesting legislation.  
The bill will transfer the fee simple estate of the Mauao historic reserve to Ngai Te Rangi Ngati Ranginui and Ngati Pukenga. Mauao will retain its historic reserve status under the Reserves Act 1977 but as the Act does not provide for the transfer of reserves enabling legislation is necessary. The bill guarantees that the public will continue to enjoy access to Mauao and the Tauranga City Council will continue to administer the reserve. The increased involvement of iwi over time will complement and enhance the already iconic status that Mauao has for the country. This bill and the agreement it seeks to implement are not consideration of any Treaty settlement nor will the bill affect any historical Treaty negotiations in the future.  
The bill is not long with 16 clauses. Its brevity however should not be seen to overshadow its significance. The vesting of the fee simple estate in iwi recognises the mana of Mauao. It is not concerned with determining ownership or mana whenua at 1840. It recognises that each of the four iwi have through the ages had significant ties to Mauao that are enduring for those iwi and hapu today. The Waitangi Tribunal understands that all the hapu of Ngai Te Rangi Ngati Ranginui Ngati Pukenga and Waitaha have associations with Tauranga Moana and Mauao. This bill fulfils the initiative of those representatives of Tauranga Moana and makes good on the agreement brokered by the body mandated by the iwi to progress the proposal through to legislation—Te Runanganui o Tauranga Moana.  
For these reasons I consider that the bill should proceed without delay to the Maori Affairs Committee and be reported back on or before 31 March 2008. This will allow the Maori Affairs Committee sufficient time to receive submissions on the bill after the Christmas break. I commend the bill to the House. 
Hon TAU HENARE (National) 
: 
 After 8 years we all of a sudden have four bills from the Minister of Maori Affairs. That is an amazing stint. Why now and what is the rush? 
First of all I want to concentrate on Mauao. Myself and my colleagues the Hon Georgina te Heuheu Chris Finlayson and the local member Bob Clarkson sat down with some of the local people. We asked them whether the Mauao Historic Reserve Vesting Bill was a good thing. They said that it was but they had one big gripe. And that one big gripe was that it was a Clayton’s bill. Basically the bill says: “You can have Mauao your historic maunga but you don’t really get it; all you get is a name on a piece of paper and that is all you’re going to get.” And it says so in the bill: “the Crown for all legal purposes continues to bear the rights and obligations in respect of the reserve … as if the fee simple in the reserve were still vested in the Crown.” That is what the bill states; that is not from us. That is I suppose an issue with the local people. They still think that there could be some movement on this bill even though they and we support the Government in putting it forward. 
Members will hear from my colleagues and me that we are not opposed to this measure. What we are opposed to I suppose is the fact that these sorts of bills are becoming far too frequent—where someone is gifted something but not really. One does not really get the Christmas present. One is getting a Christmas present but Santa Claus is saying: “You can have this but not really.” 
Hon Parekura Horomia 
: Even if that is what the iwi wants? 
Hon TAU HENARE 
: Oh no hang on. The Minister of Maori Affairs is saying that that is what the iwi wants. Well actually we were there. We talked to the local iwi and the local iwi said this— 
Hon Mita Ririnui 
: No you didn’t. 
Hon TAU HENARE 
: Oh so where were we when we met with the local people? 
Hon Parekura Horomia 
: In cuckoo-land. 
Hon TAU HENARE 
: The Minister of Maori Affairs is now saying that the local iwi office is in cuckoo-land. The people in Tauranga should know that the Minister of Maori Affairs has just referred to their officers as being in cuckoo-land. 
We were there. We were even there with Te Ururoa Flavell from the Maori Party. We heard from the local people and the local people told us that they were being forced— 
Hon Darren Hughes 
: I bet he loves Gerry Brownlee! 
Hon TAU HENARE 
: Oh no they were being forced to sign and agree with this. What worries me is that although it is a good thing that we recognise the historic traditional and cultural— 
Hon Darren Hughes 
: But! 
Hon TAU HENARE 
: Well there is a “but” because the Crown gets away with too much. If the local people say they do not want it then the Crown walks away. It is no skin off the Crown’s nose whatsoever. But for over 100 years the local people have been saying: “Please hand back the title to this maunga.” In essence they are being told that they will get the fee simple title but not really. Everything shall remain the same even though there is a bill stating that they will get the maunga back. They cannot do anything with it. They have to work with other people. That is fine. Let them work with other people—let them do all sorts of things—but at the end of the day this bill is a do-nothing bill. It forces the local people into saying: “Yes we want a Christmas present even though we are not really going to get to play with the toy.” I just wonder whether we could have done a wee bit more than what we are doing now. 
I want to turn my thoughts now to 8 years of this administration for good or for bad— 
Hon Darren Hughes 
: Mostly good. 
Hon TAU HENARE 
: Mostly bad thank you Darren. I want to turn my thoughts to the Minister of Maori Affairs who within the space of 24 hours will have introduced three bills into this House. One or two of his bills are controversial and one or two are purely and simply mechanical bills. Suddenly the Minister has got busy. Suddenly Te Puni Kokiri has got busy. Suddenly the Minister has looked at the calendar and thought to himself: “Crikey we’ve got an election soon. I had better get busy. I had better say to the public: ‘Look what I’ve done over the last 8 years of a useless administration.’ ”. It has been a no-hoper administration. So the Minister comes to the House in urgency just before everybody is about to go on holiday and he introduces three bills. For 8 years he has been sitting on $180000 a year and a Crown car and all he has come up with in those 8 years is three or four bills. One of those bills which we are talking about today forces the local people to sign on the dotted line. 
If that is the sum total of the 8 years in office of this Minister of Maori Affairs then the Maori community is in bad shape. I think the Maori community is in good shape despite the Minister. I think the Maori community is in good shape not because of this administration which wants to give and take with the same bill but because it wants to be in good shape and to move on. It is doing things despite this Government. It is not because of this Government that Maori are succeeding beyond people’s imagination. 
We have had 8 years of this administration and suddenly we have four bills. Why now? What is the rush just before Christmas? We are here in urgency and urgency requires that there is something urgent to be brought to the House. The word is “urgency”. I know that the Leader of the House may have had something urgent to bring to the House—or he may not have—but certainly this bill is not urgent. 
Hon Parekura Horomia 
: Oh you don’t want them to have it? 
Hon TAU HENARE 
: The Minister should ask the local people—you know the ones he said lived in cuckoo-land. It was the Minister of Maori Affairs who said that those people up in Tauranga lived in cuckoo-land. 
Hon Parekura Horomia 
: You are making it up Tau. You’re always in cuckoo-land. 
Hon TAU HENARE 
: The Minister can read his  
Hansard 
 afterwards; that is fine. 
After 8 years all we have is a bill that says the local people can have something but not really. They can sit on a committee but not really. They can sit around the table and make— 
Hon Parekura Horomia 
: What did you give them Tau? You gave them nothing. 
Hon TAU HENARE 
: That is what we hear after 8 years of uselessness. After 8 years of doing nothing the Minister suddenly sees the writing on the wall and he says: “Whoops-a-daisy I had better put something on the agenda so that the people out there can think that I have been doing something.” Well I have news for the Minister and it is all bad. Come election day people will not worry about the four bills the Minister of Maori Affairs tried to put up in the last days of this session. They will be thinking about the future of Maoridom and they will not be looking backwards as the Minister will be come the day after the election. 
Hon GEORGINA TE HEUHEU (National) 
: 
 E nga iwi o Tauranga Moana tena koutou tena koutou tena tatou katoa. I am very pleased to take a call on the Mauao Historic Reserve Vesting Bill. Unlike the bill that the Minister rammed through its first reading last night the Waka Umanga (Maori Corporations) Bill which no Maori leader as far as I know and no Maori tribe as far as I know requested asked for or wanted this bill is different. The presence of some of the locals from Tauranga Moana in the House today hopefully says something about the level of support for the bill now before us. That makes me feel comfortable about standing and on behalf of National supporting this bill through its first reading and on to the Maori Affairs Committee.  
My colleague the Hon Tau Henare is right though. He and I and two others of our colleagues did meet recently with some of Ngai Te Rangi and we got a sense that they felt a little bit cheated that on the one hand Mount Maunganui is being returned to them at least in the form of a vesting in trustees for the Tauranga Moana iwi but on the other hand as Tau Henare said it was a Clayton’s return. That is a shame and it takes some of the gloss off what should otherwise be a very important and significant moment in their history.  
However we are very happy to support the bill’s first reading because we are told there is a general level of support for it. It is something that the iwi of Tauranga Moana have been asking for over a long number of years. Here we are today considering this bill admittedly under urgency but I guess that for them they would see it as a priority for the House to give this bill some urgency. Most Maori who have been waiting for the return of assets or the vesting of various pieces of land or landscape to be returned to them have been waiting for a long time so if we are in urgency this is a bill that ought to get priority anyway.  
This House will have become accustomed to the importance of maunga to tribes and although parliamentarians may not have been aware of it 15 years ago or two decades ago they are certainly now aware of the importance of natural landscape features to Maori. All of us Maori in the House who sit here today can be identified through our maunga our awa and our land and that is why this should be seen as something very important for these several iwi.  
The example was set by a National Government back in the 1990s which recognised the importance of these things. I guess there is room in the future for further recognition of other maunga. We will not say where they sit but it is not far from here. Who knows whether there is a way of getting a form of ownership back. Even though it is not really ownership it is certainly a recognition of the importance of maunga to iwi and no doubt other iwi will be very interested in seeing what is going on here today. 
As the Minister has outlined Mount Maunganui which was acquired by the Crown in the 1880s has been administered as a historic reserve since 1981. Essentially it will carry on in that vein except that it will be vested in trustees consisting of representatives of the three iwi—Ngai Te Rangi Ngati Ranginui and Ngati Pukenga—and all of the activity that has gone on before on this maunga will continue. That was an issue that my colleague Bob Clarkson the local member for Tauranga was intent on ensuring as we all were. No doubt he will articulate these issues when he takes a call.  
Bob was with us when we had a meeting with representatives of Ngai Te Rangi and it is very clear that he is a good local member. He is a very good local member. He is an excellent local member because he has this pretty wide view of the interests of all but he has a keen sense of how important the vesting of this maunga is to the iwi. That is why he is in the House today and that is why he will also support this bill going to a select committee.  
National members support this bill and there is probably not a lot more that could be said about it. We support it for very good reasons. This vesting is wanted by the iwi it is something they have yearned for for a long time and it is part of the way that they identify themselves. Like all iwi of course I identify myself with Ngauruhoe and Tongariro the mountains in the middle of the North Island and I can totally accept why this vesting would be important to them. It is just a pity that they feel this reservation that they supposedly get ownership but they do not. But I think that on the other side of that equation the upside is that if they were to get complete ownership they would also get all the liabilities and obligations that go with it— 
Hon Parekura Horomia 
: Hear hear! Ka pai Georgina. 
Hon GEORGINA TE HEUHEU 
: —ae I thank the Minister very much—and of course that then becomes a return of an asset that could end up being a little bit of a chain around one’s neck. But that is up to them to decide and they have decided it.  
We will look at this bill in the select committee. We probably will not spend too long on it because it is reasonably simple but obviously if there are deeper concerns about the form of vesting—the sort of Clayton’s ownership that is being returned—then we will hear from them on that. But as I say it is quite good to leave all the responsibility with someone else and still be able to say “We own that mountain.” National supports this bill going to a select committee and my colleague the local member Bob Clarkson will have other things to say about it. I am pleased to be here today to acknowledge the iwi of Tauranga Moana and to acknowledge this step in their development and their future progress forward. Tena koutou katoa. 
DAVE HEREORA (Labour) 
: 
 I rise in support of the Mauao Historic Reserve Vesting Bill which will acknowledge the significance of this important ancestral mountain to the tangata whenua of Tauranga Moana while preserving the conservation values of Mauao to the nation. One of the principles of this bill is about the Tauranga community coming together with the iwi and Tauranga Moana and supporting the principle of preserving the conservation values of Mauao to the nation. I think that is quite significant because it shows that where there is a willingness within the community to work together and support a common goal we end up with good legislation that supports that principle.  
The transfer will recognise the value of Mauao to iwi and will elevate the values already associated with the Mauao historic reserve. The bill does not include the recreation reserve at the foot of Mauao but it includes the three parcels that comprise the historic reserve—the bulk of the mountain. From the outset kaumatua have expressed their desire to protect Mauao from alienation and commercialisation.  
This bill provides for the continuance of the provisions of the Reserves Act 1977 which already provides for those key planks. Clause 6 of the bill prohibits the trustees from disposing of transferring or charging the reserve or any part of it. Similarly the bill prevents the Minister of Conservation from exercising any power under section 26 of the Reserves Act 1977 to vest the reserve in other persons. The bill therefore achieves the transfer of the fee simple estate in Mauao historic reserve to Ngai Te Rangi Ngati Ranginui and Ngati Pukenga in perpetuity. The only remunerative activity that could occur would be under the provisions of the Reserves Act. For example interpretive tours could be undertaken and the receipts paid back into the administration of that activity. Third-party access and use rights for the incumbents such as those regarding the reservoir navigational beacon and trig station will continue and public access is guaranteed.  
There is no intention to revoke the reserve status of Mauao historic reserve. The Minister of Conservation will retain the power to appoint the administering body of the Mauao historic reserve. I consider this bill to provide a great compromise that provides for iwi to own the reserve as its registered proprietors and for all New Zealanders to continue to enjoy Mauao. The bill does not preclude iwi from investigating options with the Crown and the Tauranga City Council around the joint management of the historic reserve under the Reserves Act 1977 in the future.  
I would like to mention some of the finer points of the bill. Clause 7 has been the source of some debate. It provides that the Mauao historic reserve must be treated as if the fee simple estate were still vested in the Crown. Although that clause may sound contradictory with the proposal to transfer the ownership of Mauao it is necessary for several reasons that clause 7 provides that the Crown for all legal purposes continues to bear the rights and obligations in respect of the reserve as if it were the owner of the reserve. This clause ensures that the trustees of the Mauao Trust are not liable for any obligations that currently fall to the Crown such as those under the Building Act 2004 that the holder of the fee simple estate may have in relation to the structures or alterations to structures on the reserve.  
Clause 8 is a particular application of clause 7 and it provides that the Mauao historic reserve remains a historic reserve and that in respect of it the Minister of Conservation continues to have the functions obligations and powers of the Minister in relation to a reserve vested in the Crown. Clause 8 also maintains the current position of the Tauranga City Council as the administering body for the reserve. Without the explicit provisions in clauses 7 and 8 the Minister of Conservation would not be able to appoint that administering body and the legal status of the reserve would be unclear. 
The Tauranga Moana iwi and Waitaha are to assume more of a role in managing the Mauao historic reserve in future. When the administration infrastructure is in place the full extent of the rights obligations and potential liabilities associated with that will fall to the trustees of the management body. Ngai Te Rangi Ngati Ranginui Ngati Pukenga and Waitaha are currently represented on an advisory committee that has input into council management decisions over the reserve. A revised proposal recently submitted to the Government which formed the basis of the agreement by iwi to progress this bill includes Waitaha also being represented at the management level. Tauranga Moana iwi and Waitaha have signed the agreement and have indicated broad support for the bill.  
In summary speaking as the chair of the Maori Affairs Committee we look forward to receiving this bill. We look forward to being given the opportunity to analyse this bill through the select committee process and obviously we will be commending it when it comes back to the House. Kia ora. 
METIRIA TUREI (Green) 
: 
 I will take just a short call on the Mauao Historic Reserve Vesting Bill. The Greens are very pleased to support the bill going to the select committee and we are pleased to hear that there is generally broad support for this legislation.  
I agree with the Hon Georgina te Heuheu that it would be nice to see more of this kind of legislation where recognition is given to Maori for their ownership where there is recognition that title is not something to be feared by the community and where one can enable Maori and iwi to have title of their traditional properties without it being used as a scaremongering tactic as we have seen in the past with other kinds of properties. It does not have to be done within the framework of the Treaty settlement but through other more rational processes with the Government and with Government agencies.  
Unfortunately I was not able to meet with the iwi before this bill came to the House but I do understand that there is generally broad support and I certainly take the advice of other colleagues who have spoken with them about that. In so far as the bill provides for the maunga to go back to those who are its traditional original and rightful owners the Greens are very pleased to be able to enable that to occur to some extent. Thank you. 
Hon NANAIA MAHUTA (Minister of Customs) 
: 
 I rise to take just a very brief call also on the Mauao Historic Reserve Vesting Bill. I support the bill’s intent and I support its being sent to the select committee. There would have been a time in New Zealand’s history when Mauao would have been known only as Mount Maunganui which is tied to the shackles of our colonial past but this bill certainly signals a new way forward. The bill should be supported. The intent with which those people who want to see the restoration of the maunga back to iwi happen should be supported. The bill should also be supported because there is clearly an intention to maintain a link with everybody who now sees Mauao as their maunga not just the iwi of Ngai Te Rangi Ngati Ranginui and Ngati Pukenga but also the people of Tauranga. This is a model of what is perhaps possible.  
Some of the members who spoke before me pointed to the issue of what the benefit would be of giving back a maunga in fee simple title when the management still rests to some extent with the local authority. I will tell members what the benefit is. Partly the benefit is to ensure that iwi are now a very critical part of the management of Mauao. The other aspect is that it locks in a long-term relationship with the local authority no matter who the people around the council table of the day are and it enables iwi to say: “This is what we want to see happen with our maunga.”  
The other benefit which is made clear by the very nature of the name of this bill—the Mauao Historic Reserve Vesting Bill—is that the identity of that maunga within that rohe will now be forever known as Mauao. I think the benefits of that when leveraged by iwi will be realised in the tourism sector because now more than ever before it is not just our clean green image that is well recognised in terms of our identity throughout the world but also the living landscapes that exist and the stories we have within our areas. So people will want to know about Mauao. Just as people know about the volcanic cones in Ngati Whatua land and now a whole industry shares the history of Tamaki-makau-rau with all visitors—New Zealanders and international visitors—so too can the opportunity be for Mauao. Therein lies the benefit of vision.  
I certainly support the intent of local iwi to see their maunga returned and vested in them. Clearly recognition of the mana of Mauao within the district will be realised in current-day opportunities and certainly tourism is one part of that. More critically the opportunity to leverage a long-term relationship with local authorities in the long-term management of Mauao is something that we will continue to see realised as a result of this bill.  
I applaud the hard work and effort of the local member Mita Ririnui and also the Minister of Maori Affairs Parekura Horomia for bringing this bill to the House. In spite of the assertion by Tau Henare that the bill has come forward all of a sudden I say that no this bill has taken some time and people have had to get their minds around it. What does it really mean? Is it of benefit or is it not? Is it something that will realise opportunity or will it not? Those types of things take time and really in the sense of good faith both the Minister of Maori Affairs and the Associate Minister in charge of Treaty of Waitangi Negotiations have taken a coordinated approach to ensure that they are working in sync with the people who are really set to benefit from this.  
I say to the people of Ngai Te Rangi Ngati Ranginui and Ngati Pukenga that they have set a fine model. It is our role along every part of the way to ensure that that can be realised. I see future opportunities and potential models for other iwi but it could be something else. We should always uphold the principle that where there is greater benefit to the broader interests of all New Zealanders then surely we should support that. I would hate to see people make politics of it at this stage of the process and I would like to see full support for the intent of this bill. Tena koutou katoa. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
:  
Madam Speaker kia ora tatau katoa. Tauranga Moana mena kai te whakarongo mai koutou i te wa kainga tera pea kai runga i te rori a tera pea kai te noho mai i nga pakitara o te Whare nei ko taku noa ake ki te whaiwhai haere i nga mihi a tena a tena ki a koutou tena koutou tena koutou kia ora tatou. 
[ 
Greetings to us all Madam Speaker. To you of the Tauranga Harbour whether you are listening in perhaps from home on the road or seated within the confines of this House my part is merely to follow up the acknowledgments made by each of those before me saying: greetings to you greetings to you and to all of us 
.]  
There is a short video clip on YouTube called “Mauao Bombs” which features some Maori kids in baggy black pants doing bombs off Salisbury Wharf in Tauranga. The creative acrobatics and diving prowess of these young rangatahi is capped off at the end of the clip by a close-up of a sign that states “NO JUMPING”. The comments alongside the video clip state: “It’s a shame the council decided after decades of fun to ban jumping from this wharf.”  
With a healthy appreciation of the skills that are required to jump off a bridge having spent some of my childhood perfecting the art of bombing at school and anywhere else I could show off I can say that the video grabbed my attention as I was thinking about this Mauao Historic Reserve Vesting Bill. For those who are unfamiliar with the name by the way—and it has been discussed already—Mauao is the original name for what is now known to most as Mount Maunganui in Tauranga.  
The video made me wonder whether the mana and integrity of Tauranga Moana iwi will be as constrained by the enactments of this bill as the Mauao boys are constrained by the local council by-laws. The big question as we consider this bill is how the ownership rights of Ngai Te Rangi Ngati Ranginui and Ngati Pukenga will be respected when all rights remain with the Crown through the Minister of Conservation devolved in part to the Tauranga City Council. That is the question.  
Who will end up doing the jumping and who will end up nailing down the signs of possession and control? I ask this question with all due respect to the signatories from Tauranga Moana. As I understand it Ngai Te Rangi Ngati Ranginui and Ngati Pukenga sought a comprehensive package in respect of the transfer of title management arrangements and Treaty settlement negotiations for Mauao. Their expectation was that they would receive the entire Mauao historic reserve. Their expectation was also that the process and outcome would uphold the mana of the three iwi of Tauranga Moana.  
To cut to the chase I say that they want their maunga back. It is that simple. In case someone tries to use the old scare tactic of saying that Maori will not allow access I am clear that that claim is absolute rubbish just as it was for the seabed and foreshore legislation. The challenge for this House is to gauge whether the way in which this bill vests the fee simple estate of Mauao historic reserve in the trustees of the Mauao Trust goes anywhere near to reaching this expectation.  
In its most practical form the bill gives effect to the agreement to introduce vesting legislation in relation to Mauao signed by the Crown and iwi in August of this year. Importantly the bill makes explicit the objective of the Crown. The Crown says that it is all about building healthy relationships with Ngai Te Rangi Ngati Ranginui Ngati Pukenga and Waitaha. On the face of it it all seems to be pretty good stuff—positive expectations of the iwi constructive commitment from the Crown and at the heart of it all acknowledgment of the historic significance of Mauao.  
As the story goes I am told that the Patupaiarehe gave the name Mauao to this mountain following a battle of love between a humble nameless hill and a great chiefly mountain Otanewainuku both of whom were vying for the love of Puwhenua. Unsuccessful in his pursuit for the heart of Puwhenua the nameless one longed for the sea. The Patupaiarehe drew on all of their magical powers to drag him to the places where he now stands which marks the entrance to Tauranga Moana. He became known as Mauao—caught by the dawn—and in time he has assumed greater mana than his lifelong rival Otanewainuku.  
Mauao features throughout the mythologies whakapapa and korero known to Ngati Pukenga Ngai Te Rangi Ngati Ranginui and Waitaha. The archaeological landscape within the Mauao historic reserve is also of lasting local national and international significance. It represents the physical remains of approximately 600 years of human occupation. The archaeological features of Mauao have considerable cultural significance to iwi of Tauranga Moana. In short it is the most sacred landmark of the whole Tauranga area and is the reason that Tauranga iwi have actively resisted any commercial imposition on the mountain.  
Huge pa sites from Ngati Ranginui and Waitaha were located on the mountain. The history also includes the occupation of Ngai Te Rangi iwi through the battle of Kokowhai and the archaeological heritage of Mauao as a wahi tapu ensures that the cultural and historical significance will never be lost.  
There is also a post-contact history in which the Government of the late 1800s forcibly acquired ownership of the maunga by forcing owners to pay for expensive surveys of the land—surveys that in themselves were so prohibitive that the owners were eventually placed under no alternative but to sell their interest to extinguish the debt. According to other records fossicking by European settlers also desecrated the maunga.  
The sacred maunga of Mauao was central in the stories and whakapapa of Tauranga Moana iwi and Waitaha. His name features in the tribal pepeha. He is central to the mana rangatiratanga and kaitiakitanga of the three Tauranga Moana iwi. Members should think about it. Clause 7 of this bill states that the general law continues to apply as if the Mauao historic reserve was still vested in the Crown. What I am saying is that iwi have only the title. That is right; this is a Clayton’s return of the maunga which has the potential to completely stifle the ownership interests of Ngai Te Rangi Ngati Ranginui and Ngati Pukenga.  
Yet again we remember the words of Nopea Panakareao at the signing of the Treaty who passed comment: “The shadow of the land goes to Queen Victoria but the substance remains to us.” The problem is that only a year later he was to rephrase that original statement concluding: “The substance of the land goes to the Europeans the shadow only will be our portion.”  
In the case of Mauao it must be said that there was concern about the difference between the shadow and the substance even before the vesting agreement was signed. As I understand it on 14 July this year Ngati Pukenga attended a ratification hui at Hairini Marae at which 87 percent of them voted against the signing of the agreement. At this stage the understanding was that if the vote of the four iwi was split or consensus was not reached another hui would be called a month later for a final vote to be taken. But hello what happened? Suddenly the Crown intervened and shifted the threshold of the vote concluding that a mere 66 percent of all voters would be sufficient—a decision made without consulting or notifying the iwi runanga and in particular the people of Ngati Pukenga in this case. It was all done in the shadow of the Crown.  
We have on record information that informs us that Ngati Pukenga twice voted resoundingly for not signing the agreement. We also have statements that describe how the resolve of Ngati Pukenga has been tested unduly and unnecessarily and I quote: “The process thus far has been seriously flawed and our people have been alienated because the mana of our iwi was not respected.”  
We contrast this statement with the emphasis the Crown gave in the preamble of the bill about its so-called commitment to healthy relationships with the iwi of Tauranga Moana. But yet again the Crown comes up sadly wanting. We have a situation in which to all intents and purposes Mauao remains in Crown ownership. We have a situation in which Tauranga Moana iwi were unable to find resolutions to their concerns about the long-term impacts of clause 7 which clearly sets out that the Crown continues to bear the rights and obligations as if it was the owner of the reserve.  
Iwi wanted to know exactly how clause 7 would have an impact. Ngai Te Rangi remind us that although their old people wanted the maunga returned at all costs the price of clause 7 may be too high. I have met with representatives of Ngai Te Rangi and some of them are not happy. It is the classic divide and rule tactic. It is the same old story with settlements: “Take it or leave it. But if you leave it don’t come back and don’t do a tangiweto.” So what happens? The people become divided. It is an all too familiar feature of the interactions set in train by Crown intervention.  
What makes me angry is that the Crown will never fully understand the long-term impacts and trauma that come about through provoking such division. These are iwi just like the high-spirited young boys jumping off the wharf who see Mauao as being central to their identity and to the sense of who they are. They deserve the House’s full respect for the way they have acted and for the integrity and commitment they have always upheld in trying to achieve the best outcomes for Tauranga Moana iwi and for Mauao.  
We will support this bill going through to the select committee to ensure that all the voices that need to be heard in this debate have the chance to put their concerns. But we will be watching to see that securing Mauao remains of the highest priority for those iwi who have always called it “He maunga tipua he maunga tapu ae he maunga nui”. 
BOB CLARKSON (National—Tauranga) 
: 
 It is good to see everybody heading in the same direction. We are not actually even slagging off each other which I think is a pretty good sign. I keep going up to the Waitangi celebrations on the top of the Mount and I have to say “sorry” every time I go up. The various Maori groups know what I am talking about. I am talking about the ownership of the Mount. I have done that for several years now and it is quite sickening. So it is good to see a bit of movement here. I am pleased to talk on this Mauao Historic Reserve Vesting Bill of course because the Mount is in my area and is quite dominant within it. I do not see too much wrong with doing this deal. It will help to build a healthy relationship between the Crown and the different Maori groups. Sad to say it is a bit of a Clayton’s deal. We are vesting it to the Maori groups; we are not giving it to them. This needs to be debated in the select committee to see whether there is a better way to do it. By partly giving it it will be kept out of the Treaty settlements because there is no monetary gain in the future. If it was a simple transfer of title it could be argued that it could be part of a land Treaty settlement—which might drag on for years—and have a value put on it. I do not think that the people of Tauranga would be happy to give full title; they want free access to walk around or up the Mount at any time— 
Hon Parekura Horomia 
: That’s not what Georgina said. 
BOB CLARKSON 
: I said that there was no heckling today. And that access would be for the foreseeable future. Full title might cause some access problems in the future. 
A couple of points need to be dealt with in the select committee. If extra access rights are needed for various things like water reticulation water tanks navigation lights and those things some provisions might have to be put in the bill to cover them in the future—there are some access provisions in it at the moment—but only if they are needed for good reason. It should be made clear how we will deal with those issues. We do not need a situation whereby a future Minister can revoke the reserve status and the land become private property. This needs discussing in the select committee as well. I want to hear clearly that the camping ground is out of the equation and will not be affected. I believe it is but I would like to hear it. 
Generally to finish my short speech let us get a result. It is good to see us all moving in the same direction. I think we can get a result out of this and we need to. I need the ownership declared because I have asked the Maori groups up there to bury me on the top of the Mount when it is all sorted out. Thank you Madam Speaker. 
