Gambling Amendment Bill (No 3) — First ReadingText is incorporated into the Bound VolumeGambling Amendment Bill (No 3) — First Reading[Sitting date: 06 November 2014. Volume:701;Page:710. Text is incorporated into the Bound Volume.]Gambling Amendment Bill (No 3)First ReadingDebate resumed from 4 November.Hon PETER DUNNE (Minister of Internal Affairs):When I was speaking at the adjournment the other night I was talking about some of the provisions of the new bill in so far as they relate to conflicts of interest. I had spoken about the need to capture people who might be at the periphery of a venue’s operations but have a significant role within it. I had also talked about key people who might be in a position to receive benefits from any of the organisations in which they were involved.I want to move on from there. One of the more significant changes that this bill introduces is the prohibition of any money gifts or benefits between societies and venues aside from those legitimately paid through the venue cost payment system. The bill is intended to help clamp down on unhealthy competition for high-turnover venues around the country. In fact societies for some time have been accusing each other of offering these venues various sweeteners over and above what is legally payable in order to persuade them to sign up to host their gaming machines and this bill seeks to address that concern.The bill also makes a change in the area of compliance costs by allowing the Secretary for Internal Affairs to issue licences for gambling operators that last up to 3 years rather than just the current 18 months. The less frequent requirement for renewals will act as a reward for compliance and it will also help to reduce operator costs. I think that has the potential to be a benefit to the Department of Internal Affairs in its role as the regulator because its workload on licensing renewals could well substantially reduce as a consequence.The bill also removes the requirement for societies to publish grant information in at least one newspaper which can be costly. I am sure we all recall those big full-page spreads in national newspapers on occasions. But today information can be far more readily obtainable and available and it can be more comprehensive and more accessible if it is published on a website and so the changes that the bill contemplates will encourage greater flexibility in the publication of grant information to better meet the changing needs of particular stakeholders.The final part of the bill is to streamline the appeals framework under the Gambling Act. Societies have the right of appeal to the Gambling Commission against the department’s decision to suspend cancel not issue or not renew class 3 and 4 licences. When the commission was established back in 2003 one of its purposes was to be a specialist body that can consider appeals. What the bill does is uphold that by allowing an affected party to seek a judicial review but only after that party has exercised its right of appeal to the Gambling Commission and that appeal has been finally determined.I said at the start of the first reading the other night that this bill is an important step in an ongoing series of measures to restore greater public confidence in the gambling sector. We know that class 4 gambling generates many hundreds of millions of dollars every year and most of that money is ploughed back into the community. What this bill is about ensuring is that the maximum amount of money is ploughed back and that it goes to the right places. We are also therefore looking in the bill at decision-making and grant-making processes and at tightening up parts of the Gambling Act that potentially allow the opportunity for dishonest arrangements or where personal gains from gambling are sought. Both of those activities are clearly unacceptable. The bottom line very simply is that when the public of New Zealand pay their fee to take part they need to be assured that those who are involved in operating this type of gambling are doing the right thing and that the gambling funds are being used for what they were intended—namely the community need. So I am very comfortable commending this bill to the House and I look forward to the House’s support for it.Hon RUTH DYSON (Labour—Port Hills):Can I commend the Minister of Internal Affairs for his contribution to the House and also for the legislation that he is presenting to us. Labour is very happy to support this legislation’s referral to a select committee and we will see how we go after that. But certainly the intention of the legislation is admirable and it is something that is necessary. Should the bill be shown at the select committee to be able to deliver those objectives we will certainly support the further progress of it.I want to just take a step back in terms of the gambling regulation and regime that we have got in place before us. When we were in Government in the 2002 to 2005 period—Labour led the Government then—we introduced a major piece of gambling legislation that really set for the first time in over 29 years some fundamental objectives for the regulatory regime and that also recognised the changes that have taken place over the years in terms of gambling. This legislation does not really confront that. I have not got the answers to that actually and I would be happy to admit that but I would certainly be very happy to be part of the solution. I think there are challenges in terms of access to worldwide gambling institutions that we have not been able to regulate satisfactorily. I suppose that before we do that though we might want to consider what harm is being done and then we would have a better idea of the scale of the problem that we might need to face if indeed we do have a problem.The legislation that was introduced in 2003 introduced major reforms. We had a moratorium on casinos—of course that has been in debate over the last couple of years in relation to Skycity—we had a reduction in the number of class 4 gaming machines in new venues and we had a significant shift in focus. The debates in this House on the gambling regulatory regime were much more about the minimisation of gambling-associated harm so the public health recognition of gambling finally came to fruition in the debates in Parliament. When those changes became fully operational in July 2004 that really was a huge step for the New Zealand Parliament and I want to commend the people behind that consideration and also those who contributed to the debate at that time. It is very interesting to read the debate in the 2003-04 period and see how much things have advanced over just a decade and probably that would alert our Parliament as to how we need to keep on our toes in this regard.I think the Minister probably is ensuring that Parliament keeps on its toes given that we have got two gambling bills before Parliament at the moment. We had been debating the Gambling Amendment Bill (No 2) earlier in this session of the House and now we have got the Gambling Amendment Bill (No 3). It does puzzle me as to why we could not have waited until the No. 2 bill was concluded. It was only a matter of another few hours to go before the third amendment bill came through and it does raise the question I guess about whether there is consistency in the portfolio in terms of taking a strategic look at the entire industry. It has been a