Standards and Accreditation Bill — Second ReadingText is incorporated into the Bound VolumeStandards and Accreditation Bill — Second Reading[Sitting date: 19 May 2015. Volume:705;Page:3402. Text is incorporated into the Bound Volume.]Standards and Accreditation BillSecond ReadingHon PAUL GOLDSMITH (Minister of Commerce and Consumer Affairs): I move That the Standards and Accreditation Bill be now read a second time. The purpose of the bill is to ensure New Zealand’s standards and conformance system is viable and well functioning and meets the needs of business regulators and consumers into the foreseeable future. The bill achieves this by putting in place new arrangements for New Zealand standards development and approval and by updating the institutional arrangements for the Testing Laboratory Registration Council to better reflect the nature of its functions. The bill brings together the law relating to standards and accreditation of conformity assessment bodies and it repeals and replaces the Standards Act 1988 and the Testing Laboratory Registration Act 1972.The new arrangements for standards include the establishment of the New Zealand Standards Approval Board and the New Zealand Standards Executive. The board will approve New Zealand standards and membership of standards development committees and advise the responsible Minister on the currency of New Zealand standards the priority areas for the development of New Zealand standards and the review of existing New Zealand standards. The Standards Executive will be an independent statutory officer located in the Ministry of Business Innovation and Employment. The Standards Executive will be responsible for standards development and will assume responsibility for New Zealand’s membership of the International Organization for Standardization and the International Electrotechnical Commission. These new arrangements will replace the Standards Council which will be disestablished.I have heard the concerns regarding the independence of the standards system. Stakeholders can be assured that this has been a key consideration in the development of the new arrangements. The Standards Approval Board and the Standards Executive are statutorily independent. Neither is subject to the direction of Ministers. The board will be guided by decision-making criteria in the legislation when considering proposed standards and proposed membership of standards development committees. The Standards Executive will be required by the legislation to continue the practice of developing standards by using independent committees of technical experts approved by the board reflecting an expectation of international and domestic standards communities. I am confident that these and other measures will continue to support the independence of the standards system. I also note that there are a number of different institutional models for standards around the world including where the standards development function is located within the Government agency.The current cost recovery model for standards will be strengthened by this bill. The bill provides a framework to allow the Standards Executive to enter into arrangements that cover the life cycle of standards balancing initial development and approval costs with ongoing costs for maintenance and access. This will provide a sustainable financial footing for the standards system—a key driver for change.In relation to accreditation the bill updates the provisions of the Testing Laboratory Registration Act 1972 to reflect the contemporary nature of the functions of the Testing Laboratory Registration Council that relate to accreditation of testing and inspection services. The bill will also rename the council as the Accreditation Council.I commend the Commerce Committee for producing useful commentary in only 4 months and I thank those who submitted on the bill for their contribution. The committee’s analysis of submissions has resulted in a number of sensible recommendations. I am pleased to say that the bill has been amended to provide a more flexible pragmatic and proportional approach to managing actual and perceived conflicts of interest for standards development committee members.As I mentioned the standards will continue to be developed using the committees of technical experts and the representatives of consumer and worker organisations. It is important that any conflicts of interest are identified and managed to ensure transparency and confidence in the standards development process. The bill now strikes a more appropriate balance between ensuring people with the right knowledge and expertise can participate in standards development committees and avoiding capture by a particular interest. The definition of “personally interested” has been altered to narrow the range of interests that it captures. Second potential standards development committee members must disclose any interests to the Standards Executive before their membership is proposed to the Standards Approval Board and on an ongoing basis if interests arise while they are on standards development committees. Third the bill is now explicit that a chairman with statutory functions will be appointed for each standards development committee. The chairperson must not be personally interested.A new provision gives the chairperson a role in managing conflicts of interest in consultation with the Standards Executive. The Standards Executive will support the chairperson in managing the conflict of interest. The register of interests relating to a standards development committee will be available to the Standards Approval Board when it is considering a draft standard for approval. This allows the board to have regard to the nature and extent of the interests when approving or declining a proposal.Another aspect I would like to highlight is the addition of provisions to clarify that New Zealand will continue to participate in standards development committees run by other standards organisations such as Standards Australia. This has always been the intention but the bill now makes it clear that the Standards Executive will propose New Zealand nominees for international and joint standards development committees whom the board will approve or decline.Some changes were also made to clarify the existence of copyright in standards which was a particular concern of some stakeholders. Other changes to the bill are minor and technical in nature and include the deletion of definitions no longer required.In conclusion I once again thank the members of the Commerce Committee and those who provided submissions. I reiterate my view that the bill is stronger for having been through this process and is more able to provide a sustainable responsive standards and conformance system that can facilitate trade provide a platform for productivity and innovation and contribute to health and safety outcomes. I commend this bill to the House.KRIS FAAFOI (Labour—Mana): Can I thank the Minister of Commerce and Consumer Affairs for his contribution to the beginning of this second reading of the Standards and Accreditation Bill and also thank the Commerce Committee. We supported this bill at the first reading because we wanted this bill to go through the select committee process. We had concerns that we expressed at the first reading and we thought that because we wanted to hear from the sector those who are experts in putting the standards process together. We wanted to make sure that the concerns that we had heard from the industry and that we had ourselves got a public airing. It was not an adversarial select committee process; it was respectful. We heard a lot of submissions from people who are experts in this area. Those submissions only solidified our concerns that we had at the first reading of this bill. Therefore from this stage on unless we see a significant amount of amendment at the Committee stage—and I am not necessarily that hopeful—Labour will not continue to support the Standards and Accreditation Bill through its further passage through Parliament.It may sound like a mundane piece of legislation but it actually is very important. Standards affect us every day. Whether they be in a health and safety setting the processes we use are very important in a health and safety context and in some of the equipment that we use. Some may have varying degrees of opinions as to what kinds of standards we should have in our health and safety area but it is very important that we do have standards to make sure that workers and their customers and anyone else who is in a workplace is as safe as they possibly can be.Of course we have seen through the Christchurch earthquake that having standards around construction is very important. There has been a royal commission into one particular incident. So making sure that we have the process right in terms of building and construction and what is proposed in this bill is very important in terms of the safety of our buildings for the population of New Zealand. Also in an electronic sense we are becoming a much more digital world and we need to make sure that we have got good standards in place there. So although it might sound mundane it is very important that we have a very effective and sustainable standards process.But we do not believe that the proposals in this bill for a number of reasons will create an effective and sustainable process for coming up with standards in New Zealand. There are a number of areas that we had concerns about before the select committee process and we continue to have them. They do go to the independence of the new body that is created within the bill. As the Minister said the standards body that precedes the new body is to be disestablished and is going to be morphed into the Ministry of Business Innovation and Employment one of the superministries of Steven Joyce. We have an issue with the independence and it is not just us. A number of the submitters as I will get to later have an issue with the perceived and real lack of independence of that body now that it is located within the Ministry of Business Innovation and Employment.The Minister also mentioned that one of the key drivers of this piece of legislation was to make sure that the standards process was financially sustainable. We and others through the select committee process have real concerns about that and also about the ability to produce public-good standards and who pays for that. There is an argument that if a private business or an industry wants to come up with a standard there is a commercial benefit to it but there are a lot of standards where the standard is of a public good and I guess the big question mark around that is who pays for that. That was obviously one of the drivers behind the review of the standards process. We do not believe that this piece of legislation addresses that especially when it comes to the issue of public-good standards. Also again around health and safety our good friends at the Council of Trade Unions believed that there was not enough input in the process.Brett Hudson: Very good friends.KRIS FAAFOI: Well they are our good friends. They represent workers and being a party of workers we will stick up for workers 7 days a week 24 hours a day.Can I first move to the cost issue and point to a submission—if it is OK with you Mr Deputy Speaker I am going to be quoting quite extensively from some of the submissions to the select committee—from Diane Baguley who has been a member of the joint Australia - New Zealand committee for quality management standards since 1995. She has a lot more expertise around this area than me. I must add that this submission is dated 1 January. It was important enough for Diane Baguley to be sitting at her computer to put this submission together on the very first day of this year so this is not something that she is taking lightly. The fifth objective in the overview was around the financial sustainability of the standards process and her submissions did say: “It is a practical rather than a strategic imperative and could conflict with the first three objectives. However it seems to have been the main driving force for the change. I consider that there have been clear reasons for the Standards Council being unable to maintain financial viability under the … Act”—which we are amending—“in particular refusal by the relevant Ministry to support a strategy for funding public good standards … together with lost opportunities by government departments to reduce duplication of effort in standards development.”I think what you have got there is a clear indication from someone who has had 20 years in this area and has a major concern that when it comes to those public-good standards that I talked about before—ones where a commercial entity might not necessarily be the one that wants to front up with a bill—there is an onus on the Government of the day to fund the Standards Council as it stands currently to make sure that those public-good standards are done. Diane Baguley obviously is saying here that this Government just basically refused to do that. I think that would be a concern to most New Zealanders who would want to see a lot of these public-good standards processed.She also went on to say that the British Standards Institution pointed out in 2012 that it was “extremely rare that a national standards body exist with no financial support from the government.”