Hon MITA RIRINUI (Minister of State) 
: 
 Kia ora tatou. I rise naturally to support the Mauao Historic Reserve Vesting Bill. But before I do that I want to acknowledge something very important that I almost overlooked. A tremendous event took place this morning in Parliament: the signing of the Te Atiawa (Te Whanga-nui-a-Tara) agreement in principle in relation to their historic claim. That is a huge achievement not only for the Government but in particular for Te Atiawa. The korero here in the meeting room echoed how we must appreciate our arrival at this point. So I congratulate the Minister and all the Ministers—including me—who were involved in bringing the claim to this point.  
I want to make it clear in this House that our ancestral association with our maunga Mauao has never never never been severed—not by anyone. I recite these words which we call our popular pepeha: “Papaki tu ana nga tai ki Mauao i whakanukunukuhia i whakanekenekehia. I whiua reretia e Hotu rawa he mea rua ki te wai ki tai wiwi ki tai wawa te whai ao te ao marama tihei mauri ora.” 
[ 
The tides rendered and crashed upon Mauao casting the waters about in turbulent movements. Hotu cast two things upon the tides here and yonder. Upon the physical world and the world of enlightenment as well and behold there was life 
.] 
Essentially that pepeha is attributed to the arrival of the Tainui waka into the Tauranga Harbour. On its arrival there was not much of a welcoming committee. The seas were high the winds were strong and the weather was bad. The ariki of the Tainui canoe Huturoa said that there was a bad spirit here and that we had to make a sacrifice. So an old woman from the canoe said “I will be the sacrifice.” and threw herself into the tide. From that moment on the seas settled the clouds cleared the wind went away and settlement began. So we called Mauao Mount Maunganui our maunga iringa korero. All our history all our poetry all our culture surrounds this particular maunga at the mouth of the Tauranga Harbour. When people go on and on about transferral fee simple title and Clayton’s arrangements I wonder to myself what those people are talking about. This is our ancestral maunga. Its mana has always been with us.  
The purpose of this legislation is basically to bring authorities at a local level into line so that we can manage this very important taonga resource in an appropriate manner. That is what this is about. But there are roles and responsibilities for all those involved. Clause 3 of this transfer bill highlights what some of those are including the obligations of the Crown. In other words it removes the obligation of the trustees of the Mauao Trust from any public liability and that is an honourable thing. That is an acknowledgment of the status of local tangata whenua and we applaud that regardless of what has been said in this House.  
When people use the word “Clayton’s” the only Clayton’s phrase that comes to mind for me is “Clayton’s consultation”. What the Hon Georgina te Heuheu the Hon Tau Henare the local member Bob Clarkson and the member for Waiariki Te Ururoa Flavell had with a small organisation in Tauranga is Clayton’s consultation. If they had gone right through the moana and talked to everyone they would have come back with a better appreciation—and certainly with a better line. So when I use this tone of voice it is because I realise that although some people who have spoken in this House live very close to the vicinity of the maunga they have no understanding of its people and iwi dynamics.  
When I stand to support this Mauao Historic Reserve Vesting Bill I have to make it clear that our relationship with our ancestral maunga comes in many different forms. We describe it in the first sense as spiritual. In the second sense it is historic. In the third sense it is cultural. In the fourth and very important sense it is economic because it did form part of the base of the economic development in the times before colonisation.  
I want to respond to the member for Tauranga’s comments around his desire to be buried up on that maunga. I say to Bob that I am sorry but it cannot be done. There was a point some time this year where he made that statement clear and I offered to do it for him straight away but that was not to be.  
I need to acknowledge the wisdom of many of the kaumatua of Tauranga who have been involved in this project right from its inception but to do that I need to go right back to our old kaumatua rangatira who have always asked the question of why our maunga has been alienated from its people. As I come forward into more contemporary times up to the 1960s and 1970s and I think about the decisions that were made by local authorities to alienate the Mauao even further from the people including the public I am reminded of people like my kaumatua Turirangi Te Kani; Charlie Kuka; Bill Ohia; and my uncle and predecessor the member for Eastern Maori Paraone Rewiti who lobbied Parliament for justice in terms of the return of this ancestral maunga to the people of Tauranga.  
But as you will recall Madam Speaker—and I must acknowledge your role in bringing this legislation into the House—even in the year 2000 a delegation of Tauranga moana kaumatua met with you for the very purpose of discussing ways and means of returning their maunga to them although they did make it clear at that time that kei te pupuri tonu matou i te mana o to matou maunga. 
[ 
We will continue to retain ownership of our mountain 
.] 
Even though we still hold the mana of our maunga we want it recognised in law for its protection and everybody else’s protection. So that is very important and it needs to be acknowledged.  
I acknowledge those who have passed on since that first meeting—Wi Parera Te Kani a very very instrumental person in bringing about very difficult decisions; the late Mike O’Brien; and Kiri Toha Tangitu as mentioned by the Minister of Maori Affairs. I also acknowledge other kaumatua including my uncle Kihi Ngatai and his wife; the representative from Waitaha Tame McCausland and his wife; the Ngati Pukenga kaumatua Monty Ohia and his wife; and also Ngati Ranginui kaumatua Morehu Ngatoko and his whanau. Very important wise and level-headed people in Tauranga have been involved throughout these negotiations. They decided following that first meeting with you and myself that they wanted the return of the maunga in fee simple form although they understood that public access was important. They had no intention whatsoever of preventing that from continuing.  
So when I hear people in this House say that the people of Tauranga were forced to sign the agreement that transfers the maunga back to the people I wonder where they get those stories from because I have not been at any meetings where anybody has been forced to do anything and I say that in all sincerity. The kaumatua of Tauranga made a decision. They wanted the maunga back understanding that public access issues were involved. They can never be forced to do anything and you yourself Madam Speaker are aware of that. They are very clear-minded people. I suppose some people when it came close to signing the deed of transfer regardless of the positions they took thought it important to have their names on the document. They were given the opportunity to do that. But to turn around in the next breath and say that they were forced to do it is a load of rubbish and that needs to be said in this House.  
Once again there are a lot of stories I could tell about this incredible maunga—this maunga iringa korero—in this House but I believe I have only 10 minutes and one of the bells has already gone. So in closing I thank yourself Madam Speaker; my colleague the Minister of Maori Affairs; the Hon Nanaia Mahuta who spoke in this House earlier on and who does have an ancient association with the maunga with the arrival of the Tainui waka; and also the member Dave Hereora who was very humble and modest when he spoke in the House and who also has the same connections to the maunga as I have.  
I appreciate in particular all those members on the other side of House—the Greens the Maori Party and others including the member for Tauranga—because throughout this whole process an incredible level of patience has been shown by all parties. In conclusion I thank the Mayor of Tauranga Stuart Crosby his councillors his chief executive and all the officers of the Tauranga City Council who did all the groundwork all the legwork to make sure this day happened. On that note I thank everybody who contributed to the positive outcome of the return of the maunga Mauao to the people of Tauranga moana. Kia ora. 
Bill read a first time. 
Hon PAREKURA HOROMIA (Minister of Maori Affairs) 
: 
 I move  
That the Mauao Historic Reserve Vesting Bill be considered by the Maori Affairs Committee 
 that the committee report back to the House on or before 27 March 2008 and that the committee have authority to meet at any time while the House is sitting except during oral questions during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 192 and 195(1)(b) and (c). 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 70 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Noes 51 
New Zealand National 48; ACT New Zealand 2; Independent: Copeland. 
Motion agreed to. 
Injury Prevention Rehabilitation and Compensation Amendment Bill (No 2) 
First Reading 
Hon ANNETTE KING (Minister of Justice) 
 on behalf of the  
Minister for ACC 
: I move  
That the Injury Prevention Rehabilitation and Compensation Amendment Bill (No 2) be now read a first time. 
 At the appropriate time I intend to move that the bill be referred to the Transport and Industrial Relations Committee for consideration and that the committee present its final report on or before 12 May 2008.  
This bill continues the Government’s commitment to a fair and sustainable accident compensation scheme for reducing the incidence and impact of personal injury. This Government has already made substantial changes to the scheme including returning responsibility for cover for workplace accidents to the Accident Compensation Corporation and the introduction of the new treatment injury provisions. These changes have provided major steps in the Government’s goal of making the scheme more responsive to the needs of claimants. This amendment bill continues to progress this goal by making changes to cover for work-related injuries eligibility and entitlement to weekly compensation and entitlement and processes for vocational rehabilitation and independence.  
This bill makes some significant changes to cover provided for work-related injuries by extending this cover to include mental injuries caused by a single traumatic event and by making changes to the cover provisions for work-related gradual process disease or infection. This Government believes that if a person is clearly harmed in the course of his or her employment he or she should be covered by the scheme regardless of whether the injury was a result of an accident or an occupational illness. The changes proposed in this bill make that intent clear.  
The bill introduces cover for mental injury caused by exposure to a sudden traumatic event in the course of employment. This means for example that a train driver whose train hits somebody on the tracks or a bank worker who witnesses a colleague shot during a robbery and goes on to develop a mental injury as a result will now be covered by the accident compensation scheme. These people are entitled to the same benefits under this scheme as others harmed by their work. This cover will ensure appropriate treatment and rehabilitation and it will help facilitate an early and sustainable return to work in cases where the claimant has to take time off. This is a major and progressive development for the scheme and it brings New Zealand into line with the cover offered to workers in other overseas jurisdictions including most Australian states British Columbia Ontario Alberta Denmark and the United Kingdom. The bill provides cover for clinically significant mental injuries rather than temporary distress that constitutes a normal reaction to trauma. The bill does not introduce cover for mental injury caused by non-physical stress.  
The bill also responds to concerns expressed by the Ministerial Advisory Panel on Work-Related Gradual Process Disease or Infection. The panel highlighted the current test to determine cover for work-related conditions as being a barrier to cover for claimants. The bill introduces changes to the cover provisions for work-related gradual process disease or infection to ensure that people harmed by their work receive greater access to cover and more clarity around whether cover is available and how it is determined. It does this through amending the test of work causation set out in the existing Act to provide greater certainty of cover for claimants with these conditions. In particular the bill clarifies that the responsibility and cost for investigating a claim rests with the Accident Compensation Corporation (ACC).  
The bill also makes changes in the areas of weekly compensation. Weekly compensation is paid to claimants who are earning at the time of their injury and is intended to provide earnings-related compensation so that claimants can meet their everyday expenses and focus on recovery. A review of the existing weekly compensation provisions was undertaken in response to concerns that seasonal workers were being disadvantaged by the current rules for calculating weekly compensation. Nearly a quarter of today’s workforce is in non-standard work—they work part time are self-employed undertake casual or seasonal work or move in and out of employment. The bill updates the weekly compensation framework to improve access to weekly compensation in this increasingly varied labour market particularly to seasonal and casual workers.  
The changes to weekly compensation provisions make the assessment for claimants more reasonable and easier to understand. The bill provides fairer and more straightforward weekly compensation for seasonal and casual employees through improving access to weekly compensation for people who are injured while temporarily between jobs. The bill allows earlier access to minimum weekly compensation for certain claimants and it increases the rates of weekly compensation paid to potential earners. In addition to providing weekly compensation to people who are unable to work because of their injuries ACC also provides vocational rehabilitation to aid them in returning to work. The bill enhances the existing legislative provisions for vocational rehabilitation to provide better outcomes for the claimants.  
Together with the existing provisions the changes help to ensure that injured people are able to return to work or to look for a job. This is important to people and their families as well as to the economy of New Zealand. The provision also provides a greater degree of flexibility to allow ACC to deliver the most appropriate rehabilitation to claimants. The bill provides ACC with the discretion to extend the current 3-year limit on vocational rehabilitation to enable ACC to meet the needs of the claimants where longer periods of vocational rehabilitation may be needed. It also—and importantly—removes the upper age limit for vocational rehabilitation to reflect the changing nature of our labour market.  
The bill also introduces a requirement for occupational assessors to consider a person’s pre-injury earnings when identifying suitable work types. This provision helps to ensure that where possible jobs identified for claimants reflect their previous earnings. The bill also addresses a number of other policy issues and improvements aimed at making the scheme clearer and more responsive to the needs of claimants.  
The Injury Prevention Rehabilitation and Compensation Amendment Bill (No 2) builds on the framework provided by the existing legislation providing a fair and sustainable accident compensation scheme for reducing the incidence and impact of personal injury and it is a bill that is responsive to the needs of claimants. I commend this bill to the House. 
PANSY WONG (National) 
: 
 Forty years ago Sir Owen Woodhouse’s report led to the establishment of a comprehensive 24-hour no-fault social insurance scheme. The two most defining features of it are firstly 24-hour cover for all personal injuries regardless of fault and secondly no right to sue for damages for such injuries. The accident compensation scheme has stood the test of time because its principles are clear consistent and concise. The report also outlined the importance of prevention compensation and rehabilitation. National supports those principles and that framework.  
As I say the important features of the accident compensation scheme such as conciseness clarity and consistency are now coming under increasing threat because the Labour Government is helping to make it complicated compromising and unsustainable. Let me demonstrate this by highlighting four provisions in this bill. Currently the Act covers mental injury in only two situations: mental injury suffered because of the claimant’s physical injuries and mental injury suffered as a result of certain types of sexual abuse or assault. This bill will introduce a new cover for mental injury arising from a traumatic event in the workplace. Examples given include witnessing a colleague shot in a bank robbery. The annual cost of the claim we understand could amount to up to $72.2 million and it could lead to a potential increase in levies of between 1.3c and 12.1c of liable earnings per every $100. The cost will be funded solely from the work account and the work account levy is from employers and the self-employed.  
But how about witnessing a colleague being shot in a bank robbery while on leave—outside the staff’s working hours? Would that be less dramatic? If not why is the Government not proposing to cover that situation? The levy would have come from the earners account; the earners levy of course is imposed on the worker.  
Dr Paul Hutchison 
: Where’s the consistency? 
PANSY WONG 
: That is a good question from my colleague Dr Paul Hutchison. But what about customers who happen to be in the bank and witness the shooting of a bank clerk or feel the risk of being shot at especially if they are children or elderly people? To cover that situation the levy would have to come from general tax assuming those people were not working. So once again we want to know why traumatic mental coverage in this case is confined to only working hours in the employment situation because one of the features of the Woodhouse report was not to distinguish between workers and non-workers. Therefore different funding streams are identified to cover the various situations but the principle of personal injury or coverage should be the same. No matter whether a person is working or not working—a different funding stream—the cover should be consistent. In this case the Government chooses to cover a situation simply because the funding tends to come from employers. We want to know why other situations are not being covered.  
In the typical Labour way of doing things it went ahead raised expectations and then introduced ambiguous terms so that individuals would have to prove the injury suffered. In this case “The event must be seen heard or experienced by the person directly … and be one which could reasonably be expected to cause mental injury.” One can just envisage the arguments and the views of experts involved. The process will drag on and on and Parliament I have no doubt will be asked to introduce future amendments to simplify the provision.  
We have a case in point because in this bill we are now asked to change the criteria to cover the work-related gradual process disease or infection. No sooner had Parliament passed that gradual process coverage into law than we are now being asked to amend the legislation to make it work because not many people can qualify. I bet in the first instance that provision was brought in without detailed analysis and objective principles. The change now is to shift the responsibility and cost for investigation on to ACC and if a person has exposure to the cause of injury both through work and non-work the person will receive cover if the work exposure was the more likely cause—and who is going to decide that? Also if the person qualifies a claim can be declined only if ACC proves that the work task or work environment places the claimant at no significantly greater risk of developing that personal injury. The estimated additional cost is $11 million and the levy once again happens to come from the work account. I am not too sure these changes will actually make the provisions any simpler. All I can envisage is a lot more work for experts in the field to prove the claims.  
Another devious change is brought about in this bill to undermine Parliament’s power to scrutinise the widening of the scope of schedule 2. At the moment schedule 2 is where individual occupational diseases can be added by Order in Council. But this course is introduced to change occupational disease to personal injuries defined by exposure to agents chemicals dusts compounds etc. or by occupational groupings industry or processes. This gives wide power to broaden the scope of claims without the scrutiny of Parliament.  
It is devious and underhand because if we look at the bill in a clause by clause analysis all it states is that clause 30 will repeal section 336(1)(a) of the principal Act and substitute a new section 336(1)(a) which relates to new section 30(3). That is not exactly alerting Parliament and everybody else to that dramatic widening of the coverage of the claim. This broad brush under-the-radar approach subsequently does away with any cost-benefit analysis. We do not even know how much it is going to cost.  
The fourth provision that I want to comment on is the repeal of the entitlement for wilfully self-inflicted injury. At the moment the Act prohibits ACC from providing entitlements other than treatment for wilfully self-inflicted personal injury and suicide unless that personal injury or death is a result of mental injury. The reason for this change we were told is because apparently the research indicates that the vast majority of suicidal behaviour and wilfully self-inflicted injury is associated with having a mental health disorder. Having further proof of mental injury adds little value to the determination of cover.  
But the Act intended to cover mental injury in only two situations: that suffered because of a claimant’s physical injury and that suffered as a result of certain types of sexual abuse and assault. Now mental health disorder is classified as personal injury and we do not even know how much that will cost. The inconsistency the widening of the coverage without objective analysis and the total disregard of the fundamental principle of accident compensation is irresponsible and unacceptable. We are told in the bill that we could be looking at a cost increase of up to $75 million. ACC is already recommending increases for next year’s levy and no doubt this will ensure escalating costs. Expectation has been raised on the one hand yet the subjective nature of these new claims will ensure ongoing appeals and arguments between ACC and claimants.  
National will not support this bill because it will further undermine and endanger the long-term viability and defining feature of accident compensation as outlined in the Woodhouse report 40 years ago. The road to hell is paved with good intentions. The National Party would want the accident compensation scheme to continue with its defining feature: its comprehensive 24-hour claims in exchange for not suing for damages. The last thing we want is any Act to undermine those defining features. 
DARIEN FENTON (Labour) 
: 
 The Injury Prevention Rehabilitation and Compensation Amendment Bill (No 2) is a bill to be proud of and I congratulate the new Minister for ACC my friend and colleague Maryan Street on its introduction. The bill deals with some of the harder issues for workers facing work-related injury or disease. It keeps pace with the changing world of work and work arrangements and ensures that our world-class accident compensation scheme continues to be fair and sustainable. 
As we head towards the summer holidays when most of us are able to have at least some time off I am particularly conscious that there will be many New Zealanders working during this period. Retail workers hospitality workers care workers transport workers and tourism workers—many of whom are casual and seasonal workers—will all be at work. This is a time when there is a greater risk of work-related injury because of extra workloads longer working hours and fewer breaks. Sadly some of these workers will become work-related injury casualties. But the good news is that we have an accident compensation scheme that is the envy of the world. We can be confident that most workers who find themselves in this situation will be adequately cared for. This Government is committed to ensuring that our accident compensation system is fair and responsive to all. The bill will close the gap for those workers who may in the past have been deprived of fair compensation. The Labour-led Government continues to work hard to eliminate any arrangement where workers can be disadvantaged whether it be in relation to accident compensation or other minimum rights. 
Concerns have been raised that workers whose earnings fluctuate through the year because they are on casual or seasonal employment or some other form of non-standard work are being disadvantaged by the current rules for calculating weekly compensation. Although the current rules continue to meet the needs of people in standard work nearly 21 percent of our workforce or around 457000 people are in non-standard work. If they are unfortunate enough to have a work-related injury the current calculations do not cut it. Weekly compensation is paid at 80 percent of a claimant’s pre-injury earnings. It is intended to provide real and actual compensation so workers can meet their everyday living expenses and get on with their recovery. The reality in today’s labour market for around one-quarter of the workforce is that current arrangements can put these workers at risk of receiving inadequate or no weekly compensation. The bill addresses this by changing the way weekly compensation is calculated for casual and seasonal workers so that the compensation is based on their earning periods rather than on a combination of earning and non-earning periods. This is a particularly welcome amendment given that casual and seasonal workers are more likely than permanent workers to face work injury. I know the amendment will be widely welcomed. 
The bill also makes changes to cover for work-related gradual process disease or infection. The ministerial advisory panel has highlighted that the three-part test is a barrier for cover for payments with a work-related gradual process disease or infection. The burden of proof currently rests with the claimant and this can be hard to meet. The Government’s commitment to making these changes is reflected in the bill. It amends the three-part test of causation to clarify the threshold of allowable non-work exposure. In addition the bill clarifies that the responsibility and cost for investigating a claim rests with the Accident Compensation Corporation. 
The bill also addresses cover for mental injury arising from traumatic events in the workplace. No cover is currently available for mental injury caused by a sudden traumatic event while that person is at work. We are all aware of awful situations that have occurred at work—shocking accidents or crimes that have been witnessed by workers. I ask members to just go and talk to a train driver who has been in that situation. This exposure can lead to the development of long-term mental or psychological problems that impact on a person’s ability to function day to day. This is an important and essential addition to the accident compensation scheme. 
As has been mentioned this week is the 40th anniversary of Sir Owen Woodhouse’s recommendation to introduce what became one of the most revolutionary and innovative systems for accident compensation in the world. New Zealand’s universal no-fault accident compensation scheme has stood the test of time and is still a landmark social insurance scheme of international significance. Since the 19th century decent people have accepted that common law claims do not provide an equitable and socially desirable response to the industrial injuries of workers. Even way back then there was a growing belief that industry needed to have better regard for the welfare of its workers and that the costs of injuries should be borne as part of the costs of production. The first legislation in New Zealand to provide workers with a right to compensation for work injuries was the Workers’ Compensation for Accidents Act in 1900. But New Zealand claimants had to prove injury by accident arriving out of and in the course of employment before they were eligible for cover. Cover for disease was precluded. 
From 1940 coverage for industrial disease was gradually introduced. After the passing of the Workers’ Compensation Act 1947 compensation became payable in respect of any disease contracted in the course of employment and due to the nature of employment. The Workers’ Compensation Act 1956 provided a system of insurance at the expense of the employer of the worker against accidents arising out of and in the course of his or her employment. The benefits available under the Workers’ Compensation Act 1956 proved far from satisfactory. The maximum compensation corresponded to approximately 52 percent of average weekly earnings and could be paid for only 6 years after which it ceased automatically. Injured persons could sue for damages but they had to prove fault and if they could not they got nothing. Of course there was nothing available for those not in paid employment. 
The dissatisfaction with that scheme led to the establishment of a royal commission of inquiry chaired by the Rt Hon Sir Owen Woodhouse. As we all know a key recommendation made by the commissioners was the abolition of common law claims for compensatory damages. It was recommended that New Zealand should replace the common law lottery with a comprehensive meaningful no-fault compensation scheme in exchange for which those who had cover would surrender their right to sue. It is interesting to note that the 1972 Parliament voted unanimously to pass the Accident Compensation Bill into law which demonstrates the consensus there was around the Woodhouse recommendations. Unfortunately that all changed under the National Government of the 1990s. Listeners should have no doubt that if it gets the chance the National Party will wreck our accident compensation system again. It will privatise the system and sacrifice on the altar of privatisation the social contract that New Zealanders entered into all those years ago. 
John Key has recently confirmed that National’s policy is to re-establish a competitive market to provide accident insurance. When Murray McCully was the Minister for ACC he said that creating a competitive environment is a vital part of the reforms— 
Hon Murray McCully 
: She’s namedropping! 
DARIEN FENTON 
: Mr McCully should listen to what he said: “Insurers like everyone else are in business to make a buck.” I respect Shane Ardern but even he said that accident insurance should be no different to any other form of insurance and that the most price competitive way of making this cover available to any industry in New Zealand is to let the insurance market compete for this business. He said it worked before and that it would work again. The truth is it did not work. It was a mess—a major botch-up—and the only people who did well out of it were the insurance company mates of the National Party. 
I welcome this bill; it is another step in this Labour-led Government’s commitment to that very important social contract Sir Owen Woodhouse introduced 40 years ago. As a member of the Transport and Industrial Relations Committee I look forward to hearing submissions and progressing this bill. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 I am pleased to have the opportunity to speak on the Injury Prevention Rehabilitation and Compensation Amendment Bill (No 2). I note there is a stark contrast between the objectives put out in the policy statement of the Government and the purpose described by the parliamentary Bills Digest which was also put out. The Government goes into a long-winded waffle where it says the overall purpose of this bill is to continue the Government’s commitment to a fair and sustainable accident compensation scheme for reducing the incidence and impact of personal injury etc. whereas the parliamentary Bills Digest says the purpose is to amend the Injury Prevention Rehabilitation and Compensation Act 2001.  
There is no doubt that National will not be supporting this bill because we believe it has not been well-thought-out. It blurs the margins between injuries caused by accidents and other medical conditions and it is extremely poorly costed as Pansy Wong pointed out earlier and as I will do shortly. The Labour Government never managed to understand that when the accident compensation scheme came into being in the late 1970s along with the substantial benefits gained—and I must say it came into being under a National Government—New Zealanders also lost the very important right to sue. Although there is absolutely no political inclination to change that situation it is important to emphasise that New Zealanders made a substantial trade-off when they gave up that right to sue. 
Tariana Turia 
: So they should. 
Dr PAUL HUTCHISON 
: I agree with Tariana Turia. I do absolutely accept that. But we must not underestimate how important that loss of the right to sue is. For instance I can give an example of a young man with a family of three down in Queenstown who had a traumatic incident that has left him a paraplegic. He had just started his business so all his money had gone into that. He was therefore on a low income and for the rest of his life at 80 percent of that income he will not have the ability to be able to provide well for his young family. If he had the right to sue he would have indeed received a substantial claim because the way that it happened the perpetrator was undoubtedly in the wrong. We must not underestimate just what has been lost and therefore it is absolutely important that we make the scheme work as well as possible.  
There are several areas in this amendment bill that are particularly problematic to National. One of them is associated with the costings and the poor way in which the Government has gone about sorting out the costings related to mental harm from trauma at work and the inconsistency as again pointed out by Pansy Wong that there is no provision for mental-harm compensation outside of work. It just seems extraordinary.  
The other area of course is the way in which not only injuries but also gradual process conditions can be added to schedule 2 of the Injury Prevention Rehabilitation and Compensation Act 2001 which causes further blurring with other diseases and conditions. I think it is important to point out the situation with schedule 2 which does indeed give far wider power to broaden the scope without the scrutiny of Parliament. It is a very very much wider power and again as Pansy Wong pointed out this is being introduced in a very devious way and not in a transparent way. If we look at clause 30 we see that section 336(1) is amended and paragraph (a) is repealed and substituted with “(a) adding or varying the description of a personal injury together with the corresponding—(i) agents dusts compounds substances radiation or things (as the case may be) and if appropriate the relevant level or extent of exposure to such agents dusts compounds substances radiation or things; or (ii) occupations industries or processes; or”.  
That indeed leaves a very wide scope with which a Government can by Order in Council introduce a whole series of things. We know that the aim of the Labour Party has been for a long time to equate disease with accidents where New Zealanders have given up the right to sue. If indeed this Labour Government had raised New Zealand from the lower half of the OECD into the upper half of the OECD maybe it might be a reality to afford these things. But undoubtedly we have to spend every dollar wisely.  
It is more than a coincidence that today at Auckland University there is a forum on accident compensation. It is marking and acknowledging the 40 years since Sir Owen Woodhouse outlined this plan. I think it is important once again to reiterate the five principles that he talked about: community responsibility comprehensive entitlement complete rehabilitation real compensation and administrative efficiency which is one of the things that we are concerned about. In an article in the  
New Zealand Herald  
the other day written by Associate Professor Rosemary Tobin Susan St John and Dr Grant Duncan they say administrative efficiency is achieved in a collective scheme whose costs of administration are far lower than any private insurance arrangement could be. What absolute rubbish this is because we know that the partnership programme and third party administrators have managed to deliver these services far more efficiently and effectively than the grand monopoly of the ACC itself. I think it is very important to point that out.  
About a year ago when the issue of expanding the schedule of gradual disease process was being brought up Simon Porter who is a senior solicitor with the employment team at Bell Gully noted that the biggest challenge with these diseases is in determining whether the onset was work-related or caused by other outside factors. He said that this is certainly Business New Zealand’s main concern and mentioned that chief executive Phil O’Reilly has commented that although he does not object to the expansion of the list per se he sees real problems with some of the proposed conditions. In particular he questions how accurately hearing loss one of the proposed new conditions could be diagnosed as being caused by employment.  
But I do want to talk just for a moment about the regulatory impact statement that this Government has brought out. It is way way out of reality—just have a look at the variability. In fact we can see that the Government is costing vocational rehabilitation at about $1.7 million and the upper age-limit for rehabilitation at about $1.17 million. I cannot for one moment accept that that is anywhere near realistic. But then we go to the changes to weekly compensation packages and the variations go from $63 million to $138.6 million. That is a huge variation. How on earth does this Labour Government expect to gain any credibility whatsoever when it costs something as important as this so pathetically? Then of course the range for mental injury cover caused by work-related trauma went from $7.6 million to $72.2 million per year which is almost 700 percent. That is absolutely pathetic in terms of once again the Labour Government failing to do its homework on such an important issue. The Government says that the central cost of the cover for work-related gradual process is in the order of $11.835 million but of course that does not cover all the new claims that would be accepted. The Government merely says that claims that have previously been declined are not likely to have an impact as the reasons for their declination will not have changed.  
This amendment bill appears to be recklessly irresponsible by the Labour Government in several areas. The Government simply has not done its homework to find accurate costings of what it is proposing. As the Ministerial Advisory Panel on Work Related Gradual Process Disease or Infection pointed out it recognises that further research was required to fully calculate the cost implications of the advisory panel’s recommendations. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I have listened to both the National Party spokespeople on accident compensation and I cannot work out where they are coming from. They are advocating that we go back to the Woodhouse principles more strongly. [ 
Interruption 
] Pansy Wong is saying yes to that. But the impression members on this side of the House have is that National wants to privatise accident compensation. [ 
Interruption 
] Oh National members have changed their minds on that. When did they do that? Was it last night at the party? 
