Volume 619 Week 64 - Tuesday 10 August 2004 
Volume 619 Week 64 - Tuesday 10 August 2004 
[Volume:619;Page:14715] 
Tuesday 10 August 2004 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Motions 
Jewish Graves and Chapel Wellington—Vandalism 
Hon Dr MICHAEL CULLEN (Acting Prime Minister) 
: 
 I move  
That this House deplores recent attacks on Jewish graves and a Jewish chapel in Wellington; recalls the terrible history of anti-Semitism stretching over many centuries culminating in the Holocaust under Nazi rule; and expresses its unequivocal condemnation of anti-Semitism violence directed against Jews and Jewish religious and cultural institutions and all forms of racial and ethnic hatred persecution and discrimination 
. It is a sad day for this nation when it comes to the point that it is necessary to move a motion of this sort in Parliament. It is to be hoped that the recent vandalism is the work of an isolated crank or cranks but given its nature it inevitably raises emotions and memories that are deep-seated and profound—especially for Jewish New Zealanders but for many others as well. 
There has been in recent years a revival of anti-Semitism in a number of Western countries. There is no justification and no cause for it and especially no justification and no cause for it in this country of ours. People point to individual events as some kind of explanation; the actions by Israeli agents or the reaction by the Government against those and the proposed visit by the Holocaust-denier Mr David Irving are given for example. The danger of entering into that area is that it gives some kind of rationale to something that is both evil and irrational though sadly deep-seated in European culture. For those who are survivors of the Holocaust or related to survivors or victims such actions as we have recently seen are particularly frightening and appalling. They remind us how thin the veneer of tolerance and civilisation can sometimes be even in a country such as New Zealand. They also remind us of our duty in this House to promote those values of civilisation and tolerance and I thank all parties for the support they have given to this motion being moved. 
GERRY BROWNLEE (Deputy Leader—National) 
: 
 The National Party strongly endorses the sentiments expressed in the motion before the House today. We find totally unacceptable the destructive acts on the chapel and the 92 graves in the Jewish Orthodox section of the Makara Cemetery last week. We note that that attack was preceded by the smashing of 16 historic Jewish headstones at the Bolton Street cemetery in Wellington Central 3 weeks ago. These are disturbing acts and they should not become a trend. The National Party absolutely condemns anti-Semitism and deplores in the strongest terms these idiotic acts of hate directed at one section of our community. Such acts of hate have no place in New Zealand. They are foreign to us and we must do all in our power to ensure that they never take hold. We take to heart the point made by the Acting Prime Minister when he says it is pointless and counterproductive to look for blame. There can be nobody at fault in this case other than those—surely cowards criminals and racists—who perpetrated these acts. Whatever the reason behind them as I say there can be no justification for them. 
Cemeteries are sacred places for all peoples and as such require respect and sensitivity. These cowards have caused grief to the Jewish community and shocked all right-thinking New Zealanders and must be treated with contempt. I am sure that all New Zealanders regardless of their ethnicity culture or religion will join with this Parliament at this time in expressing our support for the Jewish community. The misguided attitudes that lead to such acts of hate have no part in the tolerant society we all cherish so much. Every one of us has a duty to help stamp out such attitudes. These cowards have also badly damaged New Zealand’s reputation overseas. The way of a peaceful and just society is the way of tolerance and we must always strive to ensure that those who would seek to disrupt are dealt with swiftly and surely. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 On behalf of New Zealand First I endorse the motion and the sentiments expressed by the previous speakers. The Jewish people have made and continue to make a very positive contribution to our society. Many of course were born here and some have come from places far away. They have their faith and their culture which they quietly observe and they in New Zealand are not people who set out to impose their beliefs on others but rather people who quietly play a positive role in our society. They have earned our respect and their dead are entitled to be respected and allowed to rest peacefully. That of course should be the case with all people who live in this country. The dead in particular are entitled to rest peacefully and not to have their graves desecrated. To those who would import such sentiments of racial prejudice against others our message is very simple: “Go back home where you came from.” 
KEITH LOCKE (Green) 
: 
 On behalf of the Green Party I would like to endorse what the previous speakers have said and express our absolute repugnance at the desecration of Jewish graves in Makara and in Wellington. We share the sadness and the pain of the Jewish community. What has happened is particularly distressing because New Zealanders have taken some pride in being largely free of the anti-Semitism that we see in some other countries. It is therefore important that on this sad occasion we renew and reaffirm our opposition to all forms of racial intolerance. The Nazi symbols daubed at the cemetery make this crime even more dastardly. The Nazis killed 6 million Jews and crushed democracy and freedom in Europe. These Nazi symbols are an affront not only to the Jewish families of the people killed in the Holocaust but also to the families of the thousands of New Zealanders who died fighting fascism. Today we stand together with the Jewish community in remembering those who died and in expressing our horror at the desecration of the tombs of their ancestors. 
RODNEY HIDE (Leader—ACT) 
: 
 I rise on behalf of the ACT party to put the ACT party’s wholehearted support behind the motion deploring the attacks and condemning anti-Semitism. We also go further. We are very concerned at the anti-Israel sentiment that is growing in the West. My party wholeheartedly supports the right of the State of Israel to exist. As a democracy ourselves we must support Israel as the only democracy in the Middle East. Sadly attacks on Israel have become another outlet for anti-Semitism. 
The ACT party has a vision for New Zealand of a free and tolerant society where all races and religions are treated equally. As a people we are falling short of that vision. We must all now realise that anti-Semitism is a reality here in New Zealand. We must all now realise that attacks on Israel will be interpreted by irresponsible elements as justification for anti-Semitism. We must all now be very very careful. We must not tolerate these attacks. We must stand side by side with the Jewish community and the evil perpetrators of those foul attacks must be brought to justice. 
Hon PETER DUNNE (Leader—United Future) 
: 
 United Future joins other parties and members in supporting the resolution that is before the House this afternoon. The most vile way in which people can be attacked are through their ethnicity and their religion. In this country and in this Parliament over the years we have been quick to condemn attacks in other places that have been rooted on racial and religious bases and we have properly deplored the extremism that accompanies such actions. 
 The true horror of the events of recent days in this city has been that those same features that we have sought to be so critical of in other countries—quite rightly—are now occurring in our own country. Just as we have always said in terms of terrorism—which is what this act is—overseas that we can never surrender to terrorists or the values that they profess so too must we say in respect of our country that we can never surrender to intolerance on racial or religious grounds. We can never surrender to the desecration of sacred burial places. We can never surrender to an attitude that says it is all right to behave in this despicable and irresponsible way. 
I hope when Parliament adopts this motion that it is widely proclaimed and that the work done by the Race Relations Commissioner in recent days in bringing together a wide range of community support for a similar sentiment is widely proclaimed as well so that not only do we recognise the contribution of the Jewish community to the life and culture of New Zealand; we recognise their absolute right in this nation to live free from prejudice free from intolerance and free from bitterness and that as a consequence we all learn a lesson and see this country move forward and not degenerate into the sort of nation that we have seen on our television screens and that we properly deplore. 