—that is the British Standards Institution looking at our situation. She said: “The development of standards and active engagement by New Zealand in the international standards community are essential parts of the infrastructure for”—I want to make sure I emphasise this—“trade innovation and consumer protection.” So here we have an expert in her field saying that by the very fact that this Government is kind of stepping away from its responsibility to properly fund the standards process in the eyes of the international sector that looks at standards this could seriously affect our reputation and our future in trade innovation and consumer protection.I also want to talk to the lack of independence concerns that we had before this piece of legislation went to the select committee. I do want to quote from a submission from the Centre for Advanced Engineering—again people who have much more experience than I in this field. In its very opening remarks in its submission it says: “The Bill presents a very major change to the way Standards are prepared and approved. [The Centre for Advanced Engineering] is concerned about the lack of rationale for these changes that the Bill contains provisions which appear unworkable that much detail about how the new system will work remains unclear and that the proposals could lead to significant dysfunctionality and poor outcomes for industry.” It goes on to list some examples of what it thinks may happen.I do acknowledge that the Minister did say that there were a number of changes that were made in the select committee but that goes nowhere near close enough to the concerns that we have about the lack of independence of the new standards body now that it is going to be put within the Ministry of Business Innovation and Employment. This decision was not taken lightly because we know that this process is very important for every New Zealander in everyday life and in every walk of life. We want to make sure that we get the standards process right. We do not believe that our international reputation is enhanced that the efficiency of the standards process is made any better or that the driving force behind this change is whether or not it is cost-effective. We do not believe that it meets those three tests.MELISSA LEE (National): It is a pleasure to rise to speak on the second reading of the Standards and Accreditation Bill. I begin by thanking the member who just sat down Kris Faafoi. In his opening remarks he talked about the way that the Commerce Committee actually operates in a collegial manner and I have to agree with him—Chris Bishop: Very well chaired.MELISSA LEE: Thank you very much Mr Bishop. I have to agree with him that I think we do try as a committee to work together and respect the fact that different members may have a different view. We even run a Twitter competition on who in our committee bakes the best cakes and so far I have to say that the effort that Judith Collins and Clare Curran—[Interruption] They actually did much better than some of the other members who had gone and purchased their cookies and some of their names will remain hidden.The purpose of this bill as the Minister has laid out and spoken about is to amend and consolidate the law relating to standards and conformity assessment bodies and to repeal and replace the Standards Act 1988 and the Testing Laboratory Registration Act 1972 to ensure that New Zealand’s standards and conformance systems are in fact viable well functioning and meet the needs of businesses regulators and consumers into the foreseeable future. When we actually look at standards I guess we need to discuss exactly what standards are and why they are in fact so important to New Zealand’s economy and safety. Standards are agreed specifications for products processes services and performances. In addition they are generally voluntary. Firms can choose to use them to support competitiveness firm productivity and trade. If for example an electrical product is marked as having met a standard it has satisfied the minimum safety requirements and therefore it is easy to see why standards are crucial for our safety.But what impact do they actually have on our economy? I think earlier other members have talked about the Standards Council. Currently the Standards Council maintains a catalogue of more than 3200 standards where 82 percent of those are joint Australia - New Zealand standards many of which are based on international standards developed by the International Organization for Standardization and International Standards Certifications. Standards underpin billions of dollars of exports and enable New Zealand firms to be internationally competitive. Standards provide access to markets and give quality assurance of products and technologies that New Zealand uses on a daily basis. Standards improve the effectiveness safety and reliability of many goods and services used by consumers and businesses.The purpose and aim of the Standards and Accreditation Bill I have actually mentioned before. Standards solutions help to keep homes public buildings playgrounds electrical appliances and health services safe. For example in New Zealand we can go to a doctor knowing that they have received the appropriate formal training needed to be a doctor and to best serve the interests of the patients concerned. However in some other countries patients do not always have the peace of mind that they have in New Zealand and question the standards that are set in place—for example for the training that the said doctor might have actually gone through. I think in the previous reading in the first reading I talked about electricity and how different countries actually have different—Kanwaljit Singh Bakshi: Voltage.MELISSA LEE: —voltage the kinds of sockets that they have. Thank you very much Mr Kanwal Bakshi. Thank you for giving me that word. Having standards actually means that we can go right across the—would it not be fabulous if we had the same socket for the rest of the world so we did not have to take away different jacks whenever we travel overseas?Kris Faafoi: Imagine.MELISSA LEE: Imagine that—imagine that. And you are opposed to having standards.At present New Zealand has measures in place to ensure that standards are met and satisfied but improvements could be made to our existing standards arrangements. For example in 2012 the standards and conformance infrastructure review happened triggered by concerns held by the Standards Council about the financial stability of New Zealand’s standards arrangements following several years of deficits and the variable demands for standards. The Standards and Accreditation Bill responds to the finding of the review. During the select committee process we also heard that at different times different industries are satisfied about some portions of the standards we actually have and other industries are not very happy. And when membership of the council changes then the other industries are quite happy while the new group is not necessarily happy. I think that was when the select committee talked about the perceived conflicts of interest that might actually appear in the council and how this proposed change may fix some of the issues.Our National-led Government is focused on boosting growth and creating jobs. Through the Standards and Accreditation Bill we can contribute towards a more productive and competitive economy. Standards can be improved in a variety of ways and also for a variety of sectors ranging from as I said the energy sector to the health sector the disabilities sector environmental management information technology—to name just a few—and many sectors where standards could be improved. We sought stakeholder views on the effectiveness of current arrangements for standards and on options for changes to organisational arrangements for how standards could be developed and improved.The Standards and Accreditation Bill aims to improve the current way things are done. What we do now and how we actually improve things is by establishing a new independent statutory board to improve New Zealand standards to ensure that independent standards development committees will continue to comprise industry and technical experts. There were some concerns that that might not actually happen but we are saying that it will happen. Consumer representatives and regulators will be involved. Establishing a new independent statutory officer within the Ministry of Business Innovation and Employment to oversee the development of standards I think is very important.I have mentioned this in different conversations that I have had about this. In some countries having an officer within an organisation a ministerial organisation like the Ministry of Business Innovation and Employment is seen as giving credence to something that the Standards Council could possibly never give the credibility for. And having an officer based out of the Ministry of Business Innovation and Employment is actually so much more important when we are doing trade with overseas countries—for example with Asian countries. I think it is very important that we have this establishment of a statutory officer within the Ministry of Business Innovation and Employment.We are amending the Copyright Act to preserve existing intellectual property standards. I think it is very important that to protect our standards we are protecting the copyright that already exists. In short the new bill will better align standards development with important Government priorities that are vital for our economy such as innovation and trade facilitation as I have said earlier. When we are dealing with other countries it is actually very important to see that officers are based within a Government department rather than in an organisation that is not part of the Government.The Commerce Committee received 21 submissions. I know that Mr Faafoi talked about some of those. In fact we heard 13 submissions. I believe that the committee had a very robust discussion and we came to a good conclusion. I think this is a fantastic bill. I commend it to the House.CLARE CURRAN (Labour—Dunedin South): The Commerce Committee did have robust discussions and it is a hard-working select committee which I think is developing its own standard for the quality of baking which may at some point become a publishable standard. But I would point out—and I am sure the members on the other side of the House know quite clearly—that the Labour Party got to the end of this process and could not support the Standards and Accreditation Bill.This is one of those unusual situations in a select committee where you go into a sitting and hear the submissions you do not feel that it is a particularly controversial bill and your ears are open to everything that is being said but the more you hear from the