If that party over there is committed to the accident compensation structure then its members should be voting for this bill. If they believe that accident compensation is the way to go they should be voting for this bill because this bill extends a number of improvements to accident victims. It is as simple as that. We can go on with this highfalutin waffle but this bill extends significant improvements to a number of accident victims. The Minister clearly outlined in her speech that it extends cover to include mental injuries for single traumatic events. She used the example of the train driver. Is that guy not worth considering? Is he not worth some sort of cover? Do National members feel proud of themselves for voting that down? For that reason alone they should vote for it. [ 
Interruption 
] They cannot sit back and say no. Does that train driver need accident cover? 
Pansy Wong 
: Look at the bill. 
PETER BROWN 
: I have looked at the bill; I think the member should look at the bill. The member should pay attention to the bill and not just be blinded by political rhetoric. 
I usually quite like Dr Hutchison’s contributions to accident compensation debates. I have always put him down as a sound thinker. But he seems to be saying that this bill blurs the edges between accidents and sickness. I would say that that is a good move. If we could extend accident compensation cover to cover sickness we would would we not? It is a good move to blur the issue. That is not a retrograde step; that is a good move. 
There is one little thing in this bill—maybe more than one—that I want to stress because I think it is a very good move. Somewhere in the bill is a clause that refers to the loss of potential earnings for young people. Paul Hutchison referred to the case of a younger person and those are the sorts of circumstances I want to talk about. I ask members to imagine a young guy of 18—or it could be a young lady—who is doing exceedingly well at university. Perhaps that person will be a high-flying lawyer or a surgeon or something that will really produce some income—maybe almost as much as Grant Dalton—so he or she can buy a $3 million section in Queenstown. Imagine that that this person takes a year off works in his or her holiday period at the meatworks or on the wharves and gets injured and is incapacitated for life. Right now that person would be getting peanuts. This bill at least acknowledges that that it is a problem. 
New Zealand First fought hard for this when the Government renationalised accident compensation. We fought hard to get this sort of coverage. It is only very lukewarm coverage but at least it is a move in the right direction. It is by no means adequate. We believe that in the longer term the Government will have to say that this young person I have hypothetically referred to should get fuller coverage. It should be recognised that he or she could be earning quite considerably in his or her more mature years and should get compensation for that. But this bill does open the door a little bit on that and New Zealand First will be pressing for a better formula in terms of compensation. 
One area that I thought was in the bill which New Zealand First also feels very strongly about is that— 
Dr Paul Hutchison 
: I thought you’d read the bill. 
PETER BROWN 
: —I know; Dr Hutchison can look at me and he might well agree by looking at me—this country is getting older. The population is getting older.  
Hon Brian Donnelly 
: Every year. 
PETER BROWN 
: Yes every year as my colleague says. Every year we are depending more and more on mature people staying in the workforce longer. If we look at the accident compensation coverage they get and the treatment they get we see that it is second rate. I thought this measure was in the bill. I was looking at it just before I came to the House but now I cannot find it. But I can say that New Zealand First will support this bill for that very reason—we will be trying to get that into the bill. We will try to get fairer coverage for older people. I know that the Greens will support this. They look at me and they say: “Yes we need people like you to carry on for quite a while yet.” 
Hon Member 
: Yeah right! 
PETER BROWN 
: Yeah right! 
Hon Harry Duynhoven 
: You’ve been carrying on for quite some time already. 
PETER BROWN 
: I have some news for the member: I will carry on for a little bit longer. 
Hon Brian Donnelly 
: A perfect remedy for sleeping disorders. 
PETER BROWN 
: Exactly. 
This bill goes quite some way to addressing some concerns but it does not go far enough and New Zealand First will be pushing it a little bit further. On the negative side—and my understanding has not been changed; someone will correct me if things have changed—we still pay compensation to a person who gets injured whilst committing a crime. We will be asking the select committee to look at that issue. 
I do not think I need to say any more. The detail has been worked through and I am sure that Mr Bennett will take a call and enlighten us even further as to why National are taking such a hard-hearted attitude to this bill. But New Zealand First will be supporting its referral to the select committee where we will endeavour to improve it even more. 
Debate interrupted. 
Ministerial Statements 
Capital and Coast District Health Board—Appointment of Crown Monitor 
Hon Dr MICHAEL CULLEN (Deputy Prime Minister) 
: 
 I wish to make a ministerial statement under Standing Order 348 relating to the appointment of a Crown monitor for Capital and Coast District Health Board. Over recent months a number of issues relating to the management of Capital and Coast District Health Board have become significant concerns for the Government and for the Wellington community. Without at this time rehashing points that have already been made and fairly widely debated within this House I will say that the quality of health services is a major priority for the Labour-led Government that we invest heavily in it and that we have achieved real and measurable improvements right across New Zealand.  
The priority we place on improving health services for our families also means that when our standards are not met and when the public has a right to feel that their expectations are not being met then the Government must act. At the Cabinet committee this week Ministers discussed the problems facing the board and a range of proposals to address them. We endeavoured not to make a decision in haste. We knew we had to get this decision right. The Government has just announced—the Hon David Cunliffe being in Auckland today—that a new chair and a Crown monitor will be appointed to Capital and Coast District Health Board. The Crown monitor who will report directly to the Minister is Dr Ian Brown an obstetrician and gynaecologist who is the current Director of Medical Services at the Northland District Health Board. He is also the former chair of the national Chief Medical Officers’ Forum and has been a member of the National Medical Strategy Workforce Group. I acknowledge that Dr Hutchison who of course was a practitioner in this area recognises Dr Brown’s expertise and value.  
The new chair is Sir John Anderson the current chairman of Television New Zealand and of course one of New Zealand’s pre-eminent business leaders with a proven record in governance. Ken Douglas will remain as deputy chair to provide continuity.  
Of course the Government at this point is appointing new board members in any case to all district health boards around the country and therefore of course the fact is that appointing a new chair is by itself not necessarily a matter of particular note but in the case of Wellington it obviously bears some relationship to other matters.  
The first priority for the new board and the Crown monitor will include consulting with clinical staff on the creation of a forward plan for the district health board. As well as appointing the Crown monitor the discussion on providing deficit support to Capital and Coast District Health Board will continue. Discussions with the board will focus on deficit support in order to relieve some of the financial pressure currently experienced by the board. This does not mean that it has an open cheque book. It means that this district health board is expected to resolve the issues it has and that the Government will be working with them to ensure that all solutions are sustainable.  
In closing I think it is important to stress that the vast majority of Wellingtonians who rely on Capital and Coast District Health Board get a very high standard of service. The doctors nurses and other staff at the region’s public health facilities are committed and hard-working. They deserve praise not the ridicule that some members of this House have expressed.  
Hon TONY RYALL (National—Bay of Plenty) 
: 
 I wonder whether the Minister of Health could clarify whether the Peter Douglas being appointed is the same Peter Douglas who is currently on the board. The Minister is standing in the House today and saying that a new board will be expected to deal with the problems facing Wellington Hospital when half of its members were on the old board. I do not think the people of Wellington will buy that.  
The culture change required at Wellington Hospital will be harder to achieve now that the Government has baulked at appointing a commissioner. What is needed at Wellington Hospital is a culture change and that is no easy task considering the climate of mistrust that exists between the management the board and the doctors nurses and other front-line heath staff.  
Government briefing papers have revealed that the Labour Government has had Wellington Hospital under intensive management or intensive monitoring since May. I cannot see how the idea of a Crown monitor will mean much as the Government has been actively monitoring Wellington Hospital for the last 6 months and all the while has been watching this crisis unfold at the Capital and Coast District Health Board. For half a year while the Government has been intensively monitoring Wellington Hospital public health services in our capital city have been allowed to suffer. I think Wellingtonians will trust Sir John Anderson and look to him for action but we believe that a commissioner would have had a more immediate impact on turning this hospital round. This turn-round could have been achieved more effectively by a commissioner. Creating culture change will be very challenging from the chairman’s seat and even more challenging when Sir John is also trying to turn round Television New Zealand.  
Sir John is left with a lot of baggage from the old board. Not only were four people re-elected by the people of Wellington on false pretences because they were part of a board that suppressed damning reports on the quality of that hospital but also Sir John is left with a lot of baggage from that district health board. There are four members whom the people of Wellington re-elected plus two more board members whom the Government is reappointing. Can we really expect Sir John to turn round Wellington Hospital when more than half of his board are the same failed people who as we have seen brought the Wellington health services to its knees?  
The most important message that the Opposition can give the Government is that front-line personnel must be part of the solution. They have been treated as though they are the problem. That is ridiculous. We have detailed previously a number of proposals that will re-engage the clinical workforce in improving the quality and productivity of services at Wellington Hospital.  
It is simply bizarre that since the Government changed Wellington Hospital has hired more managers and administrators than doctors. It has taken a crisis in maternity drastic problems with community services a damning audit report and papers showing one serious mishap after another for this Government to do anything about the state of public health services in the capital city of New Zealand. This is a Government that has dithered and dithered over saving our capital city’s health services.  
I am sure the people of Wellington will be keeping a very close eye on the performance of this board. I think people will be stunned that the Government expects a board made up of most of the people who were involved in causing the problem to be part of the solution. That is a job even a gentleman of the calibre of Sir John Anderson will struggle to meet. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 My contribution will be brief but hopefully to the point. New Zealand First acknowledges what the Government has done and is supportive of it. We also recognise that the medical staff—the doctors and nurses and all involved in that hospital and district health board—do a first-class job and are first-rate people. We believe that something had to be done and we believe that Sir John Anderson is the right person to head the new team—so to speak—with the help and assistance of Ken Douglas. We sincerely wish them well. 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 The Green Party welcomes the step the Government has taken to sort out the appalling mess at Wellington Hospital. Unlike the National Party we think this step will have minimal interference in normal processes yet maximum effect in turning things round compared with completely overturning the board and starting again. We sincerely hope it will work and we express our support for all the medical staff who at last are to be consulted on the way forward for this hospital. 
TARIANA TURIA (Co-Leader—Maori Party) 
: 
 The Maori Party supports the move the Government has made at this time. It is our firm belief that the board actually does have the confidence of the community at large because its members have only just recently been elected. Having used the services at Wellington Hospital myself as have members of my family I commend the people who work at that hospital for the great service they provide. Kia ora. 
HEATHER ROY (Deputy Leader—ACT) 
: 
 On behalf of the ACT party I say that we too felt that a commissioner should have been inserted into position—an independent commissioner with the ability to think outside the square and turn this organisation round. Unfortunately the board has a very familiar look to it. The Government has had 6 years to rectify the situation at Capital and Coast District Health Board. I wish the board well but I suspect we will see very little in the way of change.  
There is a difficulty with the district health board format. Boards are democratically elected but unfortunately democracy ends there. Boards are given the instruction that they are there to implement the Government’s health policy. That will not change. Systemic failure which has been rife I am sad to say at Capital and Coast District Health Board results in medical errors being made. This Minister of Health the Hon David Cunliffe in his very short time has managed to misinterpret very deliberately and cynically criticisms of himself and his health policies as an attack on the clinical staff at Wellington Hospital. That is quite wrong. There is no one in this House I think who does not believe that the doctors nurses and other health professionals working at Capital and Coast District Health Board are very committed professional and provide excellent skills.  
But when systemic failure arises it inevitably results in medical errors. That is exactly what we have seen. It was very distressing to see a report earlier this week about a razor gang—and the proposed cutting of 50 doctors. I can liken that only to cutting muscle rather than fat in an organisation in crisis. We do not believe that this business of dealing with Capital and Coast District Health Board’s woes has been done quickly or boldly enough. I hope things improve at Wellington Hospital but sadly I fear that will not be the case. 
JUDY TURNER (Deputy Leader—United Future) 
: 
 United Future supports what the Government has chosen to announce today. We certainly support the appointment of Sir John Anderson. We think he is a very fine choice to be looking at the very serious matters that face this district health board. We encourage the Government to continue to keep a very watchful eye on and stay in close contact with the Crown monitor as things progress. We would hate to think the Government has completely ruled out the option of appointing a commissioner in the future should the situation prove to be more serious than it looks even now. Having said that it is not because we have any disregard for who has been appointed.  
We also support the comments made by other members of this House regarding their commitment to supporting the very fine staff who work for this district health board. We want to make sure that where there are systemic problems for that district health board they are addressed as such and that this House refrains from attacking people who are delivering a very fine service. 
Hon Dr MICHAEL CULLEN (Deputy Prime Minister) 
: 
 I will respond to one key point raised by both Tony Ryall and Heather Roy which is whether a commissioner should have been appointed. Clearly the Government considered that option. There is a major legal barrier to the appointment of a commissioner. Even though there is substantial continuity in the membership of the Capital and Coast District Health Board as a legal entity in any practice this is a new health board not the old health board. A new health board started only this week. It would therefore be very difficult for the Government to justify under any legal challenge the appointment of a commissioner to replace the current board before that new board had had a chance to show whether it was capable of turning round the situation at that board. Let us not pretend that litigation does not occur in those kinds of circumstances. In other words the advice that I had very clearly as Attorney-General was that we would be exposed to a very serious risk that any such action could be challenged and overturned in court. That was not therefore thought to be the appropriate way to proceed in this case.  
On the second point made by Mr Ryall I fully agree with him that the front-line personnel need to be part of the solution. That is another reason why the Crown monitor who is being sent in is not a person from outside the hospital and medical profession but is in fact a highly experienced person within the hospital system. He has very high credibility and has participated in a range of activities that clearly well suit him to form that crucial bridge between the board and the medical staff and to ensure that proper consultation occurs.  
The Government has every hope that the appointment of a new chair and a Crown monitor will lead to a change in the effectiveness of the governance arrangements at this district health board. 
Injury Prevention Rehabilitation and Compensation Amendment Bill (No 2) 
First Reading 
Debate resumed. 
SUE BRADFORD (Green) 
: 
 Overall this bill makes a number of beneficial changes to the current accident compensation scheme and the Green Party will be supporting it to go to the select committee. However we believe that this bill should be improved in four key areas and we will reconsider our support in the future depending on whether at least some of the issues we are concerned about are addressed positively in some way during or after the select committee process. 
The first of our concerns is in regard to the cover relating to mental injury. Although we welcome the proposal to extend cover to mental injury caused by a traumatic event experienced while at work we think that this bill should go a lot further. The Green Party believes in fact that cover should be broadened out to include all mental injury covered by accident work-related gradual process disease or infection or treatment. This would effectively restore the position that existed under the Accident Compensation Act 1982 before National’s so-called reforms to the scheme in the 1990s. 
Getting down to the detail of the bill it seems to me particularly anomalous that cover will extend under this legislation for example to a person who suffers a mental injury as a result of seeing someone die in a car crash while at the same time a health professional who suffers a similar mental injury as a consequence of witnessing a series of deaths and other trauma as a result of his or her work—a paramedic or someone like that—will not get cover because his or her problems are caused by a series of events and are not a one-off experience. So at a minimum the Green Party would like to see the bill amended to correct this particular anomaly. 
The second area about which we have particular concerns relates to cover for work-related gradual process disease and infection. Although we are pleased with the provisions contained in clause 10 of the bill as far as they go we believe that they fail to address the most serious inadequacy of the current legislation as highlighted by the Ministerial Advisory Panel on Work Related Gradual Process Disease or Infection which reported back to the Government in March 2006. This issue is the difficulty faced by claimants in proving where there is no clearly separate and antecedent physical injury that conditions such as regional pain syndrome or multiple chemical sensitivity are personal injuries as defined in the principal Act even when the causation test under section 30 is met. The bill should be amended so as to ensure that claimants who have conditions such as these but without a discrete antecedent physical injury and who meet causation criteria should be able to get cover for work-related gradual process disease or infection injury. 
We would also like to see cover extended to those who contract serious illnesses or impairment as a result of being the children or grandchildren of workers who have been exposed to toxic chemicals such as dioxins. So-called third-party cover should be made available to these people without any further mucking around. Although some of the issues I am discussing here are highly technical as is the case with a lot of accident compensation law I remind the House that behind the sometimes mind-bending detail of law and regulation are real people who are suffering daily because of the often unfair and even at times cruel way in which so much of our accident compensation system still operates despite improvements made since 2000. 
The third area of particular interest to the Green Party in this bill is that of vocational rehabilitation and we are pleased to see that the circumstances under which vocational rehabilitation can be provided are extended. However the extensions all relate to people who are entitled to receive weekly compensation or who would have been entitled to receive it but for the fact that they qualify for national superannuation. The original Act and the new bill completely ignore the needs of people who may have little chance of finding employment without vocational rehabilitation but who are denied weekly compensation because they are non-earners or not potential earners as defined in the Act at the time of their personal injury. People in this situation often end up languishing on a sickness or invalids benefit for a considerable period of time or on no benefit at all if they have a partner with significant earnings. If they do qualify for an invalids benefit they may potentially be able to access the training incentive allowance through the Ministry of Social Development but others will have no support for vocational rehabilitation whatsoever. Often such people end up in debt through a student or private loan just in order to have any prospect at all of getting back into the workforce. We would like to see the bill amended by providing for an obligation on the Accident Compensation Corporation (ACC) to provide vocational rehabilitation for claimants who cannot get weekly compensation but who are vocationally and medically assessed as having little chance of getting full-time work with an earning capacity similar to their earlier employment without such rehabilitation. 
The final area of particular interest to us is that of vocational independence. We welcome the provision in this bill to require occupational assessors to take into account earnings before the claimant’s incapacity occurred and I hope that this should preclude ACC from forcing highly skilled people off weekly compensation and into inappropriate low-wage jobs. Our overarching policy in this area is that the vocational independence provisions of the Act should be repealed altogether. Losing one’s job is still at times a consequence of injury and it is not fair that someone should lose his or her compensation because even though that person is medically capable of some types of employment he or she has the skills to undertake that person cannot find a job in those areas due to the state of the job market at the time. We believe that the vocational independence assessment should be abolished. Provisions already exist in the Act for the corporation to negotiate or if the claimant does not agree to deem certain activities to be contained in an individual’s rehabilitation plan. Job search requirements can be one such deemed or negotiated activity under current law and people can be booted off compensation if they do not take reasonable steps to obtain a job. The extra step of vocational independence assessment is not necessary and is a very blunt instrument. 
Although availability of appropriate work may not be such a big issue at the moment in the current economic climate this will not always be the case just as it was not the case during much of our recent history. In the late 1990s and early 2000s I was aware of many claimants who were exited from weekly compensation and who then spent months if not years unemployed because there were no jobs available for them for which they were either vocationally or medically suited. The loss of employment such people suffered was a result of personal injury yet through no fault of their own they found themselves without a job without compensation and receiving either an unemployment a sickness or invalids benefit or no benefit at all. Some people are of course still in this situation to the present day. 
We would like to make a number of other improvements to this bill but I will not take up the House’s time with them now as I am sure we will have plenty of good submissions on these and related matters at the select committee. I look forward to the select committee process and to hearing what people who have a deep interest in the matters covered by this bill have to say. I hope that despite the unfortunate time of the year affected individuals and organisations will find the time and energy to make submissions to the select committee. As I said earlier this bill does make some progress towards improving our accident compensation system but there is a long way to go before we are even close to meeting the Woodhouse principles. The Green Party is supporting this bill in going through its first reading because of the useful steps forward it takes but we will reserve our position in later votes depending on whether we can make any progress on at least some of the matters I have talked about today. 
TARIANA TURIA (Co-Leader—Maori Party) 
: 
 Tena koe Mr Deputy Speaker; tena tatou e te Whare. It is always a good thing to be able to come to this House and know that we are debating legislation that if implemented well and with some changes will make a difference in the quality of people’s lives. The quality of life for Maori workers in relation to their experiences with injury prevention rehabilitation and compensation has not always been a topic that I can talk about with much joy. We know only too well that injury is the leading cause of death for Maori for the first three decades of life. Maori are overrepresented in injury statistics across all age groups and in employment and sports. Most of these injuries are preventable.  
We know also that Maori aged 25 to 64 particularly men are more likely to be injured at work than non-Maori. This reflects the types of occupations in which Maori men are overrepresented such as manual and trade occupations manufacturing and construction. Occupational segregation operates to maintain Maori in more high-risk employment. High-risk occupations which are those with high rates of new workplace injury claims are agriculture manufacturing construction and forestry. These come after hunting fishing and mining. 
It is not just a matter of Maori having such dire experiences of injury statistics; it is also a matter of the fairly negative experience of having to go to the Accident Compensation Corporation (ACC) itself. Research from Dr Peter Jansen on  
Maori consumer use and experience of health and disability and ACC services  
reveals that Maori are currently not receiving entitlements to care rehabilitation and compensation at a level comparable to the proportion of Maori in the population. That is appalling.  
The issue is in essence that Maori have greater need but have less access to treatment. I know this because many people who have come to my office—Maori people—have come for help because the staff at ACC have tended to treat them as malingerers who do not want to work and who do not have any rights to accident compensation. It is obvious from these stories and these statistics that our people are overrepresented in high-risk industries and under-represented in claims and entitlements from ACC.  
Given this history we have given priority to this Injury Prevention Rehabilitation and Compensation Amendment Bill (No 2) in order to review the amendments proposed for work-related injuries the changes in weekly compensation eligibility and entitlement and the changes in entitlement and processes around vocational rehabilitation and independence. We are particularly pleased that the bill improves access to compensation for a number of currently disenfranchised groups—seasonal and casual workers and those in non-standard work; those mentally injured by trauma; those between work; and young people who are injured. The Maori Party has previously voted against bills that were not inclusive of the rights of these groups so it is obviously pleasing to see that these groups have been included from the outset.  
We are especially interested in the initiatives to provide cover for mental injury arising from traumatic events in the workplace. Our reading of the bill suggests that cover is extended to those suffering mental injury as opposed to temporary distress by exposure to a sudden traumatic event in the course of employment situations—for example witnessing a death.  
I know the impact of such events from personal experience. When I was working in a Government agency a member of the public held a staff member up against a wall and clutched the staff member’s throat in response to behaviour that the member of the public had clearly taken offence at. I imagine that the trauma for that worker was huge. I also remember only too vividly that at a hui I attended when I was working in Ruatoki one of the speakers attending the hui died. As I moved to give him CPR I realised that it was too late. The shock of that sudden death stayed with me for a very very long time.  
Sometimes when we talk about people having temporary distress it is unfair not to note that that distress can stay with them for a long time. When I read in this bill that this cover will help ensure there is appropriate treatment to facilitate rehabilitation I am absolutely convinced that experiences such as those I have mentioned are indeed encompassed within the scope of personal injury.  
I will be interested to learn at the select committee whether any of the submitters bring to our attention the possibility of racism being added as a work-related gradual process of injury because that was identified in Dr Peter Jansen’s report as well. Clearly racism has long-term effects including that of post-traumatic stress disorder.  
There are some very good features in this bill and I believe that weekly compensation for seasonal and casual workers will be calculated more fairly as a result of amendments included in the bill. For example compensation for meatworkers will be calculated more in line with their working periods rather than their non-working periods which I think is fair. Instead of having 3 months’ work averaged out over 52 weeks it will be averaged out over 12 weeks which in effect means that the 80 percent compensation will be of their real income. This change is intended to improve access for seasonal casual workers and others in non-standard work and it is something we would support.  
We would like to see more focus on occupational safety and health included in this bill. A 2004 National Occupational Health and Safety Advisory Committee report on occupational injury and disease in New Zealand highlights the lack of information on Maori work-related mortality and morbidity. Despite the fact that awareness and monitoring of occupational safety and health issues for Maori are sorely lacking we know that particular issues flow from the facts of their employment. Maori and Pacific workers are more likely to be shift workers and as a consequence are more likely to be vulnerable to the range of work-related disorders associated with shift work—sleep disturbance peptic ulcers ischaemic heart disease obesity hypertension diabetes mellitus female reproductive disorders and disorders of the immune system as well as psychological and relationship disorders. A recent publication the  
New Zealand Blood Donors’ Health Study 
 reported that when occupation lifestyle factors and excessive sleepiness are controlled for there is an almost twofold increase in the risk of work-related injury for shift workers.  
The final issue I bring to the debate is the precarious nature of non - full-time non-permanent employment where Maori are also highly represented. Precarious employment is employment that is low quality and puts workers at risk of injury illness and/or poverty. Precarious workers are more exposed to physical work hazards and stress from insecurity. We will be looking carefully at the select committee report to see that the specific issues for shift workers and workers in precarious employment are fully canvassed in this bill.  
All workers have a right to expect that the workplaces they go to the work they do and the people they work with and for are not compromising their health and well-being. They also have a right to benefit from the social contract represented in the accident compensation scheme which began some 40 years ago.  
We will be supporting this bill in order to enable a full discussion to take place and to allow all of us in this House to benefit from the robust discussion about the impact of injuries upon the community. We will reserve our final decision until we are really well informed by the submissions made to the select committee. Kia ora. 
JUDY TURNER (Deputy Leader—United Future) 
: 
 I speak on behalf of United Future on this first reading of the Injury Prevention Rehabilitation and Compensation Amendment Bill (No 2). This is a bill that seems to widen access to accident compensation entitlements. It is a refinement of the accident compensation system as it proposes amendments to cover for work-related injuries changes in weekly compensation eligibility and entitlement and changes to entitlement and processes around vocational rehabilitation and independence. 
There are some changes in the bill to tests for causation for work-related injury where there is a gradual process—when an injury is gradually experienced by somebody—and that is a good thing. It includes eligibility to lump-sum payments to be extended to claimants for work-related gradual process disease and infection and to those who suffer personal injury following the date the bill comes into force. 
The previous speaker Tariana Turia talked about the new cover for mental injury that is caused by exposure to a sudden traumatic event in the course of employment. I think that this is an extremely good thing to be included in the bill. We know of some very highly publicised cases where people have witnessed murders train drivers have had people walk out on to the line and be killed or very traumatic events like that. The cover for those people to get some counselling and help with that is hugely important. 
The access to cover for people in between jobs is widened from 14 to 28 days as long as future employment has been organised. This provision does not apply to people who are out of work and who have left work but if people are in between jobs for a period of up to 28 days then they can still receive cover. I think it is a good thing. The abatement conditions for those who are partially incapacitated and who return to part-time work are improved and I have had lots of constituent cases around that issue. 
I am particularly pleased to see that the bill is making some improvements to leave entitlements so that they will not be considered earnings for weekly abatement purposes. I had a case only about a week ago from a constituent who fell exactly into this category. He was in between jobs. There was an accident during that period of time that was work-related because he was finishing up but he had handed in his notice on a job and was planning to go into new employment after taking a holiday. He was very full of angst over the fact that the holiday pay that he was entitled to—that had been caught up on and paid out from the first job—was calculated and it affected his accident compensation payments at that time. It looks like we will get some real movement on that and I am sure that the gentleman I spoke to in Whakatane only a week or so ago will be very pleased to hear of that change. 
One of the negatives of this bill is that in widening access to accident compensation entitlements we also widen the very real gap that exists right now between trauma-based disability and medical or disease-based disability. I accept that the issue I am bringing before the House does not fall within the scope of this bill. I believe that there is a very real challenge for the Government to address this matter in the future and I would also go as far as to say that failure to address this blatant inequity is an extension of gross unfairness that borders on cruelty. I have been spending quite a bit of time recently talking to those within the disability sector and the stories are tragic. We can meet people whose set of limitations is identical to the set of limitations of somebody living right next door where their impairment has been caused by an illness and the people next door have had a car accident. The difference between the services provided in each case is enormous and it is discouraging. 
I believe that some real work needs to be done by this Government—and in fact by every party in this Parliament that is seeking re-election—to look at how we can better help those who suffer debilitating conditions but who have not suffered them as a result of a traumatic accident. There is a very very big gap in the provision of health and disability services in this country right now. Issues around compensation and the loss of income remain unaddressed and I think we do the public whom we serve a great disservice when we fail to find a way forward on this matter. 
United Future is happy to support this bill. We will be very interested to see what submitters to the select committee say. We do not have membership on the select committee that will be looking at this bill so we will be relying very heavily on the report back from the select committee and the recommendations it makes but we are very happy to support this first reading. 
LESLEY SOPER (Labour) 
: 
 Our world-leading accident compensation scheme was a social contract to provide a universal no-fault accident compensation scheme in this country for which New Zealanders gave up the litigious path of the right to sue and it has very much stood the test of time. I compliment the new Minister for ACC Maryan Street on bringing this Injury Prevention Rehabilitation and Compensation Amendment Bill (No 2) to the House. It is a far-sighted and significant bill that will further deliver for New Zealanders and I am proud of this bill. 
In contrast to the negative speeches given by the National members who want of course to return to a privatised accident compensation scheme—a National experience that did not work for employers employees or for anyone except the insurers—the Labour Government is committed to having a fair and sustainable accident compensation scheme and to making this scheme more responsive to claimants’ needs because at the end of the day a technical bill which this one is is still delivering to the human stories of the people affected by the legislation we create. I am very sad that National members can come to this House and witter on about their opposition to this bill pretending that this bill is making accident compensation more complicated when in fact they know that this bill is about having an even fairer and more sustainable accident compensation scheme. It is about improving outcomes for injured workers; providing fairer and more straightforward weekly compensation for seasonal and casual employees whether they might be meatworkers farm workers tourism workers care workers or retail workers; making important changes to the cover provisions for work-related gradual process disease or infection; providing cover for clinically significant mental injuries like the train driver whose train hits someone on the tracks or the bank clerk who witnesses a colleague being killed in a bank robbery; and providing the Accident Compensation Corporation with the discretion to extend the current 3-year limit on vocational rehabilitation when claimants need longer periods of rehabilitation. These are all exceptionally important provisions in this bill. None of these provisions or the people who will have their lives improved by them deserve the nonsense of petty opposition that we have heard from the National speakers today. 