Hon MATT ROBSON (Deputy Leader—Progressive) 
: 
 The Progressive Party strongly supports this motion against intimidation hate and bullying which was first suggested to the House by the Minister next to me Chris Carter. We thank him for bringing up this matter. 
The attacks committed against the Wellington Jewish Community over the past months are an affront to every community and everyone in New Zealand. They are attacks on democracy. The use of the swastika in the attacks was particularly reprehensible. Under Hitler the death of more than 6 million Jews of Slavs gypsies gay people immigrants refugees and communists was an attack on all human beings and was raised to the level of a perverted science. 
August Bebel a German Socialist leader before the First World War called anti-Semitism the philosophy of fools. By that he meant that those who fell for it were people who would go to war against other human beings. When the Roman slave Spartacus was killed those who stood with him refused to be divided and said that they were all Spartacus. I believe that at a time like this when the Parliament stands united in solidarity against the hateful bullies and racists who attack any part of a united community like Spartacus we are saying that when there is an attack like this on people whether they are Jews Palestinians immigrants refugees or people who in some way are different from ourselves we will not be disconnected from our common humanity. 
Mr SPEAKER 
: As Speaker I shall take the unusual course of making my own personal comment on this. In all the 37½ years I have been in Parliament this for me has been one of the most shocking incidents I have ever noted in this country. When this motion is passed I intend to send the motion and all the contributions made this afternoon to the Speaker of the Knesset in Israel. 
Motion agreed to. 
Hon Dr MICHAEL CULLEN (Acting Prime Minister) 
: 
 I seek leave to table a message from a range of prominent New Zealanders representing a very large range of organisations that expresses support for the move taken by Parliament. 
Mr SPEAKER 
: I will ensure that that message is also included in the letter to the Speaker of the Knesset. 
Document by leave laid on the Table of the House. 
Points of Order 
Question No. 4 to Minister—Minister Answering 
GERRY BROWNLEE (Deputy Leader—National) 
: 
 I raise a point of order Mr Speaker. Just before we start I would like you to consider the matter of question No. 4. When the question was lodged this morning it was addressed to the Associate Minister for Social Development and Employment when the first sheet was produced by the Clerk’s Office the question was still addressed to the Associate Minister for Social Development and Employment and it was changed some time later. 
If you look at the content of that question you will see that it deals in particular with the actions of the Associate Minister and not of the Minister himself. I call your attention to Speaker’s ruling 129/4 which states: “The Minister primarily concerned is presumed to be the person to decide whether it is a question related to that portfolio or whether it is misdirected.” That leads to the question as to whether the Associate Minister in this case has seen a question on the sheet about the actions that she is alleged to have taken and decided that it was inappropriate for her to answer the question and therefore requested that it be transferred. 
We get to a little bit of a ridiculous situation where we are expected to accept that although at the time the Associate Minister was acting as the Minister the Minister should answer the questions for the actions that she took as the Acting Minister and although she is the Associate Minister the Minister who was on leave at the time and cannot possibly know about these matters is required to answer the question. That seems to be somewhat abusive of the process. 
Mr SPEAKER 
: I refer the member to the very next Speaker’s ruling 129/5. Members can transfer at any time. The member was Acting Minister at the time and took some official action. Any question raised subsequently should be addressed to the Minister who holds the portfolio responsibility. When an Acting Minister has been appointed that person is while the appointment continues the Minister for all purposes. 
SIMON POWER (Senior Whip—National) 
: 
 I raise a point of order Mr Speaker. I then ask for your advice on that matter in respect of Speaker’s ruling 130/1. I submit to you that that provision does apply and it is appropriate for you to disallow the transfer noting that it was the comments of the Associate Minister specifically that were particular to her about events that brought about these matters but more particularly that that original question was accepted by the Clerk to go to the Associate Minister and has only since that time been changed by the Government. 
Mr SPEAKER 
: I refer to Speaker’s ruling 130/3 which answers that point fully. 
Provision of Phones in Chamber—Allocation 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 I raise a point of order Mr Speaker. Over the weekend some of us will know there was a reshuffle in the National Party’s line-up. 
Opposition Member 
: That’s not a point of order! 
Rt Hon WINSTON PETERS 
: It would be a point of order if that member would keep quiet and wait for me to state my point of order. It is a very very sound point of order. 
Mr SPEAKER 
: All members are entitled to raise points of order but I stress that they must be points of order. 
Rt Hon WINSTON PETERS 
: Thank you Mr Speaker. I just wanted to set the scene. The reality is that every party in this Parliament is entitled to certain provisions such as one phone for the leader and one for that party’s whip. Right now we have phones dotted up and down here and I do not know what is going on or whether special provisions have been made for a party that cannot make up its mind who is doing what where and when. 
Mr SPEAKER 
: The member knows that his point of order is only barely there. The phone was put in for the whip and his whip is entitled to have one—the member’s own whip has one. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 That is true but what about that phone over there? 
Mr SPEAKER 
: I will be examining that when I come to look at it—[ 
Interruption 
] 
Hon Member 
: But there is not one there. 
Mr SPEAKER 
: I am sure that that has been correctly pointed out to members and now having been advised of that I advise Mr Peters that there is not a phone there. 
Questions to Ministers 
Mayors Task Force for Jobs—Government Initiatives 
1. LUAMANUVAO WINNIE LABAN (Labour—Mana) 
 to the  
Minister for Social Development and Employment 
: What recent initiatives has the Government taken to help achieve the shared goal it has with the Mayors Task Force for Jobs that by 2007 all 15 to 19-year-olds will be engaged in education training work or other options? 
Hon STEVE MAHAREY (Minister for Social Development and Employment) 
: 
 Today I—and local MPs including the member who asked the question—announced that the areas for the first five of 14 Youth Transitions Services to be established over the next 3 years at a cost of $26.9 million in New Plymouth Porirua Rotorua Waitakere and Whangarei will go ahead. The Youth Transitions Service will assist those school leavers who are at greatest risk of not making a transition from school to work by linking them to work training or further education. 
Luamanuvao Winnie Laban 
: How will the Youth Transitions Service relate to other employment initiatives the Government has taken? 
Hon STEVE MAHAREY 
: The Government has been hugely successful in the area of employment with the unemployment rate now down to 4 percent—the second-lowest in the OECD. We need to ensure that young people can move into existing job vacancies. We will do this by linking young people through programmes such as Modern Apprenticeships industry training careers information the new Gateway programme and regional initiatives with the Mayors Task Force for Jobs. I invite members to contrast that with the 1990s when transition pathways were cancelled by the National Party such as cancelling apprenticeships. 
Sue Bradford 
: What steps is the Government taking if any to encourage both local authorities and Government departments to introduce youth recruitment policies and cadet programmes given current skill shortages that we are facing and the fact that some 18000 young people are still out of work? 