submitters the more concerned you become. You get to the point which is what the Labour members did where you just cannot support the bill as it stands even with the amendments. I would describe those amendments as being very once-over-lightly amendments. I would have liked to have heard from the Minister of Commerce and Consumer Affairs in his opening remarks today about what further amendments he thinks would be appropriate given his review of the progress of this bill before the House and the fact that he now has had the chance to have a think about it.I would make the point that it is a clear sign of an out-of-touch Government and of arrogance when you have submitter after submitter after submitter coming before a select committee and saying: “There is something fundamentally wrong with this bill. Please listen.” And these are organisations that represent thousands of members working in professions such as the Institution of Professional Engineers consulting engineers incorporated architects public works engineers and the New Zealand Building Industry Federation which said: “Standard-setting should not be subject to direct political influence by the government of the day.” That is the crux of the problem in this bill. It is the lack of independence perceived or otherwise by putting such an important function of democracy—standards setting—inside a massive Government department while appearing to give it independence. I am not saying that there was not an attempt to try and provide independent governance but the mere fact that the standards-setting body has been absorbed into a Government department is the fundamental issue in this bill.I think that is really what we are talking about today. It is that the submitters and the Labour Party and I hope other parties in this House realised that this was actually a backwards step and that you have got to ask yourself what lies behind it and what is the reasoning. Well fundamentally the reasoning is cost cutting.Chris Bishop: Oh!CLARE CURRAN: Well there is no other demonstrable—Mr DEPUTY SPEAKER: I am sorry to interrupt the member. The time has come for me to leave the Chair for the dinner break.Sitting suspended from 6 p.m. to 7.30 p.m.CLARE CURRAN: When I was cut off in mid-flight I think my last word was “demonstrable”. So I will start again with that which is to say that it is demonstrably arrogant and out of touch for this legislation to pass through the House without more amendment. This party on this side of the House is the party that listened to the submitters. That is the party over there National which has just railroaded through this legislation which should not be controversial. It had its gestation back in the previous Labour Government around a review that was undertaken and there was a piece of legislation that came forward but this Government threw that out and then came back with this piece of legislation which brings the important independent function of making standards inside a massive Government agency.I want to refer to the regulatory impact statement on this. When we had the first reading of this bill we took heed of the advice that was given around this the concerns that were being expressed and we said that we would vote for this piece of legislation to go to the select committee but that we would be listening very carefully to submitters because of what was raised in the regulatory impact statement. This advice said: “The advice we have received suggested that overall costs of Standards development can be reduced by moving the function into a larger organisation.” That was also my point earlier on which was that what really lies behind this bill is cost cutting and cost saving. It said: “However other changes to the environment we are anticipating such as a desire by regulators to make their documents available to key users at no or low cost may change the costs that specific commissioners of Standards pay over time.” Therefore that could not be predicted and there may not be cost savings. It went on to say: “Some stakeholders have indicated the risk that experts may no longer be willing to participate on Standards development committees given their perception that the independence of Standards will be eroded under the proposed changes. We consider experts will continue to have incentives to participate however the actual impact is uncertain.”This has all been borne out in the select committee in the submissions that came before us. This was a very highly respectable very diverse group of submitters including from Water Safety New Zealand which said that industry consultation should be required in the preparation of the work programme. Well that has not been properly addressed. The Centre for Advanced Engineering—so we have gone from water to engineering—said that “MBIE as the building regulator should not be in the business of drafting standards many of which are building sector related. The relationships as set out in the Bill between the Minister the Standards Approval Board the Standards Executive are awkward and unnatural and could easily lead to significant difficulties.” I grant that there were some amendments around this in the select committee but they did not go far enough. The Centre for Advanced Engineering also said: “The [removal] of ‘personally interested’ people and parties from the standards setting process … is impracticable”.Also the Electricity Engineers’ Association expressed similar concerns. It said “… the apparent unlimited powers of the independent statutory officer (SO) the NZ Standards Executive to among other important functions decide the membership of standards committees … decide or influence the information placed before the Board …”. It was expressing concern about independence about bringing this important function inside. Let us just remember what some of those standards actually achieve. They set the standards for buildings such as buildings in Christchurch that were affected by earthquakes such as standards at Pike River in the mining industry—standards that have real health and safety implications for workers in their workplaces for New Zealanders who are going about their general business and expect that industries and services that are provided for them have safe standards attached to them.There are too many questions about this bill. There are questions around the independence the conflicts of interest and the international reputation of New Zealand standards as was raised by Standards Australia. If the reason for this bill was to save money and it is questionable about whether it will actually save money then this is actually a bill that needs further review and needs further amendment and the Labour Party cannot support it.BRETT HUDSON (National): It is an absolute joy to rise in support of the Standards and Accreditation Bill in its second reading particularly so because we have heard some very divergent views tonight. There has been a lot of sound rational argument from this side of the House from people whom I was fortunate enough to sit on the Commerce Committee with but I have to say that I am not completely certain that members on the other side were actually at the same hearings that I was at. Along with the submissions we heard we also got a very extensive set of reports from the Ministry for Business Innovation and Employment and it really strikes me that the two members opposite who have spoken to date just really either did not read or did not grasp those reports.I will get to that but before we get there I think it is important to remind ourselves of why we are even looking at this bill because we are not creating legislation for the sake of it. This forms part of this Government’s plan to grow the New Zealand economy through our Business Growth Agenda particularly the parts that are about structures processes and supports to help businesses grow and to compete both at home and indeed abroad. Standards improve the effectiveness safety and reliability of many goods and services that are used by consumers and businesses every day throughout our economy. The proposed changes are aimed at ensuring that our standards system is well functioning and is meeting the needs of today and into the future.In particular in supporting our Business Growth Agenda there are two key points. Firstly a well-managed standards system builds innovation by facilitating the creation and diffusion of technology by codifying technical excellence. Secondly the changes that we are proposing support exports by preserving New Zealand’s connections to international standards organisations and ensuring that international expectations are met.Let us for a moment just turn to what the key changes of this bill are. Firstly we are proposing a new standards board with statutory independence that will be responsible for reviewing and approving standards. Likewise we are proposing a Standards Executive again who is statutorily independent who will be independent of the organisation that he or she resides in but will be based—to help foster collaboration in alignment with the growth plans across our economy and particularly with the building and construction sector—within the Ministry of Business Innovation and Employment. But they will like the board have statutory independence. In addition we will have independent standards development committees. Those committees will include industry and technical experts consumer representatives and regulators. We will also amend the Copyright Act to ensure that we both protect intellectual property within New Zealand and particularly as one speaker noted we will continue to work with Standards Australia which raised a very very important point with us during the select committee hearing.In the select committee hearings we received 21 submissions 13 of which we heard in person or by teleconference and a number of issues were raised. I would like to cover some of those. The issue of independence—raised by many—was that by having these functions particularly the Standards Executive residing within the Ministry of Business Innovation and Employment somehow that might lead to undue influence from the ministry on them and erode their true independent nature. Well quite frankly there is nothing more powerful in terms of independence that this Parliament can confer on any individual or anybody than statutory independence which is precisely what both the standards board and the Standards Executive will have under the proposed legislation.Even more important than that simple piece of legislative fact is evidence. I have spent over 20 years prior to entering Parliament in corporate company environments the commercial world and the information and communications technology business and most of those years were with fairly large companies or multinationals. I can tell you that if you want to do your level best to make true collaboration or influence tougher then put someone in the same large company with a separate reporting line. It is as tough as you can imagine to get quite the level of cooperation and collaboration that that company and its shareholders would like. That is a bit flippant but if you were to ask these businesses out there in the commercial world they would agree. They are of such a size and a complexity that they need to have the structures they have but they would be the first to admit that those structures cause challenges when it comes to working together effectively for the one objective that that company might have. So that experience for one would say that actually putting the Standards Executive in the Ministry of Business Innovation and Employment does not actually immediately mean that there is any erosion of their independence at all.But even more important than the anecdotal experience of one member of this House how about the real-world example of the Ministry of Business Innovation and Employment itself? Within the ministry we have three other individuals or groups in the same situation. We have the Registrar of Companies we have the Commissioner of Patents and we have the Official Assignee—each of them with their independence