I will concentrate particularly on some of the positive aspects of this bill for the benefit of workers whom I have had through my office door and whom I dealt with in my previous life as a union organiser. The first aspect is changes in the area of weekly compensation. The bill provides fairer and more straightforward weekly compensation for seasonal and casual employees and that is a very good thing. There is no doubt that the world of work has changed dramatically and that more people are working part time are moving in and out of employment are self-employed or are in casual or seasonal work. Updating the weekly compensation framework to improve access to weekly compensation changing the way that weekly compensation is calculated for casual and seasonal workers making the assessment for claimants more reasonable and easier to understand allowing easier access to minimum weekly compensation and extending the period of eligibility so that claimants can access weekly compensation if they are injured within 28 days of stopping work and also allowing self-employed people and shareholder employees who are injured during a transition to employee status to be eligible are all positive parts of the bill. So is improving abatement conditions for partially incapacitated workers when they return to work part time. I would ask why the National Party is opposing those very good proposals that increase fairness. Well who knows? I wonder whether the National members themselves know. 
The other positive aspect I want to talk about is the changes the bill introduces to the cover provisions for work-related gradual process disease and infection to ensure that people harmed by their work receive greater access to cover and can have more clarity as to whether cover is available. If people have been clearly harmed in the course of their employment then they should be covered by the accident compensation scheme regardless of whether the injury is the result of accident or occupational illness. The bill makes that philosophy clear. The three-part test set out in section 30(2) of the Injury Prevention Rehabilitation and Compensation Act is revised in the bill in order to clarify the threshold of allowable non-work exposure and that is a good thing as is some provision for extending eligibility for lump-sum compensation. 
No cover is currently available under the accident compensation scheme for mental injury caused by exposure to a sudden traumatic event in the course of employment. The bill introduces such cover where the traumatic event is significant and is seen heard or experienced by a person directly. Providing that cover will help to ensure appropriate treatment and rehabilitation and an early and sustainable return to work. Again those are all good provisions of this very good bill that I am surprised to hear the National Party opposing. 
Lastly I want to point out how pleased I am to see that the bill introduces a requirement for occupational assessors to consider a person’s pre-injury earnings when identifying suitable future work for claimants. Having worked with those faced with the identification of unsuitable jobs in the past I think this provision is a very important one for a lot of reasons including the full utilisation of retained skills and professional abilities by a great number of those claimants and also because of the injured person’s own self-esteem and the attention we need to pay to that as part of any rehabilitation and return to work process. 
In summing up I say that this is a very good and well-thought-out bill. It is a technical bill and it is also as I said at the start a bill that addresses real human stories that come through the doors of our electorate offices. These are real human stories that my former colleagues as union organisers still experience very often. The bill talks about delivering real improvements for the people involved the people whom we must never forget in a technical bill. I am looking forward to the submissions on this bill to the Transport and Industrial Relations Committee of which I am a member and I commend this bill. 
ANNE TOLLEY (National—East Coast) 
: 
 I saw the Injury Prevention Rehabilitation and Compensation Amendment Bill (No 2) come across my desk. I grabbed it read the general policy statement and saw that the bill would “continue the Government’s commitment to a fair and sustainable ACC scheme for reducing the incidence and impact of personal injury by proposing amendments to cover for work-related injuries”. When I read that I thought “Great!”. Of course if I had been like Peter Brown as he explained to us last night I probably would have put the bill down and thought it would do everything that I hoped it would do and everything that the general policy statement said it would do.  
I brought an issue to this House in September of this year about work-related injuries. I assumed and hoped that when legislation came before the House that had a commitment to a fair and sustainable accident compensation scheme and that was proposing amendments to cover for work-related injuries I would see some changes to the law around the case that I had brought to the attention of the Minister for ACC. But alas when I read the legislation I found that that had not happened.  
I want to talk today at the first reading of this legislation about what is not in it and what should be in it if we are indeed to have a fair and sustainable accident compensation scheme and if we genuinely want to reduce the incidence and impact of personal injury. You see if one looks at the definition of a work-related injury in section 28(1) of the principal Act one finds that we are talking about a personal injury that the insured suffers “(a) while he or she is at any place for the purposes of his or her employment including for example a place that itself moves or a place to or through which the claimant moves;”. So we are defining that workplace as somewhere where the insured person is actually working whether it is a movable place or a place that a person moves through while doing his or her work. Section 28(1)(b) also states: “while he or she is having a break from work for a meal or rest or refreshment at his or her place of employment;”. I read those provisions carefully because they are really pertinent to the case that I brought before this House in September and brought to the Minister’s attention.  
What is the problem? The problem occurred in 2003 when an employee of AFFCO—a meatworks company—left the plant on a break walked outside the secured compound of the plant and went to the car-park with another person. That employee went into that car-park on his break allegedly to smoke a joint. It had nothing to do with work he was on a work break and he was actually committing an illegal act. 
Hon Harry Duynhoven 
: Allegedly. 
ANNE TOLLEY 
: I said “allegedly”. While they were sitting in a car a car drove up. An occupant saw the worker and his mate sitting in the car recognised the worker’s mate and as part of ongoing gang warfare in the area put a shotgun through the window shot at the gang member who was not the person whom this accident compensation claim was about and also badly injured that worker. It had nothing to do with a workplace injury it had nothing to do with the company and it did not happen in the place of work—not even within the secured compound of a workplace. As a result of that AFFCO is being charged $1 million for the ongoing care of this injured worker despite the fact that the company has talked incessantly with the Accident Compensation Corporation (ACC) about it not being a workplace injury.  
One has to look at the definition of workplace. I was hoping that this legislation would start looking at the definition of workplace. The car-park where this accident took place was outside the secured area. In fact I am informed that Ministry of Agriculture and Forestry regulations require that a car-park that is used as a public car-park cannot form part of a secure workplace. So the poor old employer which has a car-park outside the secured premises that is a public car-park for a public park next door on one side and a butchery shop on the other is now being told that that car-park forms part of the workplace. So members should forget all the stuff around the alleged happenings and what the worker was allegedly doing; the fact that this car-park was not part of the workplace is irrelevant to ACC. That to me seemed wrong. And I would have thought from the reaction to this story when I raised it in this House that the Minister accepted that there was some opportunity to have a discussion about it.  
At the time that this incident happened nobody saw it as a workplace accident. It was reported in the local papers and there was a great deal of publicity about it. The police treated it as a gangland shooting. It was written up in all the local papers as part of an ongoing gangland shooting problem. It had nothing to do with AFFCO and the meatworks other than the fact that it had taken place in the car-park outside the AFFCO meatworks. The Occupational Safety and Health Service did not consider that it was a workplace accident either; it considered that it was a police matter. The only person who in addition to ACC has continued to say it was a workplace accident despite AFFCO notifying ACC that it did not consider it to be a workplace accident is the Minister herself. 
I heard one of the members on the other side going on about liability and ACC accepting that. That is not true. An original letter was sent to the claimant the injured person but that was withdrawn when the full information became available. ACC has been well aware of that. I tabled it in the House; it is a fact. But I just want to make the point that I am also informed that the issue of AFFCO’s liability is not determined by the letter ACC sent to the injured person but by the accreditation agreement AFFCO has with ACC. It does not affect at all ACC’s ability to exercise its statutory discretion to accept responsibility for the accident.  
I want to raise one last point. When I raised this issue with the Minister in the House and asked her whether she would commit to a mediation process she agreed. In fact she issued a media statement on 20 September welcoming that mediation and negotiation. Well of course it did not happen. It was just a way to get the issue off the front page. The parties did meet at the car-park and that quite clearly showed ACC that the car-park was a public car-park outside the secured area. They did meet but it turned out that the ACC officials who turned up at the so-called mediation meeting had no power to act. They had no intention to act because they had not been given an alternative amount of negotiating dollars with which to act. So there was no mediation and there was no negotiation and all the Minister did was get the issue off the front page of the papers by agreeing to look at it.  
I repeat: I eagerly looked at this legislation fully expecting that having been made fully aware of the circumstances around this particular case the Minister would have taken some opportunity to address that obvious iniquity in this legislation. It is not there Madam Assistant Speaker and the National Party is not supporting this bill. 
SUE MORONEY (Labour) 
: 
 It is a great pleasure to be able to rise and speak in the first reading of the Injury Prevention Rehabilitation and Compensation Amendment Bill (No 2). I congratulate my colleague Maryan Street. As a new Minister it must be very exciting for her to bring forward such an important bill that will make a real difference to people’s lives.  
Negativity has been displayed by members opposite today. However this legislation is something positive that will actually affect some of the most vulnerable people in our society—those who have been injured at work and those who are in seasonal and precarious employment. This bill will do a lot to make things right for this particular group of people in our society. It is about the Labour-led Government’s commitment to a fair and sustainable accident compensation scheme. It is the envy of the international community. I hope the National Party take that into consideration instead of condemning this very important step forward for our well-valued accident compensation scheme.  
The last speaker Anne Tolley spoke about a situation local to her and I wish to bring to the House’s attention a situation in my local area—in Hamilton East—that will be resolved by this bill. I am disappointed because I had hoped that the member of Parliament for Hamilton East who is on the Transport and Industrial Relations Committee that will hear this bill would be present in the House this afternoon to take a call. It seems that he will not be taking a call and that is disappointing because a man in Hamilton East Mr Bruce Gardiner has communicated frequently with members of Parliament over his particular situation and it will be addressed by this bill. His pleas have been heard—yes by this Labour-led Government. Unfortunately his member of Parliament David Bennett will be voting against this bill—a bill that will actually address the issues of one of his constituents. I am sure Mr Gardiner wants his story to be known because he has had a lot of publicity about what happened to him.  
This bill will make some significant changes to the cover provided by accident compensation for work-related injuries. It will extend this cover to include mental injuries caused by a single traumatic event and it will make changes to the cover provisions for work-related gradual process disease or infection. The cover that includes mental injuries caused by a single traumatic event will be of particular importance to Mr Bruce Gardiner of Hamilton East. 
His story is that one day in the course of his duties as a milk tanker driver for Fonterra he was driving along a country road—well within the speed limit and well within the law—doing the job that he had done many times before he noticed a person crouching in a sprint position on the side of the road. He did not have time to react before the person ran out in front of his milk tanker. Unfortunately Mr Gardiner could do nothing to avoid that accident and that death from occurring. That person had probably got to a point in his life where he had decided to end it. Mr Bruce Gardiner through his work actually became an unwitting player in that scenario and the trauma and mental injury that that caused him was not covered by accident compensation. 
Mr Gardiner has been a very strong advocate for the law being changed in this regard. As I said he is from Hamilton East. It has been a big call for Mr Gardiner to talk about the personal stress that this moment in his life caused him. His suffering meant that he was unable to continue in his duties as a milk tanker driver for Fonterra and he continues to suffer to this very day because of that very traumatic event.  
I will be very pleased to campaign as Labour’s candidate in Hamilton East at the next election and to be able to inform Mr Gardiner his family his friends and his entire community that the Labour-led Government has heard his pleas. It is the Labour-led Government that cares about these issues and this bill—having its first reading today—will address those issues in the future. 
The bill provides cover for clinically significant mental injuries rather than for temporary distress that constitutes a normal reaction to trauma. The bill does not introduce cover for mental injury caused by non-physical stress. It introduces changes to the cover provisions for work-related gradual process disease or infection to ensure that people harmed by their work receive greater access to cover and more clarity about whether cover is available and how it is determined. 
The bill also provides fairer and more straightforward weekly compensation for seasonal and casual employees by improving access to weekly compensation for people who are injured while temporarily between jobs. Many New Zealanders will be very pleased to hear that Parliament is considering this issue because a great many New Zealanders are involved in temporary work. 
The bill also provides the Accident Compensation Corporation with the discretion to extend the current 3-year limit on vocational rehabilitation where appropriate.  
I have listened very carefully to the debate because this issue will be a litmus-test issue for New Zealanders come the next election. I have listened very carefully in the hope that the National Party speakers on this bill will throw some light on what their policy is in regard to this issue. Unfortunately it was very difficult to work out. Apart from hearing their negativity and their opposition to our world-class accident compensation system it was very difficult to work out where National may go on this. However although they may not have let that slip in the course of this debate they certainly have made public statements that give us some clues about where National would go on the issue of accident compensation.  
John Key said: “I want to confirm today that National’s policy is to re-establish a competitive market to provide accident insurance.” Back to the good old market model the failed model of the 1990s! The National Party has not learnt a thing. Gerry Brownlee says that during the last all too brief period of private sector involvement in accident compensation premiums fell dramatically and accident statistics fell as employers experienced the direct financial benefit of keeping workplaces safe. 
Well what we know is that privatisation of accident compensation did not mean a better service and it did not work for employers or employees. Since Labour renationalised accident compensation the average self-employed levy has come down by 6 percent the earners rate has reduced by 7 percent and the average employer’s levy has dropped by—and wait for this figure—a massive 43 percent. That has happened under our world-class system of accident compensation which is the envy of the international community. Labour stands firm and very proud on its record in this area. It is an area that is close to my heart. Before my election to Parliament I trained health and safety reps in the workplace and I know of many many other stories of trauma apart from Mr Bruce Gardiner’s. I know what that trauma means for people’s lives—not only for the people injured but for the people around them for their workmates and yes for the profits and productivity of their workplace as well.  
In closing I say that although there are many wonderful challenges in my new role as the junior Government whip one of the downsides is that I am no longer a member of the Transport and Industrial Relations Committee which will consider this bill. However I give my best wishes to that select committee. I know that it will be well led and that the submissions on this bill will be well received. I wish the committee luck in its deliberations. 
A party vote was called for on the question  
That the Injury Prevention Rehabilitation and Compensation Amendment Bill (No 2) be now read a first time. 
Ayes 70 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Noes 51 
New Zealand National 48; ACT New Zealand 2; Independent: Copeland. 
Bill read a first time. 
Hon DARREN HUGHES (Deputy Leader of the House) 
 on behalf of the  
Minister for ACC 
: I move  
That the Injury Prevention Rehabilitation and Compensation Amendment Bill (No 2) be referred to the Transport and Industrial Relations Committee 
 and that the committee report the bill by 12 May 2008. 
Motion agreed to. 
Voting 
Point of Order—Mauao Historic Reserves Vesting Bill 
ANNE TOLLEY (Senior Whip—National) 
: 
 I wish to correct an error in our voting on the previous bill the Mauao Historic Reserve Vesting Bill. I believe that our votes were given against the bill and we wish them to be recorded in favour of the bill. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member is seeking leave?  
ANNE TOLLEY 
: I am seeking leave to change the vote. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member is seeking leave to have the vote recorded in the way the member has indicated. Is there any objection? There is not. That will be done. 
Maori Purposes Bill (No 2) 
First Reading 
Hon PAREKURA HOROMIA (Minister of Maori Affairs) 
: 
 I move  
That the Maori Purposes Bill (No 2) be now read a first time. 
 At the appropriate time I intend to move that the bill be considered by the Maori Affairs Committee that the committee report back to the House on or before 27 March 2008 and that the committee have the authority to meet at any time while the House is sitting except during oral questions during any evening of a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 192 and 195(1)(b) and (c).  
This bill brings together amendments to a variety of legislation related to Maori affairs including the Maniapoto Maori Trust Board Act 1988 the Maori Trust Boards Act 1955 the Treaty of Waitangi Act 1975 and Te Ture Whenua Maori Act 1993. On the whole the changes are in the nature of housekeeping. They update legislative provisions currently out of date or improve existing provisions. None the less they are important to the groups affected by these provisions. 
Firstly the bill will amend the Maniapoto Maori Trust Board Act 1988 and the Maori Trust Boards Regulations 1985 to provide for a seventh regional management committee to represent Maniapoto marae from the Kawhia Harbour region. Until this occurs a new regional management committee cannot officially represent its constituent marae on the Maniapoto Maori Trust Board vote on trust board matters or receive operational funding. By bringing about the formal recognition of the new regional management committee in legislation the bill ensures that Kawhia marae will be able to fully participate in the decision making of their iwi governance entity. The Maniapoto Maori Trust Board has also requested that the Act be updated to record the new name of the Maniapoto council of elders. Accordingly the bill replaces references to the council’s previous name Te Mauri o Maniapoto with its new name Te Kaumatua Kaunihera o Maniapoto throughout the Maniapoto Maori Trust Board Act.  
The bill will also align the minimum voting ages under the Maori Trust Boards Act 1955 and the Maori Fisheries Act 2004. Some Maori trust boards also act as trustees of their iwis’ fisheries settlement entity. This means in practice that when iwi members vote for members of their trust board they are also voting for the trustees of their fisheries settlement entity. There is confusion however over who is eligible to vote in these elections. Under the Maori Trust Boards Act iwi members must be 20 years or over to vote whereas under the Maori Fisheries Act 2004 18 and 19-year-olds can also vote. This inconsistency in minimum voting ages causes statutory compliance issues for trust boards. If trust boards let only beneficiaries aged 20 years or over vote they will comply with the Maori Trust Boards Act but be in breach of the Maori Fisheries Act. Equally if trust boards let 18 and 19-year-olds vote they will comply with the Maori Fisheries Act but be in breach of the Maori Trust Boards Act. To remove this confusion the bill will change the minimum voting age under the Maori Trust Boards Act to 18 years. This will bring the Act into line with not only the Maori Fisheries Act but also society’s common understanding of the age of maturity and the voting age for general and other elections.  
The bill will also remedy any irregularities in voting that may have occurred due to the inconsistency in minimum voting ages. Some trust boards may have opted to comply with the Maori Fisheries Act and allowed 18 and 19-year-olds to vote. The bill will validate instances where this may have occurred by providing that the election of trust board members prior to enactment of this bill will not be invalid on the basis of under-age voting. This validation will remedy any adverse effects of the statutory inconsistency and provide certainty for trust boards and beneficiaries.  
The bill will also execute a key condition of the agreement between the Crown and the Tuwharetoa Maori Trust Board relating to Lake Taupo. In 2007 the Crown and the Tuwharetoa Maori Trust Board came to a final settlement in relation to the trust board’s property rights in Lake Taupo. Under the agreement the trust board will receive a lump-sum payment and a new annual payment from the Crown. The bill will amend the Maori Trust Boards Act to provide for the new annual payment so that the trust board will begin to receive a key part of its compensation package. 
The bill will also provide for an increase in the membership of the Waitangi Tribunal from 16 to 20 members. The Government is committed to settling all historical Treaty claims by 2020. An important part of reaching this goal will be the ability of the tribunal to inquire into and report on the historical Treaty claims it receives. The tribunal is committed to completing this process by 2015 but has identified that to do so will place further pressure on its already busy membership. The bill addresses this issue by providing the tribunal with four extra members. It is hoped that this increased support will assist the tribunal to achieve its goal of inquiring into and reporting on historical treaty claims by 2015—contributing to the Government’s goal of settling all historical Treaty claims by 2020.  
The bill also makes technical drafting changes to section 6 of the Treaty of Waitangi Act 1975. Section 6 is a key provision of the Act as it sets out the rights of Maori to make claims against the Crown in respect of alleged breaches of the Treaty of Waitangi and the tribunal’s jurisdiction to consider them. Since the fisheries settlement in 1992 section 6 has been amended every time a settlement is achieved to specify the effect of each settlement on the tribunal’s jurisdiction. This drafting practice has led to 26 subsections being added to section 6 overshadowing its key provisions. Without the proposed amendment more subsections would be added as future settlements are achieved. The bill will move these subsections to a new schedule to the Act and add a single provision to section 6 stating that the jurisdiction of the tribunal is subject to the Treaty settlement legislation listed in the new schedule. Finally the bill tidies up a number of minor drafting errors in some of the other Acts and updates information as required.  
In conclusion I thank the many people who participated in the consultation process for these provisions. Although these amendments may be technical in nature they will create certainty for a number of Maori groups by ensuring that the legal frameworks in which they operate are up to date and reflect current situations. 
Hon GEORGINA TE HEUHEU (National) 
: 
 I am pleased to take a call on the first reading of the Maori Purposes Bill (No 2) which the Minister moved in the House this afternoon. As the Minister quite rightly said omnibus legislation deals with matters that are largely technical in nature. He has outlined proposals to amend various Acts. The amendments to the Maniapoto Maori Trust Board Act the Maori Trust Boards Act the Treaty of Waitangi Act and Te Ture Whenua Maori Act are largely technical in nature. They are aimed at increasing administrative efficiency and at tidying up matters of a technical nature that require tidying up. In that sense the changes in this bill are appropriate. They make sense and National supports them.  
That is why though we were quite shocked to find when the Minister first briefed us on this bill that he had included major changes to the Maori Trustee Act 1953 in it. We thought the Minister had tried to sneak major changes—after so-called consultation but not necessarily consultation with the right people—into a bill that should largely meet with the agreement of the Opposition. Those changes are contentious in nature. In fact just recently I have had inquiries about the changes he proposes to make to the Maori Trustee Act in the Maori Trustee and Maori Development Amendment Bill which I notice is on the Order Paper but has been shifted quite a long way down it—and that is where it should be. The Minister consulted with us National members and he had included amendments to the Maori Trustee Act in the Maori Purposes Bill (No 2) that we said we did not accept were actually appropriate because they were contentious.  
I am pleased that the Rt Hon Winston Peters is in the House this afternoon because he will of course recall the contentious nature of the Maori Trustee Act. When he was the Minister of Maori Affairs under the National Government in 1990 he actually commissioned an inquiry into and a report on the Maori Trustee Act. That report was done by the solicitors Richard Charters and Annette Sykes and if I recall matters correctly they came up with some rather horrendous findings that suggested the Maori Trustee may be in debt to beneficiaries to the tune of millions of dollars.  
The Minister should really listen to this because he should actually take the Maori Trustee and Maori Development Amendment Bill off the Order Paper. It is inappropriate and it is contentious and he has not consulted the right people. The assets of that trust do not belong to all Maori. The owners of those trustee assets can be identified albeit a lot of them have passed on. But the descendants of those people can be identified and the bulk of those assets belong in the Waiariki and Aotea district Maori Land Court.  
As I say the Minister took that legislation those amendments out of this bill at our request. They are gone for the moment. So we accept that this bill before us is largely technical and we support it. We support the bill before us now.  
The Minister has outlined the reasons for the changes included in the bill. I will comment on only a couple of them. The technical nature of the bill is I think very well demonstrated by the change to the Maori Trust Boards Act 1955 that specifies a minimum voting age of 18 for Maori trust board elections as the Minister has explained. There is a difference right now between the minimum voting age for Maori trust boards and the minimum voting age for the mandated iwi organisations under the Maori Fisheries Act—one is 20 years and the other is 18 years and it makes sense to align them. That will be done and of course it should be done because the difference results in extra compliance costs which the various boards should not have to meet.  
One of the other changes reflects changes to the annual payment to be paid by the Crown to the Tuwharetoa Maori Trust Board. That brings the Act into line with a recent agreement between the Crown and the Tuwharetoa Maori Trust Board. Again that is necessary to give effect to recent agreements.  
I suppose the one area of this legislation that in a way could be contentious but is probably not in effect contentious concerns the changes that are proposed to amend the Treaty of Waitangi Act 1975 to increase the statutory cap on the membership of the Waitangi Tribunal from 16 to 20 and to restructure section 6 of the Act. The first of those changes is probably the more substantial change. The tribunal has been operating with that membership since 1987 I think. There were originally three members on the tribunal but that was extended to seven. When I was a member of the tribunal—and very proud to be so—there were seven members. In around 1987 the Government of the day took the starting point for claims to be heard back to 1840 and the membership was increased to 16. Given that last year this Parliament set a closing date of next year—2008—for the submission of claims to the Waitangi Tribunal and given that this Government is endeavouring to complete all settlements by the year 2020 in National’s view it makes sense to increase the membership in the way that is proposed in this bill today.  
I suggest that increasing the Waitangi Tribunal’s membership is one thing but I trust that the Government will also boost the funding of the Waitangi Tribunal to enable it to take advantage of that increase in membership. Given the Government’s record over the last 8 years of not properly funding the tribunal yet seeking for it to get going in its work there is no point in having additional members without having the financial resources needed to make sure that all 20 members are sitting regularly and can in fact sit like a normal court. That is one of the things National would give consideration to. This measure will only make sense and we will only get through the settlement of claims in a timely and durable way if the membership of the tribunal is given proper backing and support to enable it to sit regularly in order to clear the mountain of claims that still lie before it. I hope we do not have—as we do now—members not always being fully occupied: some members waiting to be appointed to a tribunal and some members not sitting regularly at all. That does not make sense when the tribunal is under a time limit of sorts. The Minister makes no mention at all that he sees the need to increase the funding of the tribunal. So as I say I hope this will not be a Clayton’s increase where we get more members but they sit around not hearing claims.  
In reality the tribunal has been poorly served under this administration. It has had to cancel hearing dates that it had scheduled—sometimes those scheduled for the beginning of the year get moved towards the end of the year. Urgent inquiries have necessitated changes to the tribunal’s timetable. We do not want to have any of that. As I say we are very supportive of the increase in membership but we want to see the Minister committed to ensuring that financial resources follow that membership increase. I know that would be hard for that Minister though actually this is not the Minister that the money comes through; it is a justice one. Who would that be? 
Christopher Finlayson 
: Barker. 
Hon GEORGINA TE HEUHEU 
: It is Rick Barker the Minister for Courts. He is going to get the money needed to support the tribunal’s new membership. So a good job for Parekura Horomia in the new year is to get on to Rick Barker chase him around make sure that he has put in a Budget bid for the next year and make sure that the tribunal members actually get to work sit on claims start to clear the logjam of claims and get these settlements out.  
One thing is absolutely certain: although some claimants are happy to move to direct negotiations other groups of claimants want to have their day in court. National recognises that. When we get into power next year we will make sure that the tribunal can meet deadlines and can move to get the settlement process under way in a much more robust matter than is currently the situation. 
Debate interrupted. 
Voting 
Point of Order—Mauao Historic Reserve Vesting Bill 
NATHAN GUY (Junior Whip—National) 
: 
 I raise a point of order Madam Speaker. I want to talk about a matter that occurred earlier on this afternoon to do with the National Party’s vote on the Mauao Historic Reserve Vesting Bill.  
Hansard 
 and the television footage will show that no party vote was called; everyone in the House was in favour of that and what the National Party opposed was to do with the Maori Affairs Committee meeting outside Standing Orders on the sitting days because the Maori Affairs Committee is not the busiest one in Parliament. I want to make the point that the error occurred as a result of human error and the Clerk is aware of that. I want to put that on record. 
The ASSISTANT SPEAKER (Ann Hartley) 
: Thank you for that. It is certainly acknowledged in the record. 
Maori Purposes Bill (No 2) 
First Reading 
Debate resumed. 
DAVE HEREORA (Labour) 
: 
 I take this opportunity to stand in support of the Maori Purposes Bill (No. 2) and I look forward to it coming to the Maori Affairs Committee. I want to assure the previous speaker in terms of the issue raised about increased funding that that along with other issues gives us the opportunity to consider it and make recommendations back to the House. I certainly look forward to that discussion with the members.  
The Maori Purposes Bill (No. 2) is omnibus legislation that amends four existing pieces of legislation relating to issues relative to Maori: the Maniopoto Maori Trust Board Act 1988; the Maori Trust Boards Act 1955; the Treaty of Waitangi Act 1975; and Te Ture Whenua Maori Act 1993. I understand that it is intended that the bill will be broken up into four separate bills after the Committee of the whole House.  
I note that the bill will bring into effect a key condition of the new deed of agreement achieved between the Tuwharetoa Maori Trust Board and the Crown in relation to Lake Taupo a taonga of Ngati Tuwharetoa. The new deed of agreement clarifies Tuwharetoa’s property rights in Lake Taupo. Under previous agreements Tuwharetoa was granted a share in the revenue of the Crown generated from Lake Taupo and Tuwharetoa’s ownership of the bed of Lake Taupo was also recognised. In 2005 negotiations were commenced to further clarify Tuwharetoa’s property rights in Lake Taupo and in 2007 this resulted in a new deed of agreement between the Crown and Tuwharetoa in relation to the lake.  
The terms of the deed include agreement that the people of New Zealand will continue to have freedom of access to Lake Taupo for non-commercial recreational use. Lake Taupo will be managed in partnership between the Crown and the trust board. The trust board as a landowner will have the right to change commercial operations for use of the lake the Crown will continue to own and manage the trout fishery and the Crown will pay the trust board a capital sum of $9.865 million in settlement of loss of revenue and other financial issues. In the spirit of partnership the Crown will also increase its annual payment to the trust board to $1.5 million to better reflect the trust board’s share of the revenue the Crown generates from Lake Taupo. So although it may seem that the Maori Purposes Bill (No. 2) is simply making a technical amendment to section 10 of the Maori Trust Boards Act it marks a significant step for all Ngati Tuwharetoa.  
On the amendment being made the new annual payment will be triggered. This will put in place a key aspect of the deed further strengthening the relationship between the Crown and Ngati Tuwharetoa. The trust board will have certainty over its rights as owner and a sound financial base from which to manage Lake Taupo for the benefit of Ngati Tuwharetoa and the public of New Zealand.  