little ad hoc.I know that some of the changes that have come about were the result of the National Government slashing Te Ururoa Flavell’s member’s bill. He had a very comprehensive member’s bill the Gambling (Gambling Harm Reduction) Amendment Bill which he had introduced. Unfortunately it got hijacked by National which refused to support it unless he made substantial changes to it and I think that we lost an opportunity really to stand up to some of the lack of transparency in the industry. It was not entirely of my making—in terms of the bill I would not have supported every piece of it—but I was certainly disappointed that it was watered down to the extent it was.The aim of this bill is to provide greater transparency and that is certainly needed. The Minister gave one example of cost—but retaining transparency or perhaps even enhancing it—by using the example of the full-page ad in the paper that we have seen. All of us would have seen it; probably very few of us would have read it. Electorate MPs tend to read those things with a little more care than perhaps other members of the public because we are interested in what organisations in our electorates have received funding. Then we are able to link in with what activity they are going to use it for. The Minister noted that that information could now for example be available on a website. I will just raise a note of caution. I think the theory sounds great but actually how many people would think to look at a website unless they were triggered by a particular occurrence? Whereas when we look through the newspaper we see a full-page ad. We do not think to look for it; we just turn the page and there it is. So sometimes having a change in the way that information is made available does not always mean having the same sort of transparency. I am not opposed to it; I am just raising that as one of the cautions that I would like the select committee to consider.We would certainly support the point—improving transparency. This is particularly around grant-making which I just referred to in terms of the full-page ad; the grants from the class 4 gaming machines which are the non-casino gaming machines so the pokies that are in clubs or pubs or bars not the casino ones. This is about transparency and the grants where the pokie machine money is given to the community. We have also got in the legislation the purpose of trying to reduce the potential conflict of interest situations. It was a big concern when we were debating Te Ururoa Flavell’s bill at the Commerce Committee. I do not think that there is enough recognition of potential conflict of interest and declarations in the industry. So improving that in the legislation is certainly something we would support.Another purpose is that of improving transparency surrounding the management companies that provide the societies with service and the contract negotiation with venues is one such example. I am not aware of any particular issue that has been raised that has caused this to be addressed in the legislation but I am sure the officials or submitters will give us a bit more clarity around why the lack of transparency or apparent lack of transparency has caused any concern. As for simplifying compliance costs and reducing costs for society and venue owners how could you argue—how could anyone argue; not you Mr Deputy Speaker; I am sure you would not argue—against reducing compliance costs or complexities? We have to make sure that the accountability for those organisations is not reduced by any reduction in compliance costs but that the principle certainly will be strongly supported. As the Minister mentioned there is also the purpose of ensuring the efficiency of the appeals process is not undermined.So those are some of the key points of the legislation. As I said we have two gambling bills going through Parliament at the moment both of which I think would be quite widely supported by the community who are increasingly recognising that gambling is a public health issue and is one that you do not clamp down on to try to stop but that you have a regulatory regime that protects our citizens from harm. That is the importance of it. It is also to make sure that a significant amount of money is not used or abused. That is the responsibility of this Parliament as well.Having a debate as open as this and obviously having the bill go through a proper select committee process soon does bring it into sharp contrast with the way the Skycity legislation was rammed through Parliament where basically John Key and probably Steven Joyce did a dirty deal with Skycity and enabled it to break the agreement with the Auckland City Council in terms of reducing the number of pokies—a huge increase in the number of pokies in Skycity in Auckland in a convention centre that would be able to be used by the public. The deal was sold to New Zealand by the Prime Minister as us getting a convention centre for free. There was no regard for the democratic process that Auckland City Council went through in terms of determining the limit of pokies in its community—and that is something that is its right and it was undermined by the deal that John Key did—let alone the actual harm that is done by pokies. That is why we had a commitment by this Parliament in the earlier gambling legislation to reduce the number of pokie machines. So the deal that John Key did went straight against that.I notice that the Minister who has got his name on this bill did not comment on that but I have seen his writings on this subject. He seemed to be singularly unimpressed at the time with the deal that had been done by John Key with Skycity. He wrote some unfavourable comments about it but I am pretty sure that when he came into the House he was supportive of the deal. So I was puzzled by what happened between one statement and another. The Minister is looking puzzled now. Did he not support the Skycity deal? Yes he did—that is right. He did say that it was not a great deal; it was a dodgy deal. I could probably table the comments he made if he wants. But there was an inconsistency there. It is always a puzzle to me and to others on this side of the House when members of Parliament make a comment about an issue and say one thing and then when it comes to voting do another.I am pleased that we are debating this legislation. I think it is a step in the right direction. Again I commend the Minister for bringing it to the House and I look forward to the debate at the select committee.SARAH DOWIE (National—Invercargill):I too would like to commend the Minister Peter Dunne for bringing this bill to the House and I am looking forward to hearing submissions in the select committee. Even though this bill is quite technical in nature and makes technical changes the broad purpose is of course to minimise the harm of gambling and to make sure that the funds are filtered back into the community to obviously minimise that harm. The bill simplifies streamlines and makes provisions more transparent. As the Minister said there are large amounts of cash at stake here and they do need to be filtered into the community. The community needs to have a stake in that and through that transparency there are checks and balances that guard against any dishonesty.In particular I would like to highlight two changes. The first is the grant process—making that more transparent by putting in