each of them resident within the ministry and not a single suggestion has come from a member of this House or anyone submitting that their residence within the ministry has in any way compromised their independence. The facts of the real-world situation show us with absolute clarity that the mere fact they are resident within the ministry does not automatically mean that there is any erosion of independence. When I have been hearing the members opposite speak and thinking of the examples I just cited—to paraphrase Daniel Patrick Moynihan they are entitled to their opinion but not their own facts.Another problematic area that was raised from the submitters was stakeholder representation. This is being met through the appointment of relevant individuals to standards development committees. Within that there was a question of conflicts of interest particularly if you have people from the industry serving on these committees. The argument and the way the bill is currently structured is that if you wish to have the best possible standards development committee for the standard that is being developed or reviewed then you need the flexibility to appoint the very best and most experienced of people from a range of areas. It could be academic. It could be industry. It could be consumer. There is any number of groups and individuals that might be relevant for a particular standard. So in actual fact by incorporating the flexibility we have we actually allow for the committee to comprise the best possible members while giving the Standards Executive in particular in proposing those people the ability to manage conflicts of interest.We need industry experts on board—people with real-world working knowledge around the standards that they are creating or that they may be reviewing. If you have a blanket restriction simply for instance if they happen to be an owner of a company that might be seen to benefit in some way from a standard because it is in that industry or in the case of the masters of the people opposite—the Council of Trade Unions—who said that even if you were an employee of a company in the industry you should be excluded then all you are really doing is constraining the quality of experience that you can actually have on the committee. You are basically setting yourself up for suboptimal standards to be created. It is quite stunning that it was even mooted in the first place.The other one that those members raised was that stakeholders should nominate members of the standards development committee. Well again a flexible and better way of addressing that is that by making the Standards Executive have to engage with industry and stakeholder groups to identify suitable experts it allows for the most relevant the most appropriate people to be on board. We can ensure that they will engage with those groups because in order for a standard to be approved or amended the standards board must approve it. The standards board is required—this is from the departmental report—“to have regard to the importance of ensuring that … membership constitutes a balanced representation of … interests relevant to the proposed draft standard.” So just because the Standards Executive can propose the members of the committee the governance role of the board ensures that if the standard is to be approved the executive will have to engage with the right groups whether they are industry whether they are consumer representatives—no matter who they might be.I will finish up with the objections raised by Standards Australia. It raised an issue: 82 percent of current New Zealand standards are jointly developed with Australia and New Zealand and the rules as they were drafted would harm their intellectual property. So what we have done is made sure that that intellectual property will be preserved and our links with Standards Australia will continue. I commend this bill to the House.JAMES SHAW (Green): I rise to speak on the Standards and Accreditation Bill. I would like to start by commending the previous speaker Brett Hudson for the passion with which he spoke to this topic. Some of the previous speakers have mentioned the spirit of cooperation with which Commerce Committee undertook its work on the Standards and Accreditation Bill. I found that the process has been collaborative and thoughtful and I particularly want to commend the people who made submissions for the quality of their submissions because they were intelligent well-thought-out and very well-informed. They were very very useful to the work that we were doing as we were considering the bill.The Green Party supported the bill through the first stage to the select committee. We are broadly supportive of the intention of the bill. However we do have some concerns about it which at this point have not been addressed sufficiently so we will not be supporting the bill through the next stage unless those concerns can be addressed. There are three concerns. First of all does it solve the financial sustainability problem? Does it actually do the job that it was designed to do? The second concern is about the perception of independence. The third concern is about the trend of scooping up statutory bodies into the Ministry of Business Innovation and Employment which the previous speaker just referred to.In relation to the first one does it do the job that it was designed to do? We know that the current system of standards design and processing actually is not financially sustainable over the long term and there are significant bottlenecks in getting through the work programme that needs to be undertaken to get New Zealand’s standards completed. However we are unconvinced that the bill as it is currently designed actually enables that process to be any more or significantly more financially sustainable over the long term or to be able to expand the programme of work significantly.When I was in the United Kingdom I was involved in a couple of standards processes with the British Standards Institute one of which was around ethical fashion—fair trade fashion—and the second of which was around smart-metering. As some of the submitters said it kind of takes the amount of time to make a standard that it takes. You know it is a process that has a beginning a middle and an end and you cannot really compress that a great deal. So the only way that you can get through many standards at once is by having parallel processing—to actually be handling a number of different standards and having a lot of different processes at the same time. A number of different submitters actually pointed to this and said that they could not see how this new system that was being designed was going to enable a great deal more work to get done in terms of the parallel processing of different standards.The second concern that we have is about the perception of independence. I accept the points that the Government has been making about the independent board and the number of checks and balances that have been built into the system as it is designed so that it does have that independence from the ministry and Ministers. The problem here is actually one of perception. A number of people have referred tonight to the submission from Standards Australia which actually said in its submission over the phone to us that if we put this system in place it could not see how it would be able to continue to cooperate with us on future standards. Given that we have such a huge level of integration with Australia and with other bodies around the world particularly the UK and European jurisdictions it is really concerning that if they perceive that our standards body is not independent they will actually withdraw cooperation from us. One of the earlier speakers tonight talked about the extent to which standards underpin our trade our consumer guarantees and so on. It is sort of part of the system of global trade that we are obviously so heavily integrated into. That is a concern that also has not yet been met.The third one which is sort of a more general concern is that this Government does have a kind of habit of scooping up independent bodies and putting them into the Ministry of Business Innovation and Employment in particular. That is a sort of a trend that has concerned us. Over the last several years there have been a number of bills that we have spoken on about that and this bill kind of continues that trend as well. That is more of a general concern.We are actually open to supporting the bill but we do want really those first two sets of concerns addressed. The first is whether we can see how this actually enables a great deal more financial sustainability and whether we can we see how it really enables a significant increase in parallel processing of different standards at the same time. Does the bill actually do the job that it is designed to do? Does it fix that problem? And the second is the perception of independence. We did raise that in the select committee. My own concern with that is that essentially we were kind of told: “Well don’t worry about it. It is an independent body; it is not really a valid concern.” But I think that if it is a concern of some really significant stakeholders both inside the country and in terms of our trading partner countries then it kind of does not matter what our opinion is about it; it matters what their opinions and perceptions are. That to me has not yet been resolved. I felt that the response that we got was too sort of blasé about that.But if the Government can help us to overcome really those two primary concerns—firstly about the financial sustainability and whether it achieves the purpose and secondly this one about the perception of independence—then we would be open to changing our vote and voting for the bill in its final stages. So we will be looking for some Supplementary Order Papers from the Government in the Committee stage of the bill. Thank you.FLETCHER TABUTEAU (NZ First): I stated in the first reading of this bill and I will say it again that this bill arose from a review undertaken by the Ministry of Economic Development at the time some 8 years ago. It is highly important to note today that at the time the ministry actually stated categorically that its findings showed that the infrastructure relating to standards and accreditations was basically sound. Further the discussion document released by the ministry had no actual submissions regarding the governance arrangements of the current two Crown entities. I question therefore the need for this debate and the use of this House’s time for this matter at this present time. There are some issues and we have talked about some of those but they could have been dealt with within the existing legislation.New Zealand First like many of the other parties in this House supported this bill through to its first reading so that individual New Zealanders in the form of consumers the industry itself workers and experts within the standards and accreditation sector could have their say. It is becoming harder and harder I note for the public to have their say with this Government so when the opportunity arises we would support it.Many submitters spoke about the lack of sufficient detail provided in order to make truly informed submissions in the latest round of discussions. They suggested that this lack of detail will undermine the confidence that they and our trading partners need in order to maintain the current high standing of our standards and accreditation system. The concerns that the select committee heard from the public and industry have not been addressed in this bill. Some minor alterations were made by this Government in response to these concerns and New Zealand First does acknowledge the concerns around transparency in particular. The possible arising of conflicts of interest would actually we concede have been dealt with in quite a great level of detail and we believe would have answered those concerns.Tonight the members of the National Government have spoken about the need for the accreditation and standards system to move forward and do what it is that we need to do so that