Hon STEVE MAHAREY 
: In the time-honoured fashion heaps! If I can just point to the Associate Minister for Social Development and Employment Mr Rick Barker. As the member will know the Associate Minister has launched a programme particularly around Government departments and their recruitment of young people. On top of that can I say that one of the issues we canvassed in for example Northland the other day was exactly how to recruit those young people into the many jobs in the Government and in the private sector that are appearing in the Northland area. 
Maori Party—Public Service Resources 
2.  
GERRY BROWNLEE (Deputy Leader—National) 
 to the  
Associate Minister of Maori Affairs 
: What information had he received and from whom that formed the basis of his statement last week: “I had concern about the use of public service databases office space telephones equipment and cars to call host and manage a hui for the Maori Party.”? 
Hon JOHN TAMIHERE (Associate Minister of Maori Affairs) 
: 
 Maori attending the Maori Party meeting raised concerns with me as the MP for TamakiMakaurau relating to possible use of Government resources by a senior public servant and the extent of her involvement in that meeting. 
Gerry Brownlee 
: What did he mean when he said in a press release on 5 August 2004 in relation to the northern regional manager of Community Employment Groups that: “There is an underlying duress under which they may have felt obligated to attend for fear their applications would not be treated favourably.” and who was the person he was referring to? 
Hon JOHN TAMIHERE 
: The person I raised concerns about was AmokuraPanoho. That person is the northern regional manager of the Community Employment Group and that person attended the Maori Party meeting as the regional organiser for the Maori Party. 
Gerry Brownlee 
: I raise a point of order Mr Speaker. With all due respect although that is an address to the question it is not an answer by any manner of means. I ask this question— 
Mr SPEAKER 
: Please be seated. 
Gerry Brownlee 
: Well I will just come back at you. 
Mr SPEAKER 
: Please be seated. I just want to say that getting up all the time and questioning answers when the second part of the question asked who the person was and the first answer the Minister gave actually named the person; and then—[ 
Interruption 
] The member was not listening as I was. I was listening very carefully. That answer clearly addressed the question. Points of order about that are really quite frivolous. 
Gerry Brownlee 
: I raise a point of order Mr Speaker. The question asked what he meant and then referred to a quote from him or by him and therefore we were wanting to know what he meant when he said that those people attending that hui would have felt underlying duress and feared that their applications may not be favoured appropriately— 
Mr SPEAKER 
: And then? 
Gerry Brownlee 
: Then we asked who the person referred to was— 
Mr SPEAKER 
: That is three questions. 
Gerry Brownlee 
: No with respect there are only two questions and he has answered one of them. 
Mr SPEAKER 
: No he addressed the question that was asked. 
Nanaia Mahuta 
: Can the Minister clarify—[ 
Interruption 
] 
Mr SPEAKER 
: The member will stand withdraw and apologise because that is a reference to me. 
Gerry Brownlee 
: I withdraw and apologise. 
Mr SPEAKER 
: I want him to assure me it was not a reference to me. 
Gerry Brownlee 
: It most certainly was not; it was directed at the Associate Minister. 
Mr SPEAKER 
: I just want to say that is sufficient. The member must learn how to make his interjections in order. 
Nanaia Mahuta 
: Can the Minister clarify whether he put these concerns or Ms AmokuraPanoho’s name into the public domain? 
Hon JOHN TAMIHERE 
: No the Maori Party told Ruth Berry from the  
New Zealand Herald  
about AmokuraPanoho. 
Rt Hon Winston Peters 
: Could the Minister tell the House and the country whether his concern about this person’s attendance was that the person in question was attending business in respect of the Tariana Turia party at the time she should have been and was employed to be doing work on behalf of the New Zealand taxpayer? 
Hon JOHN TAMIHERE 
: Yes. 
Metiria Turei 
: Does the Minister agree with Michael Joseph Savage who in 1936 on the introduction of a bill to give public servants the same political rights as other citizens said: “I have sufficient confidence in civil servants to believe they will use their political rights just as intelligently as anyone else; probably that is the reason they have been denied them in the past.” or does the Minister’s understanding of Labour Party history go back only as far as 1984? 
Hon JOHN TAMIHERE 
: He is the great forefather of the Labour Party and was a great Cabinet Minister and Minister; and I agree with him. 
Rt Hon Winston Peters 
: Why is it not known and is it not a matter of astonishment that after all this controversy the real issue here is of someone being paid for by the taxpayer to be in one place but is at a political meeting for another party at another place and is that the answer in respect of all four questions laid out by the National Party today in question No. 2— 
Mr SPEAKER 
: No the member can ask only about this question but the Minister can reply. 
Hon JOHN TAMIHERE 
: Yes one does wonder when Mr Gerry Brownlee wants the head of the Maori Language Commissioner one day and wants to keep the head of another the next day. I just do not know how mixed up they are. 
Hon Richard Prebble 
: Is the reason the Minister assumed that Maori Party supporters were misusing public service databases office space telephones equipment and cars to call host and manage a hui for the Maori Party because for years that is exactly what the Labour Party has been doing? 
Hon JOHN TAMIHERE 
: No. 
Gerry Brownlee 
: Why did he send his staff to the hui and were his unproven accusations against Ms Panoho motivated by the fact that she as a Maori Party organiser in her private capacity is determined to unseat him? 
Hon JOHN TAMIHERE 
: The latter might be true. As to the former I would have to say that my people go voluntarily to a number of hui in my electorate. 
Gerry Brownlee 
: Has he had any discussions with other Ministers or officials that canvassed the potential cost of legal fees and possible settlement that his unproven allegations may cost the taxpayer? 
Hon JOHN TAMIHERE 
: No. 
Economic Growth—Labour Constraints 
3.  
PAUL ADAMS (United Future) 
 to the  
Minister of Finance 
: Does he agree that the shortage of labour skilled and unskilled is the single biggest constraint on growth in New Zealand; if not what is the biggest constraint on growth? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 Yes I do. The workforce participation rate is now very high. Our unemployment rate is down to 4 percent which is the second-lowest in the developed world and the household labour force survey out today shows the total workforce for the first time now numbers more than 2 million people. The downside of course with this is a shortage of skilled labour. The solution lies in a mix of training immigration remuneration working conditions and a more productive workforce. 
Paul Adams 
: How can he claim that the country is “firmly on a path to growth” when labour shortages are threatening infrastructural development leading Fletcher Construction to turn down a $250 million construction project and stopping Auckland’s roading upgrade from being compressed from 15 years to 8 years? 
Hon Dr MICHAEL CULLEN 
: There are always some people who will find a cloud rather than a silver lining. The fact is that we are facing for the first time for getting towards 20 years serious labour shortages because the economy is going so well. 
Clayton Cosgrove 
: What is the Government doing to resolve this problem in respect of skills shortages? 
Hon Dr MICHAEL CULLEN 
: There is a range of initiatives across education and industry that are designed to address skills shortages. We have numbers of people in the Modern Apprenticeships scheme. We have very large numbers of people—numbers that are growing rapidly—in industry training. We are attempting to re-orientate the tertiary education system in a more productive fashion that is more relevant to the needs of business. We are getting key industries working together with the Government on those matters. Industry training alone grew by 20 percent between 2002 and 2003. 