place reporting measures to make the criteria for grants more clear. The second part of that change is to make societies that obviously operate these pokie machines more accountable to the public by having them report as to their operational efficiency. I think that is a great way to keep the societies honest and to keep the community involved in how this funding is to go back into their community. The second change I want to highlight is that there is a change in the definition of “key person” and that is to reduce any conflicts of interest and deal with any indirect conflicts of interest where there could be some benefits derived in an improper manner. That obviously means again that communities have a greater input to make sure that that abuse is minimised.In short this bill goes toward a balance between allowing people to have a flutter and minimising the harm of gambling by putting those funds back into the community. I certainly support this process. I look forward to the select committee consideration to hearing people’s views and to striking that balance. I definitely look forward to hearing the submissions on this bill.CHRIS HIPKINS (Labour—Rimutaka):I am very happy to take a call on the Gambling Amendment Bill (No 3). I certainly hope that I will have the opportunity to see this bill through to its final conclusion. Of course if it follows the passage of the Gambling Amendment Bill (No 2) I will need to be re-elected at least three more times in order to see this bill through from start to finish. I hope that the Government has more success in passing this bill than the last three Governments had in progressing the Gambling Amendment Bill (No 2). The Gambling Amendment Bill (No 2) incidentally was one of the first bills I spoke on when I first became a member of Parliament in 2008 and by then it had already been sitting on the Order Paper for several years. So I hope we get to see this bill through much more promptly than that. In fact I hope we get to finish progressing the Gambling Amendment Bill (No 2) quite quickly as well.I think one of the things that struck me about the first of the bills I have just mentioned is that this is an incredibly heavily regulated area and it is incredibly technical. However an awful lot of technological change takes place in this area and keeping on top of it is very very important. That is actually one of the reasons why I hope we will be able to expedite this bill and the process around the other bill. When we talk about the technology involved in pokie machines for example the technology that is used to hook people in and get them addicted is heavily regulated. Unfortunately I suspect that those regulations are now quite out of date because the law that enables them is also out of date. It is important that we get this legislation through so that we can keep on top of this and deal with the issues around problem gambling.I want to be really clear here. For most New Zealanders gambling is a bit of fun. They go to a casino and they might walk in with $50; they either walk out with $500 or walk out with nothing. In my case it is normally the latter of the two examples. I walk in with a certain amount of money and walk out with nothing—but it is a bit of fun. Then you might be in a pub and put $2 into a slot machine and that is a bit of a laugh and then you go. But for a smaller number of New Zealanders it is not like that; it is much much more serious. It is a big problem. I see those examples in my own electorate. They are tragedies and we should be taking all of the steps we reasonably can to ensure that we minimise the harm from gambling and that we minimise the potential for people to get hooked in that way. Basically we should put some fences at the top of the cliff rather than dealing with the problems when they arise. I know that that is some of what this bill is all about.The societies that administer class 4 pokies—class 4 pokies are the ones that are not in casinos but are in the pubs and the clubs—have changed quite dramatically over the last 10 to 15 years and that is a good thing. With regard to pokie machines we saw a massive increase in the number of pokie machines and the number of venues between 1994 and the passage of the Gambling Act in 2003. We have seen a steady decline in the number of pokie machines since then and that is a welcome thing. We have also seen a steady decline in recent years—probably since about 2005 when we had the peak when gambling turnover was over a billion dollars in pokie machines in class 4 pokies—and I think that that is a welcome trend as well. So those are good things. We have also seen the sector clean up its act a lot as a result of the passage of that legislation but there is still a way to go.I think back to the wild west days when I was president of the Victoria University of Wellington Students Association. Some of the big sponsors that our University Games team used to have were the local pubs which would take the money from pokie machines and effectively use it as an incentive to lure people in. They sponsored our University Games team but a lot of mutual back-scratching went with it. So they would say: “We’ll give you a certain amount of money from our pokie machines but we expect you to come into our bar with your whole team and divert a certain portion of the money we are giving you back across the bar or back into the pokie machines.”Ian McKelvie: That’s fair enough.CHRIS HIPKINS: Well no no—the member says: “That’s fair enough.” It is actually against the law now. That is quite a corrupt practice because it means that the proceeds from the pokie machines are not actually being applied in the way they are intended. The proceeds from pokie machines are designed to be used for charitable purposes and if a business is applying them in such a way that it says “Well you can have the money as long as you give it back to us.” then it is not actually applying that funding for genuine charitable purposes.That has changed a lot. We have seen a dramatic reduction in the number of societies that are involved in this process. We used to have a situation where every pub would set up its own little society. The pub manager would run it it would be done out of a back room and there would be all sorts of interesting exchanges going on. There is a lot less of that now than there used to be and that is a good thing but there are still some areas where improvement is required and it is often within those less formal settings—the sports clubrooms—where there might be some issues that need to be addressed.I think there are some pragmatic and sensible changes in this bill that will help to address the remaining issues that exist around that and there are also some anomalies that this bill starts to correct which I also think are very sensible. It has always irked me a little bit when you pick up a copy of the Sunday papers to see full-page advertisements printed in a very tiny font listing every individual grant that some of the societies have made. When you think about the cost of the advertisement—to be transparent about it—it often adds up to more than what many of the grants were. That is if you took a chunk of the grants and totalled them up. I would rather see that money going into grants. If we can ensure that there is transparency by having the information available electronically online and at a much much cheaper