we can be a viable international trading partner. They seem to ignore the fact that we can do that currently under existing legislation. We do not need this bill and I will go into detail on the feedback from submitters as to why most of those who submitted also do not think we need this bill.We are not convinced firstly that these changes are actually needed as I have pointed out. Secondly having put this bill in front of this House and the public this Government seems to be undermining and compromising what to date has been an internationally recognised standards and accreditation process. I would submit that this Government is actually taking us backwards with this legislation.This bill’s intent is to ensure that the New Zealand standards and accreditation system functions well and meets the needs of businesses regulators and consumers. And actually these are admirable goals and New Zealand First would support this bill if we believed that these goals had been achieved in the rewrite. As has been raised repeatedly by others tonight New Zealand First shares the following concerns. In my address on the first reading of the bill I stated that we are yet to see evidence that proposed changes will ensure the financial viability of the standards and accreditation process. Unfortunately we continue to be concerned with statements made by the regulatory impact statement that if these new bodies sat within the Ministry of Business Innovation and Employment then there would be cost savings. No evidence has been submitted to be presented publicly justifying this stance.New Zealand First has yet to see evidence that the proposed changes will ensure the financial viability of the standards process. Although it could be argued that the system will be viable perhaps my interpretation of “viable” is that it will continue to function at a bare minimum which does not actually ensure safety or integrity for the New Zealand public or New Zealand businesses in an international context. This viability has still not been addressed. There has been no evidence or insufficient evidence to suggest that this bill will be any better than what we currently have with regard to efficiencies particularly around operational costs.We keep seeing a particular clause time and time again with this National Government. I refer to National’s numerous pieces of legislation where the Minister empowers himself or herself to pick the members of boards or committees. New Zealand First does not believe this is good enough. One of our key concerns is centred on the lack of independence that both the New Zealand Standards Approval Board and the renamed Accreditation Council would have. This concern was spoken to tonight but we do not think it has been addressed adequately.These two entities cannot and will not be independent if they are working within the governance structure of the Ministry of Business Innovation and Employment. The governance structure within the ministry means a lack of independence for the standards and the setting body. There have been no substantial changes to the appointment process. The Minister and the Minister alone will have the responsibility to appoint all members.Ministerial appointments and orders of council bypass the democratic process whereby each and every New Zealander can take the opportunity to have their say. The very possible and highly probable lack of representation of consumers and workers on the new board and council is of real concern to New Zealand First. There is a reference in schedule 1 of the newly worded legislation that states that when making his appointments the Minister must consider skills and experience including knowledge of the sectors that use standards but actually it is not sufficient. It is insufficient it is too broad and it does not ensure a real and meaningful representation of those directly affected by the matters relating to goods services processes and the practices of them.There is a significant lack of representation of consumers and workers under this new structure. There is nothing in the reworked bill that is specific enough to allay the fears that dispute this bill. This system and framework is supposedly seeking to represent consumers. Will consumers be able to contribute in a productive legal fashion? No they will not. All that consumers will be able to do is protest and complain from outside Parliament if the Government passes this bill. New Zealand First says that this is not good enough.To repeat we lack confidence that this bill will provide a voice for our consumers and the industries that are affected. This reworked piece of legislation still talks about a preference being given to the facilitation of trade within the criteria for accreditation schemes. We have a concern that there is no balance to this and that preference may be given to practices or players in order to facilitate trade whilst compromising standards. Is that a likely and reasonable assertion to this House? Under this Government without the independence we would seek from this bill yes it is more than likely.Hon Judith Collins: He’s reading his speech.FLETCHER TABUTEAU: I am. Given many of these issues that will undermine the whole framework around standards and accreditation I do not think that New Zealand’s reputation in this space will be upheld under the proposed changes in the bill. Submitters spoke to the Commerce Committee about this very issue.Standards need to be accepted internationally. Our trading partners need to have faith in the New Zealand system. If they cannot find that confidence and if they cannot be assured that New Zealand’s standards and accreditation process has not been compromised by a lack of impartiality and a question mark around its operational capabilities then we do New Zealand business a disservice.In closing I address the National caucus in particular specifically given the changes here to legislation. Other than the removal of the repeal of the two main pieces of legislation affected there are 40 other pieces of legislation that will need to be altered in order to ensure that this bill has its proper impact on the New Zealand economy. But given the recent history in this term alone with the number of amendments to legislation that this House has had to consider and work on I would caution this Government that it is putting too much of a burden on an under-resourced unit within this Government and it could create—and I suggest will create—problems. We need to look after our New Zealand businesses regulators and consumers. This bill does not do that. Thank you.Hon JUDITH COLLINS (National—Papakura): What a privilege it is to be able to speak to this most important bill the Standards and Accreditation Bill. I know it is important because of the quality and the length of the speeches that have preceded mine which of course will not be a read-out speech prepared for me by Winston Peters but in fact will be my own. Having said that if there were any doubt in the minds of the public as to the need for this bill all I would say to you is this: Labour the Greens and New Zealand First are against it; it has got to be good. If in doubt if they are for it be wary. They are against it. They started off being for it—I was a bit worried then—but now I know that we are on safe ground. Even though we have so much fun in the Commerce Committee with the really good-natured chair Melissa Lee the deputy chair Mr Brett Hudson and also my dear colleague across the tablefrom me Clare Curran—we have so much fun—I have to say that we do occasionally disagree. And that gives me hope because with total agreement in Parliament well that is not really democracy is it? It is the Opposition’s job to hold the Government to account and occasionally to let us know why we are here.I think it is just fantastic that the member who has resumed his seat is so concerned about this bill stopping trade. Well actually it is the other way round really. What this is about is actually saying: “Do you know? The standards people have been working really hard for a long long time.” That is the problem. It is taking too long for standards to come through—standards that are around trade and business—and this is a country of trade. So yes the legislation that this is going to replace has been around for a long time too—so long that even the previous Labour Government decided that it needed a review. What has happened between the previous Labour Government’s deciding that standards and accreditation legislation needed to be reviewed and changed and now? Well what has happened is actually about 7 years of Opposition for Labour—and that is about it really. It cannot find anything good to say so it is just not bothering to say it; unlike me of course who is always looking at the positives along with my colleagues on the Commerce Committee. I must say it is so good being the MP for Papakura—everything is positive apart from that terrible thing that we had the other day.Having said that seriously standards and accreditation are important. They are important for business. They are actually very important for our consumers. We are all consumers are we not? We all expect certain standards but actually in most cases standards are not compulsory unless they are legislated for or regulated for. The previous speaker—and I am not going to try to remember who he is—said something about how so much of the working parts of the bill will be taken care of by regulations Order in Council and therefore will not be subject to the democratic process. He has not been in Parliament for very long so I am going to tell him this. We have the Regulations Review Committee actually and regulations can be reviewed by that committee. That is a very powerful committee of Parliament. It is so powerful that I have never been appointed to it. I am sure the Deputy Speaker has been though. [Interruption] Yes you are on the right side there. I never have been. It is just too powerful for someone like me. What that committee does is actually look at those regulations. It takes complaints from members of the public. It takes complaints from MPs. And it can actually bring about changes. I would say that it is a significant check on the executive and the power of regulation making so members should be aware of that and take that into account.One of the reasons why you would not want to have a bill like this with all of the detail about regulations and everything that we would have in regulations in it is because of the fact that it takes a long time for legislation to come through the House. The fact that this piece of legislation has been incubating since 2007 tells us that it takes an awfully long time for such contentious legislation to come through the House. What that says to us is that if you want anything changed you need to have the power to have it changed quickly—particularly when you are dealing with trade. If everything was fabulous in the whole standards sphere we would not be bothering with this would we? Really would we? The fact is no we would not. It is not fabulous because the legislation that is being repealed has been around since 1988. I do not think DNA was even being used in 1988. Everything has changed since then. The Testing Laboratory Registration Act is also being repealed and that is from 1972. People on the opposite side of the House will remember that year; that is the year Labour won. It was a big year. It was the year my family voted for Labour—about the last time but there you go.Having said that I think it is really important that we try to keep up to date with things. So I see no problem with the Ministry of Business Innovation and Employment having some responsibility. It does not mean that it is in charge of how the standards are made or of what standards are made but actually it means that you have a Minister who is responsible if there is not enough funding and if there are not enough standards coming through. I would say this to the Opposition: you will be able to really hold the Minister and the ministryto account.So I think that is a really good thing—Stuart Nash: Imagine holding