John Key 
: Did the Minister notice recent comments by the co-leader of the Greens Jeanette Fitzsimons on Television One’s  
Agenda 
 programme where she concluded that a future Labour-Greens Government would implement capital gains tax even more restrictive transport and energy legislation and new environmental taxes; if so what impact does the Minister think these initiatives will have on New Zealand’s future growth rate? 
Hon Dr MICHAEL CULLEN 
: No I did not but I did see suggestions that the Government should own a very large number of local industries that should be controlled directly by the Government through an investment fund that should be dominated by a very small group of senior Ministers working together when the member opposite said we should emulate Singapore in terms of the way we organise our economy. 
Dail Jones 
: Does the Minister accept that the present problems being experienced for example in Auckland as indicated by the United Future member are brought about by the untrammelled uncontrolled and unplanned immigration to New Zealand as a result of the policies of the National Party and the Labour Party over the last 10 years resulting in housing shortages for the poor in Auckland and west Auckland; health problems not being able to be resolved; and of course educational problems with schools’ rolls rising to 2000 and 3000 something for which this Government must accept responsibility? 
Mr SPEAKER 
: In so far as that relates to the Minister’s responsibilities he may answer. 
Hon Dr MICHAEL CULLEN 
: It is certainly true that high levels of net immigration—and I emphasise “net” because most of that is not New Zealanders leaving or it is New Zealanders returning—has contributed to the pressure on New Zealand. But I certainly stand proudly in this House and say that many immigrants have contributed a great deal to this country; not least Mr Jones and myself. 
Paul Adams 
: Does the Minister agree that part of the solution to the labour shortage lies in fully utilising spare capacity in the domestic labour market; if so why has this Government presided over a 45 percent increase in the number of people who have been unemployed for 3 years or more? 
Hon Dr MICHAEL CULLEN 
: Unemployment levels have dropped very dramatically under this Government—down 12 percent in the last year alone. The problem is that there is not a great deal of unemployed labour resources in New Zealand at the present time particularly amongst those capable of being reskilled to participate in construction industries. 
Paul Adams 
: Is the high participation rate in tertiary education necessarily an effective response to the skills shortage when 50 percent fail to complete their qualifications after 5 years; and has he discussed the possibility of raising the entry standards for university courses with the Minister responsible for tertiary education in an effort to ensure students are undertaking the most appropriate study? 
Mr SPEAKER 
: I just want to say that I want to hear questions in silence. 
Hon Dr MICHAEL CULLEN 
: I think it is fair to say that sometimes problems with completion rates go with the territory as one might say. But I have raised this and my colleague the Associate Minister of Education shares with me the desire to ensure that we are getting better value for money out of the tertiary education system. 
Paul Adams 
: My problem was that I did not go to one of those courses. 
Mr SPEAKER 
: Regrettable though that may be that is irrelevant. Please come to the question. 
Paul Adams 
: Does the Minister agree that internal migration may provide a partial solution to regional labour shortages such as those in the South Island; if so why are there still no significant schemes to facilitate mobility between regions when this very point was made in the 2001 Treasury discussion paper  
Towards an Inclusive Economy 
? 
Hon Dr MICHAEL CULLEN 
: While it may be possible to have some measures that act in a negative sense by discouraging people from moving to areas of high unemployment—in other words making it more difficult to obtain benefits—it is very hard to move people around the country if they do not wish it to places where there is employment. Personally I regard it as strange that some people might stay in some parts of the country somewhat north of this place when they could move to the South Island to find employment and a better lifestyle. 
Question No. 4 to Minister 
GERRY BROWNLEE (Deputy Leader—National) 
: 
 I raise a point of order Mr Speaker. When we asked you questions about transferring questions before you referred us to Speaker’s ruling 130/3. That is one of your own rulings from the year 2000. I think it is interesting in that it appears to set out the criteria under which a Speaker may consider that a transfer is inappropriate. They include: “exceptional circumstances—such as if the Minister concerned could be expected to have personal knowledge of the issue that it would not be likely that any other Minister would have.” In this case the person the Government wishes to answer the question was on leave at the time so it is a bit of a stretch to think he would have personal knowledge of it. We know that the information concerned was passed to Ruth Dyson who was the Acting Minister. She is surely therefore a Minister who has personal knowledge of the information concerned and in that event should be required to answer the question. The Government’s option of transferring the question should be denied. 
Mr SPEAKER 
: No this was action taken in an official capacity and any Minister can answer. 
Community Employment Group—Resignation Northern Regional Manager 
4.  
KATHERINE RICH (National) 
 to the  
Minister for Social Development and Employment 
: What specific information or concerns did the Acting Minister pass on to the Secretary of Labour Dr James Buwalda regarding the Community Employment Group’s northern regional manager Ms AmokuraPanoho and from whom did the Acting Minister receive that information? 
Hon STEVE MAHAREY (Minister for Social Development and Employment) 
: 
 On 20 July 2004 during a meeting with officials the Acting Minister noted that concerns had been raised about the extent and appropriateness of Ms Panoho’s involvement in the Maori Party. She passed those concerns on to Dr Buwalda to act on as he thought fit. The Acting Minister was acting upon information provided by the Hon John Tamihere to the Prime Minister who as is consistent with normal practice passed it on to the relevant Minister to decide what to do. The Acting Minister did not take any further part in the investigation of the issue but was advised on 30 July 2004 that Ms Panoho had tendered her resignation. 
Katherine Rich 
: What specifically were the concerns of the Acting Minister regarding Ms Panoho’s involvement with the Maori Party that led Department of Labour officials to take such significant steps as to meet with Ms Panoho and to bully her into resigning? 
Hon STEVE MAHAREY 
: To start at the end of the question I really need just to quote from an interview with Ms Panoho in which she repeated on a number of occasions one line. Ms Panoho in her interview with Linda Clark on Radio New Zealand said: “No I wasn’t put under pressure to resign.” The specific issues that were raised were the extent and appropriateness of Ms Panoho’s involvement in the Maori Party. I repeat because the member opposite is trying to attack Ms Panoho that Ms Panoho has said repeatedly that she was not put under pressure. 
Katherine Rich 
: Does the Minister think it is inconsistent that this Government thinks the attendance of a Community Employment Group regional manager at a Maori Party meeting was wrong but the activism prior to the 1999 election of a previous Community Employment Group national manager who is now the Minister of Maori Affairs was OK? 
Hon STEVE MAHAREY 
: My understanding is that the current Minister of Maori Affairs who was the chief executive for the Community Employment Group resigned well in advance of the election as public servants do—I did so myself when I was running for office. In relation to concerns about Ms Panoho members should remember that concerns about the extent and appropriateness of her involvement were raised but that they was dealt with appropriately by the chief executive purely as an employment issue as they should have been. 