I also indicate my support for the increase in membership of the Waitangi Tribunal. Last year the Maori Affairs Committee considered the amendment proposing a closing date of 1 September 2008 for submitting historical Treaty claims to the Waitangi Tribunal. I spoke in support of that amendment at the first reading of last year’s Maori Purposes Bill and I noted that a closing date would give Maori the Crown and the Waitangi Tribunal the certainty of knowing that historical inquiry processes would be completed in a timely fashion. The ability to appoint four extra tribunal members will ensure that the completion of the historical inquiry process is done not only in a timely fashion but also in a comprehensive and expert manner.  
The Minister of Maori Affairs has indicated that this bill will be coming to the Maori Affairs Committee. The amendments are technical in nature and those groups likely to be affected by them have been widely consulted. Many support the proposals. The committee therefore looks forward to receiving this bill considering the public submissions received and reporting it back to the House. Kia ora. 
Hon TAU HENARE (National) 
: 
 I want to start by saying that the National Party will support this bill’s referral to the select committee especially the very very non-controversial issues with the Maori Trust Boards Act 1955—the voting age being 18 and the changes to the annual payment to the Tuwharetoa Maori Trust Board under the new agreement relating to the lake—and issues with the Maniapoto Maori Trust Board Act 1988 including formalising of a new regional management committee for the Kawhia Harbour and effecting a name change for the Maniapoto council of elders. Also the minor drafting errors in Te Ture Whenua Maori Act 1993 and Te Ture Whenua Maori Amendment Act 2002 are to be addressed.  
I want to cut to the chase and say it is about time that there was an increase in the statutory cap in terms of the membership of the Waitangi Tribunal from 16 to 20. I think that some form of increase and some form of change to the way we look at the Treaty settlement process is well overdue. It has needed to happen for a long time. So I congratulate the Minister on at least increasing from 16 to 20 the statutory cap on the membership. Whether we will get an extra 4 people or whether we will get the maximum and whether the tribunal will be funded appropriately to actually move quickly to settle to look into and to tell the stories of those who are laying claims before the tribunal is another matter and that most probably is not the outcome of this bill. On the surface it is a mechanical bill that tightens the bolts changes a few tyres here and there and hopefully puts a new spin on this Minister of Maori Affairs and the work he has done—or the lack of work—over the last 7 or 8 years.  
My colleague the Hon Georgina te Heuheu was absolutely right in her criticism of the Minister in terms of his wanting to include in this bill the amendment to the Maori Trustee Act 1955. I was shocked and appalled that no one had told the Minister that in a Maori Purposes bill we could not really have as controversial a measure as that. A Maori Purposes bill is an omnibus bill and it is supposed to be supported by the House. At the briefing he gave the National Party we saw that the bill had the amendment to the Maori Trustee Act and as my colleague said to change something like that to use a Maori Purposes bill to change something as fundamental as the Maori Trustee and the role of the Maori Trustee is huge. It is not only controversial but also a huge step in the wrong direction I would suggest. There has not been any consultation whatsoever with those beneficiaries who basically own the bank in terms of the Maori Trustee and whose money it is that the Maori Trustee looks after in the interest of those people.  
The National Party will not stand in the way of this bill which as I said is a mechanical bill. It changes the nuts changes a few tyres here and there and greases the wheels. I think when it does come to the Maori Affairs Committee we will find—and the House will find—that the most interesting part of this bill will be the amendment to the Treaty of Waitangi Act 1975. That really has been and will continue to be the nub of the question as to race relations in the next 5-10 years.  
We know that educational standards health issues and the like will continue to be issues but until this nation is able to stand up and say to itself that we have honestly and fairly tried to address the claims before the tribunal in a manner that is quick and lasting then we are not going to go anywhere near where we thought our country might have been 10 20 or 150 years ago. I think that will be the major point of the Maori Purposes Bill (No 2) when it comes before the select committee. It will be about where our nation goes. We cannot go down a track of just tinkering with legislation and hoping that one day things will just fall into place. The increase from 16 to 20 on the statutory cap is basically nothing legislation. We will see whether it does what the Minister says it will do. I have grave doubts because we cannot increase the cap unless we are going— 
Hon Parekura Horomia 
: You were blaming Winston last time! 
Hon TAU HENARE 
: No it is not the Rt Hon Winston Peters’s fault I say to Mr Horomia. It has nothing to do with New Zealand First. Like I said about the last bill it has got everything to do with the Minister wanting to show the community that he has been doing something—whatever it is. For the last 8 years— 
Hon Parekura Horomia 
: That’s why more Maori work. That’s why Maori assets are growing. We work hard. 
Hon TAU HENARE 
: Oh yes; that is why Maoridom voted for the Maori Party. 
Hon Parekura Horomia 
: You’ll saddle up the market rents. 
Hon TAU HENARE 
: Oh—market rents! That Minister can talk about market rents. He was one of the slum landlords down on the East Coast. He was trying to rent out his house to his whanau and I would not have rented out a house that looked like that to a dog. But the Minister did and we all know that. We all know he is a bit of a landlord down on the East Coast. We all know he is one of the absentee landlords but that is all right. What we are talking about is a Clayton’s Treaty of Waitangi amendment to the Maori Purposes Bill.  
What we are here today to talk about is that Minister’s lack of foresight and lack of vision in the 8 years he has been sitting in his seat and taking the ministerial salary the Crown car and everything that goes with it like the free flights all around the country. All he can come up with is increasing the membership of the tribunal from 16 to 20. That is not going to work unless we put in substantial resources along with the extra four people. 
Hon Parekura Horomia 
: Which has been done. 
Hon TAU HENARE 
: Oh it has been done—in the twilight of the member’s career. He is in the twilight of his career and he wants to make an impression but the only lasting impression the Minister makes is that of a do-nothing Minister for 8 years.  
National will vote for this bill. We want it to come before the select committee because we want to hear what the people have to say about this Minister’s lack of work over 8 years. He has been paid but he could have stayed at home. In fact it would have been better if he had stayed at home and taken the salary that he has been on for so long. We will support this bill’s referral to the select committee and we cannot wait for the submissions to roll in in their thousands. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 It must be great to be the spokesperson on Maori affairs for the National Party. That person could make one speech a year then go home for Christmas. Mr Henare gets even that part wrong. 
I ask which members remember the fiscal cap of $1 billion that Doug Graham floated in 1994 with National’s consent and backing. When I heard Georgina te Heuheu say that National would provide the resources on this matter I pricked up my ears because that will come as the best-kept secret within the politics of this country as far as Maori are concerned. That is the first thing. 
Secondly as Mr Henare well knows National says one thing before an election and does the very reverse after it. When National was in power there was never any mention whatsoever in respect of the Maori Purposes Bill’s effect on the tribunal’s work of ever properly providing the tribunal with the resources to do its job. 
Christopher Finlayson 
: That’s wrong. 
Rt Hon WINSTON PETERS 
: Is that wrong? I ask Mr Finlayson to tell me why I am wrong. I say to Mr Finlayson that he cannot sit there and shout out every day. The member is qualified so he can tell me why I am wrong. He cannot. That was the value of that interjection. I think Mr Finlayson is one of the most qualified people in the National Party.  
R Doug Woolerton 
: So they say. 
Rt Hon WINSTON PETERS 
: I suppose Mr Woolerton can throw in that interjection. When Mr Finlayson is put to the test he also does not know what he is talking about. 
This is National’s record. When did National provide the tribunal with the resources to do its job? Everybody knows that it is a huge job to be done and if we are going to get the target settlement dates completed via the tribunal in a way that makes Maoridom happy then the tribunal will need greater resourcing—perhaps more than this. 
Hon Georgina te Heuheu 
: You’ve done nothing for us in 8 years! 
Rt Hon WINSTON PETERS 
: I suppose we could say the Government is guilty of not doing anything in 8 years but what is National’s record? What has National’s record been since 1975? It has done nothing at all. It has done nothing at all since the tribunal was first established. 
I also say to Mr Henare that it is not right to criticise a Maori who still owns ancestral land. That is the aim of the exercise—to have ancestral land to keep it and hopefully to pass it on to future generations. Why Mr Horomia should be slagged for being such a Maori is beyond me but then there may be a slight envy factor that we could refer to here. 
The Maori Trustee funds have been taken out of this bill. I ask whether members remember that in 1985 an attempt was made by Roger Douglas to sweep all the funds into the consolidated account via an addition to the schedule. That is what he did and he got stopped—not by the National Party. [ 
Interruption 
] No he was not one of mine. Roger Douglas has never been one of New Zealand First’s people. I say to Mr Bennett that Roger Douglas is one of his types of people and he is welcome to him. 
Hon Darren Hughes 
: He knows a lot about politics that fella! 
Rt Hon WINSTON PETERS 
: Well he is a new member and he does not even know who Roger Douglas is. But I will tell members what he does know. He knows how to imitate Roger Douglas’ policies—how to pillage the country and leave it wide open to the ravages of international money based not on the interests of this country’s wealth and export creation but just on helping out one’s mates which is what the Electoral Finance Bill is all about as we all know. 
Hon Darren Hughes 
: That’s why they hate it so much. 
Rt Hon WINSTON PETERS 
: Well they always revert to type. That happened in 1985. Then of course as Georgina te Heuheu said there was an inquiry in 1991 by two very able people Mr Charters in particular and the Maori Trustee has been soundly based ever since. We will be very interested to see what the legislation says come next year. 
Let me ask a question of the National Party. What is the National Party policy on the issue of the Maori Trustee? 
Hon Members 
: Wait and see. 
Rt Hon WINSTON PETERS 
: Oh I get it. What is the policy? It is “wait and see”. Why have those members departed from their real policy which is “me too-ism”? Someone on the Government side of the House says something and National members say “me too”. It goes even as far as the music industry. We have seen it in respect of National’s DVD. Why everybody is complaining about Mr Key using Coldplay’s music I do not know because that is what National’s stance has been. It is “me too” on everything including the music. We saw a variation on that today. It is called “wait and see”. 
I suggest to the National Party spokesperson from Tuwharetoa that we would like to know National’s policy before Christmas. All these Maori will be going to all these unveilings and all these marae and having all these whanau meetings and they would like to know what the National Party’s policy is. 
Hon Member 
: Chris Finlayson knows. 
Rt Hon WINSTON PETERS 
: He would be the only guy in the party who does. 
All I want to say is simply this. The bill does increase the numbers on the tribunal from 16 to 20. Frankly I think it is not enough. The tribunal needs more members if we are to expedite its work and take this issue which has tended to linger for far too long off the political agenda as a result of people being satisfied that their claims have been properly met. 
While I am talking about this issue I just want to say this. The Central Plateau settlement should be going ahead with expedition. To delay this matter month after month and year after year is not in anybody’s interests. I would ask those other people who are not happy to go back again to join with the original claimant group in order to try to sort out this matter before they next come to Government rather than go through this tortuous process of going to the High Court for a further legal wrangle. But then again which party said that this would be the matter that would create more dissension amongst Maori than any other? In actual fact it was New Zealand First. We said that. There is nothing as antiseptic as the old saying “I told you so” but we did say that. 
I conclude by thanking the Minister for the precise and clear way in which he enunciated the provisions of the bill and to wish all those in Maoridom—in fact the country itself—a very happy Christmas and a delightful New Year. 
METIRIA TUREI (Green) 
: 
 I will take just a very short call on the Maori Purposes Bill (No 2) to say that the Green Party is supporting it. We are pleased to be able to do so. It does do some useful things. I do not see that it is particularly controversial though some members especially this week have made an absolute drama out of all sorts of strange things for quite unnecessary reasons. But it all adds to the pleasure of being here so I do not mind particularly. It is certainly entertaining. It is very good that this bill is before the House. It means that this work will be done. We agree with much of what is in the bill and we look forward to the comments from submitters and to working in the select committee on progressing the legislation. Thank you. 
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 Tena koe Madam Assistant Speaker. As has been noted before this bill is an omnibus bill amending four Acts: the Maniapoto Maori Trust Board Act 1988 the Maori Trust Boards Act 1955 the Treaty of Waitangi Act 1975 and Te Ture Whenua Maori Act 1993. In considering these bills I thought of some words of my ancestors—he kai kei te hara a te kaki. It is a literal reference to food that causes the throat to sin which is an allusion to the sin of overindulgence—ara kai kia makona. Gluttony is a fault that is severely criticised amongst Maoridom and gluttony is the fault we level at this Maori Purposes Bill (No 2). The only consolation we can offer the House is the fact that the excesses of this bill today are at least somewhat restrained by the fact that the amendments to the Maori Trustee Act 1953 will be considered at a later stage.  
We want to place on record our appreciation that the Minister of Maori Affairs listened to our concerns about the overcrowding of bills that have come before this House. We will never understand the logic of squashing a whole heap of different legislative items together for the sake of getting them through the House. We are pleased that the very significant proposals being put up around creating the Maori Trustee as a stand-alone organisation have been deferred for another day. I say kia ora to Parekura.  
But getting back to the feast that is being debated today I turn to the bill that we will digest in its four separate parts. The chameleon actions of this Government towards the age of youth never cease to astound us. On the one hand the Minimum Wage (New Entrants) Amendment Bill creates a situation in which 16 and 17-year-olds are entitled only to 80 percent of the adult wage and then this bill looks to promote a minimum voting age of 18 years.  
The amendments to the Maori Trust Boards Act address yet another peculiarity around age—this time the fact that the current minimum voting age under the Act is 20 years. The thing is that the Maori trust boards that come within the jurisdiction of this bill are mandated iwi organisations subject to the Maori Fisheries Act 2004 in which the minimum voting age is 18 years. This is not the first piece of legislation and it is bound not to be the last in which the merry-go-round of eligibility ages for youth is creating havoc for legislators. We suggest that a useful outcome of this specific issue in the Maori Purposes Bill (No 2) to validate the voting age as 18 might be to consider a broader item of legislation that addresses the uncertainty around consistency with matters of age.  
Another aspect of the amendments to the Maori Trust Boards Act is the amendment to give effect to the recent agreement made between Ngati Tuwharetoa Maori Trust Board and the Crown to repeal annuity and revenue-sharing arrangements in place of a lump-sum payment. This aspect of the bill has a fascinating whakapapa dating back some 80 years to 1927 when the Crown legislated to vest title in Lake Taupo the Waikato River—up to and including the Huka Falls—and most of the rivers flowing into Lake Taupo.  
It was only 15 years ago in 1992 following years of negotiations that the Crown agreed to return title to the trust board as trustee for its beneficiaries. The passage of the last decade and more has seen the Ngati Tuwharetoa Maori Trust Board involved in complex negotiations towards securing title in respect of the lake bed and the bed of the Waikato River to the Huka Falls. Having secured title the board negotiated with the Crown to grant licences and concessions for commercial purposes and to charge for them.  
This series of negotiations contained in a deed signed on 10 September 2007 has freed up Tuwharetoa to negotiate with local government in the management of the lake as a taonga of Ngati Tuwharetoa. This bill therefore comes at the end of some 80 years of perseverance and commitment from Tuwharetoa to give effect to that September agreement to repeal annuity and revenue-sharing arrangements in place of an annual payment to Ngati Tuwharetoa Maori Trust Board. 
We support the opportunity for Tuwharetoa to proceed in this regard but we must place on record the ongoing issues that remain to be dealt with regarding the anomaly to do with water—that is that Tuwharetoa has rights over space above the water but not over the water itself. To use a word that has been used in this Chamber today is this not something of a Clayton’s concept if ever there was one?  
I refer now to the Ngati Maniapoto Maori Trust Board. The amendment relating to the trust board is a significant but safe set of proposals around naming and representation rights. The bill will change the name of the Maniapoto council of elders from Te Mauri o Maniapoto to Te Kaumatua Kaunihera o Maniapoto. Both the council and the trust board agree that the new name better reflects the nature of the council and given the obvious unity we will of course support the proposal which reflects their interests.  
The bill also amends the Maori Trust Boards Regulations 1985 to enable a new Nga Tai o Kawhia Regional Management Committee for the Kawhia Harbour region to have representation on the Ngati Maniapoto Maori Trust Board. That is another amendment that we as the Maori Party a proud and independent Maori voice in Parliament will of course support to ensure that all Maniapoto-affiliated marae are represented both by a regional management committee and by a representative on the trust board.  
The Maori Purposes Bill (No 2) also introduces two amendments to Te Ture Whenua Maori Act 1993: one to remove an incorrect reference to section 227 in section 40(2); and two to of all things correct the spelling of “incorporation”. I might be out of order here but really how can it take 14 years for someone to realise that “incorporation” is spelt with two i’s and not one!  
I move now to the Treaty of Waitangi Act 1975. The last course in the hakari laid out in the Maori Purposes Bill (No 2) will be to increase the statutory cap on the membership of the Waitangi Tribunal from 16 to 20. This move to enhance the membership is in response to an anticipated increase in its workload as a result of the rushing forward of the closing date for the submission of historical Treaty claims in 2008. This is a very significant amendment and one that we wholeheartedly support. Any proposal to assist iwi in having their claims heard before the tribunal is to be supported.  
Indeed this was a proposal that we first announced on 9 May 2007 in our release calling for more resourcing for the Waitangi Tribunal. We have constantly sought support for the enhancement of the role of the Waitangi Tribunal so it can deal with claims more speedily. The tribunal needs to be resourced sufficiently so it can work full time. We are hopeful that increasing the statutory cap on the membership of the Waitangi Tribunal will be a step in the right direction and will lead also to the opportunity to review more widely regarding functions and funding.  
We note however that setting deadlines for historical claims will not actually do anything to bring the process to an end. Just as the amendments to specify a voting age of 18 bring up far broader issues around entitlement no one in this House can ignore the wider context around the Treaty settlement process. Improving the settlement process from a Maori perspective will ensure that the claims will be settled earlier that they will be settled fairly and that there is broad consensus for the process and therefore greater commitment to settlement resolution. This bill does not achieve the progress we so desperately need but it does establish a starting point for at least the conversation to occur. We will support this bill going to the select committee to ensure that the conversation is given space to take place. 
CHRISTOPHER FINLAYSON (National) 
: 
 I will take a brief call because the National Party has indicated through previous speakers that it will support this bill going to a select committee. As a member of the Maori Affairs Committee I am looking forward to dealing with the issues it raises particularly in relation to Part 3 which deals with the Treaty of Waitangi Act 1975.  
But before dealing with the particular provisions I think in fairness to Sir Douglas Graham who was such an outstanding Minister in charge of Treaty of Waitangi Negotiations I ought to respond in some detail to the vulgar crude and intemperate attack made by the Minister of Foreign Affairs. He has come back from North Korea and of course we are pleased to see him back from North Korea but I think that he has learnt a thing or two from his new friend Kim Jong Il and he is confusing the truth and propaganda.  
When we look at the truth of the record of the National Government between 1992 and 1999 and at the work done by Sir Douglas Graham as the Minister in charge of Treaty of Waitangi Negotiations we know that for Mr Peters to stand up in this House and insult that work by implication is totally unfair. The record of the National Government between 1992 and 1999 in this area is nothing other than outstanding and that Minister who is now a member of the Labour Government—he ran away from the National Party in the mid-1990s—did not do anything to advance the cause of justice in so far as the historical grievances were concerned.  
Rt Hon Winston Peters 
: Is that why you won all the Maori seats? 
CHRISTOPHER FINLAYSON 
: I can understand why he probably has the pip that Sir Douglas Graham was made the Minister in charge of Treaty of Waitangi Negotiations because I know he made a bid for it when he was the Minister of Maori Affairs. But Jim Bolger with his customary foresight knew he would be no good and he appointed Sir Douglas Graham who was then the Minister of Justice to take the job. So I can understand why that member has got the pip. He was pipped at the post by Sir Douglas Graham. All I can say for New Zealand is thank goodness he was because if he had been the Minister in charge of Treaty of Waitangi Negotiations then his performance probably would have been as lousy as Mark Burton’s.  
The reality of the matter is that Jim Bolger and Sir Douglas Graham did a great job in the Treaty area and they can be very proud of what they did. For that member the former member of Tauranga to stand up 9 years later and insult that memory is grossly unfair. If he has any decency he will stand up and apologise to Sir Douglas Graham when I have finished my speech.  
It is a great honour to follow Georgina te Heuheu because she was a member of the tribunal from 1986 to 1996 and a very good member of the tribunal she was. She was there and when she talks about issues about the tribunal she talks not only as an extremely diligent member of Parliament but also as a person who made a significant contribution to New Zealand as a member of that tribunal.  
Rt Hon Winston Peters 
: So what’s the policy? 
CHRISTOPHER FINLAYSON 
: Oh the member asks where the policy is. The policy will be announced in due course. Where is the member’s policy on all sorts of things? The policy will be announced in due course and I am sure that the Maori of New Zealand will be very impressed with it. We will wipe the floor with you when the policy is announced. Let me deal very briefly with— 
Rt Hon Winston Peters 
: I raise a point of order Madam Speaker. I know that the member is a very junior member and has just arrived here but he cannot talk about wiping the floor “with you”. That is not a proper parliamentary term. I would ask him to try to collect his thoughts which are pretty chaotic right now and apologise for what he said. 
CHRISTOPHER FINLAYSON 
: That is quite right. The last thing I would say is “wipe the floor with you” Madam Assistant Speaker. I regret that because of course what I meant to say was that we will wipe the floor with the former member for Tauranga just as Bob Clarkson will wipe the floor with the former member of Tauranga if Mr Peters decides to stand there again.  
Let us get on to clause 16 which deals with the jurisdiction of the tribunal. This clause is an extremely good amendment and the National Party will support it. Clause 16 amends section 6 of the Treaty of Waitangi Act. It sets out the jurisdiction of the tribunal to consider claims. While the Minister of Foreign Affairs was away in Pyongyang his colleague Mr Woolerton introduced what could only be described as a half-baked member’s bill to try to delete all references to the principles of the Treaty of Waitangi from section 6. 
Rt Hon Winston Peters 
: I raise a point of order Madam Speaker. It is outside the Standing Orders and parliamentary rules to seek to relitigate a bill that has been dealt with in the same term of a Parliament as this speaker is wont to do and is trying to do now. I know that he is new to the House and that he is only a junior member and does not know too much about procedure but he cannot do that. I would ask him to come back to the legislation before the House now. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member was making references outside the bill. He should please continue. 
CHRISTOPHER FINLAYSON 
: I was of course making reference in passing for the benefit of the Minister who has been so busy cuddling up to Kim Jong Il in Pyongyang that I thought it only fair I should tell him what his colleagues have been up to. That bill could only be described as dopey legislation which sought to remove all references to the principles. Maybe if the Minister has time at some point he should read section 6(1) of the Treaty of Waitangi Act and he would see that to remove references to the principles there would render the whole Act meaningless.  
What is proposed is that all the subclauses in section 6 from subclause (4A) through to the end of section 6 be removed and put in the schedule. That is a perfectly sensible amendment and the National Party will support it. That issue really does not need any argument in the select committee.  
The second point—and it has been adverted to by a number of speakers including Dr Sharples—concerns clause 15. It involves increasing the number of members of the tribunal from 16 to 20. The National Party again thinks that is a very sensible proposal.  
But as all the speakers have said it is only part of the story because the tribunal is suffering from not only a lack of numbers of members who can do the job but also a lack of adequate resourcing. Indeed section 4(5) of the Act states that the Ministry of Justice is obligated to “furnish such secretarial recording and other services as may be necessary to enable the Tribunal to exercise its functions and powers.” The reality of the matter is that the legislative framework is there to enable this sort of thing but it has not happened adequately enough over recent years. The tribunal suffers from a lack of resources. In particular it suffers from a lack of qualified historians.  
There is also the need for proper funding for hearings so that as Mrs te Heuheu said hearings can proceed with greater speed than they proceeded for example in the northern South Island tribunal inquiry Wai785. That was a stop-start affair for a number of years. For example in August 2003 for a couple of days the claimants themselves presented their evidence. Then there was a gap for some months before a hearing was held at Omaka Marae from 13 to 17 October when Ngai Tahu presented its evidence in response. Again there was another gap until November of that year when the Crown heard evidence. Then there were final submissions—I know because I was involved in them—early in the following year. Then there was a 3-year gap between the final submissions and the tribunal’s release of the report.  
Maybe the Minister of Foreign Affairs thinks a 3-year gap between the final submissions and the report is acceptable but we in the National Party do not. We think it is unfair on the claimants it is unfair on the Crown and it is unfair on those who get involved in the hearings before the tribunal.  
So we say these are good measures but they are only part of the story. What is needed is proper funding and proper resourcing—particularly I emphasise proper resourcing achieved by finding historians who can help write the reports. These are the issues the Government needs to face.  
When this Maori Purposes Bill (No 2) becomes law and the Treaty of Waitangi Act is thereby amended the framework for getting on with the job and for completing Sir Douglas Graham’s great achievements is there but a lot more work needs to be done. National will be supporting this bill going through to the select committee but we say that it is only part of the story. This Government’s record on funding the tribunal and indeed on the important work of resolving the historical grievances is particularly poor even by the Government’s standards. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 I seek leave to table the E9 for the 1996 election in which the National Party had a disastrous year in the Maori seats and we in New Zealand First won the whole lot of them which would probably give a clear indication as to whether Mr Finlayson the previous speaker was making any sense or telling any truth whatsoever in his speech. 
Document not tabled. 
CHRISTOPHER FINLAYSON (National) 
: 
 I seek leave to table the results of the election in Tauranga in 2005 when Kim Jong Il’s mate was completely outclassed by Bob Clarkson. 
Document not tabled. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 I seek leave to table the returns in respect of expenditure in the Tauranga electorate at the last election in which one candidate declared $10000 and the court said: “No you are not telling the truth. It is much more than that. Let us work our way through and find out what it is.” He did sneak through because of other things but the reality of it all is that he put in a false return. 
Document not tabled. 
CHRISTOPHER FINLAYSON (National) 
: 
 I seek leave to table the report of the full court of the High Court that adjudicated on the petition brought by Mr Peters which was the second resounding loss he had in 2005. 
Document not tabled. 
BOB CLARKSON (National—Tauranga) 
: 
 I seek leave to table the paper declaring where Winston got his funds from during the election in Tauranga—Western Bay Finance—but unfortunately I do not have a paper so I cannot do it. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member should not trifle with the House like that. If members do not have something to table then they cannot ask for leave to table it. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 I raise a point of order Madam Assistant Speaker. That member has made that allegation to the man in question who has denied it—as I deny it. Why does he not go outside and say it? Because he knows he will have his little bottom sued off. There he is prepared to make a statement to this House without one fact or the document and having said it he admitted it. He should go outside and say that and we will see how long he lasts—“Big Boy”! 
The ASSISTANT SPEAKER (Ann Hartley) 
: That is not a point of order. 
LESLEY SOPER (Labour) 
: 
 I rise to return the House to the seriousness of the Maori Purposes Bill (No 2) and to take a short call on the bill of which my colleague the Hon Parekura Horomia very ably moved the first reading today and on which the Minister of Foreign Affairs has also spoken very ably.  
The bill is one that is largely technical in nature and perhaps not one that many Pakeha have paid much attention to. I note that it will be broken up into four separate parts during the Committee of the whole House stage of the bill. There are two parts that I would particularly like to speak on. The first is the bill’s provision for an increase in the membership of the Waitangi Tribunal from 16 to 20 members. The Labour Government is committed to settling all historical Treaty claims by 2020. The closing date of the submission of historical claims to the tribunal is as we all know 1 September 2008. Four of the current 16 warranted members of the Waitangi Tribunal are historians. Of course the increase in the number of historical claims and the time frame in which they will need to inquire and report to the tribunal make it essential that there be more provision for extra members of the tribunal. Even more important we have to consider the fact that many of the current members are part-time and that there are questions about whether they can serve on every case. It is essential that this work is done clearly straightforwardly and with provision for reaching the date of 2020.  
It seems to me that an important part of reaching the goal of the ability of the tribunal to inquire and report fairly and openly is that we increase the number to 20. Many Pakeha will not have realised the significance of this but the fact is that those four additional members should assist the tribunal in achieving that goal of inquiring into and reporting on the historical Treaty claims by 2015 contributing to the Labour Government’s goal of settling all those historical Treaty claims by 2020 which is something that has been well received throughout this country. 
Sitting suspended from 6 p.m. to 7 p.m. 
LESLEY SOPER 
: Before the House rose for the dinner break I was speaking on the Maori Purposes Bill (No 2) and I had dealt with the increase in numbers for the Waitangi Tribunal which is a very sensible move in the bill.  
The second matter I was interested to take a short call on is that of voting ages. The bill will align the minimum voting ages under the Maori Trust Boards Act 1955 and the Maori Fisheries Act 2004. This is a very good thing. Some Maori trust boards of course also act as trustees of their iwi fisheries entity. This means in practice that when iwi members vote for members of their trust board they are also voting for the trustees of their fisheries settlement entity. So we can understand some confusion over who is eligible to vote. Under the Maori Trust Boards Act iwi members must be 20 whereas under the Maori Fisheries Act 2004 18 and 19-year-olds can also vote. This inconsistency in the minimum voting ages causes statutory compliance issues for trust boards. If trust boards let beneficiaries aged 20 years and over vote they will find that they comply with the Maori Trust Boards Act but are in breach of the Maori Fisheries Act. Equally if trust boards let 18 and 19-year-olds vote they will comply with the Maori Fisheries Act but will be in breach of the Maori Trust Boards Act.  