a Minister to account.Hon JUDITH COLLINS: Mr Stuart Nash MP for Napier says that is an excellent thing.Stuart Nash: Imagine holding a Minister to account.Hon JUDITH COLLINS: Well would that not be wonderful Mr Nash and while I think of it is it not great news standards-wise and accreditation-wise that the Hon John Banks has been exonerated today. Well what good news for justice coming through—fantastic. And I think all those people who thought such bad things about the Hon John Banks—my good friend—might now like to apologise. But there you go; that would require standards from the Opposition.Sue Moroney: A technicality—come on.Hon JUDITH COLLINS: Yes and Miss Moroney says: “Come on.” Well I know Miss Moroney that you would not be up to it. But anyway I am sure Mr Nash would because he is the next leader of the Labour Party and I think it will be an interesting day when that happens.Quite seriously standards are really important for our trade. We are a little country. We are a trading nation. This is how we make the money that pays the taxes that by the way pay our salaries that pay for Working for Families and that pay those who are having to be dependent on the State. How we pay for things is actually by trade. We are never going to survive by trading with ourselves: 4.5 million people—fewer people than there are in Melbourne—are not enough for us to be able to survive on. We cannot all knit things that we want to buy from each other. It is not going to work like that. What we need to do is trade and we are competing against some massive markets and some really big players. If we look at some of the huge players that our exporters have to deal with and actually have to compete with we need standards about which they can in fact say: “These are New Zealand standards and these standards mean something.” It is all very well to say it has all been fine in the past but actually do you think the leaky home issue came about because of excellent standards? Really? [Interruption] Do you really think it did? Do you really think that that helped? I do not think it did at all.I think it is time for a Government to take responsibility for standards and this Government is putting its hand up and saying: “We will take responsibility.” That is a really good thing. We are not saying which standards should be approved. We are not saying how to do it. But we are saying that this is important and we are going to take responsibility.Mr DEPUTY SPEAKER: This is a 5-minute call and I call Julie Anne Genter.JULIE ANNE GENTER (Green): The Green Party supported the Standards and Accreditation Bill initially at first reading to select committee and we certainly support the direction or intent that it is meant to implement. But unfortunately during the select committee process which my colleague James Shaw was involved in there were a number of concerns raised by submitters and we do not believe that the legislation addresses those concerns to such an extent that we can support it at this stage. I have to start probably by saying just how fundamentally important standards are. It is incredibly important that we have a process for setting them that is robust informed and absolutely independent. The previous speaker the Hon Judith Collins mentioned the leaky buildings fiasco and of course the leaky buildings fiasco came about because of changes to the standards that were made by a National Government which—Melissa Lee: Actually it was Labour.JULIE ANNE GENTER: Well there were changes made by Labour and by National and it was indeed Treasury that did not take the advice of the experts who were sitting in on the meetings and who said that it was not the Government’s role to regulate this sort of thing and that the standards of buildings would be sorted out in case law. I think the reason why we are quite concerned about this National Government introducing such a fundamental change to the process for setting standards is because there has been a pattern with this National Government of influence by businesses and industry and making decisions that make their lives easier in the short term but ultimately that can end up costing us all in the long term because what is cheaper and better for some players in the short term is not necessarily what is best for everyone—for consumers and for residents here in New Zealand. So it is incredibly important that we have a robust independent informed process for setting the standards.This bill is proposing quite a shake-up to the current system. I am not arguing that it does not need a shake-up but the main reason for the changes that was listed is that it is not financially sustainable within its current business model and its operating environment. What has not come through in the select committee process at all is how this changed process is going to solve that problem of financial sustainability so it is unclear that there are going to be any cost savings. It is possible that they will be recovering the cost through user chargers so that is just shifting the cost elsewhere and it is certainly has not been demonstrated that that is going to have a better result for the standard-setting process.The other two issues that my colleague James Shaw raised which we are still concerned about are first the fact that the legislation is not going to deal with the issue of parallel processing which is the ability for the multiple standards to be progressed at the same time. So there is a capacity issue which is not likely to be solved by the new model. And finally there is the perception of independence which was raised by a number of submitters. It is clearly very important to us as a trading nation that we are perceived to have a robust independent system for setting standards that can give consumers and other countries confidence in our standard-setting process.I would just like to raise the issue—because obviously we hear a lot from this National Government that because we are a trading nation we have to make it easier to trade and make it easier for businesses to do business—and point out that some of the most successful trading nations on the planet at the moment have very very high standards. They have robust processes and they are quite strict and yet they manage to be successful manufacturing economies that make their way on exports. Examples I am thinking of are like Germany which has a much different approach to its building standards and as a result it has healthier buildings longer-lasting buildings and more energy-efficient buildings. If we are going to tackle the crises of climate change and of inequality then standards are going to be essential to that. Some of the standards that have been set in the past have actually led us to an outcome where we have less-healthy buildings more energy-intensive buildings and it is through this process of standards that we can start to actually reduce the energy consumption of the economy to have healthier homes and longer-lasting homes. We need to ensure that we have a good process for setting those standards and we are not convinced that this bill is making the right changes.Mr DEPUTY SPEAKER: I call Stuart Nash—a 5-minute call.STUART NASH (Labour—Napier): If there is any doubt that there is a little bit of dissension in the National caucus we just have to listen to Judith Collins. I mean I do not know who sets the National speaking list—I suspect it might have been Jami-Lee Ross—but whoever put Judith Collins up to speak about trade obviously was out to set her up. When the Hon Judith Collins stands up and says: “Don’t trust anything that Labour and the Greens do.” I would say to the people of New Zealand that when that member starts speaking about trade and free and fair trade and good standards we have got to be worried because the one thing we know is that when Judith Collins speaks about trade it possibly means that any piece of legislation may lack transparency accountability and very definitely responsibility.Dr David Clark: What about Oravida?STUART NASH: That is true. What about Oravida? We are still murky about that. What the hell happened there? I do not know. No one knows. Mr Key does not know. Only Judith Collins and the Chinese officials know.But the former Minister was right in one respect—when she said that we need excellent robust standards that have international recognition. She is dead right. In fact in the regulatory impact statement the role of the standards is this: “Standards make an important contribution to the economic growth and health and safety. Standards promote innovation facilitate international trade and enable firms to leverage their competitive advantage. Many standards are also designed to increase safety and manage risk.” That is why we have on this side of the House a real problem with the bill as it stands because we do not think that this piece of legislation mirrors that in any way shape or form.Todd Muller must understand this. Todd Muller must have a huge problem with this and I will tell you why. Todd was at a senior level in a large organisation and Todd Muller understands Governments. He understands that governance is about managing risk and mitigating risk. That is what governance is about. But it is not just the reality; it is also the perception of risk and the fact that a large number of submitters highlighted the perceived conflicts of interest here is really telling.In fact let me read out what one submitter said and this is the Centre for Advanced Engineering and you could hardly say that this is a Labour Party organisation or anything at all like that. What it said was: “MBIE as the building regulator should not be in the business of drafting standards many of which are building sector related. The relationships as set out in the Bill between the Minister the Standards Approval Board the Standards Executive are awkward and unnatural and could easily lead to significant difficulties. The removal of ‘personally interested’ people and parties from the standards setting process is impracticable.”The real concern that I have about this—and I worked in international trade; I know how these things work—and the real issue I have with this piece of legislation and the framework it is setting up is that the Ministry of Business Innovation and Employment will simply not get the buy-in necessary to give this new body credibility. That is a real problem. James Shaw of the Green Party highlighted the fact that the Australian standards authority has massive problems with this legislation and if we cannot get on with our Australian brothers and sisters let alone everyone else—if they are voicing such major discontentment with this piece of legislation then it says that something is wrong. It might not be that there is—maybe it is only their perception and that is not the reality.Whatever the issue this legislation needs to change. It needs to go back to the select committee and it needs to be changed because the perception is that this piece of legislation will not do the job that is required by New Zealand by New Zealanders and by our international trading partners. That is why the Labour Party simply cannot support this bill. Thank you very much.KANWALJIT SINGH BAKSHI (National): I feel privileged to be given this opportunity to speak during the second reading of the Standards and Accreditation Bill. I would like to start by commending the Minister of Commerce and Consumer Affairs the Hon Paul Goldsmith for sponsoring this bill and Melissa Lee the chair of the Commerce Committee as well as the other members of the committee for their contribution in this process.Time and again National has laid stress on creating safer communities for New Zealanders and on making sure that the families feel financially secure and the economy is more competitive. One of the biggest signs of a healthy and productive economy is when the standards and the conformance system functions well and is able to meet the needs of consumers businesses and regulators. The bill we are debating replaces the Standards Act 1988 to ensure New Zealand’s new standards are modern sustainable and will fulfil the