Rt Hon Winston Peters 
: Is it a fact that a substantial number of the people who attended that hui were there whilst being paid by the taxpayer to be somewhere else—namely at their job—and if it was wrong for Ms Panoho to be in that situation which I think most people would accept then what is being done about the remainder of those who left their job that day to attend that hui at the taxpayers’ expense? 
Hon STEVE MAHAREY 
: I advise the member that the meeting was in the evening. I was not at the meeting so I cannot answer as to the specifics of what he asked. The general principle that I think all of us work on—and have done so from the time of Peter Fraser on—is that public servants need to be very careful that they remain being seen to be independent so that they can act on behalf of any Government. 
Katherine Rich 
: Why was it not OK for Ms Panoho to attend a Maori Party hui when it was OK for John Tamihere’s staff to attend the same Maori Party hui and are they not public servants as well? 
Hon STEVE MAHAREY 
: I have to say that it is not for me to judge. It is appropriately a responsibility within the judgment of the chief executive who has an employment relationship with an employee to work on that matter. 
Dr Muriel Newman 
: In light of the Minister’s previous answer is he assuring the House that the Hon Parekura Horomia attended no Labour Party meetings while he was the general manager of the Community Employment Group? 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. You have frequently ruled in the past that Ministers in this Government are not responsible for their actions under previous Governments. Clearly the Minister was not chief executive of the Community Employment Group under this Government. 
Mr SPEAKER 
: I thought that the question on balance could be answered. 
Hon STEVE MAHAREY 
: As my colleague has just pointed out of course I have no real knowledge of what Mr Horomia may or may not have done when he was working for the National Government at that time. But I would repeat the golden rule is that public servants need to be available to work for any Government of any hue at any time and therefore their independence and autonomy need to be something they guard very preciously. 
Katherine Rich 
: Has he or any official sought or received any legal advice about what likely legal fees or compensation to Ms Panoho could cost the taxpayer? 
Hon STEVE MAHAREY 
: No. 
Packaging Accord—Effectiveness 
5.  
MIKE WARD (Green) 
 to the  
Minister for the Environment 
: Will the voluntary Packaging Accord she signed today reduce the amount of packaging in people’s shopping baskets and the volume of packaging waste going to landfill; and if these voluntary measures do not work what will she do? 
Hon MARIAN HOBBS (Minister for the Environment) 
: 
 Yes. Over 80 percent of the supermarket business— Foodstuffs and Progressive Enterprises—and more than 200 organisations have signed up to the Packaging Accord and intend to reduce the amount of waste going to landfill. Today we also agreed that if this collaborative effort does not achieve reduction then we would look at regulation. 
Mike Ward 
: Why are the target recovery rates so modest such as 23 percent for plastic compared with the current 19 percent and would those levels of recovery not be achieved through the ongoing expansion of local authority recycling schemes even without the Packaging Accord? 
Hon MARIAN HOBBS 
: The targets are not weak. For paper the recovery target is 70 percent by weight of all packaging materials consumed. The other targets include 65 percent for aluminium and 55 percent for glass. The recovery levels are comparable with the targets of the European Union packaging directive. Officials involved advise that the targets can be achieved or exceeded. 
Dr Ashraf Choudhary 
: What does the Government hope to achieve from signatories including businesses such as Cadbury’s McDonald’s and Heinz-Wattie? 
Hon MARIAN HOBBS 
: The brand owners of the key packaging sectors of paper plastic glass steel and aluminium—which include the likes of Cadbury’s and McDonald’s—and the retailers have outlined the steps they will take over the next 5 years to reduce waste and increase the amount of packaging that can be recycled. The Government’s hope is that brand owners will focus on the design of their packaging with the aim to reduce waste. 
Hon Dr Nick Smith 
: Is the Minister aware that a number of key players in the waste management field have boycotted the launch saying it is simply a joke a recycling of a previous accord and effectively a policy about rubbish that is rubbish? 
Hon MARIAN HOBBS 
: I would have found that the fact that 150 people attended today as against the 10 who attended the anti-accord meeting last week would speak for itself. 
Mr SPEAKER 
: I want to say to members particularly those on my right that they do not have to be chipping when I have called another member. Mr Peters is entitled to the call; he alone gets it. 
Jim Peters 
: Do not international research and practice indicate that today’s media statement that: “A voluntary accord is likely to be more cost-effective for business than legislation.” is really nothing more than wishful thinking? 
Hon MARIAN HOBBS 
: Yes. 
Larry Baldock 
: Will the Minister and her department be waiting 5 years until the expiry of the accord before evaluating its success in contributing to the goals of the New Zealand waste strategy or can we rely on constant monitoring and the introduction of alternative plans earlier than at the end of 5 years if the voluntary accord does not meet expectations? 
Hon MARIAN HOBBS 
: On the Packaging Accord part of the Ministry for the Environment website there will be annual progress reports about how we are actually meeting those targets. Therefore we do not have to wait for the 5 years to be up before we make some decisions. 
Mike Ward 
: Why is the 2008 target for the recovery of aluminium set at 65 percent when that is 5 percent below the 70 percent of aluminium that was recovered in 2001 and in 2002? 
Hon MARIAN HOBBS 
: I am constantly disappointed by the people from the Green movement including the packaging movement who rather than concentrate on and work with businesses manufacturers and packaging manufacturers to reduce waste want to play games with one percentage versus another percentage versus a volume percentage versus a weight percentage which entirely confuses the public whom we are trying to persuade to indulge in waste reduction. 
Mike Ward 
: I raise a point of order Mr Speaker. I asked why the target was below the level not why I raised the issue in the first place. 
Mr SPEAKER 
: Yes. I feared that the Minister was not addressing the question but she did at the end of it. 
Mike Ward 
: Does the Minister agree that the lack of a target for the use of recycled material and packaging is a glaring omission and that that omission is simply a reflection of the limitations of voluntary accords? 
Hon MARIAN HOBBS 
: No. 
Mike Ward 
: Does the Minister agree that this accord is not an example of extended producer responsibility; and when will the Government legislate to make producers take full responsibility for their waste rather than continue to transfer the cost on to local authorities and ratepayers? 
Hon MARIAN HOBBS 
: It is an example of extended producer responsibility. The only difference is that that member wants to force people to follow one prescription rather than actually to work with people and use the brains of the whole industry. 
Powerco—Sale 
6.  
Rt Hon WINSTON PETERS (Leader—NZ First) 
 to the  
Minister of Finance 
: Does he have any interest in the recently announced sale of Powerco to Australian interests? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I assume the member is not referring to a pecuniary interest! Yes I certainly find it encouraging that Australian investors are showing an interest in the New Zealand economy but any comments on the particular merits of that proposal would be inappropriate because I would have to consider it under the Overseas Investment Act. 
Rt Hon Winston Peters 
: Has the Minister read the Powerco board chairman’s speech to the company’s annual general meeting in which he states: “The time is looming when electricity supply availability and system reliability will become a severe constraint on economic growth for the country.”; and does he not think it is a matter of great concern that such an important infrastructural asset is now in the hands of majority 
foreign ownership? 