price than sticking it in a newspaper advertisement—thereby enabling those societies to make more grants—that is common sense to me as well as and that is a sensible thing. So I think that is one of a change in this legislation that is important.Of course my colleague Ruth Dyson also made a very valid point about this though in that it is important that this information is not just buried. So it has to be readily accessible. People have to know where it is and they have to be able to access it. But I do not think that organisations need to spend large amounts of money in order to make that information accessible. In fact I would argue that putting it online in a searchable form is a far more accessible way to make that information available than putting out a full-page newspaper advertisement with tiny little letters that you need a magnifying glass to be able to read. So those are some relatively sensible provisions in the bill which I think will certainly improve the situation enormously.The Labour Party has been very supportive over a long period of time—since 2003 when the Gambling Act was first introduced and passed. There is a long history about that piece of legislation. My colleague Grant Robertson would wax lyrical about that for many hours given the opportunity because of course the legislation started as the Responsible Gambling Act but after it had been though the process the word “responsible” was dropped and the legislation became the Gambling Act. But I think there has been a real drive over a period of time since then to ensure that we do put “responsible” into responsible gambling legislation and the Labour Party has supported this right the way through. So each time there is an opportunity for us to go a little bit further to refine the system further to increase transparency and to reduce the potential for gambling to become a problem we are going to be very supportive of those things. So this legislation certainly makes some of those things better.I mentioned before the societies involved. The changes to conflict of interest provisions in this bill will help to stop the situation where somebody who is involved in the administration of one of the societies or in the running of the pokie machines can eventually end up being a beneficiary of the grants. I think the conflict of interest provisions in this legislation are a big improvement on what we have now and I think that will be very welcome.The final point I want to make—and I think it is a more difficult issue to deal with; it is not dealt with in this legislation but I think it will need to be dealt with by Parliament—is about ensuring equity in the way that grants are applied in terms of the communities that they are drawn from and the communities that they are invested back into. There is too much potential in the legislation now for pokie machines to be located in poor communities for them to take money out of poor communities and then for them to redistribute the money in the form of charitable grants to middle-class or higher -income communities. Taking money out of a very poor community and giving it to the local golf club is probably not going to benefit the people who are most likely putting the money into the machines in the first place. So I think there does need to be further discussion and further consideration of how we can ensure equity in the distribution of grants. I want to acknowledge in my own electorate the Rimutaka Licensing Trust. It has a conscious policy of saying it will reinvest this money only in the communities that it comes from. I think that is a very sensible thing. It means that the local schools in its catchment area do very well out of it because it is investing that money in education. It is going back into the community it is drawn from and I think that is positive. I would like to see that principle applied much much more widely through the class 4 pokie sector.So with those thoughts in mind we will certainly be supporting the bill to the select committee and I look forward to seeing it progress more expeditiously hopefully than the Gambling Amendment Bill (No 2).MARK MITCHELL (National—Rodney):I am very happy to take a call on the Gambling Amendment Bill (No 3). I was surprised to hear the comments from the previous speaker Chris Hipkins. It sounded like he was not very confident that he was going to be returned to Parliament to see the passage of this bill. I did not think things were as bad as what they really are over there if those comments are indicative of the current situation. I am sure that he will see the passage of this bill this term.I want to acknowledge the chair of the Government Administration Committee the Hon Ruth Dyson and the newly appointed deputy chair Sarah Dowie. Like her I look forward to receiving this bill at the committee. It is a good bill. Of course I want to acknowledge the Hon Peter Dunne as well the Minister of Internal Affairs.It is a good bill. I do not have much time to go into it. However I do like the fact that this bill has got some very strong provisions around reducing conflicts of interest. We have seen some major issues arise because of conflicts of interest. The Gambling Act currently has two conflict of interest provisions with associated summary offences. The conflict of interest provisions are important because they help to ensure that gambling is undertaken for the benefit of the community rather than the benefit or personal gain of an individual.The bill’s amendments strengthen the conflict of interest provisions in the Gambling Act by changing the definition of a venue “key person” so that indirect interests and relationships of venue operators to grant recipients are captured. The bill is simplifying the test for determining whether a person has an interest in a venue such that he or she is in essence a venue “key person”. It will prohibit payments gifts or benefits between societies and venues when there is no condition attached to the payment gift or benefit. There are several other very good clauses but like I said I do not have time for a lengthy speech. I am certainly looking forward to receiving this bill at the select committee. Thank you.KEVIN HAGUE (Green):I rise to give this speech on behalf of Denise Roche who handles the gambling portfolio for the Green Party. The Gambling Amendment Bill (No 3) deals with class 4 gambling—pokies in pubs and clubs—and it is the result of changes that were suggested during the submission process on Te Ururoa Flavell’s bill the Gambling (Harm Reduction) Amendment Bill. Sadly that bill was essentially gutted before it passed last year. The bill generated around 30000 submissions because the pokie industry had mobilised and it would be fair to say that the industry achieved what it wanted—an Act that does essentially nothing. Actually the speech notes that Denise has given me do not say “essentially nothing”; they use a different phrase. I will spare the House from that today. This bill tries to address some of the issues raised during that process.In this bill the distribution of community funds is a key issue as is trying to ensure that there are fewer dodgy people and practices involved in the distribution of funds. There is still real concern that the industry is full of rorts. Any Google search will result in numerous examples of the corrupt distribution of money. Class 4 gambling is still raking