The bill will change the minimum voting age under the Maori Trust Boards Act to 18 years bringing the Act into line not only with the Maori Fisheries Act—a very good move on the Minister’s part—but also with society’s common understanding of the age of maturity and the voting age for general and other elections. Considering the many different legal ages for various things in New Zealand any move to align ages of entitlements is a very good action and will be of general interest to the New Zealand community. 
Bill read a first time. 
Hon PAREKURA HOROMIA (Minister of Maori Affairs) 
: 
 I move  
That the Maori Purposes Bill (No 2) be considered by the Maori Affairs Committee 
 that the committee report back to the House on or before 27 March 2008 and that the committee have authority to meet at any time while the House is sitting except during oral questions during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 191(2) 195(1)(b) and (c). 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 70 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Noes 49 
New Zealand National 48; Independent: Copeland. 
Motion agreed to. 
Electricity Industry Reform Amendment Bill 
First Reading 
Hon HARRY DUYNHOVEN (Associate Minister of Energy) 
: 
 I move  
That the Electricity Industry Reform Amendment Bill be now read a first time. 
 I will be recommending that the bill be referred to the Commerce Committee for consideration. 
The Electricity Industry Reform Act of 1998 required ownership separation between electricity lines companies and electricity supply companies in order to facilitate competition in the electricity industry. The Act was amended in 2001 and again in 2004 to encourage lines companies to invest in generation—in particular in “new renewables” provided they did so in separate companies and complied with arm’s-length rules. In practice notwithstanding these amendments there has been little investment in generation by lines businesses. Lines companies submitted that the amendments did not go far enough and that barriers remained to their investing in generation. The purpose of this amendment bill is to address the issues that discourage lines companies from investing in renewable generation while retaining key restrictions on cross involvement between a company’s lines and generation activities. 
The bill achieves this through three main policy changes. The first policy change is intended to make it easier for owners of lines businesses to sell the output of the generation they were permitted to own under the 2001and 2004 amendments to the Act. The objective here is to encourage the owners of lines businesses to invest in permitted generation especially generation from new renewable energy sources. This policy objective will be achieved by allowing lines companies to retail up to 100 percent of the nominal annual output capacity of their permitted generation. This is an improvement on the existing Act where allowable sales are restricted to the actual output of the generating station. In situations where this generation has a variable output such as on a wind farm this places a significant restriction on the company’s ability to sell the electricity it generates. Lines companies will also be allowed to trade in financial hedges without restriction in order to manage their risks. 
The amendment bill proposes a number of significant changes to corporate governance rules intended to lower the costs of corporate separation and compliance with arm’s-length rules. The threshold for compliance will be raised to 10 megawatts an increase from the present limit of the higher of 2 megawatts or 5 percent of maximum demand. Currently a lines company intending to operate in both lines and generation or retail activities needs separate boards and management structures. The proposed amendments will relax the separate board member requirement thus allowing the same person to be a director of both the lines and the supply businesses provided that there is at least one independent director excluding executive directors. In addition the same person will be able to be the manager of both companies when the companies supply up to a threshold of 30 megawatts. 
The second main change is to narrow the scope of ownership separation requirements to focus on geographical areas where there is potential for the exercise of market power and anti-competitive practices namely where lines and supply are co-located. This will be achieved by allowing owners of lines businesses to be involved in generation and retailing without limit outside their lines area. In addition requirements for corporate separation and compliance with arm’s-length rules outside the lines area will be repealed. Existing ownership separation rules will be retained where lines and supply are co-located. This is because co-owned co-located lines and supply businesses have both the incentive and the ability to lessen competition in retailing and local generation. Ownership separation removes this incentive and ability. 
The third main change is to amend the definition of renewables. Currently the owner of a lines business may only invest without quantity limitations in “new renewables” which are defined to exclude hydro and geothermal generation using traditional technologies. This new definition includes all renewables to reflect the Government’s policy of encouraging the development of renewable energy. 
The amendment bill is an important element in the New Zealand Energy Strategy. By facilitating lines company construction of renewable generation and the selling of the output these proposals will contribute significantly towards our 90 percent renewable energy target. At the end of the debate I will move that the Electricity Industry Reform Amendment Bill 2007 be referred to the Commerce Committee for consideration.  
GERRY BROWNLEE (National—Ilam) 
: 
 The National Party will support the Electricity Industry Reform Amendment Bill being referred to the Commerce Committee. We do so making the observation that this bill and its intention joins a very long list of policies announced by the National Party then flogged by the Labour Government.  
Sue Moroney 
: No one believes that. 
GERRY BROWNLEE 
: Poor old Sue Moroney is the Labour junior whip. I mention her name because her opportunities to have it recorded in  
Hansard 
 during her political career have been relatively few. We had a policy in 2005 going into the election that did exactly this. If the member were to go through the  
Hansard 
 record of the debate on the 2004 amendment legislation she would see reported throughout it our comment that restricting lines companies in the way they were being restricted then would not result in the necessary pick-up.  
The Hon Harry Duynhoven who does not know much about this topic and who unfortunately is just a stand-in Minister of Energy tonight did his best. He read from the officials’ notes and he did a beautiful job of reading them. It was almost seamless; one would not have known he was reading— 
Hon Tony Ryall 
: Other than the strings! He’s just a puppet. 
GERRY BROWNLEE 
: —that is right—other than the pauses sometimes being in the wrong place. He tried to explain what this is all about. It is pretty simple. Lines companies throughout the country obviously have an interest in electricity distribution. They also have very very stringent limits on what they are able to invest in. They are companies that have particularly strong balance sheets and the ability for those companies to invest in generation—particularly embedded generation or distributed generation—is quite considerable. If they did invest in a wind farm that had 100 megawatts of capacity they would never have that 100 megawatts available for sale because we know that a wind farm works at only 43 percent or 45 percent efficiency if we are lucky. They would be constantly chasing their tails. This provision says that the lines companies can go out and retail their full 10000 gigawatt hours that they can supply that by buying in and out of the market that they can hedge that cost by taking out hedge contracts and that they can fully participate in the market provided that they put the generation in place and that is the key to it.  
This country has a scarcity of electrical energy but we should not. We should have an abundance of electrical energy but unfortunately for the last 8 years the Labour Government has made conditions so tough that no one has invested to any great extent. It is very interesting that in the 9 years of the last National Government nearly 1600 megawatts of new electricity was put in place but in the last 8 years the amount has been much less than 700 megawatts. A lot of that has been renewal which we want but its efficiency rating is so low that it causes a problem.  
Surprisingly this is not a bad attempt by the Government to put into legislation the National Party’s 2005 energy policy. For that reason we are prepared to consider it at the Commerce Committee. We think that some of the arm’s length separations in here are a little bit of a joke. I guess they reflect how the factions work inside the Labour Party— 
Hon Tony Ryall 
: Oh yes there are plenty of those.  
GERRY BROWNLEE 
: Yes. Everyone knows they are all one but there are different heads of factions and different handshakes going on around the place at different times and they all try to keep their little bit secret from each other. I do not think that is a good way to conduct business. 
We will look at the provisions as the select committee considers them. All in all I do think that if this law is enacted and the lines companies respond to the opportunities offered by the change in the law it should have quite an effect in at least holding the price of electricity if not seeing it fall. 
DARIEN FENTON (Labour) 
: 
 It is a pleasure to take a short call on the Electricity Industry Reform Amendment Bill. It was interesting to hear the previous speaker Gerry Brownlee. He had some sort of paranoia about National’s policies being stolen by the Labour Party. Yeah right! [ 
Interruption 
] That is right. It also reminded us of Max Bradford. That name is a blast from the past that I never thought I would have to worry about. The unlamented Max Bradford—oh my goodness! We have moved on from there but I do not like to be reminded of these things. 
Lesley Soper 
: His colleagues are still here. 
DARIEN FENTON 
: That is true. 
This bill is an important part of the Government’s plan for a sustainable future. Sustainability is something that we are all coming to grips with. Everybody is talking about it. Everybody knows that we have to deal with the issues facing our planet and the issues we have with climate change. Our Labour-led Government has set a goal of 90 percent renewable generation by 2025. It is a perfectly achievable goal. We have already introduced legislation for a New Zealand emissions trading scheme and a 10-year ban on baseload thermal generation except where it is needed to ensure security of supply. This Government is committed to both renewable generation and security of supply in order to continue New Zealand’s drive for economic transformation. We are encouraging more renewable generation improving energy efficiency and maintaining security of supply. 
The purpose of this bill is to deliver all of those things and the amendment is to further encourage lines companies to invest in renewable generation. As the Minister has outlined it does that through three major changes. First it makes it easier for owners of lines businesses to sell the renewable generation they are permitted to own under the 2001 and 2004 amendments. Second it allows owners of lines businesses to be involved in generation and retailing without restrictions outside their lines area. Third it extends the definition of eligible renewables to include hydro and geothermal energy now covering all renewables. 
This is a good bill. It is good that it has the support of the Opposition. I can assure the Opposition that we did not steal its policy. This is our idea. 
Lesley Soper 
: They’re desperate. 
DARIEN FENTON 
: Yes Opposition members are desperate to claim ownership of things that we all know we have to deal with. I look forward to the debate at the Commerce Committee and to the bill being reported back to the House. 
CHRIS AUCHINVOLE (National) 
: 
 I rise in support of the Electricity Industry Reform Amendment Bill. I understand that it is in perfect line with National’s 2005 policy initiative. Indeed we probably would have had it more quickly— 
Hon Tony Ryall 
: It’s a photocopy! 
CHRIS AUCHINVOLE 
: Mr Ryall could well be right; it could be a photocopy.  
I fully concur with the points that have already been raised by my colleague Gerry Brownlee. In taking this call I will illustrate how useful this bill will be to the smaller lines companies like those we have in the West Coast and Buller regions. The mission of Westpower down on the West Coast is to operate successful businesses that provide the following electricity-based services: distributing electricity generating electricity providing power systems electrical contracting asset management services and electrical engineering consultancy services. Further north at Westport we have Buller Electricity Ltd and its mission is to be “an innovative customer-focused company providing excellent services and a high quality reticulation system.”  
Those specifications are exactly what people would want. Both of those organisations exist for the community or are owned by the community but the impact of legislative and regulatory changes on companies the size of Buller Electricity and the somewhat larger Westpower is considerable. On the one hand they strive to be a successful enterprise and on the other hand they have been caught between the narrowing gap of escalating costs and prices restricted by regulation. The key to success for these smaller lines companies in this bill is that hydroelectricity generation is now classed as a renewable—something that was not certain previously.  
This bill frees up small lines companies to get engaged in electricity generation thereby improving their income and their security of supply and limiting their dependence on imposed costs from other generators. Without this bill if Westpower wishes to build a hydro scheme it has to seek a special exemption from the Commerce Commission. Making an application for an exemption is not a cheap exercise and the associated costs are restrictive. That does not stop the development from happening but the arm’s length rules provisions in section 25 of the Act make it necessary—and expensive—to seek exemption. 
The interpretation clause in the bill specifies that “ ‘renewable energy source’ means solar wind hydro geothermal biomass tidal wave ocean current sources or any other energy source that occurs naturally and the use of which will not permanently deplete New Zealand’s energy sources of that kind because those sources are generally expected to be replenished by natural processes within 50 years or less of being used”. This lifts a whole load of restrictions that small lines companies previously worked under. It allows them to look at having hydro schemes for increased security of supply and a reduction of supply costs and it reduces the cost of the 30 percent transmission loss that is reputed to occur when electricity is sent from Lake Coleridge across Mount Horrible to the West Coast.  
We already have Westpower looking at a hydro scheme that will produce perhaps 6 megawatts in South Westland which would be adequate for the development of hotels and dairying in that area. Without increased electricity we will not get development there. The West Coast has 56 rivers and heaps of creeks with limited reservoir capacity. The development of new systems will probably depend on the use of run-of-the-river systems taking full advantage of the plentiful and frequent gifts of rain we enjoy down there. This bill provides for a 50 megawatt limit on generation by lines companies. This is not at all restrictive in the case of the West Coast which has a capacity to use 42 megawatts at peak periods.  
Another benefit this bill will bring is in allowing knowledge to be freed up and used to good advantage. There are presently large reservoirs of intellectual capacity relating to electrical generation within the lines companies. For instance Westpower has a contracting subsidiary called ElectroNet with over 120 qualified staff involved in asset management information technology and electrical and lines divisions. The company has an excellent record of having the resource and expertise to compete at the highest level in the electrical field. Adding generation capacity to lines companies creates an opportunity for career path development. It is particularly important at the present time with the brain drain and skills drain to Australia that we take every opportunity we can to attract people and hold them by usefully engaging their talents. This bill goes some way towards that.  
Looking further north I see that the bill allows Buller Electricity to continue to develop hydro opportunities. It has a chequered history of doing that. One reflects on  
Buller Electricity Ltd v Attorney-General 
 over the Ngakawau scheme which brought everything to a grinding halt. Without this bill if small community-owned lines companies such as Buller Electricity have fulfilled an intention to generate locally from hydro generation—and this is the catch 22—it would be compelled to sell it off because ownership of hydro generation without hydro being classed as renewable prevented any benefits from coming to Buller Electricity. In other words it was stuck in a poverty trap. This bill will provide potential income streams which will benefit Buller consumers. None the less the company is still in the situation of having no foreseeable load growth capped revenue and ever-increasing costs. At least now there can be revenue from its own generation plus sales outside the region the benefits of which go back to the consumer-owned trust.  
In conclusion I support this bill but would like to sound one note of caution: in spite of this beneficial change of regulation the Resource Management Act could still stifle the sensible development of this initiative. I think the beneficiaries of this bill will welcome National’s policy on revision of the Resource Management Act to give this bill true effect. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I thought the previous speaker made his point pretty well. I have to say he read that speech pretty darn well. Perhaps someone should advise him that from time to time when there is a little dot at the end of a sentence one pauses; one does not carry on reading—that is the idea.  
Chris Auchinvole 
: Thank you Mr Brown. 
PETER BROWN 
: No problem! I would love to give National Party members advice and I know that that member will take my advice willingly. Let me get back to a few basics. I hope the National Party appreciates this because my colleagues here are going to give me a little bit of borax.  
Hon Members 
: Oh here we go! 
PETER BROWN 
: No no. They will give me a little bit of hell but never mind I can handle that. When Max Bradford brought in his reforms—[ 
Interruption 
] They are getting a little bit irate now. At the time he did that there was an abundance of electricity in this country. There was more than we needed. The theory was he would carve it up and there would be competing entities generating electricity and that would reduce the price for the consumer. That worked for a year or so but gradually the demand for electricity overtook the pace with which generation was being brought on stream. This bill is essential. This gives the lines companies more freedom to produce electricity. That is it in a nutshell; that is all it is about. Believe it or not the first party to say that we should be doing that in— 
Chris Auchinvole 
: Was it ACT? 
PETER BROWN 
: No it was not actually. It was New Zealand First and Phil Heatley the member for Whangarei—and I have just checked this—followed us around on the campaign in 2005 and thought that that was a good idea and that National would follow that. That is how National became involved.  
With due respect I cannot recall Labour wanting to give too much more freedom to lines companies; but they do now because firstly the country needs more electricity and these guys are prepared to get in and do it—or we hope they are. Currently they can produce electricity but there is no incentive for them to do it because they have to sell it all into the grid. This bill releases that obligation. But there is another incentive for them to do it because the Government is putting on a moratorium; Part 2 of the emissions trading legislation which the National Party voted for yesterday will put a moratorium on base electricity produced from coal or gas.  
I have real concerns about that and I have no problem saying that because I know that we have supported the bill and my colleague Doug Woolerton stood in this House yesterday and acknowledged me as at least one New Zealand First member who has concerns about Part 2 of the emissions trading bill that had its first reading yesterday. Let me make it quite clear: I agreed with my caucus colleagues to send the bill to the select committee but I do have real concerns about putting a moratorium on coal and gas.  
Let me tell the House why; I know I am deviating from this bill but it is all intertwined and it is important that people understand the full reason. If we put a moratorium on coal and gas it seems to be a little bit of a double standard because we are mining coal and we are selling it to the Indians the Chinese and the Japanese and two of those countries are not signed up to the Kyoto Protocol and they are burning coal— 
Chris Auchinvole 
: For steel. 
PETER BROWN 
: They are burning it probably to produce steel and we are also giving exploration licences to people down south to go and look for oil. If they find oil they will find gas first. We are saying that they are unlikely to be able to sell it into the New Zealand market so that will discourage— 
Jeanette Fitzsimons 
: You can’t get it here. 
PETER BROWN 
: The Green member says “Forget it.” 
Jeanette Fitzsimons 
: No I said: “You can’t get it here.” 
PETER BROWN 
: Well you do not know that with respect. You might think you know that but you do not. If they find gas they will have no market in this country to sell it and they will have to sell it overseas. So that will be a disincentive for exploration for oil and whatever in this country. I say that that is a bit of a double standard and that I have major concerns about supporting a moratorium on coal and gas or thermal energy as it says in the bill. I want to be straight up. I wonder whether the Minister the Hon Harry Duynhoven will share that view. I know that the Greens will criticise me for it. I know that the National Party will criticise me for it.  
But let me just draw the attention of the House to the fact that tonight we will finish in urgency tomorrow 120 MPs will go home and most of us—most of us—will get on a plane and fly to wherever. Then we will come back Tuesday morning on another plane and we will probably stay in a hotel overnight on Tuesday night and our carbon footprint will go up considerably. Yet we stand in this House—National Party members and Greens in particular—saying we are greater than the average member of the public and that we should be doing everything possible to reduce our carbon footprint. I will not blame the Greens for the delay in the House. This crowd over here—the 48 National Party members here—have done their very very best to delay this House over the last few days in urgency. They have been talking waffle garbage and God knows what to extend it out. They want to put 50 questions to members in the House. 
I have got quite a lot off my chest tonight actually. I have been dying to say much of this tonight. I am grateful that Arsenal won today and got into the UEFA Champions League play-offs and will be playing a European team. But more important back to this bill: this bill is a very simple straightforward bill and New Zealand First will be supporting it to the select committee. 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 Once again the House sits to fix up Max Bradford’s dog’s breakfast and I think back to just how many times we have had to do that since 1998. 
Hon Harry Duynhoven 
: It was such a bad mess. 
JEANETTE FITZSIMONS 
: It was such a bad mess. I sat on the select committee considering Max Bradford’s bill and we had officials who were lawyers and economists come along to the select committee and say: “It will work like this. Under this great market we are having this person here will be able to sell to that person there.” I said through the chair: “But they won’t because there aren’t any wires running from here to there.” The economists and lawyers looked at me and said: “Wires? What have wires got to do with it?”. Well I told them that if one is to sell electricity from here to there one needs wires for it to run through. That idea seemed to be something that was completely beyond their comprehension. 
The Max Bradford bill was a matter of pure ideology triumphing over all practicality and feasibility. It broke up an integrated and efficient system that was the envy of the world in that it had a plan for dispatching the most efficient generation first. That is replaced these days with a market which sounds fine except that a market can be gamed. A market can be gamed and we have no guarantee that it is the most efficient generation that is displaced first. The very sophisticated computer that Electricorp used to have did a good job of that. It broke up what it saw as a horizontal monopoly with retail companies and lines companies owned in the same structure and it was worried about cross-subsidisation. Well it replaced that with a very much more powerful and very much more serious vertically integrated monopoly. We actually do not get competition because we have five major generators that do not all retail in all areas. Where we have incumbent retailers in different regions that have virtually a regional monopoly we do not have a fully competitive electricity market. We warned everyone at the beginning that we would not have that because the market in New Zealand is too small for that and ever since then we have been trying to fix it.  
We learnt shortly afterwards that when that bill went through 500 megawatts of new renewable generation—mainly wind power—fell off the table because the lines companies had been planning to build another 500 megawatts and suddenly they were not allowed to. 
Peter Brown 
: Is the member saying that the wind power got blown away? 
JEANETTE FITZSIMONS 
: Yes I am saying that wind power got blown away by the Max Bradford reforms—500 megawatts. We have people standing in this House saying that not enough generation was built after that legislation went through. Well 500 megawatts that would have been built was not built because all of a sudden the builders were no longer able to do it. 
In 2001 the first step was taken which allowed lines companies to build small-scale renewable generation without a cap and fossil generation up to 10 megawatts. That was logical for distributed generation to be built in the area where it was used rather than having it built at one end of the country with massive pylons taking it to the other end. We do not lose as much on the lines if we use it locally. That sounded like a great idea but what happened then was that the lines companies that looked into building such generation found they could not really sell the power because they were selling it into a market that was totally controlled by their competitors. One does not get a very good price when one is selling through one’s competitors. The problem was that they were not allowed to buy hedges. They were not allowed to buy back-up for their power. If a lines company builds a wind farm and it cannot buy hedge power from the market to sell to its customers when the wind is not blowing—like say from someone else’s hydro which is the perfect match for wind power—then it is hamstrung. It has to take whatever price the market hands out rather than being able to sell at a good price. This legislation fixes that. Lines companies with generation will be able to buy hedges up to the level of the maximum output of their generation so that they can fill in the gaps when the generation is intermittent. That is a totally logical thing to be able to do. 
I think it is also time now that we have some of the new renewables like wind power happening to revisit the definition of renewables in the 2001 Electricity Industry Reform Amendment Act. At that stage we excluded hydro conventional technology from the definition of renewables. We also excluded geothermal because there were quite a lot of doubts at that stage about the amount of carbon dioxide that geothermal was putting out. At this stage when we look at a future where we are trying not to use fossil energy for generation it is appropriate to reinstate hydro and geothermal in that definition and that is what the bill does. We need to look at this in relation to the review that is going on at the moment of section 62 of the Electricity Industry Reform Act which ends the requirement to supply rural areas in 2013. That review is going on at the moment and we need to make sure that this decentralised and distributed generation is able to fill that gap. We want some certainty now that companies wanting to invest in renewables in their local community will be able to do so and will be able to engage with the market in a fully competitive and effective manner and will not be trying to do so with one hand tied behind their back. 
We still have not dealt though with the question of the generators/retailers monopolies. We still have very very large industries making very very large profits and shortly they will make larger profits still when the emissions trading scheme comes in. Three of them are owned by the Government and one of them is not. They are able to exert considerable monopoly power because they combine generation and retailing. That is something that has still not been addressed and I suspect that when this legislation comes back to the House for a further look sometime in the future that is the thing we will be looking at. The Greens will be supporting the legislation. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Kia ora Mr Assistant Speaker. Kia ora tatou e te Whare. Earlier this year the Maori Party caucus had the opportunity to meet with the Aotearoa Wave and Tidal Energy Association. It was a most instructive hui where we were told that given Aotearoa’s likely energy demands over the next 10 years we needed to be creating a larger renewable energy “pipeline” now. The association reckons that wave and tidal power solutions or “blue energy” could start contributing to the country’s power supply within the next 5 to 10 years and eventually meet up to 20 percent of the nation’s energy demands.  
I was reminded of that meeting and the association’s passion for tidal energy as I worked on my speech for the Electricity Industry Reform Amendment Bill tonight because the association also felt that marine energy technologies were on the cusp of commercial development and that we should be capitalising on our world-class wave and tidal resources to test home-grown and overseas designs. So we urge energy leaders in Aotearoa to catch this wave of innovation if we are to optimise energy generation from renewable sources. The Maori Party has often raised in this House the need to confront the twin crises of peak oil and climate change. Indeed just last week I issued a press release reiterating the call we made back in 2005 and oft times since for the need for a cross-party parliamentary commission on peak oil.  
Everyone knows too that the link between oil consumption and climate change is a priority issue for everyone in this House. So we again repeat the call for broad-ranging options to serve our future power demands and to invest in new power generation options: blue energy hydro wind geothermal or whatever—just let us give it a go. We support the change to the definition of “new renewables” so that lines businesses can invest in all renewables including hydro and geothermal which had previously been excluded. We are well aware of the positive contribution that efficient geothermal generation can make to reducing carbon emissions. The New Zealand Council for Infrastructure Development tells us for example that efficient gas-fired power generation in and around Auckland could replace our dependence on Huntly coal as well as reduce pressure on transmission capacity into the region.  
It is very timely that geothermal generation is included in this broader definition of renewables because just yesterday I was referring to the work of the Tuaropaki Trust which has just granted a 30-year licence to the Tuaropaki Power Company to generate power from its geothermal fields until 2027. We note that this bill also proposes to make it easier for lines businesses that carry electricity produced by others to sell the output of that part of the generation they carry thereby encouraging them and others to invest further and hopefully in renewable energy generation. Just a small but necessary word of caution though. We would hope that any such investment would include fair and just negotiations for those hapu and iwi within whose territories those resources lie. On another level this bill also proposes to narrow the scope of ownership separation requirements so that where lines and supply are not collocated line businesses can be involved in both generation and retail again to encourage more market investment in renewable energy generation and development.  
In closing then we can again raise the critical importance of our whole nation preparing to deal with a pending energy crisis and we challenge all sectors of our economy and the wider community to utilise our limited natural resources in a sustainable environmentally considerate manner so that all citizens of Aotearoa New Zealand can have access to affordable energy resources in a world of ever-increasing energy shortages and rising prices. Whatever our future might involve it must include efficient management of electricity and the Maori Party will be supporting the promotion of a range of strategies as part of those solutions. These include: the investigation of net metering and the viability of compulsory solar water heating in all new homes and buildings; the investigation of passive solar design as mandatory in all new dwellings; the retrofitting of all Government buildings with solar water heating and renewable energy power supplies where possible; tax breaks for approved passive solar new and retrofitted design buildings; and tax breaks for insulating solar heating and energy-efficient dwellings businesses and vehicles.  
We look forward to discussing these and a whole range of other proposals as submitters come through the select committee process in relation to this Electricity Industry Reform Amendment Bill. Accordingly the Maori Party will be supporting the bill at this reading. Kia ora Mr Assistant Speaker. 
Hon PAUL SWAIN (Labour—Rimutaka) 
: 
 I do not do regrets but if I did they would be that I had to sit and suffer on the select committee which I was on with Jeanette Fitzsimons and others that had to deal with the botch-up of the Max Bradford reforms back around 1997-98. The classic comment that Max Bradford summarised in a short sentence was: “As a result of these reforms power prices will come down.” It was a very clear statement. I remember it; it was on the telly. He was asked: “Mr Bradford what do you expect as a result of these reforms?”. “Oh” said Max Bradford “power prices will come down.” In fact power prices went up. That was what happened. That was the problem with those reforms. As a result of that Max Bradford lost Rotorua his seat and of course the National Government lost power in 1999. If members will excuse the pun the National Government ran out of power as a result of those power reforms.  
We sat in that select committee night after night trying to get at what the reforms were supposed to do. The Government said that the issue was about getting rid of cross-subsidisation. Of course there are a number of ways to deal with cross-subsidisation. Functional operational separation for example is one way to deal with it and we are dealing with that in the telecommunications legislation. But you see the reforms were about ideology. They had nothing to do with reforming the electricity sector trying to improve the cost of electricity or trying to provide better services.  
Hon Member 
: Looking after their mates. 
Hon PAUL SWAIN 
: It was. It was about National’s mates. Which people suffered? The elderly and people on fixed and low incomes. They are the ones who paid the price for Max Bradford’s electricity reforms.  
I recall what happened in the Hutt Valley. There was a sudden surge in privatisation and shares were given out. Everyone got 1000 shares if members remember that. Of course what happened was that low-income people—beneficiaries and people who had debt—took $800 instead of $1000 because they needed the money to pay debt off with. Suddenly those people were disenfranchised. They had no ability to influence the power company and they had no dividends as a result of selling their shares off for $800. The power price went up. So the people who could stick their shares in the bottom of the drawer the ones who could afford to do that—people on decent incomes—sat on their shares. They were blue-chip stocks and as a result the prices rose. The people on low incomes once again paid for that.  
Then there was the great theory that electricity was a perfect market and that if people did not like the energy company they were with they could swap companies. Do members remember that? There was to be the great switch. The problem was that when customers rang to say they did not like a company and were going to swap to someone else they did not hear back for 6 months. They never heard back. Then suddenly people ended up with power bills 9 months later and when they did want to switch and swap companies the companies said that yes they realised people could do that but it was all very difficult. The companies said they did not have the technology and were not ready for that. So the perfect market in which consumers were able to swap and switch companies was completely nonsensical.  
What happened with regard to the meters? In the end the select committee said that the issue of the meters was too hard. The select committee members said they did not really know what to do about them so things should just be left the way they were. The great theory was that new meters would start to be used and people would be able to tell straight away whether they were spending too much on electricity. The meter industry was all revved up. The silly old thing stuck on the side of my house is still there. What happened to the new flash thing that was to go above the bench top? It did not come. So that was a total fiasco.  
Now I see Max Bradford is travelling the world as an international consultant—yes he is—on behalf of the World Bank. Do members know what for? Electricity reform! Can members believe that? I say to the World Bank that it should look at the 1998 reforms and see whether it can get its money back because the people of New Zealand certainly have not succeeded in doing that.  
People have outlined the nature of this bill. I think it is a good bill. This is not the last time we will have to come back and fix the botch-ups of Max Bradford—I am sure it is not. As Jeanette Fitzsimons outlined quite clearly the bill involves three policy changes. The first makes it easier for owners with lines businesses to sell the output of the generation they were permitted to own under the 2001 and 2004 amendment Acts—that is for people to be able to hedge and to sell at times when there are problems with for example wind power. The second change is to allow the owners of lines businesses to be able to be involved in generation and retailing without limit outside their lines area. That was restricted before. And the third one is to define renewables which is a really good thing too given the issues now around climate change.  