Hon Dr MICHAEL CULLEN 
: It is not yet because the sale is subject to Overseas Investment Commission approval and because it involves sensitive land it will actually come to Ministers. But I cannot comment further on that. On his primary point around concerns about power supply yes I do agree with him but I tell him he will not have to wait too long for some good news. 
Jeanette Fitzsimons 
: Is the Minister aware that the first privately owned lines company in New Zealand United Networks milked profit from the lines but failed to maintain them so Coromandel businesses and residents suffered frequent prolonged blackouts over the Christmas period; and how can he be sure that that Tranz Rail - like situation will not happen again to our power lines? 
Hon Dr MICHAEL CULLEN 
: It would be nice to pretend that if New Zealanders owned the lines they would necessarily be better owners from a public perspective; I am afraid that is not demonstrated historically. But I refer the member to the Electricity Commission and to the legislation passing through the House which is a major move to ensure there is not a repetition of that kind of failure. 
Rt Hon Winston Peters 
: As a matter of principle how does it advantage this country’s balance of payments crisis to have a very high returning asset like Powerco now in the hands of not a savings fund that we are saving for in respect of retirement but again a foreign-owned operation—given that Telecom which is a good example is about to repatriate in excess of half a billion dollars off shore to its shareholders? 
Hon Dr MICHAEL CULLEN 
: In the case of the latter the level of New Zealand ownership of Telecom now is considerably higher than it has been previously and indeed the level of New Zealand ownership of the New Zealand market in general has risen quite substantially over recent years. Foreign ownership has declined from 60 percent to 40 percent. 
Rt Hon Winston Peters 
: 50. 
Hon Dr MICHAEL CULLEN 
: No it is about 40 percent. It is also worth noting that not a single major business investment proposal has been turned down by the Overseas Investment Commission since 1984 which includes the period when the member was the Minister in charge. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. I missed what the Minister said at the end there because of some chat on my right. Could he just outline the comparison with the period post-1984. 
Mr SPEAKER 
: Could the Minister just repeat the last part of his answer. 
Hon Dr MICHAEL CULLEN 
: Not a single major investment proposal on the business side as opposed to the land purchase side has been turned down since 1985 which includes the period when the member as Treasurer was the Minister in charge. 
Mathematics—Skill Levels 
7.  
GEORGINA BEYER (Labour—Wairarapa) 
 to the  
Minister of Education 
: Does he have concerns about mathematical skills in New Zealand; if so what are they? 
Hon TREVOR MALLARD (Minister of Education) 
: 
 Yes. Research shows that our 15-year-olds are fourth in the OECD for numeracy skills but I am concerned about the wide gaps between New Zealand’s best and our poorest performers. Mathematical skills are still a problem in some groups even beyond school. It seems that some people cannot tell the difference between three and 14 they sack someone for incompetence and give him a $21000 a year pay rise—and now we see what was wrong with the Reserve Bank. 
Mr SPEAKER 
: The Minister might like to indulge himself but I am not very happy with that outcome at all. That last part of the answer was not in order. 
Georgina Beyer 
: What groups in particular appear to be behind in maths skills and what is the Government doing to assist those groups? 
Hon TREVOR MALLARD 
: It is important that leaders of organisations have the skills to make additions and subtractions. In some cases the sums have been done so badly that there is nothing the Government can do to help them and when one ends up with health and finance on the second bench that is obvious. 
Mr SPEAKER 
: The Minister is now trying my patience and I do not think he is contributing to the good running of this House. That is the end of all comments about that particular matter. 
Treaty of Waitangi Claims—Deadline 
8.  
RODNEY HIDE (Leader—ACT) 
 to the  
Prime Minister 
: Is the Government considering a deadline for lodging Treaty of Waitangi claims and is her position still “I neither support nor don’t support” the idea? 
Hon Dr MICHAEL CULLEN (Acting Prime Minister) 
: 
 As was indicated by the Hon Margaret Wilson in a press release on 21 July 2004 proposals are being considered to streamline historical Treaty of Waitangi settlements including a time line on lodging claims. Decisions are not yet taken. 
Rodney Hide 
: How is it possible for there to be any finality to treaty claims as long as we have a Government that agrees with the Deputy Prime Minister that the treaty is a “living document where new applications or implications may arise as circumstances change”? 
Hon Dr MICHAEL CULLEN 
: The Deputy Prime Minister was extraordinarily well informed and perceptive on that matter. What the previous question referred to primarily and what my answer referred to was historical settlements and a time line on those. Contemporary claims may arise as circumstances change. 
Jill Pettis 
: What progress has the Government made in settling historical treaty claims? 
Hon Dr MICHAEL CULLEN 
: The Government has settled the following claims: Te Uri o Hau NgatiRuanui Ngati Tama Ngati Awa NgatiTuwharetoa Bay of Plenty and Nga Rauru. We have recognised the mandates of three other iwi claimants and have signed terms of negotiation with four other iwi claimants. 
Gerry Brownlee 
: How can anybody think the Government is serious about proposing a deadline for the lodging of treaty claims when its record is that in the last 5 years it has managed to pass only four Treaty of Waitangi settlement Acts? 
Hon Dr MICHAEL CULLEN 
: The member will know that there is a lengthy process around such claims running through mandating tribunal reports negotiations and legislation. However if the member cares to wait tomorrow he will see another treaty claims bill being presented to the House for introduction. 
Metiria Turei 
: Does the Prime Minister support the statement by the Hon Margaret Wilson in response to Mr Rodney Hide’s bill on a time limit for treaty settlements that: “The bill is a typical ACT quick fix. Let’s ignore that it’s about partnership that it’s about negotiation and that the other partner may have some rights in that process.”; and can she explain how that member’s bill is or was different from the reports that her Cabinet will impose time limits on treaty settlements without negotiation with those partners? 
Mr SPEAKER 
: Certainly the second part of the question was in order. The first part was a bit doubtful but I will allow the Minister to comment. 
Hon Dr MICHAEL CULLEN 
: There is a very large difference between thinking of a time limit on the lodging of claims and a time limit on the settlement of those claims. It is now nearly 20 years since the ability to lodge historical claims became open. It is not possible to set a time limit on settlement because that would be unfair to the process. 
Hon Peter Dunne 
: If the Government is now considering the introduction of a time limit for the lodging of claims—and I am just picking up on the last answer given by the Minister—what is its view regarding a timetable for the settlement of claims that are lodged and is it moving to try to speed up that process in any particular way? 
Hon Dr MICHAEL CULLEN 
: Taking the latter point I say that we have already approved the funding for an additional treaty claims settlement team and that has helped to accelerate the process already. We are making significant progress on the central North Island issue but there are mandating problems there which are really what is holding up the process. The Prime Minister and the Minister have said before that the 10 to 15 year time frame for settling historical treaty claims is realistic but it would not be possible to sensibly set such a rigid time frame in the same way that it is not possible to set such a rigid budget for the settlement of treaty claims. 