in the money. Department of Internal Affairs’ results show that $808 million was lost in pokies in the year to September. That is equivalent to the cost of running six or seven district health boards the size of the one that I used to run. That is a very very large amount of money indeed. Although it is good to see that in that same year there was a 1.4 percent reduction that still equates to a very very large amount of money—almost $1 billion. Those statistics do not include losses to pokie machines in casinos; that nearly $1 billion in losses pertains just to the pokie machines in pubs and clubs. That is of course what this legislation deals with.Public health workers and problem-gambling service providers estimate that around 40 percent of the money lost on pokie machines comes from gamblers with little control over their gambling behaviour. I would endorse that from my own experience. I was a consultant hired to scope out the health services that would be required to deal with the issues associated with problem gambling if the responsibility for dealing with problem gambling were to be transferred from the Department of Internal Affairs to the health authorities. Certainly what I found is that most of the losses were concentrated amongst people who essentially had no control over their gambling behaviour. Interestingly when I recommended what health services would be required to deal with the problem I reported back to the committee that controlled problem gambling for the industry at that time and my recommendations were found to be far too excessive. That is the problem is it not with the fox controlling the hen house.We never seem to factor in the costs that come with the proceeds generated from pokies. As well as the costs to the victims of crimes there are the legal bills and the potential prison costs that are also associated with gambling harm. It would be good to see those figures stacked up alongside that $808 million. We do not have to create so much misery from gambling. Pokie machines can be made safer to use with the introduction of real-time player tracking and pre-commit cards. I am sure a lot of people would feel much better about the proceeds from pokies going to good community organisations if there was more of an effort made to curb the social harm from them.Most of the changes in this bill are reasonable or benign except for one and that is the provision that will remove the prohibition on paying venues on a commission basis. We oppose this change for two reasons. Firstly commission-based payments for venues would act as a disincentive for venue operators to monitor problem gambling. Yes they have host responsibility programmes but currently they are paid the actual and reasonable costs associated with hosting the machines on their premises. If they get paid a commission it will be in their interests to ensure that there is a high spend on each machine in order to maximise their percentage payments. Secondly the only reason we have class 4 gambling in the first place is to fund community activities—“for authorised purposes”. That is the only reason in law. Once we move to a commission-based payment system for venues we start to further eat away at the funds available for those community activities.The new commission structure proposed in this legislation for pubs with pokie machines is actually a giant leap backwards. The move to a commission system announced earlier this year by the Minister of Internal Affairs Peter Dunne overturns a section of the Gambling Act 2003 that prohibited commission payments for pokie operators because of the reasons I have given—because they give publicans an incentive to promote gambling particularly problem gambling. Instead publicans and other venue operators have been allowed to claim only actual reasonable and necessary costs up to a maximum of 16 percent of their proceeds. Before we had the current law some venues were receiving commissions that were wildly outside costs. According to those who work in problem-gambling areas there was a pub in South Auckland that was getting $500000 a year in commissions from its pokies.The move to return to commissions is a kick in the teeth for those who battled to get rid of them back in 2003. It is actually a huge bonus for those in the gambling industry. Interestingly the bill repeals the prohibition on commissions but does not specify a commission structure. It is simply not good enough that the details of this will be negotiated with the industry. Last September a consultation document proposed paying venues on a sliding scale ranging from 40 percent of the first $1750 of pokie proceeds a week down to 8 percent on proceeds above $15500 a week and nothing at all above $30000 a week. It is unsurprising that those who stand to make the most out of this retrograde move are fully supportive. According to news reports Community Gaming Association director—I always smile when I hear those words—Brian Corbett has those in the industry welcoming a commission-based system. The reason given for this is that evidently the current system is “clumsy unwieldy and very difficult to process”.Despite the current system apparently being so clumsy unwieldy and difficult to process we still have hundreds and hundreds of pokie machines scattered throughout New Zealand pulling hundreds of millions of dollars from communities. This move will give those with pokie machines even more incentive to maximise those profits. It is simply living in cloud-cuckoo-land to believe the Minister Peter Dunne when he states that this move is unlikely to see any increase in the level of reimbursement to venues. Those who stand to gain will do so for the simple reason that their profits will be maximised by commissions. Given this legislation does a number of positive things the Greens will support this bill to the Government Administration Committee but we do so with grave reservations regarding the potential weakening of the controls on gambling. This clause about commissions which I have spoken about mostly will be the deal-breaker for us.CLAYTON MITCHELL (NZ First):I rise to speak for New Zealand First and to oppose these amendments in the Gambling Amendment Bill (No 3). We are not here to promote gambling or to say that we are advocates for gambling but it is important to know that we are looking for a common-sense pragmatic approach to gambling throughout this country.It is interesting today to hear some of the comments that keep being brought up with regard to gambling and harm minimisation. It is interesting to note that nobody is actually talking specifically about those statistics that show it is less than 0.03 percent of people who gamble who make up those problem gamblers. The very interesting part that I find difficult to swallow is that we do not have a mechanism to find out what sort of harm minimisation we need to implement because we do not know what sorts of people have problems with certain aspects of gambling. We have 14 percent of the country spending money on racing with regard to gambling. We have the New Zealand Lotteries Commission with a turnover of $947 million. We have gaming machine income at around the $800 million mark and casinos which account for only 26 percent of the total machines at $520 million. We do not have a mechanism to actually identify what specifically people have difficulties and gambling problems