So here we are again under urgency in the dead of night ramming through legislation to fix the botch-up—the muck-up the mess-up—of the Max Bradford “power prices will come down” reforms of 1998. As I say if I ever get to heaven and I am standing there and there is some discussion about whether I should go in or go downstairs I will say I sat on that select committee—I sat on that thing and I had to put up with about a year of listening to ideological nonsense about electricity reform in New Zealand. I am hoping that St Peter will say “Come forward my son; you have done your time on Earth.” 
Bill read a first time.  
Bill referred to the Commerce Committee. 
Customs and Excise Amendment Bill (No 3) 
First Reading 
Hon CHRIS CARTER (Minister of Education) 
 on behalf of the  
Minister of Customs 
: I move  
That the Customs and Excise Amendment Bill (No 3) be now read a first time. 
 At the appropriate time I intend to move that the bill be considered by the Foreign Affairs Defence and Trade Committee.  
The bill deals with three aspects of customs work. It will enhance the current statutory appeal and review rights in relation to the forfeiture and seizure regime provide greater flexibility for the New Zealand Customs Service to deal with ad hoc arrivals and departures from our shores and strengthen the service’s ability to deal with the illegal manufacture of tobacco. It also makes minor technical amendments to clarify certain provisions in the Act.  
The first major change relates to the appeal process about forfeiture of goods. The forfeiture regime is a whole-of-Government mechanism that the Customs Service enforces in its own right and also on behalf of approximately 15 other Government agencies with border-related interests. The regime is a strong one and it needs to be in order to encourage people to comply with New Zealand’s laws and to deter people from attempting to evade New Zealand’s legitimate revenue-gathering activities or to breach its borders by importing or exporting restricted goods.  
A recent Law Commission report reviewed the forfeiture appeals regime and suggested it could be reformed to be simpler and to provide greater transparency and better access to justice. It also recognises that where people want to claim back an interest in forfeited goods the process should be low-cost and speedy and should be able to be dealt with by the Customs Service in the first instance.  
To simplify the process the bill proposes replacing the existing system with an internal review process with the right to appeal to the independent Customs Appeal Authority. There will be a single point of entry to the appeal process via the Customs Service chief executive which will cost the applicant nothing and will enable matters to be dealt with speedily. The amendments will streamline customs processes and provide a greater level of transparency and protection for innocent third parties. We thank the Law Commission for the work that it has done in reviewing the current customs forfeiture legislation.  
The second major change relates to the arrival and departure of craft at places outside the main entry points to New Zealand. Currently the Customs and Excise Act requires that craft arrive and depart within a designated customs-place except for where emergencies or weather conditions dictate otherwise. This could be unnecessarily restricting in some circumstances. The proposal seeks to allow the chief executive to grant reasonable one-off requests to land outside official customs points of entry on a case by case basis where that is considered appropriate. The proposed amendment responds to a public need and supports both regional and economic development and a thriving tourism industry—for example by allowing charter flights to land at smaller airports without compromising border security.  
The third major proposal in the bill relates to the management of domestic tobacco production. The current regime for controlling the manufacture of tobacco products makes it illegal to manufacture tobacco products outside a licensed Customs Service - controlled area. There is an exemption that allows the manufacture of tobacco products for personal use without a customs licence. It is proposed to add conditions to this exemption to provide more flexibility and clarity about the regulations.  
We are also proposing to increase the penalties associated with dealing in illegally manufactured tobacco products. The bill is particularly concerned about the undesirable health and social consequences that stem from the illegal manufacture of tobacco products. These include making tobacco products available at low cost which encourages higher consumption levels with the associated health impacts. The illegal manufacture of tobacco products also reduces the amount of excise duty the Government collects. Increased penalties will provide a greater disincentive for people to abuse the personal use exemption and will signal how seriously the Government regards the illegal supply of tobacco products.  
Finally there are some minor technical amendments to the Act contained in the bill. A change to section 209(1A) under clause 9 clarifies that this offence provision involves an element of knowledge. A change to section 148B under clause 7 corrects a drafting error and a change to section 288(1)(a) under clause 15 includes “outward reports” that were omitted when the Act was last amended.  
In conclusion I tell the House that the bill has been carefully drafted to strike a balance between the need to protect our communities and the rights of individuals. It will allow greater flexibility of customs processes and facilitate smoother interactions between the Government and the New Zealand public. Thank you very much. 
SHANE ARDERN (National—Taranaki-King Country) 
: 
 I rise tonight on behalf of the National Party in support of the Customs and Excise Amendment Bill (No 3) going to the Foreign Affairs Defence and Trade Committee.  
As the Minister of Education has just stated the bill does three things. Each one of those needs to be thoroughly investigated in the select committee and I am sure that the National members on the committee will do just that. The issues raised in the bill for further discussion are the enhancement of the statutory appeal and review rights in relation to forfeiture and seizure regulations and legislation the provision of greater flexibility for the Customs Service to deal with ad hoc arrivals and departures and the remedying of legislative inconsistencies relating to the illegal manufacture of tobacco and other products. On the basis of that it seems to me that it would be sensible for this bill to be given a thorough investigation in the select committee.  
The issues that need to be properly looked at are the reasons why the Law Commission recommended the changes to the forfeiture and seizure regime. Based on what the Minister said I understand that the current way people can appeal—the multi-appeal system as it were or the two-pronged appeal system—could be costly. It could also cause problems for those who subsequently find that the reasons the Customs Service had for taking that product or material—whatever it was that was forfeited or seized—were no longer relevant. The process that people go through is expensive and can sometimes cause unnecessary and damaging delays. 
Probably the best anecdote I have heard so far is the case of some night-vision goggles seized from the Taranaki Rescue Helicopter Trust. The Customs Service was notified that these goggles which had been bought in good faith from US military surplus might have been acquired in an illegal way or even stolen. While the US investigation was going on the Customs Service was obliged to take those goggles back and there was a potential loss to the trust of $34000. Over time it was discovered that they had not been stolen and the trust found itself in a lengthy process to have the equipment returned to it. That is probably as good an example as I have come across of a situation where the chief executive of the Customs Service should have had the ability to look at where the Customs and Excise Act applied and where the Customs Service was involved and say: “Look obviously this has now been resolved. We can now tick this off and that material or equipment can be returned.”  
The second area of concern is ad hoc arrivals and departures. Under the proposed legislation the chief executive will have the ability to decide whether a place not deemed to be a customs place such as a provincial airport can be a customs place for the purpose of diverting a medium-sized aircraft coming from an international destination. What needs to be thoroughly investigated in the select committee is whether those airports will be able to cope with things like the biosecurity concerns of the Ministry of Agriculture and Forestry. We could be exposing ourselves to quite a high risk there. Under the bill the chief executive will have to consult the Ministry of Agriculture and Forestry on biosecurity. Given that this will be an ad hoc decision—and probably an eleventh hour decision because the plane may have been waiting for fog to clear or whatever the reason may be that the international airport that is a certified customs-place is unavailable—what happens if there are not enough staff on the ground to look at what the airplane is carrying whether it be passengers luggage cargo or whatever else? That issue needs to be thoroughly looked at in the select committee.  
The third point is the tighter control of exemptions around the harvesting and domestic cultivation of tobacco and the potential risks not only to health but also for black market—clandestine call it what you will—underground activity with the Customs Service not having the ability to charge a fair tax which has all sorts of ramifications in terms of developing a market. It also has a negative impact on health in that those who are supposedly cultivating this tobacco for their own domestic use may be selling it and there is no possibility of the State recovering any costs that may flow from that in terms of health care.  
In summary National is in support of the proposal but—to use the words of my senior colleague Murray McCully who is a former Minister of Customs—we need to give the tyres a thoroughly good kicking in the select committee to find out exactly what is hidden in the detail of some of this stuff particularly in terms of the Law Commission’s recommendations and some of the official advice that has been received over the years and whether the ability of the Minister to intervene in some cases is still the best approach. The select committee is the right place to look at those issues and for that reason the select committee will give this bill a thoroughly good going-over. 
DIANNE YATES (Labour) 
: 
 I rise to speak at the first reading of the Customs and Excise Amendment Bill (No 3) and I thank the speaker opposite Shane Ardern for his support of this bill and for his comments.  
As we have seen the bill does three things. Firstly on the recommendation of the Law Commission the bill changes the appeals system for people after their goods are seized and it makes the appeal process faster and cheaper for the appellant. So it is a matter of streamlining the system and cutting back on cost.  
Secondly it makes a number of technical amendments to ad hoc arrivals and departures. As the member mentioned it will deal with ad hoc events tourist events and will be of great benefit to those places that are running one-off ad hoc events. As has been mentioned the select committee will no doubt look very thoroughly into this legislation to make sure that biosecurity measures are complied with and that it is possible for the appropriate mechanisms to go to those particular ports for those biosecurity measures to take place. We must be particularly careful when these ad hoc events happen that they comply with all the usual processes of arrivals and departures both for people and for any goods they are carrying.  
Thirdly because of other changes to our tobacco laws the bill tightens up on the personal use and growing of tobacco and I note also that there will be increased penalties for those who are dealing illegally with manufactured tobacco products. So the Customs and Excise Amendment Bill (No 3) is in some ways making things easier and is in other ways closing up loopholes. Basically the bill is about technicalities around customs and excise.  
We thank the Minister for bringing these measures before the House and we trust that once submissions are in the select committee will make sure there are no inadvertent loopholes and that the new procedures will mean that the Customs Service will be able to get on with its duty. I just want to thank the Customs Service for the work it does. I have just read its latest magazine and it has been doing an excellent job particularly around drugs and illegal imports to New Zealand. I take this opportunity to thank the Customs Service staff on behalf of New Zealanders for the work they do in protecting not only our biosecurity but our shores.  
RODNEY HIDE (Leader—ACT) 
: 
 The ACT party rises to support this bill’s referral to the select committee and we will be most interested in it. I will take what the last speaker Dianne Yates said and just focus briefly on one point. It is something for this House to consider.  
We have had an exemption in the past for the growing of tobacco for one’s own use. It is something of an anomaly I guess because we have the view that it is something that is bad and should be subject to a sin tax essentially to drive down the use of tobacco. But we have figured that it is pretty hard to police people who grow a few tobacco plants out the back. 
Dianne Yates 
: It’s not just to do that. 
RODNEY HIDE 
: No but this is the nature of the policy—it is too hard to police people growing a few plants out the back for their own use and rather than making that a criminal offence making it illegal and having the police arrest people who have a few tobacco plants out the back we will give an exemption for personal use. Now there has been the discovery that people have been growing several tonnes of tobacco ostensibly for their personal use. The Government understandably is moving to clamp down and make it clear that the law around tobacco for personal use does not mean one can have tonnes and tonnes because with the best will in the world it is hard to smoke a tonne of tobacco in a year. It is very very hard to do. So that is quite smart. But I want to explore this idea.  
The bill goes on to state that it will not just clamp down on the growing of multiple tonnes—which clearly are for sale or reward or quid pro quo—but will also eliminate the personal use exemption for tobacco. I am not sure that is smart. The bill states that we need to do that because the personal exemption is ultra vires. They are a couple of big words which I understand after I checked with people smarter than me mean that something is outside the law. I have been thinking about this. Is it not this Parliament that makes the law? How can it be that we are passing a law because what Parliament intends is outside it? If it is the will of this Parliament that it is OK for people to grow a bit of tobacco and sit down on their porches and smoke it in their pipes without having to fear the police descending on them and without having to fear customs and excise legislation penalising them criminalising them and taxing them then surely we can do that because there cannot be any law more superior than this Parliament’s.  
This Parliament has to give some thought to whether it is OK to grow tobacco for one’s own personal use. It cannot be the case that the reasoning for doing it is that to allow it is ultra vires. That cannot be right and I look forward to that explanation in the select committee though sadly I will not be there. But in the Committee of the whole House I will make that point.  
Second I am worried about the Government’s comment that the illegal manufacture of tobacco products also reduces the amount of excise duty the Government collects. Now that has to be a worry in the context of this bill because presumably the Government is not taxing tobacco to raise money but because of the health concerns we have. In fact people who smoke complain bitterly that taxing tobacco is just a revenue generating device. In fact my friend from the Maori Party made the point that if the Government was serious about dealing to tobacco then it would prohibit its sale. I ask the member whether it would be manufacture or just sale. 
Te Ururoa Flavell 
: The whole lot. 
RODNEY HIDE 
: The whole lot in New Zealand. But Hone Harawira tells me the Government will not do it because it loves the revenue. I thought that cannot be true but then I read that we have to clamp down on the private growing of tobacco in someone’s backyard because of the revenue implications. I could understand that if we were talking about tonnes and tonnes but if we think about this we realise there cannot be that much money if grandad living as he does in the Marlborough Sounds grows a bit of tobacco. 
John Hayes 
: Wacky backy. 
RODNEY HIDE 
: No—tobacco. Is the member casting aspersions on my grandfather? It would be tobacco. He sits on the porch in his 89th year puffing on his pipe free of Government interference and happy with the world. I think it is probably a health plus because such people are out there hoeing in the sun. They are enjoying themselves they are getting their benefits and they are puffing on their pipes once in a blue moon. Are we in this Parliament serious when we say: “No no the police will turn up.”? Are we serious when we say that people cannot have as few as 10 tobacco plants which on their birthdays they roll into a bit of tobacco to smoke in their pipe? Are we seriously saying in this Parliament that doing that should be illegal? I do not think it should be.  
In fact I can go further. Hone Harawira told me that he would not make it illegal for people to grow their own tobacco for their own use. So even the man who raised the issue—and I think it is an important issue to raise—of banning tobacco totally would still allow us to grow a bit for our own use. Yet here we are in Parliament saying that people cannot. What will we do? Will we have the police running around checking on tobacco?  
I look across at the Greens. I do not know what their policy is on marijuana but I do remember the discussion that people should be able to grow marijuana for their own use. Well why not tobacco? Why not let people grow tobacco? I am looking forward very much to the discussion in the select committee about what the policy towards the growing and use of tobacco for one’s own use should be because I do like the idea of living in a society where one can do that. I would extend it to other medicinal products as well. People could grow herbs in their backyard. 
Sue Bradford 
: A few poppies. 
RODNEY HIDE 
: A few poppies—whoa! Sue Bradford is putting words in my mouth.  
But why not? This issue about the use of tobacco—growing it in the backyard for one’s own use—is actually a serious issue. I know that Mr Charles Chauvel being a liberal being of a legal mind and being open-minded about these things will want to know a good reason why New Zealanders living in a free society like this cannot have a few tobacco plants in their backyards to puff in their pipes on their 85th birthdays.  
CHESTER BORROWS (National—Whanganui) 
: 
 I rise to take just a short call in respect of the Customs and Excise Amendment Bill (No. 3) and to make a number of small points. The first one is of course that what this bill does and the reason the National Party is going to support it is that it clarifies law that at the moment is unclear and it sets about two different courses of action for what is pretty much the same objective. The Law Commission has made a recommendation that the law be clear and concise—and so it should be. People have to live within the law; they need to be able to know where the lines are drawn. This bill aims at simplification in respect of appeal processes for those people who have had items taken from them at the borders and seek to regain control of them. At the moment they head along a track where they need the Minister’s authority to have those released or need to appeal to the Minister.  
This bill seeks to allow an appeal to go through the chief executive officer of the Customs Service and then to the appeal authority. Eventually the second leg of appeal is through the High Court—a court that is used to dealing with those matters and is obviously the final court of appeal for a number of other pieces of legislation that we have to work under.  
The next thing the bill seeks to do is to establish the authority of the chief executive officer to be able to designate on a case by case basis landing places for the entry and exit of people entering and leaving our borders if they are not traditionally supervised by customs and excise staff. Of course we have to remember that in today’s world we are under greater threat from the incursion of criminal products and processes. Also as regards border control there are threats to our biodiversity. So there is a need to guard those very carefully. We have seen incursions from other countries in recent times of pests we do not want to have here—both criminal and “biodiversical” if there is such a word. Authorisation can be made in consultation with the police and the Ministry of Agriculture and Forestry the Customs Service the Ministry of Transport and the Department of Labour and so it should be. It should be a much simpler and fairer process and it makes good common sense.  
The third point which our friend from the ACT party has recently outlined and debated from a constitutional point of view is the limitations around the growth and manufacture of tobacco products supposedly for personal use. It may be surprising to people to learn that there is a trade in illicitly grown and manufactured tobacco products. People are taking the opportunity to grow tobacco products on a commercial scale. As an ex-smoker I wonder why the hell people would even bother but they do.  
It will be interesting to see just where the various parties line up in respect of this because we do have a bill before the House at the moment for the growth of cannabis for personal use in respect of medicinal cannabis. My view is that it would be incredibly hard to control; it would lead to the commercialisation of that little industry.  
I thought that my friend Mr Hide was going to start making a play about how we can move for the growth for personal use of tobacco and then leave off cannabis but surprisingly he did not head down that track. My response to that is that having worked in some small towns with an absolute plague of cannabis I am sure we do not want to go there. The ramifications of allowing the growing of cannabis for personal use would be much worse than for tobacco. Also trying to restrict tobacco use any further than this legislation does is something for which we could never put the lid back on the bottle.  
National will support this bill because in a timely way it makes three significant amendments towards the simplification and the control of parts of New Zealand ways of life and protection that need to happen. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 My call will not take very long. I thought Rodney Hide raised an interesting point. Let me suggest that New Zealand First would not for one moment be against Rodney’s 85-year-old father growing the odd tobacco plant so he could put it in his pipe and smoke it on his porch. I would agree with Rodney’s father making his own home brew— 
Rodney Hide 
: He does! 
PETER BROWN 
: Oh he does. 
Shane Ardern 
: Put that in your pipe and smoke it! 
PETER BROWN 
: Yes. I say in fairness to Rodney that he raised an interesting point. That is not what the Customs and Excise Amendment Bill (No 3) is about and that is not as I see it what the customs and excise people are about. I think he raised an interesting point. Should there be an allowance for elderly people to grow tobacco for their own pipes? Maybe Rodney will agree that if they have the golden age card and they are unemployed they should be able to grow a bit of tobacco in their backyards. Is that a reasonable way of putting it? 
Rodney Hide 
: Absolutely. Can we hold you to that? 
PETER BROWN 
: I think the member will get my vote on that. 
New Zealand First is on record as wanting tighter and firmer border controls. By that I mean tighter controls on people goods and everything that comes and goes across our borders. We have pushed for the Immigration Bill which is going in the right direction and when that comes back to the House some time in the new year we hope we will have tighter controls on the people who come here in terms of the reasons they can come here how they get visas and what have you. We support the Customs Service having tougher controls on its responsibilities. Those guys do a great job on behalf of this country—often in the middle of the night often dealing with very awkward customers—and we need to give them all the legislative support we can. 
I will not go into the details of this bill because it has been well canvassed by the Minister and various other members in this House. New Zealand First will support this bill going to a select committee. 
MARTIN GALLAGHER (Labour—Hamilton West) 
: 
 It is a huge pleasure for me to speak to the Customs and Excise Amendment Bill (No 3). I note that this Government wants to ensure that the processes surrounding forfeiture and seizure are as streamlined and practical as possible. I also note that in 2006 the Law Commission recommended that the current system which allows people to appeal after their goods are seized be changed to make the appeal process faster and cheaper for appellants. 
I also note that the New Zealand Customs Service has the very difficult job of balancing the needs of trade and tourism with the need to ensure that our borders are secure and our people are protected from harm. Managing that balance which is sometimes tricky sees the service working both to facilitate the movement of people craft and goods across the border and to enforce the laws that ensure that illicit goods or people do not enter or leave New Zealand. 
I take the opportunity in this first reading to pay a great compliment to the Minister of Customs my Hamilton colleague Nanaia Mahuta. I want to say what a very hard-working good Hamilton member the MP for Tainui is and what really good work she has done since she assumed this portfolio. This bill is just another example of Nanaia Mahuta’s very hard work. I know that all Hamilton and Waikato members of Parliament irrespective of their political affiliation support me in that. I have heard great praise from across the political spectrum for her excellent work. 
The other thing I want to acknowledge in the context of border security is the wonderful men and women of the New Zealand Customs Service and our border control agencies. I note particularly the very very good work done by the Customs Service in the Hamilton-Waikato area. The Waikato is emerging as a major inland port in the context of the Fonterra operation at the Te Rapa rail marshalling yard. That is a huge boost to rail. The number of containers that go out of there to the ports of Tauranga and Auckland means that many many trucks are now coming off the road. That yard is a jewel in Hamilton’s crown and I acknowledge the role of the Customs Service in terms of some of the processing that it does there. 
Also just the other day it was my pleasure to be present along with my good colleague Sue Moroney at the opening of the new Hamilton International Airport terminal which has customs clearance facilities. It was wonderful that that terminal was opened by the Prime Minister.  
Nathan Guy 
: David Bennett was there! 
MARTIN GALLAGHER 
: No sadly he was not. I think Lindsay Tisch— 
Sue Moroney 
: Yes Lindsay Tisch was there. 
MARTIN GALLAGHER 
: The member for Piako was there. I know that David Bennett wanted to be there but I suspect that ten to one the whips on his side of the House did not have the vision and the wit to give him leave to attend that very very important occasion. Our whips had huge vision; the Government whips allowed two members of Parliament leave to be there with the Prime Minister. Those whips showed some strategic thinking and recognition of the importance of the opening of that major airport terminal and customs facility. 
I want to focus in the context of this first reading speech on this bill on how important an airport such as the Hamilton International Airport is in terms of the customs process and clearance. I want to observe and acknowledge that it is a very good example of local authorities working together. The five key local authorities in the central Waikato area are shareholders in the airport. It is a case of collaboration of their working together with agencies such as the Customs Service which does a very important job. Balancing the needs of trade and tourism with the need to ensure that our borders are secure and our people are protected from harm is a matter of facilitation of both the people and the goods that come through an airport such as the Hamilton International Airport. Obviously we are very encouraging of further international flights there. 
We should bear in mind that this wonderful development happened under this Government and in the economic climate that this Government has created. I certainly acknowledge the member opposite Richard Worth for his huge support of it. I suspect he feels a degree of envy for the development that has taken place in Hamilton. He will know the huge pleasure I have along with Sue Moroney and others in representing this area. 
Finally I also compliment previous speakers on their very interesting contributions. 
In terms of some of the detail of the bill I note that currently when there is a dispute the appellants can appeal to the District Court or to the Minister of Customs. The bill replaces that dual system with an internal review process with a right of appeal to the customs appeal authority. That creates a cheaper and more expeditious review process. Again some processes are being streamlined. 
I also want to say that as a member of the Foreign Affairs Defence and Trade Committee I am really looking forward to doing a lot of good hard work on this bill as is my good colleague Dianne Yates who is a very very good chair of that committee. [ 
Interruption 
] I think Palmerston North has a very good operation but I know that Simon Power in his heart of hearts will share a degree of envy of the wonderful Hamilton International Airport terminal in the Waikato which our good Prime Minister opened recently. 
Without further ado I commend the first reading of the Customs and Excise Amendment Bill (No 3) to the House. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena tatou katoa e te Whare. Kia ora tatou i tenei po. Every Tuesday morning and every Thursday night I depart from and arrive at a place that is not “a Customs place” but that may well be in the near future. Rotorua Regional Airport certainly has plans in the pipeline to enter into the running to be an airport that will be designated as a customs place. That is of course dependent on the strength of the consultation with the affected community and in particular in our case with an iwi called Ngati Uenukukopako.  
Ngati Uenukukopako has in fact lodged a complaint with the Human Rights Commission claiming that the Rotorua District Council has prejudiced the iwi by failing to offer it the same or similar redress that the council has extended to other people situated within the same noise-impacted areas identified by the council. The dispute centres on the way that consultation has occurred on the proposal to extend the runway at Rotorua Regional Airport—a proposal that would place Rotorua firmly in the queue for the establishment of an international airport. So I am interested in the amendments in this Customs and Excise Amendment Bill (No 3) in respect of the arrival of aircraft that may land at Rotorua for both commercial and recreational purposes and require customs services.  
This bill will enable a process to occur by which as others have mentioned the chief executive of the Customs Service could designate Rotorua Regional Airport as a customs place with the understanding of course that all of those agencies that have an interest in border control would also enable such a process to occur. It makes it easier for agencies like the Ministry of Agriculture and Forestry the Civil Aviation Authority the Ministry of Health Maritime New Zealand and others with an interest to be involved in the process of assessing an airport or a port’s eligibility to approve ad hoc arrivals and departures.  
From another angle this bill also provides clarification around the personal use exemption for manufacturing tobacco and strengthens the penalty regime in respect of unlawfully manufactured tobacco as has been discussed by other members this evening. As the House will know we in the Maori Party and in particular my fine colleague from the north Hone Harawira have placed priority on our campaign to get tobacco out of Aotearoa. The Tobacco out of Aotearoa or “TOA” campaign encourages tangata whenua to work towards their auahi koretanga—to be smoke-free and proud. Our strategy has included the promotion of marae that seek to make their tribal womb totally smoke-free. We have also spoken out about other initiatives such as the proposal from the Cancer Society and Action on Smoking and Health to ban visible cigarette displays.  
Again in May of this year my fine upstanding colleague and good friend Mr Harawira launched the Black Rock Awards for contributions towards making Aotearoa smoke-free. Recipients this year included Brendon Pongia the Warriors the Motion Picture Association of America and smoke-free workers. It is entirely consistent with our Tobacco out of Aotearoa strategy to support the amendments in this bill that place controls on the manufacture of tobacco.  
I want also to mihi to all of the auahi kore champions across Aotearoa such as Mr Mahara Okeroa who are doing their best to reduce the use of tobacco whether it is manufactured legally or illegally. I refer to things like the smoke-free hikoi that was organised this year around the lakefront at Rotorua by Te Papa Takaro o Te Arawa Te Whare Hauora o Ngongotaha Korowai Aroha and Tipu Ora Maori providers to acknowledge World Smokefree Day.  
This bill builds on all of those efforts to stamp out a product that clearly does much injury to our health our economic stability our social well-being and our future. We hope that the measures mooted in this bill will provide a strong disincentive to the illegal manufacture or use of tobacco. We know too well the toll that tobacco has on our people and we want to be clear that our support for this bill is aligned with our strategy to make Aotearoa tobacco smoke - free. But we are however puzzled that although the bill puts in place mechanisms to address the issue of illegally manufactured tobacco products it still allows individuals who wish to cultivate and manufacture small quantities of tobacco for their own consumption to do so as Mr Hide has alluded to. I cannot quite see the logic of that myself. Surely it is either illegal or it is not. Surely some tests will be carried out to ascertain whether the small quantity of tobacco is actually for personal use.  
Finally I want to touch on the appeal and review rights under the statutory forfeiture and seizure regime. We note that the Law Commission has recommended that the current appeals system should be replaced with another process that provides for a cheap and speedy internal review process. In its report the Law Commission had highlighted concerns about a dual system of appeal to a court and a ministerial review. But there is also another report by the Law Commission that might be relevant to further discussion on the bill. The president of the Law Commission the Rt Hon Sir Geoffrey Palmer said: “The law on search and surveillance in New Zealand is a mess. The rule of law in our society depends upon having certain and principled law enforcement powers. New Zealand does not currently have that.”  
As I understand it the report of the Law Commission into search and surveillance was a massive report of some 500 pages with 300 recommendations that took the Law Commission 5 years to complete. The Law Commission also found that present-day statutory provisions often contain insufficient safeguards to ensure the rights of innocent citizens are protected. As I understand it section 21 of the New Zealand Bill of Rights Act provides the right to be secure against unreasonable search and seizure. But as the Law Commission concludes clear controls on the use of search and surveillance powers by law enforcement officers are necessary.  
So although we support the general intentions of this bill and the general progress it makes in controlling the illegal manufacture of tobacco and in opening up other ports or airports that have not been designated as customs places we leave open the question as to how thoroughly and effectively the forfeiture and seizure regime has dealt with the issues around also protecting the rights of citizens. We look forward to further debate on the bill in the select committee. 
NICKY WAGNER (National) 
: 
 I rise to speak to the Customs and Excise Amendment Bill (No 3). National supports this bill. However as an assistant spokesperson on the environment I want to focus on some of the concerns I have about the part of the bill that deals with ad hoc arrivals and departures to and from ports and airports and how this could affect biosecurity risks. Generally speaking except for exceptional circumstances such as violent weather or navigation-related issues all craft arriving at and departing from New Zealand have to access designated customs-places. However in recent years there has been demand for craft both commercial and recreational to arrive at non-designated places. This bill makes it easier for the chief executive officer of the Customs Service to improve ports and airports for arrivals at and departures from places that are not usual customs-places on an ad hoc basis.  
The chief executive officer may approve these places subject to any conditions that he or she feels are relevant and in consultation with border control authorities such as the Minister of Agriculture and Forestry the Civil Aviation Authority the Ministry of Health Maritime New Zealand and any other department of State whose operations may in the chief executive officer’s opinion be affected by the granting of an authorisation.  
Although National agrees that this provision makes good sense—particularly if we are hoping to minimise the effects of energy use and emissions for transportation—National wants to be assured that these provisions will in no way increase biosecurity risks. New Zealand’s isolated geological history our unique flora and fauna and our economic dependence on primary industries mean that we are particularly vulnerable to pests weeds and diseases from overseas. The social and economic consequences of biosecurity breaches are huge. Didymo which is already destroying our beautiful mountain rivers is expected to cost $285 million and the varroa bee mite which has infested hives throughout the North Island and is beginning to enter the South Island will cost $661 million. A foot-and-mouth outbreak could be disastrous for our country and could cost up to $10 billion.  