Hon Ken Shirley 
: What has led the Prime Minister to change her mind on the issue of the proposal to establish a deadline for lodging Treaty of Waitangi claims when it was condemned by her when first advocated by the ACT party several years ago? 
Hon Dr Michael Cullen 
: My understanding is that the rejection has been on the issue of a deadline for settlement rather than for lodging claims. However there are still important issues to think through in terms of whether such a fixed and rigid deadline should be set and whether that would be a positive or a negative in terms of actually achieving a successful process around the settlement of treaty claims. 
Hon Ken Shirley 
: I raise a point of order Mr Speaker. In answering that question the Minister actually changed the question and then answered the question he had changed it to. My question was quite specific about the ACT party first proposing that there be a time limit on the lodging of treaty claims. The Minister then referred to settlement and answered that part. I would like him to address the question that was asked please. 
Mr SPEAKER 
: That was his understanding. He is entitled to take that interpretation if he wishes. I cannot judge that as long as he addresses the question. 
Rodney Hide 
: Just so that we can be clear on the issue is the Government now considering a deadline for historical claims and notwithstanding that will it allow new and innovative claims to be made and would the only way to end the treaty grievance industry be to vote Labour out of office? 
Hon Dr MICHAEL CULLEN 
: No. What it is true to say is that contemporary claims arise out of changing circumstances. If the member wishes to end any possibility of future contemporary treaty claims he will have to find a way legally to rescind the treaty. I wish him well in trying to attempt that. 
Unemployment Beneficiaries—Job Placements 
9.  
DAVE HEREORA (Labour) 
 to the  
Associate Minister for Social Development and Employment 
: Has Work and Income set targets for placing unemployment beneficiaries into jobs; if so what progress have they made? 
Hon RICK BARKER (Associate Minister for Social Development and Employment) 
: 
 Performance targets for Work and Income New Zealand are set in the statement of corporate intent of the Ministry of Social Development. Recent results show that in the 2003-04 year 52000 people were placed into jobs. That number is equivalent to a job for every man woman and child in Rotorua and is 8000 above target. That performance is especially satisfying given that the pool of unemployed beneficiaries has significantly reduced by 30.4 percent from the same time last year. When there are fewer people in the pool of unemployed it can become harder to find jobs but that has not been so. Although fewer people have needed to find jobs we have been more successful in getting people into work. 
Dave Hereora 
: Is the Minister confident that the downward trend in unemployment figures will continue? 
Hon RICK BARKER 
: Yes I am. That trend has been maintained over a sustained period of time and the Government has established a number of initiatives targeted at assisting job seekers into work. The $105 million Jobs Jolt package kicked off in the 2003 Budget helps to skill people in information technology employment coaching and other work skills. Currently we also have five industry partnerships and expect a further 567 positions from those partnerships with more industry partnerships to come. That is training real people for real jobs. 
Katherine Rich 
: How many unemployed have transferred to the sickness benefit or the invalids benefit from the unemployment benefit in the last 12 months? 
Hon RICK BARKER 
: I cannot find the figures immediately but I will get them to the member. However if the member wants to highlight that there has been a growth in the number of sickness benefits the fact is that the number of people dependent on the State for a benefit since this Government has been in power has plummeted. That is quite contrary to the effect the National Government had. 
Judy Turner 
: How can he state credibly in his press release today that he is “pleased to see that people who have been out of work for a long time have found jobs” when the actual number of those on the dole for more than 3 years has increased from 10789 to 15672 which is an increase of 45 percent? 
Hon RICK BARKER 
: Quite a number of people have been on the unemployment benefit for a long time. It is true to say that a significant slice of those people have been in the 50-year-plus group and it is proving very difficult to get them into jobs but in reducing the number of people on the unemployment benefit and getting people into employment we have exceeded our target. The facts speak for themselves. Unemployment now stands at 4 percent. Last year we put over 52000 people into jobs which I think is an outstanding result. 
Rt Hon Winston Peters 
: I seek leave to table the answer given by Mr Barker on 13 November last year on the question of transfer from unemployment benefit to sickness benefit which he put at above 40000 New Zealanders. 
Mr SPEAKER 
: Leave is sought to table that. Is there any objection? There is. 
Rt Hon Winston Peters 
: There is? 
Mr SPEAKER 
: I heard someone say yes. For goodness’ sake! 
Rt Hon Winston Peters 
: We didn’t know. 
Mr SPEAKER 
: It is early in the week I know. 
Community Employment Group—Resignation Northern Regional Manager 
10.  
Dr WAYNE MAPP (National—North Shore) 
 to the  
Minister of Labour 
: Is he satisfied all correct procedures were followed by the Department of Labour leading up to the resignation of Ms AmokuraPanoho and that she was treated appropriately by Ministers and officials? 
Hon PAUL SWAIN (Minister of Labour) 
: 
 Yes. 
Dr Wayne Mapp 
: Does the Minister accept that the inappropriate activities of his ministerial colleagues Mr Tamihere and Ms Dyson for which Mr Tamihere has apologised on air contributed to Miss Panoho resigning and given that he is the Minister in charge what is he doing to remedy that wrongful dismissal? 
Hon PAUL SWAIN 
: No. My concern was that the process and procedures were in place—and they were. I note from Miss Panoho’s comment in the  
New Zealand Herald 
 today that she did not plan any action against the Department of Labour which she said had “treated her with respect” and further said on  
Nine to Noon 
 that she was “not pressured to resign” and nor was she given an ultimatum. The process and procedures were good. 
Rt Hon Winston Peters 
: If Community Employment Group cars were at the hui was it either a case that the cars were converted or that their drivers were there—and could have been there only if they were definitely on taxpayers’ paid business—because they were using those cars for that occasion? 
Hon PAUL SWAIN 
: That was not my concern. My concern was with the process and procedure and they were followed properly. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. The Minister should make it his concern to answer my question. 
Mr SPEAKER 
: That may well be the case but— 
Rt Hon Winston Peters 
: With respect he did not; he just said that it was not his concern. The purpose of question time is to bring our concerns to him and make them his concern. He did not answer the question. 
Mr SPEAKER 
: Perhaps the Minister may comment. 
Hon PAUL SWAIN 
: The Minister responsible for the Community Employment Group is my colleague Steve Maharey. My concern in the primary question was whether I considered the process and procedures followed were fair and I have answered that they were. 
Mr SPEAKER 
: That is perfectly correct. 
Heather Roy 
: Is it not true that the Minister’s department is investigating Miss Panoho’s role as northern regional manager of the Community Employment Group for inappropriately favouring capacity building for Maori groups but that the Government’s main concern is that Miss Panoho was approving inappropriate capacity building to favour the Maori Party when previously she had favoured the Labour Government? 
Hon PAUL SWAIN 
: I am not aware of that. 