with directly or indirectly.We have had a proud history for many many years of being a society that has allowed people to gamble whether it be a friendly game of poker or back in World War I playing two-up in the trenches with their diggers and mates. I am concerned with the devils that are in the detail of this bill. When I read the bill it does not sound particularly harmful until I actually delve into it in its entirety. This legislation is I think at best quite vague and it is going to enable our Department of Internal Affairs audit people to actually get a big stick with which to beat this industry over the head—an industry that is already under large amounts of pressure with the amount of legislation that is against it.I also think that this industry does far more good than it does harm and it needs a little bit more of a common-sense approach with regard to the legislation that it brings. Currently class 4 gambling brings in around $300 million to our communities from Invercargill right through to Kaitāia. Those people who are somehow involved with sports clubs community groups churches schools and arts culture and heritage groups have all had the pleasure of actually facilitating the money that comes out of class 4 gambling to build their community. The difficulty we are going to have is that if we tighten up the legislation even more we will see vast droppings in the number of machines and the turnovers coming down.Iain Lees-Galloway: Vast droppings?CLAYTON MITCHELL: Thank you—those droppings will have a negative impact specifically on those people who are looking for help and support in the community.Iain Lees-Galloway: Are they elephant droppings?CLAYTON MITCHELL: They will be much like elephant droppings—big droppings.The issue I have is that we now have councils making a lot of inroads into decision making on sinking-lid policies with regard to gambling and they do not realise the negative impact that this legislation is going to have on communities throughout the country because those communities rely heavily on that support specifically from class 4 gambling. In comparison Skycity Casino put only $3 million back into the community with its grants. I am still struggling to find specifically where that money went to as opposed to the near $300 million that class 4 gambling has brought in.Some of the issues that I have concerns about in relation to this class 4 gambling legislation reading through some of it is that it says here in the purpose and overview of the bill: “The Gambling Amendment Bill (No 3) makes a small number of important improvements …” which I would suggest would have a large negative impact on class 4 gambling societies and venues as well as the recipients of those grants. The bill’s policy objectives are to make five basic changes: “increase transparency of grant-making from the proceeds of Class 4 gambling; reduce potential conflicts of interest situations between Class 4 gambling operators (societies) venues and grant recipients; improve transparency surrounding management companies that provide societies with services (for example contract negotiation with venues administrative and financial management or grant application processing); simplify compliance and reduce costs for societies and venue owners in some areas; and ensure the efficiency of the appeals process is not undermined.”To talk to a couple of those provisions it states in new section 4 that a gambling society key person cannot be a key person in relation to a class 4 venue licence held or applied for. They cannot be a society key person a trustee a director an officer a chief executive or a person who exercises significant influence in management of a gambling society which under the proposed changes in the bill extends to management services providers. Also under the bill’s proposed changes it extends to a person who has the ability directly or indirectly to exert a significant degree of influence over the management or operation of the venue operator or who may reasonably be perceived to have that ability. That could extend to relatives. The concern relates to amended section 4(2)(ivb) which states this. This is specifically the kind of subjectivity I am speaking about which is in my view going to give the Department of Internal Affairs the stick with which to hit those people over the head.I think one of the changes we need to make with regard to section 110 is to rename the bill and call it the “Six Degrees of Separation Amendment Bill”. It actually covers just about every person likely to apply for any grant throughout this country. It states that no proceeds committee members can have direct or indirect interests in any successful application by a grant recipient. Interest is defined as deriving a financial benefit or having a financial interest in the recipient; being a relative of the recipient; being a member or other of the recipient where the recipient is a club; being a relative of a member or officer of the recipient or having been the recipient’s lawyer or another professional capacity; being or having been employed by or being indebted to—which I underline—the recipient; being involved in the business or financial dealing of the recipient; or being otherwise connected or otherwise involved with the recipient in a way that can reasonably be perceived as having influence in the decision to make the grant to recipient. This I call to rename it the “Six Degrees of Separation Bill” because this just about covers everybody in the country. Everybody knows somebody. It could be a second cousin twice removed who is connected in some way by family or a sporting connection. I do not think this provision should be allowed to be put in.I have had a lot of involvement with the gambling industry specifically with class 4 gambling through my business in hospitality. We are a large employer of people in the business and despite what people think we are not making the money out of those gaming machines that people think. In fact I get a site rental of about $100 per machine. We all know the stories and have seen the headlines that make the newspapers—specifically in the early 2000s when there were episodes of people taking full advantage taking money and popping it away for their best use and benefit. However this practice has largely decreased.With regard to the decreasing of the number of machines that are throughout our country at the moment we have come from 27000-odd machines in 2003 to 16800 in July of this year. That is a 30 percent drop in the number of gaming machines which is obviously a drop in revenue which is a drop in what we can afford to put into our communities.We are opposing this bill. I think it needs to be very very seriously thought out. The select committee needs to be looking at the devils in the detail because there are so many. I believe this will be the nail in the coffin for an industry that is already under siege. Thank you.BRETT HUDSON (National):It is indeed a good thing that this bill provides provisions to take care of conflicts of interest. I rise for a short call to support this bill. The reforms in it will deliver a simple more transparent system providing in fact more funds back into our Kiwi communities. There are large sums of money at stake in the class 4 sector and it is important to ensure that as far as possible the maximum amount of gaming machine funds is returned