Right now under the designated customs-places policy with limited entry points barely a week goes by without a biosecurity breach. There have been 227 incursions in the last 5 years. As I come from the South Island didymo is one of the ones that upsets me. When we see the streams of toilet paper - like growths in our once pristine southern rivers it breaks our hearts. It is suspected that didymo was introduced by overseas fishermen who carried the infestation in their waders. Those are the types of people who may like to fly to a non-designated airport for recreational reasons and unless the chief executive officer of the Customs Service is extremely well organised and diligent they could well pose an increased biosecurity risk to our country.  
Similarly New Zealand is under threat from marine infestations with 150 non-indigenous marine species now identified in New Zealand waters. Although they are mostly benign recent infestations such as seaweed  
Undaria 
 and the sea squirt are a serious threat to our marine environment. I would like to be assured by the chief executive officer of the Customs Service that he is well aware of these dangers of further infestations. New Zealand waters are at present free of many of the world’s most renowned marine pests and we must ensure that that continues.  
In conclusion I say that National supports the bill’s referral to the select committee but with a plea that the issues concerning the management of biosecurity and health risks around the use of non - customs-places—ports and airports—can be well canvassed and vigorously debated. Our country and its water are at risk. 
Bill read a first time. 
Bill referred to the Foreign Affairs Defence and Trade Committee. 
Financial Service Providers (Registration and Dispute Resolution) Bill 
First Reading 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I move  
That the Financial Service Providers (Registration and Dispute Resolution) Bill be now read a first time. 
 It is my intention that the bill will be referred to the Finance and Expenditure Committee. 
As the title indicates the bill sets up a registration system for financial service providers and establishes a requirement that they all belong to an industry-based approved dispute resolution system to improve consumer access to redress in the financial sector. It is the second bill arising from the Review of Financial Products and Providers that we have dealt with in this final sitting of the year. I am aware that such bills would normally be referred to the Commerce Committee. However the first of these bills was an amendment to the Reserve Bank of New Zealand Act and it makes sense that these other bills go to the same committee that dealt with that bill. That committee is under the very able chairmanship of my colleague Charles Chauvel. 
The new registration system will identify for the first time all entities providing financial services in the New Zealand market—in fact I find it rather extraordinary that we do not have a single register that is able to identify all such entities at this stage. This will assist all relevant regulatory authorities to both monitor and enforce the law and enable sectoral data to be collected. It will allow more effective monitoring and evaluation of financial service providers including facilitating effective coordination and information-sharing between financial sector regulatory authorities so that the requirements on firms are streamlined. The establishment of such a register will provide easy access to information about financial service providers. Having a register will enable New Zealand to meet specific anti - money-laundering obligations under the Financial Action Task Force or FATF as it is referred to—the particular recommendations that it has made—and it will ensure that the controlling owners directors and senior managers of financial service providers do not have certain criminal convictions are not bankrupt and are not the subject of a management ban under companies securities or consumer legislation. 
The bill covers a wide range of entities including banks building societies credit unions managed funds securities issuers money transfer services finance companies credit providers foreign currency exchanges and insurers. The definitions are intended to be as broad as they can possibly be. 
The register will be operated by the Companies Office. The Companies Office has been consistently assessed by the Business New Zealand - KPMG survey as the most helpful Government department in New Zealand. It provides a world-class service with efficient and user-friendly processes to help reduce compliance costs for business. This bill leverages off that expertise and capability. 
Virtually all financial service providers are companies or entities that are already required to register with or provide information to the Companies Office. Giving the Companies Office the function of registering financial service providers means that efficiencies will be gained and that compliance costs will be minimised for businesses which will have to deal with only one registration body. There will not be duplication of requirements to provide registration information. For consumers it will mean that there is one easily accessible point for information on financial service providers. For example a consumer could find information about a financial service provider—such as its constitution trust deeds prospectuses and other disclosure documents; details of senior management; and financial reports—all from a single online source. The registration function will be separate from any other merit licensing or qualitative fit and proper tests that the relevant financial sector regulator will carry out. But all information on the financial services provider will be accessible making it a comprehensive database of information on a provider. 
The registrar of financial service providers will undertake enforcement functions in relation to breaches of the registration requirements and will have the power to share information with the Securities Commission the Reserve Bank of New Zealand and other prescribed agencies that carry out supervisory and enforcement functions relating to money-laundering or terrorist financing—for example the police. 
The bill also establishes access to a comprehensive industry-based dispute resolution system to improve consumer access to redress in the financial sector. Effective dispute resolution and redress mechanisms are essential to encourage consumers to participate in financial markets and to promote market discipline for financial providers. Existing voluntary industry-based dispute resolution schemes such as the Banking Ombudsman and the Insurance and Savings Ombudsman already provide effective access to redress for consumers. However they do not currently extend to building societies credit unions finance companies financial advisers and some superannuation schemes. This bill will not see those schemes replaced. In fact some of the existing schemes may expand their coverage and others will model themselves on the existing schemes. 
Membership of an approved dispute resolution scheme will be mandatory for financial service providers that transact with consumers. Consumers in this context include small to medium sized enterprises. I think that is a considerable advance in consumer protection; it recognises that small businesses can be as vulnerable as natural persons. Dispute resolution schemes will be approved by the Minister of Commerce if the schemes meet the principles of accessibility independence fairness accountability efficiency and effectiveness. 
In conclusion I would like to extend my thanks to the industry participants who contributed to this bill through the consultation process and to the officials for all their hard work. I am pleased that the parties in this House have agreed to facilitate the referral of this bill to the select committee. I look forward to seeing the committee look carefully at the detail of the bill. I commend the bill to the House. 
SIMON POWER (National—Rangitikei) 
: 
 We are now in the thick of urgency and the Financial Service Providers (Registration and Dispute Resolution) Bill being referred to the Finance and Expenditure Committee requires some careful attention.  
I start by complimenting the Minister of Commerce Lianne Dalziel on her handling of this particular legislation. I do that in a genuine way because when the Minister set out on this particular course of action off the back of the Government’s Review of Financial Products and Providers she did so using a level of language and rhetoric that was appropriate. She consulted widely in the industry. She kept the issue relatively low profile. She did not take the opportunity in recent months to vilify participants in the industry. She did not at any time I am aware of use the opportunity to stand on a platform and have a crack at—to use a colloquial term—the industry she was in the middle of discussions with over some of the regulatory matters before it.  
This stands in stark contrast to the way her colleague the Hon Clayton Cosgrove dealt with the real estate industry. Let that be a lesson to him. If the language and rhetoric are appropriate if the industries being dealt with are dealt with with respect if their views are listened to if they are quietly consulted and if the process is seen to be transparent and not political people get results.  
This bill comes off the back of the Government’s Review of Financial Products and Providers which was designed to promote confidence and participation in financial markets by investors and institutions and to promote a sound and efficient non-bank financial sector. Since that review process commenced in earnest we have seen a number of second-tier lenders collapse. What that has meant for some 58000 individual investments—not investors but investments—and what the loss of approximately $1.3 billion in investors’ funds has meant is that the magnifying glass has gone on to this process quite significantly. It has taken on a new level of importance in recent months.  
The Minister has been very careful when making public statements about this process. I have listened very very carefully to the language the Minister has chosen in this area. At the end of just about every press release she has issued on this matter she has been wise to state that Parliament cannot legislate against risk. Parliament cannot prevent risk. It cannot educate or inform people to the point where it ends up leaving the Government as a co-guarantor or with some type of vicarious liability because it has overstretched in informing regulating and educating the public and the public may form a view that that level of involvement by the Government has placed it in a position where it may be seen to act as some type of guarantor for these types of investments. That is not the case and should not be the case; nor should any Government or Parliament attempt to legislate for risk. However a suite of bills is currently before the House—one in particular is about to come. Amendments to the Reserve Bank of New Zealand Act the introduction of the prudential supervision regime the registration bill we are discussing today and the long-awaited Financial Advisers Bill which we may or may not see prior to Christmas form an integral part of that suite of bills.  
I think the entire House and all parties are concerned—and if they are not they should be—about the quality of advice being offered by financial service providers. This bill creates a registration system for those financial service providers that they will be required to belong to that will identify them that will allow better monitoring and evaluation and that will provide information for consumers. As the Minister said it is kind of an online one-stop shop source where information—financial statements and the like—will be readily available for those investors and others who have an interest in these matters. 
There is—and I qualify my earlier remarks by saying this—likely to be a cost for this legislation. We on the select committee will be interested to examine the costs to business for this regime where they will be passed on to and who will ultimately end up bearing the cost of this regulation. That needs to be carefully examined during the select committee process. The matter of access to consumer credit—a summit was recently chaired or held by the Hon Judith Tizard I am told—is one we may need to consider in the context of this bill. A particular consideration is whether loan sharks or their equivalent need a similar type of registration system or whether this registration system could be used as overarching legislation right across the financial provider sector. As the Minister noted in a briefing today that is a matter for the select committee to discuss. The Minister pointed out in her contribution the issue of whether a person should be placed on the register if a criminal conviction has occurred. That is slightly trickier than we first thought particularly under the Fair Trading Act and it is a matter that will require some further examination at the select committee as well.  
Although National will be supporting the first reading of this bill and will be looking to play a constructive role during the discussion of this particular suite of bills let us just say that when we get to the Financial Advisers Bill either prior to Christmas or early next year there will still be a number of unresolved issues. The Minister acknowledges that there is still work to be done but it is fair to say this: we have to start this process in earnest quickly in 2008. This is a big deal for the finance sector. This is a significant suite of legislation that the select committee will be required to deal with. National will come to the table of the select committee with an open mind to make sure that a cost-effective efficient system is put in place across these bills to ensure consumer protection without putting Governments in a difficult position and without crossing the line to pretend to legislate against risk which of course we know is inherent in any investment decision. 
CHARLES CHAUVEL (Labour) 
: 
 In New Zealand at the moment there are registration requirements for some financial providers such as banks building societies and credit unions and for some products such as prospectuses under specific legislation but the provisions that require these protections are not comprehensive and they do not identify what financial services a particular entity provides. This situation does not comply with international standards for combating money-laundering and the financing of terrorism.  
Members will be aware that in 2005 the Government announced a review of the regulation of non-bank financial products and providers. The previous speakers referred to this review. The aim of the review was to develop an effective and consistent regulatory framework to promote confidence and participation in sound and efficient financial markets which are clearly essential as we build prosperity in this country. The review has combined a number of separate reviews of financial products and providers that were planned or already in train.  
The Financial Service Providers (Registration and Dispute Resolution) Bill implements some aspects of the highest-priority priorities under the review which are necessary to achieve compliance with international obligations and to better protect consumers. Other aspects of the first stage of the review are being implemented through companion legislation the Financial Advisers Bill and the Reserve Bank of New Zealand Amendment Bill (No 3).  
This bill proposes the establishment of a compulsory register of financial service providers. The purposes of the proposed register include identifying the service providers and ensuring that the controlling shareholders directors and senior managers are subject to criminal checks to enable members of the public to access information on the products and services provided by the entity and to provide information about which consumer dispute resolution scheme the entity should belong to. The purposes also include assisting the registrar and other regulators to enforce legislation regulating the financial sector.  
The bill provides for the Registrar of Financial Service Providers and Financial Advisers to have responsibility for establishing and maintaining the register. The registrar will be the person holding the office of Registrar of Companies—an existing position. That person will undertake enforcement functions in relation to breaches of the registration requirements and will have the power to share information with the Securities Commission the Reserve Bank and other agencies that carry out anti - money-laundering supervisory and enforcement functions such as the financial intelligence unit of the police.  
The bill also includes provisions for establishing a comprehensive industry-based consumer dispute resolution system to improve consumer access to redress in the financial sector. The purpose of the dispute resolution system is to provide a simple low-cost avenue for consumers to seek redress. The dispute resolution system will be fully funded by the industry. Government involvement will be limited to approving schemes including periodic renewal receiving periodic reports and powers of inspection if necessary rather than involvement in the day-to-day operation of a scheme. The schemes to be set up under the bill are intended to be accessible independent fair accountable efficient and effective. I welcome the indication from the Opposition that there will be a commitment to constructive dialogue at the Finance and Expenditure Committee over the details of the bill and I very much look forward to its consideration in that committee. 
Hon DAVID CARTER (National) 
: 
 As my colleague Simon Power has said National will support the Financial Service Providers (Registration and Dispute Resolution) Bill going to a select committee. I guess 2007 will be recalled in history for quite a long time as the year in which we saw a substantial collapse of finance companies here in New Zealand. Mr Power mentioned a $1.3 billion loss which was largely to smaller investors who will suffer that sort of loss for a long long time.  
I note that the Government in this bill and in other bills associated with this legislation is moving to restore confidence within this particular industry. A lot of investors have been badly hurt and I would like to note that this is not entirely the Government’s fault. This trend is not unique to New Zealand. It started in particular in the United States with second-tier lenders there under pressure so there has been a world-wide trend. In many cases it is a loss of confidence that is causing the problems to the extent that some very well-founded finance companies have been pressured although not to the point of collapse because their long-term investors have been scared by some of the horror stories.  
The package we are discussing in this legislation will be coupled with the Financial Advisers Bill. I note that Charles Chauvel interjected during Mr Power’s speech and said that we will be discussing it on Thursday of next week. Mr Chauvel should know. He is a very very senior member of the Labour Government. He is the one who welcomed his own appointment as a parliamentary private secretary to the Attorney-General on 1 November this year. 
Simon Power 
: How is he going? 
Hon DAVID CARTER 
: I think he is going very well in his role. I must admit that he has not had a huge amount of publicity. He got a lot of publicity when he announced his own appointment but he has not had not a lot since. But I am sure that Mr Chauvel is indeed in touch with the Attorney-General who will be well aware of the programme for next week so he has announced to us today that we are back here not only on Tuesday but clearly on Wednesday and Thursday to debate the Financial Advisers Bill. 
On a more cautious note I say that any of this legislation must be balanced. The consumer deserves protection but at the same time any Government initiative to deliver that protection and confidence back into this industry must be very very carefully balanced because if it is not done correctly the protective legislation will become both cumbersome and costly. If that happens it will ultimately be the investors themselves who pay.  
I conclude by echoing the comments made by my colleague Simon Power in congratulating the Minister of Commerce on the way she has worked with the industry to deliver this legislation. I have had the opportunity to speak to a number of people over the last week who certainly welcome the legislation. They feel they have been very adequately consulted and they have been treated with absolute respect. That is in sharp contrast to the response I know Mr Clayton Cosgrove has received from the Real Estate Institute. Mr Cosgrove if he is listening should take heed of the way in which his colleague Lianne Dalziel has delivered this.  
My final point is one I hope Dr Cullen will consider carefully. This legislation is heading to the Finance and Expenditure Committee. I express concern here about the workload we have put on that select committee in the last couple of days. It has received the Reserve Bank legislation and the emissions trading legislation which in itself as acknowledged by the Minister is landmark legislation more so than we have seen in this House in a long time. Here we are loading the committee again with the Financial Services Providers (Registration and Dispute Resolution) Bill and no doubt on Thursday it will get the Financial Advisers Bill as well. 
Simon Power 
: On Thursday? 
Hon DAVID CARTER 
: On Thursday of next week. It will be a long long week but the Opposition is up to it. We have enjoyed the last couple of days and we are looking forward to coming back on Tuesday to continue the debate for the rest of the week. 
MARTIN GALLAGHER (Labour—Hamilton West) 
: 
 I rise to support the Financial Service Providers (Registration and Dispute Resolution) Bill and to say that this bill has in common with the Real Estate Agents Bill that one of its purposes is to try to protect small investors. I was not in the Chamber at the time but I certainly hope that the Opposition supported the first reading of the Real Estate Agents Bill. [ 
Interruption 
] I hope that it did support that very important bill. Dr Cullen says— 
Simon Power 
: Why when the whole industry has been vilified? 
MARTIN GALLAGHER 
: To be honest I am staggered and surprised to learn that it did not. The issue addressed in that bill relates to this bill in the sense that the Hon Clayton Cosgrove who is a very very good Minister wants to protect the consumer—the ordinary person—who wants to get a fair shake and that is also the case with regard to this bill. Frankly yes I will concede that the Hon Clayton Cosgrove’s style can be robust but it is a robustness on behalf of the ordinary little people in this country who want to have a fair shake and he is to be strongly commended for that.  
We talked before in relation to other legislation previously in front of the House in terms of the buy-out of minority shareholders about having an environment that protects small investors whether they are investing in their own home or a rental property or are lending their hard-earned money to financial providers. I acknowledge that Simon Power certainly illustrated the huge impact on our economy of the collapse of various finance companies and how mum and dad shareholders and particularly older investors have been swept up in that. Any legislation be it the Real Estate Agents Bill—which seems to me to be a pretty good bill and I am shocked and staggered to have to absorb the information that the Opposition did not support its first reading—or any other bill that helps to protect the small investor is to be commended.  
The Financial Service Providers (Registration and Dispute Resolution) Bill contributes to the aim of our Government’s major reform programme of promoting confidence and participation in the financial markets by investors and institutions no matter how big or how small they may be. The Government also wants to promote a sound and efficient non-banking financial sector which again is very important in terms of international investment in our economy. I note that the bill sets up a registration system for financial service providers and establishes an industry-based dispute resolution system to improve consumer access to redress in the financial sector.  
I will not take too long a call— 
Hon Dr Michael Cullen 
: Oh go for it; there’s no rush. 
MARTIN GALLAGHER 
: There we go the Minister is encouraging me to take a longer call but I will not take very long except to say that I note the bill will set up a registration system for financial service providers that will identify all entities providing financial services in the New Zealand market. As well it establishes a comprehensive industry-based dispute resolution system.  
The registration system set up by this bill will assist the relevant regulatory authorities to monitor and enforce the law and enable sectoral data to be collected. That is a good thing. The register will provide easy access to information about financial service providers to investors and institutions who seek to utilise them and that is another good thing. At present it can be very costly for investors to seek information on the products provided by the various financial service providers. This bill will allow investors to be well informed in their investment decisions. It does not matter whether one is a large investor or a small investor; that is obviously a very very important thing.  
The dispute resolution system will improve customer access to redress in the financial sector. I notice also that the dispute resolution in this bill will be industry-based providing an effective alternative to court action. That is a positive thing. Indeed the involvement of industry participants in the operation of the dispute resolution body encourages the adoption of customer service - oriented attitudes. Reflecting on previous speakers I think it has been extremely sobering to read in the media of the collapse of various finance institutions and the terrible devastating impact that has had on life savings.  
I hope obviously there will be a wide cross-section of submissions to the Finance and Expenditure Committee on this bill. I commend the chair of that committee Mr Charles Chauvel. I think he is making a very very good contribution. He is certainly a very hard-working member of our team. As I said before I see this particular bill very much in the context of other legislation that has been introduced over the last day or two including the Real Estate Agents Bill. I have to say I am still trying to come to terms with the fact that the Opposition for reasons totally lost to me is not supporting that particular bill.  
I commend the first reading of this bill. Thank you. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I will take an exceedingly short call. We are talking about an industry a segment of New Zealand society that is causing huge concern for the general public of this country—huge concern. Simon Power advised the House of the figure that investors have lost in recent times—something like $1.3 billion. Although it is something like $1.3 billion we have turned this debate into an argument over whether Clayton Cosgrove has handled the Real Estate Agents Bill as well as he should have. The National Party members should have supported the Real Estate Agents Bill and got over their problem of dealing with the Hon Clayton Cosgrove.  
But some of the goings-on in this industry have to see the light of day. Organisations—and I do not know whether I should name them—are engaging so-called independent financial advisers on a commission basis knowing that they are no longer independent. These financial advisers go out to sell the product of a particular organisation and to put it bluntly speak bullshit to the individual members of the public because they sell on the basis of maximising their commission rather than trying to get the best and safest return for the individual. 
I invite members of the House to put themselves in the position of mature adults who have just lost hundreds of thousands of dollars because that is what has happened. I know we cannot legislate against risk but we can legislate to ensure that the playing field is level that people fully understand the level of risk they are getting involved in and that the risk is minimised to the degree that they want. If people want to go for a high interest rate they must be aware that they are taking on a higher risk than if they played it safe.  
We know that many of these financial service providers invested in second-hand cars and dubious overseas land and property deals. But the average investor did not know where his or her money was going. A second-hand car loses its value the day it is driven out of the car yard. It goes down X percent. So the valuation of the asset goes down but the return that the company pays to the investor goes up. Well sooner or later the guy who pays out the 10 or 15 percent interest— 
Simon Power 
: They are trying to assist and this member has been asking questions about why it should go ahead.  
PETER BROWN 
: I did not quite catch that but I am interested. The point is that when an asset goes down and costs go up sooner or later the ends of the problem meet and something goes belly up.  
We have seen another financial service provider advertise its service by using a very very famous and well-respected rugby player on the front of its advertisements. I know people who have invested in that organisation because of that rugby player. I do not know the rugby player at all; I have never met him but I have a high regard for his past ability on the rugby field. If he wanted to give me advice on rugby I would say yes and I would bow to it. If he wanted to give me advice on farming I would respect it. But with due respect to the individual I would not respect his advice on financial matters. But that is the way financial services are being sold. Many many hundreds if not thousands of people in New Zealand thought: “This guy’s on the front; it must be good.” and now those people have lost hundreds of thousands of dollars.  
The Financial Service Providers (Registration and Dispute Resolution) Bill is essential. I will not go into the details because my honourable colleague Martin Gallagher who has just resumed his seat has outlined what the bill is all about as have previous speakers. I just say that we have to take this issue much more seriously than we appear to be doing tonight. I know that we will knock off early when we finish this bill but this is really key stuff for the average New Zealander.  
Simon Power 
: The big one next time—the Financial Advisers Bill; it’s the biggest.  
PETER BROWN 
: Yes the Financial Advisers Bill has to be coupled with the Financial Service Providers (Registration and Dispute Resolution) Bill and we have got to get it right. We know we cannot eliminate the risk and we have to tell the public that that cannot happen but we have to minimise the risk. We have to make it so transparent that when the public make a decision they know what that decision is all about what the risks are and what could eventuate.  
I am tired and I guess that everybody is tired so I will take my seat. Thank you. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Tena koe Mr Assistant Speaker. Tena tatou katoa e te iwi e noho tonu nei i roto i tenei Whare o tatou—special greetings to those of us left here tonight. 
It seems like just the other day—actually it might have been just last night—that I was speaking to the Reserve Bank of New Zealand Amendment Bill (No 3) the companion bill to this Financial Service Providers (Registration and Dispute Resolution) Bill. During that debate we talked about a new breed of financial institutions called non-bank deposit takers—building societies credit unions and finance companies or loan sharks as some of them are known. Both this bill and the Reserve Bank bill introduce a new framework to ensure that all such deposit takers are licensed and to ensure that directors and senior managers are made subject to fit and proper standards. 
The aim of the new framework of course is to promote confidence and participation in financial markets by investors and institutions and to ensure a sound and efficient non-bank financial sector. That is all fine and dandy; this sort of policy change was actually needed some time ago to tidy up the sector and to make it more accountable to investors and consumers alike. The key problem has been the lack of adequate protections for investors and given that more and more people are pulling their money out of finance companies we need to prepare for more collapses before they occur. Although compliance costs will increase the changes are needed. 
Tighter control is needed over some of the rather shaky sharky and shonky financial service providers and advisers whom my constituents tell me have done a lot worse in terms of defrauding people than even real estate agents. Talking about that lot it is worthwhile pointing out one of the flaws in this bill which is the proposed model of dispute resolution. Although dispute resolution provides a level of consumer protection it would have been better if the process were not so dominated by industry players as has been the case in the real estate industry which has led to the Real Estate Agents Bill providing for the dispute process to be administered by the Ministry of Justice. 
This bill before us also establishes a registration system for financial service providers to enable easy access to information about providers and to allow more effective monitoring and evaluation of those providers as well. This is supposed to ensure certain standards for owners directors and senior managers. Although it is great to know that people will not now be allowed to serve in those roles if they have certain criminal convictions are bankrupt or are the subject of management bans history tells us that thieves and crooks come with a range of degrees and titles—particularly the good ones. 
The Maori Party is also very interested in the creation of this new registrar of financial service providers which will have the power to share information with the Securities Commission the Reserve Bank and the police. We will be even more interested to see how it actually rolls out in practice because the bill as it reads presupposes that the Securities Commission will be active and we know that it has no great history of being proactive or diligent in enforcing breaches of securities law. 
Finally it would be remiss of me to leave the House tonight without noting the high finance company charges that often cripple consumers and hinder those on low incomes from seeking development loans. I raise the possibility of establishing a Maori financial institution along the lines of the Grameen Bank successfully set up in Bangladesh. The Grameen Bank and its founder Mohammed Yunus were jointly awarded the Nobel Peace Prize in 2006 for placing trust in the skills and capabilities of the community by lending funds for community development. Best described as a microfinance organisation the Grameen Bank is a community development bank that makes small loans without collateral—no charges low interest and high levels of support and controls. Such a bank for Maori would be well-positioned to lend to those at the low end of the income and assets scale to help them improve their lot through the funding of enterprise development. In the same way that other major financial institutions are backed by the Government we suggest that a Maori bank established along these lines should also be so underwritten in line with proactive recognition of the Treaty partnership. 
In sum we support the changes to ensure that deposit takers are better monitored and evaluated by the Reserve Bank so as to minimise the shock and ripple effects of financial collapse on families and the economy. We would also encourage wider discussion on the development of a financial institution to fund low-level Maori development as an idea whose time has surely come. Tena koe Mr Deputy Speaker. Kia ora tatou e te Whare. 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I am pleased to rise to support the Financial Service Providers (Registration and Dispute Resolution) Bill and I hope that next Tuesday we will have the chance to complete the trio with the Financial Advisers Bill which is still below the line. This is part of an important suite of legislation dealing with issues that have been highlighted by recent events. As both Ms Dalziel and I have explained to the House on a number of occasions the legislation has actually arisen out of an extensive programme of review of the regulation of the non-banking financial sector. 
It is important to note that risk is inherent in investment and it is important that people understand what that risk is and judge that risk against the returns they are getting. We have seen in New Zealand over the last year or so many people chasing a small amount of additional return people who nearly always have relatively modest amounts of assets. Mr Brown mentioned people losing hundreds of thousands of dollars. Most of those people are actually people with $20000 $30000 or $40000 as their life-savings apart from their house. Sadly we have seen these people losing some of that money. They are looking for an extra 0.5 or 1 percent but are taking a far too excessive risk in relation to the additional return because of the information available.  
Although we can never completely prevent those things happening it is hoped that this suite of legislation and changes will reduce the chances of that recurring in the next economic cycle. This is actually a very classic outcome of an economic cycle. As asset values rise as people seek higher rates of return and as people become more and more confident that nothing can go wrong people start taking higher and higher risks. Of course eventually things go wrong as they always do sooner or later in this regard.  
As this is the last bill we are doing I think it would be highly churlish of me not to thank the Opposition for its cooperation. I would dearly like to be a fly on the wall at National’s caucus meeting next Tuesday morning as the House manager explains why we have not finished the entire business this week and have had to come back next week. This was the Government’s plan A as I explained to the media and my own caucus on Tuesday morning and the great majority of Government members are here next Tuesday in any case. I particularly thank the Opposition because the way things have turned out means I will now get home significantly earlier than I had been anticipating this week. So I thank those members very much. I expect to get home at the same time next Wednesday as I had been planning. 
RODNEY HIDE (Leader—ACT) 
: 
 Let me too commend the Minister Lianne Dalziel for the way she has gone about this legislation. I think she has done a fantastic job in a difficult area. It is a job most politicians would be tempted to grandstand on and make a song and dance about. I believe that the Minister has actually got in and done the business and produced a bill in what is a very very difficult and fraught area. I also think there is an amazing consensus around Parliament about the limits and abilities of Government regulation when dealing with risk and financial management. This is something I think is new to this House. The consensus is that yes the Government can provide a role in providing better information and in rooting out fraud and fly-by-nighters but it cannot eliminate the risk. There is this peculiarity about people—I guess it is greed and the idea that history does not repeat itself. When a company or financial institution is doing particularly well and when as the Minister Michael Cullen observed people can get an extra 0.5 percent they will rush in not recognising that down through the ages people who have got high returns have had to take on a big risk and have often lost the very money they seek to protect to provide the lifestyle that we would all wish for.  
The Government cannot protect people from their greed or prevent them from taking exceptional risks. It is part of life. But the Government can provide a good regulatory regime that provides the necessary disclosure the necessary information and the desired checks and balances on those people who would stand up and say they will take our money our savings and invest them wisely on our behalf.  
I believe this is very difficult legislation. It is complex legislation with a complex impact. There are high rewards for people who can game the regulatory environment and for those who can find routes through that others cannot and therefore can appear to offer better returns with a suspected lower risk than what is real. Unfortunately we have seen that happen in recent times in New Zealand and that lesson has been hard-learnt for some people. Hopefully it is a lesson that others will pick up on and therefore they will be much more careful with their investments. I commend the Minister for this bill and I look forward to considering it in the select committee. Like Minister Michael Cullen I too thank the National Party members for letting us get home early. Thank you. 
Bill read a first time.  
Bill referred to the Finance and Expenditure Committee. 
The House adjourned at 9.35 p.m. (Thursday)