demands of consumers and businesses.The standards and the standardisation can make a real difference in the lives of everyone. It improves the effectiveness and the reliability of the goods that we use in our everyday life. In other words standards are agreed specifications for products services processes and performances that protect the health safety and the well-being of the public.If a product is marked as a standard it means that it meets the minimum safety requirements which is helpful for the safeguarding of our children and families. Standard solutions help in keeping our environment safe whilst at the same time it allows productivity to be increased whether we are at home or at work whether our kids are at the playground or whether our family members are using various health services.The Standards and Accreditation Bill was referred to the Commerce Committee. We received and considered 21 submissions from interested groups and individuals and heard 13 submissions in person. The Commerce Committee indeed recommended changes that provide a flexible approach to managing actual and perceived conflicts of interest for members of the standards development committees.The Standards and Accreditation Bill would firstly replace the Standards Council with the New Zealand Standards Approval Board rename the Testing Laboratory Registration Council as the Accreditation Council and make minor amendments to its institutional arrangements to reflect its functions more accurately. It will strengthen the current cost recovery model for standards. This will provide the NZ Standards Executive to set a fee for access to the standards and will allow it to recover the cost associated with developing approving maintaining and providing access to New Zealand Standards. Last but not least the bill allows the formation of standards development committees.Today’s newspaper highlighted the potential risk of an earthquake—a mega-quake—that would prove to be highly damaging to central New Zealand. We cannot fully predict what is going to happen next but we can certainly protect the country to some extent by minimising the impact of such a deadly disaster through the use of good standards.One of the key aspects of the bill is to establish a new independent statutory body to approve New Zealand standards which will comprise industry technical experts consumers’ representatives and regulators. Although it is a priority for this Government to build an economy based on investment and to be export-driven through our Business Growth Agenda the new model will ensure that the standards development is in sync with the Government’s priorities.Standardisation indeed plays a huge role in contributing to a more competitive productive economy. To promote the role of standardisation the Ministry of Business Innovation and Employment is taking several initiatives to contribute to economic growth and innovation. The ministry will be doing more on the trade facilitation front including making strategic choices about the International Organisation for Standardization and the International Electrotechnical Commission and about which New Zealand experts will participate in other standards-related activities—for example progressing the implementation of the Electrical and Electronic Equipment Mutual Recognition Arrangement with China.National is constantly working towards protecting the strong reputation of New Zealand standards by ensuring that it maintains its linkages with the international standards community including the international organisations for standardisation. By participating in international standards preparation New Zealand is able to ensure that New Zealand’s voice is heard.Standards New Zealand can identify areas where it should be active in ensuring that New Zealand industry the Government and consumers can provide input into standards being processed internationally. National has been keeping spending under control and is working hard to achieve a surplus and to reduce debt. We have been able to strengthen capital markets and progress our commitment towards a single economic market with Australia and we are on track to reduce our Crown debt to 20 percent of GDP by 2020. New Zealand—Dr David Clark: Capital debt is one of our biggest issues. Come on! How can the member say that with a straight face?KANWALJIT SINGH BAKSHI: If you want to see me come over here—I can see you.New Zealand is in good shape and we can continue to maintain New Zealand’s good reputation by improving the transparency of New Zealand’s company registration system lifting confidence in New Zealand’s financial market and progressing with changes to strengthen the development of New Zealand’s standards by passing this bill. The National Government is striving to make New Zealand a safer and more prosperous country and New Zealand is rated first equal in global anti-corruption by Transparency International and rated third by the World Bank for ease of doing business. We will continue to achieve more and endeavour to make all New Zealanders feel proud of this National-led Government. I commend this bill to the House.Dr DAVID CLARK (Labour—Dunedin North): It is a pleasure to get up to speak on this bill and to follow that member Kanwaljit Bakshi whose wide-ranging speech I must take issue with at several points. I think some of the claims made in that speech about capital debt and the Business Growth Agenda must be challenged. They cannot be left to lie on the floor of this House without being addressed.Similarly some of them were raised by the Hon Judith Collins who made—Mr DEPUTY SPEAKER: Do they relate to the bill?Dr DAVID CLARK: I assume they relate to the bill otherwise you would have stopped them in their tracks. The Hon Judith Collins raised the issue of taking responsibility on standards. The implementation of this bill hangs on the ability of the Government to implement it. I think we could reasonably doubt that this Government has the ability to implement this bill effectively based on its own track record in dealing with standards. That is the simple point I would like to make. The fact that standards are important was raised by the previous speaker the fact that they are important to our international trade was raised by several members opposite and I think it is important to recognise that this is a Government that has failed to diversify the economy. If those members say that setting these standards is a part of its growth strategy and I do believe that is part of what they were saying I think they are mistaken.I also think that a lot of the puffery we have seen in the House this evening does not reflect the very genuine concerns that were raised in the select committee as we debated the issues through. The issues do hang around what kinds of standards are set by whom and in whose interests and those are the matters that we should be debating in this debate this evening I believe.We are having an argument about whether and how we adopt the correct standards that are in New Zealand’s long-term interests. There was a certain irony I have to say in having Judith Collins raise the issue of the Government taking responsibility on standards. There was a certain undertone I think in her presentation. Whether she was challenging the Government over the matters of the Cabinet club or the Skycity deal and its lack of transparent standards and lack of accountability around that or the setting of the way in which the decisions around sending our young people overseas to Iraq was dealt with; whether it was how the Government Communications Security Bureau set-up was done—again in a non-transparent and unaccountable fashion as has been borne out over time—whether it was about corporate welfare and about how the deals were done with Rio Tinto or Chorus; or whether it was about how the Novopay standards were set and how the accountability around that was run I understand she will have some concerns. I have no doubt she has got some concerns.As my colleague behind me Clare Curran was saying there is always a subtext with that member opposite and I take her point there. So we do struggle on this side of the House to understand the talk of standards from that side—the way that those members say it is about the Government taking responsibility from some standards. In Judith Collins’ own words: “I don’t care what standards. They could be any standards.” Well it might be a start but there is certainly some irony in those comments that has to be noted right from the outset in my contribution.I want to also address a point raised by Melissa Lee the chair of the Commerce Committee who raised some critical comments about home baking and the level of performance in that respect. We will not go into the possible impugning of my reputation around baking that might be implied there but I do want to say that the issue she raised about having an electricity jack around the world which formed an important part of her speech has to be challenged. She said: “Wouldn’t it be good if we all had the same electricity jack around the world?” and she is right in one sense but she could be absolutely wrong in another and I think this is what the whole debate hinges on. The answer is yes and no. Yes if it is a safe phone jack that reaches a suitable standard and ideally one that is manufactured in New Zealand using New Zealand intellectual property. If that is what the world standard is and New Zealand is there at the standard-setting and sets it up in our own economic interests then yes we do want the whole world to be using the same jack to charge our phones or any other household items. But if the jack that the world is adopting is set to a Third World standard is made cheaply and is unsafe then no we do not want the whole world to have the same electricity jack. There is the nub of the issue. Actually without knowing it I suspect Melissa Lee has cut to the absolute core of what this debate is about.One of the issues that was brought up by many submitters as we discussed it in the select committee was how the setting of standards will be funded. We have already acknowledged that it is a cost-cutting measure. This is a way that the Government has seen to short-circuit processes and cut costs. That is not in itself a bad idea. If there are good costs that can be cut and we all benefit from them well no one would argue against that. But submitters raised concerns about our reputation in international fora and how they will be funded as budgets are squeezed in the area of standards setting and accreditation and about whether New Zealand will be at the table when decisions about the future of shall we say electricity jacks are made. Will there be New Zealand representation at the table saying: “We should have a world-class standard. And by the way in New Zealand we actually have one of the best manufacturers”—for argument’s sake—“of this particular product.”