to the community and in particular to the communities where the gaming activities occur. This bill will very much see that come about.We are also giving local communities better information about grant-making decisions. One particular measure is to report on whether the grant decision-makers have any direct or indirect interest in a successful grant application. I believe that will give members of those communities far greater confidence in how those funds are distributed.I would just like to conclude by saying that I commend this bill to the House. I look forward to dealing with it in the Government Administration Committee.ADRIAN RURAWHE (Labour—Te Tai Hauāuru):It gives me great pleasure to join my colleagues in supporting this bill in its first reading. I want to acknowledge the work done by the Taumata Hauora Trust when I was a trustee on that trust for the gambling initiatives to work with problem gambling. I want to acknowledge the former chief executive officer of that organisation Jo Hayes who is now a member of Parliament sitting on the opposite side of the House. Today I find myself supporting the same bill that both she and I worked on in that sector so I just want to acknowledge her.I also took the opportunity to contact those who are still working in that sector in my electorate. Last week a number of organisation providers working in that sector were meeting in my electorate so I took that opportunity to talk to a few of them. They are really keen as I am to make certain that there is more transparency which is provided for in this Gambling Amendment (No 3) Bill. I think we have all heard lots of stories about how things really do happen out in the communities. There are some practices—and I think some people in this sector make the most of those opportunities under the current legislation—so it is very good that we have some transparency in that sector.Reducing the conflicts of interest is also a really important area. I have had the occasion of being part of an organisation and going through the process of applying for funds to support the activities of that organisation. You know there were some subtle hints about what was expected in return. I think we need to make certain that there is clear separation between the roles of the people involved in this process. That is a very good thing that is addressed through this bill.Also I support the contribution of Chris Hipkins about the best way of getting information out to the community. Maybe having full-page advertisements is not the best way of transmitting that information. I think there are social media in particular and the internet that would be better used for that purpose.I am taking only a short call on this bill but I look forward to it coming to the Government Administration Committee of which I am a member. I look forward to having more contributions in the future. Kia ora mai tātou.IAN McKELVIE (National—Rangitīkei):I will take a brief call on this Gambling Amendment Bill (No 3). The great thing about this country is that much of what is good and bad can be sheeted directly back to this very place we are standing in this afternoon. I guess although I have some sympathy for the arguments of New Zealand First I do think that the tidying up of this class 4 gambling is certainly overdue. I think it has had an interesting past and I think this bill will go a long way towards I guess what I think are the last steps required just to tidy this thing up. I think many of the trusts and those associated with the distribution of funds in this industry or business are doing really well with it now. I think to a large extent it has already been tidied up but there are just some last little pieces that need to be dealt with and I think this bill deals with them pretty well.There is one thing I want to caution on when it goes to the select committee and that really is the interests of our clubs throughout New Zealand. Many parts of New Zealand—and in my electorate certainly in the north—are heavily affected by the way those clubs look after their communities and the way those clubs are situated in the communities. We have a historical licensing issue in the north of my electorate which has led to a predominance of clubs in that area. Those clubs have relied on this type of income and they operate in a very well-controlled environment. I think as we go through the select committee process on this bill we need to pay a little bit of attention to them and have some sympathy for them because I think they are extremely capable and worthy operators. Finally I just want to say as I said earlier that I think many of the trusts and charitable organisations responsible for the distribution of funds in this area are doing a very good job. I think we have got a much better direction for those institutions now. Some of the organisations that receive those funds certainly need them. I have got no problem with commending this bill to the select committee stage. Thank you.IAIN LEES-GALLOWAY (Labour—Palmerston North):It is a pleasure to speak on the Government’s Gambling Amendment Bill (No 3). It is very pleasing to see that the bill is receiving wide support from around the House. This bill has some provisions in it that are worthy of consideration by the Government Administration Committee. I should think given that most members support improving transparency and improving the regulation of gambling it will be something that has very constructive consideration at the select committee. I was somewhat disappointed with the contribution by the New Zealand First member Clayton Mitchell. I thought it was full of droppings to be honest. I was very very disappointed because he was bordering on misleading the House when he said that we do not know about the impacts of gambling and who is affected by problem gambling. I appreciate what the member said—that the vast majority of people who gamble do so in a safe way just as the vast majority of people who drink do so in a safe way. Yet we have a very very tight regulatory system around alcohol. During the last term of Parliament a lot of the time was spent on passing new legislation to regulate alcohol despite the fact that the vast majority of people can use alcohol quite safely. But we do need to legislate for the fact that it does have a harmful impact.We know that gambling has a harmful impact on our communities. Every day New Zealanders lose $5.5 million on gambling—$5.5 million every single day. That is not insignificant. It is about $2 billion a year and half of that $2 billion a year—I think Kevin Hague pointed this out—goes on the pokie machines. The pokie machines are probably the most insidious and nasty and most addictive form of gambling that there is out there. Of course the pokie machines are one of the primary forms of gambling that occurs outside of casinos. They are a little bit more hidden away in darkened rooms usually out the back of the pub where people just quietly spend hours and hours and hours spending their pay cheque—Denis O’Rourke: Why shouldn’t they if that’s what they want to do. It’s personal freedom.IAIN LEES-GALLOWAY: It is personal freedom says Denis O’Rourke just as it is personal freedom to go down to the pub and spend some money on drinking alcohol. Yet I know that that party voted in favour of legislation that was designed to reduce the harm caused by alcohol because families