? Let us have a look at whether that should be the basis for setting the standards that the world adopts.We heard from several submitters their concern that this particular representation would wither away and New Zealand’s economic interests would not be protected. That leads as we know down the track we are already on which is towards an economy more and more and more focused on one or two commodities—on trading houses in Auckland currently on the dairy sector and on our overexposure to China in the primary trade area. These are concerns that the Reserve Bank holds. They are not concerns held just on this side of the House by the Labour Party; these are concerns that the Reserve Bank has been iterating over and over and over again. They affect every New Zealander.The prosperity we enjoy is based upon having a sound economy—an economy that in our past has been sound but is looking more dangerous in our future as we focus more and more on fewer and fewer commodities. We have seen our credit rating slip under this Government. That means it costs more to borrow money from overseas. It is harder for New Zealand businesses to get ahead. This is a Government that seems to be out of ideas and it is making cuts where they may actually harm New Zealand’s long-term interests and our ability to diversify.The previous speaker Mr Bakshi raised the issue of the Business Growth Agenda. The Business Growth Agenda which he spoke to has a goal at its heart of raising exports from 30 percent of our economy to 40 percent of our economy and that is a good thing. Judith Collins if I can quote her said: “You know trade is what we survive on. It is all important.” and yet this Government opposite has overseen drops in those international trade percentages. They are dropping under this Government’s oversight and it is through policies such as this one which we are putting through the House that these things are being put at risk. Our future prosperity our future security as a nation is being put at risk when those members opposite make cuts without thinking through the consequences when they do not listen to the submitters to the select committee and when they adopt an arrogant out-of-touch attitude that says: “New Zealanders we don’t care what you say. We in National have the answer and it is more of the same. Keep going down the same track. We’ll survive. Hang on. Shut your eyes. Trust us.” Well Mr Key New Zealanders are falling out of love with National and with the track that sees us dependent on fewer and fewer and fewer commodities and sees us focused on trading housing and on speculation in the economy.The economy becoming vulnerable and the economic credibility that is eroding away will cost this Government at the next election. Those members on the other side of the House know that. I can see that their heads have dropped again. They know that this week as the Government comes to announce its Budget it will not have anything in it that ordinary New Zealanders are after. Ordinary New Zealanders are already anticipating that they will not get the wage rises that were promised. They have already been told they will not get the surplus that they were promised. We know that the export numbers are dropping and the economy is becoming more vulnerable. This is a Government that is out of ideas and out of touch. We will not be supporting this bill.SIMON O’CONNOR (National—Tāmaki): I am exhausted after listening to that. It was the old stump speech from Labour.Dr David Clark: The arrogance.SIMON O’CONNOR: Yes there is the word—arrogance. That is the word those members keep using—that vainglorious hope that if they use the words “arrogance” and “tired” they will fall on to the National Government. But the strange thing is as I go through my electorate the wonderful place of Tāmaki my constituents actually do not worry about the arrogance or the tiredness of the National Party because they see us progressing positively. What I find most striking though is they do not even talk about the Labour Party. The Labour Party is completely totally irrelevant—not up to scratch not up to standard would not be accredited has not been accredited since 2008 and God help us if it is accredited in 2017.On the Standards and Accreditation Bill I was going to say early on that I actually thought the speeches were up to a relatively good standard; it has been falling away a little bit there. There has been a lot of talk around trade. We have fallen back—and I think Andrew Little was talking about it last week—to the importance of trade and how New Zealand must diversify and reach out into the markets and how we are not doing enough there is a crisis and the sky is falling in. It is interesting that the Labour Party has gone back to logs. I see that the Labour Party has gone back to logs as a great way to save this economy—that somehow we are just going to add value to logs and build all sorts of bits and bobs which the world strangely enough does not seem to want to buy off us at the moment. But that is completely irrelevant. We will just continue on with theories.We have heard theories too tonight around standards and accreditations. The last speaker David Clark was really really keen on talking about electrical jacks and then for some reason switched to phone jacks and then switched back to electrical jacks. So when it comes to standards the Labour Party seems to be really concerned about jacks. And then I thought that maybe that just fits in with its previous policies where it was concerned about the standards of light bulbs the standards of shower heads—and you go: “Are these really the things that matter?”. They are not. What matters is that this Government is progressing legislation through the Commerce Committee that is going to help strengthen the way that we engage.What we can see is actually a Commerce Committee I believe that has worked jolly hard on this. I know other speakers have acknowledged the chair Melissa Lee and the general consensus that has occurred in the committee. That is often being displayed these days on Twitter on a Thursday morning with a whole lot of epicurean delights. I am not sure who is on this week but it is actually a very cooperative working committee. But one of the elements that has come up tonight is this question of perception particularly the perception that the committee and this side of the House has not listened to petitioners. I just want to put paid to that. Twenty-one people came before our committee and submitted. I think all people in the House—even the other side—have acknowledged that they generally were experts in their field.Clare Curran: Not listening.SIMON O’CONNOR: All of us listened actually which is quite an important distinction. We listened and then what we did is what most human beings do: we engaged our minds we discussed between ourselves we read the departmental reports we went away and engaged with people in our communities and in our electorates and we had those conversations. A strange thing about democracy is that people are allowed to have different opinions. In fact the Hon Judith Collins touched on it very briefly when she said that actually the whole point of democracy at times is to have a difference of opinion. We do not come into this House for the sake of just agreeing with each other. That in itself is anti-democratic. What we found in this process is that we did not fully agree but the fundamental points where the disagreements are happening from the Opposition’s side I do not believe are actually real.The first is around conflicts of interest. This was discussed quite a bit—that all of a sudden the people on these panels these working groups somehow are going to be conflicted. The strange thing is that if you wish to have people setting standards working to accreditations you want them to have a certain degree of knowledge and understanding. The committee worked I think jolly hard on this to say—[Interruption] Yes that is right unless you are from the union; that raises a whole lot of other questions. But what we want is people with experience. We want them to declare that. I do not have the exact wording in front of me but we have actually made changes in the select committee to make sure that that bar is not set too high or too low. You cannot have someone on a standards working panel who does not know about the subject so instantly you are going to have a builder an electrician a radiographer—whatever—sitting on one of these working groups and of course they are going to have a conflict of interest; it is their area of expertise. So we have tried to put a measurement if you will in there that allows some conflicts obviously to be acknowledged as we would expect but not too large conflicts.The other disagreement has been the whole question that we would dare to put this organisation under the auspices of the Ministry of Business Innovation and Employment. A great scandal—a great scandal we are hearing from the other side. I think the first point for the House and obviously anyone listening at home and those in the industry is that this is an independent statutory body. What we are developing here through legislation is an independent statutory body. For the edification of the other side—Clare Curran: Edification!SIMON O’CONNOR: The edification of the other side. I am all for sesquipedalianism—increasing the standards of language. We have a number of independent statutory bodies and it is strange to note that we have not heard the Opposition demanding that these be closed down. In fact if you look at the Ministry of Business Innovation and Employment there are 35 statutory bodies under its auspices. Not all I would note are independent but those that are include the likes of the Remu-ra—rather the Remuneration Authority; yes I am getting tongue-tied here. They are the likes of the Banking Ombudsman scheme the Copyright Tribunal and of course the Employment Relations Authority. These are—Brett Hudson: Clearly they’re influenced by MBIE.SIMON O’CONNOR: Exactly—if you are following the logic or lack of of the other side these are no longer independent because they are under the auspices of a particular ministry. That does not make any sense if you are going to be consistent. The second side and this is what Judith Collins was noting is that in this structure a Minister is held accountable—a very particular person. It could be an encouragement to the Opposition after all these years to actually ask some questions that really matter to a Minister and that matter to the people.The last point I would make around that is around the word “synergies”. Ultimately working within a ministry such as the Ministry of Business Innovation and Employment allows for synergies—that actually ideas are being shared. You can be independent; you can act in that space—Brett Hudson: Do you mean collaboration?SIMON O’CONNOR: Collaboration.Brett Hudson: Working together positively?SIMON O’CONNOR: Exactly. Absolutely. Can you believe it? Positive collaboration—something that actually this Government remains very very keen on.Another element I want to touch on is around copyright. A number of submitters raised this in different ways and a couple of constituents did with me as well. It is in clause 42 of the bill. One particular submitter during the select committee was basically concerned about their copyright if it was put into legislation the idea being that if they have an idea that is then articulated in legislation they would lose their copyright. It is very important in the notion of New Zealand’s laws that if something is formally put into legislation it comes under the Crown’s copyright. And if something is under the Crown’s copyright then it must be available to all for free and to be used. There is no point in having laws if they are not transparent and accessible. So within clause 42 and we took a bit of time discussing this as a committee we have made the distinction between those items that are referenced in the law—those will maintain a third-party copyright so if you are the person who has articulated the standard and ideas you have a copyright to that. If it is only referenced in the legislation you maintain the copyright. If however the standard is fully incorporated into the body of the legislation—and I can see my colleague here Todd Barclay from Clutha-Southland is absolutely hanging on every word about this distinction—Hon Amy Adams: Why wouldn’t he?SIMON O’CONNOR: Absolutely—you know this is what the House is about. But again if it is fully engaged in the legislation the Crown copyright holds again so it is accessible. So I think we have come to a worthwhile balance there.Ultimately this is just one bill in a whole suite of bills that this Government is progressing. We heard a lot from the previous speaker around the whole Business Growth Agenda. It is a fantastic agenda it is working and it is bringing about results. This bill in the name of the Hon Paul Goldsmith the Minister of Commerce and Consumer Affairs is just one part of that. I commend it to the House.A party vote was called for on the question That the Standards and Accreditation Bill be now read a second time.Ayes 61New Zealand National 59; ACT New Zealand 1; United Future 1.Noes 60New Zealand Labour 32; Green Party 14; New Zealand First 12; Māori Party 2.Bill read a second time.