lose an awful lot of money to alcohol addiction just as the lives of families the most vulnerable families that that member should be standing up for—the most vulnerable families that that member should be standing up for—are ruined by problem gambling. This is the “member for problem gambling”. This is the member who wants to see vulnerable families harmed to see children not have food put on the table to see people miss their mortgage payments and to see people indebted to finance companies because they have lost their money on gambling.That member should be ashamed. That member should be absolutely ashamed for standing up for the gambling industry and for not being prepared to stand up for vulnerable families. The New Zealand Health Survey—Hon Dr Jonathan Coleman: He’s lost it.IAIN LEES-GALLOWAY: Again if the Minister Jonathan Coleman does not think that MPs should get passionate about the most vulnerable people in our society—I know what that member gets passionate about. He gets passionate about tax cuts for the rich he gets passionate about ensuring there are plenty of loopholes and he gets passionate about corporate boxes and smoking cigars. He gets passionate about a lot of things but he obviously does not get passionate about the most vulnerable. So if he thinks I have lost it because one of the things that annoys me the most is when members of Parliament are prepared to defend industries that prey on the most vulnerable people in society then I think that tells you a lot more about Jonathan Coleman’s values than it does about mine.The New Zealand Health Survey reported that 3 percent of adults about 87000 people experienced problems due to someone’s gambling in the previous 12 months. A lot of the harm caused by gambling is not just to the person themselves. It is not just to the gambler. It is to their wider families and their wider society and community. Two out of five regular pokie players are likely to have a gambling problem. I hear the members in New Zealand First saying: “What about the sports clubs? What about the community and voluntary organisations?”. Like Chris Hipkins I have been involved with organisations that have relied on donations and funding from organisations that raise their funds through pokie money. But of course the only reason—the only reason—we are reliant on the funds from gambling to support community and voluntary organisations is that we are not prepared to fund them in some other form. That is the only reason.So I do not have any truck with people who say: “What’s the impact going to be on voluntary and community organisations?”. If members of this House are so concerned about those organisations that do good work in our community and support youngsters to get involved in sport and all the myriad things that these organisations that rely on the funds from pokies do then we should establish a fund to make sure that those organisations can be funded without the need for gambling money. Because what it is essentially is a tax on the poor and the vulnerable. It is a tax on the poor and the vulnerable in order to fund organisations that should be able to rely on more reliable and more seemly forms of funding than a tax on the poor and the vulnerable which is essentially what gambling is.I am no prohibitionist. I am no prohibitionist and members around here will know that but we do need to make sure that we have a transparent and conflict of interest - free regulatory system to ensure that those proceeds that are collected from gambling are appropriately deployed.I have to say I got a lot of those statistics that I used to demonstrate just how harmful gambling is in this country from the Health Promotion Agency website because the Health Promotion Agency is of course the Government-mandated organisation to deal with and try to reduce the effects of harmful gambling just as it is involved with trying to reduce the harmful effects of other addictive activities and other health issues.I have to say that the information is very useful and it does a very good job but if we are going to deal with reducing conflicts of interest in the regulation of gambling then I think that the Health Promotion Agency needs to get its own house in order by dealing with the conflict of interest that Katherine Rich has. She is on the board of an organisation that is supposed to reduce the harm caused by alcohol and that is supposed to reduce the harm caused by diabetes and obesity and heart disease. Yet with her other hat on—and we know about the difficulty that the Prime Minister has with his multiple hats and the conflicts of interest they can create for him—she comes along to select committees goes along and lobbies Ministers talks to bloggers—The ASSISTANT SPEAKER (Lindsay Tisch): Order!IAIN LEES-GALLOWAY: Well you know this is an important component—The ASSISTANT SPEAKER (Lindsay Tisch): It’s about gambling.IAIN LEES-GALLOWAY: This bill is about reducing conflicts of interest and the organisation that is mandated with reducing the harm associated with gambling which is what this legislation is all about is the Health Promotion Agency which has to deal with an enormous conflict of interest in its own house. This is the situation for Katherine Rich who lobbies for the alcohol industry who lobbies for the sugar industry who lobbies for so many businesses that cause harm and yet she is there on the Health Promotion Agency supposedly doing the exact opposite meanwhile funding who knows who to attack anybody who speaks out against the alcohol industry or speaks out in favour of greater regulation of food that causes harm.Gambling is something that people can enjoy. I put some money on the Melbourne Cup the other day. It was the first time I have placed a bet in quite some time.Ian McKelvie: Who’d you back?IAIN LEES-GALLOWAY: Well I went for the box trifecta and I had Red Cadeaux and I had Protectionist. Silly me I did not back the New Zealand horse and I do not want to dwell on how that impacted me financially. But anyway $10 was spent for a bit of fun and that is probably my gambling for the year. But that is not the story for so many people. That is not the story for so many people. For so many people the day the pay cheque arrives they are on the pokies spending money that should be spent on their rent that should be spent on their mortgage that should be spent on food and that should be spent on their children. Gambling can be addictive for a significant proportion of the population; therefore we need to have good regulation.We do need to have good regulation and so that is why Labour supports this bill and that is why Labour MPs such as myself get passionate about issues that affect the most vulnerable in society.JAMI-LEE ROSS (National—Botany):After the very impassioned speech from Mr Lees-Galloway and the interjections from the “Letter-box Man” in New Zealand First I do not feel there is much more I can add. There is a bill here that addresses some important issues that the House and the select committee should consider. I commend the bill to the House.A party votewas called for on the questionThat the Gambling Amendment Bill (No 3) be now read a first time.Ayes108New Zealand National 60; New Zealand Labour 32; Green Party 14; Māori Party 2; ACT New Zealand 1; United Future 1.Noes11New Zealand First 11.Bill read a first time.Bill referred to the Government Administration Committee.