Peter Brown 
: Was it appropriate for two Ministers to go out publicly with their thoughts on this issue and subsequently apologise on air and does the Minister believe that that was acting in good faith? 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. What responsibility does this Minister have for other Ministers’ actions? The Prime Minister bears such responsibility. 
Peter Brown 
: I asked the Minister his views on acting principally in good faith; that was the thrust of my question. 
Mr SPEAKER 
: In so far as that relates to the Minister’s portfolio he is to answer. 
Hon PAUL SWAIN 
: I note the last part of the comment—that the Ministers have apologised for those comments. 
Dr Wayne Mapp 
: Will the Minister ensure that the ministry has discussions with Miss Panoho in relation to reinstatement to her former position to the offer of a new position or to compensation for her wrongful constructive dismissal and will he report those discussions to this House? 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. Is it permissible to ask a Minister to perform an act that he is not allowed to perform? That is precisely what the question has asked the Minister to do because he is not allowed to intervene in that fashion. 
Mr SPEAKER 
: If the Minister is not allowed to intervene then of course that becomes his answer. 
Hon PAUL SWAIN 
: I am not allowed to intervene. 
Dr Wayne Mapp 
: I raise a point of order Mr Speaker. I asked two questions. The first one asked what he would do to ensure the ministry had discussions with Miss Panaho and secondly I asked whether he would report back to the House the results of any such discussions. 
Hon PAUL SWAIN 
: I think the answer to the second depends on the first. I am not allowed to intervene. 
Dr Muriel Newman 
: I seek leave to table documents that show that the Hon Parekura Horomia was a candidate for the Labour Party while still general manager of the Community Employment Group. 
Document by leave laid on the Table of the House. 
Overstayers—Thai Worker 
11.  
Rt Hon WINSTON PETERS (Leader—NZ First) 
 to the  
Minister of Immigration 
: Does he agree with the reported comments by Immigration Service spokeswoman Janine Parsons that the exploited Thai overstayer bakery worker case in New Lynn sent a strong warning to employers hiring overstayers or exploiting staff and how widespread does he believe this problem to be? 
Hon PAUL SWAIN (Minister of Immigration) 
: 
 Yes. The penalty for knowingly hiring an unlawful worker including an overstayer has been increased by this Government. It is unclear how widespread the problem is but from my discussions with the horticultural industry my view is that there is a problem. This issue is being considered as part of work relating to labour and skill shortages in New Zealand and as part of the review of the Immigration Act. 
Rt Hon Winston Peters 
: If there is a problem firstly why did the Inland Revenue Department deny it just a year ago and secondly how can the $2000 fine that was imposed on a crook from the Western Bakery in New Lynn who exploited a Thai overstayer for 7 years on $4.70 an hour 12 hours a day 7 days a week—making $250000 in profit—be consistent without sending some message to the employers of this country? 
Hon PAUL SWAIN 
: I am not sure and the member will have to ask the judge. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. I will not ask the judge; I am asking the Minister. If the member is going to be a Minister then it is high time he started to answer the questions. I am asking the Minister of Immigration whether he thinks it sends a consistent message. If he wants me to ask the judge then I will take leave and I will do that via this Parliament. 
Mr SPEAKER 
: No the Minister was asked for an opinion which he can give if he wishes. The Minister can address the question in that way but if he wants to add to that he can. 
Hon PAUL SWAIN 
: It is up to Parliament to set the penalties; it is up to judges to impose the penalties. That is why I suggested that the member should take it up with the judge. 
Moana Mackey 
: What has the Government done to toughen up on employers who hire people unlawfully? 
Hon PAUL SWAIN 
: Quite a lot. In 2002 the Government increased penalties by increasing the maximum fine from $2000 to $50000 for employers who knowingly employ a migrant not lawfully entitled to undertake that work; created a new strict liability offence with a maximum fine of $10000 for an employer who employs a migrant to do work he or she is not entitled to undertake; and created a new offence with a maximum fine of $100000 and 7 years’ imprisonment for any employer who knowingly employs a migrant not lawfully entitled to do that work and exploits that migrant. I understand that all parties in the House supported those changes. 
Rt Hon Winston Peters 
: What responsibility does he and his Government intend to take for the Inland Revenue Department refusing to decline IRD numbers to such overstayers and dishing them out willy-nilly which is what has been going on; and how is it fair that the hard-working overstayer who got absolutely totally exploited to the tune of $250000 got sent home while the crook stayed here? 
Hon PAUL SWAIN 
: In answer to the first part of the question there is an issue between the ways in which the Inland Revenue Department in my view gives out numbers to people who are not lawfully able to work in New Zealand. That is an issue that has been taken up as part of the review of the Act. There is a concern there even though I am sure that the Minister of Revenue will have a view on that from another perspective. As far as the second point is concerned as I have said the Government’s responsibility is to set the penalties which it has done. It has increased them substantially as I pointed out and it is up to the courts to make decisions about the appropriate level of sentence for that particular offence. 
Community Employment Group—Resignation Northern Regional Manager 
12.  
SIMON POWER (National—Rangitikei) 
 to the  
Minister of State Services 
: What information or advice did he rely on for his statement on  
Morning Report 
 that “apparent pressure on particular staff members who the individual was managing” was the issue in the resignation of Ms AmokuraPanoho and who was the source of that information? 
Hon TREVOR MALLARD (Minister of State Services) 
: 
 The information was erroneous and I have indicated my regret. 
Simon Power 
: Is he satisfied with the example he as Minister of State Services has set in publicly attacking an individual public servant who has now lost her job without getting his facts straight; and what advice has he received from the Acting Prime Minister in relation to his actions? 
Hon TREVOR MALLARD 
: No; she had lost her job before I made the comments; and I received clear and frank advice. 
Deborah Coddington 
: Is the Minister saying to the House that he made up this erroneous statement or is he saying that he did have a source the source was Mr Tamihere and Mr Tamihere made it up? 
Hon TREVOR MALLARD 
: I am not sure of the source but it is clear that at least one of the tributaries was a hot-blooded indigenous mate of mine. 
Simon Power 
: Does he agree with Dr Cullen’s reported remarks that he “would have been better off staying away from the matter and by wading in gave the impression they were clamping down on free speech”; and will he now actually apologise as at least his colleague John Tamihere has done? 
Hon TREVOR MALLARD 
: I of course agree with the Acting Prime Minister and I apologised on the day. 
Simon Power 
: Has he done an estimate of the likely amount that his remarks could cost the taxpayer if legal action results from his remarks? 
Hon TREVOR MALLARD 
: No. 
Amended answers to Oral Questions 
Question No. 8 to Minister 5 August 
Hon PAUL SWAIN (Minister of Corrections) 
: 
 On Thursday 5 August in response to a supplementary question regarding the Auckland Central Remand Prison I stated that the previous National Government did not fund the prison after the expiry of the current contract. The correct response was that the previous National Government did not fully fund the prison following the expiry of the current contract. 
Electricity and Gas Industries Bill 
Second Reading 
Debate resumed from 5 August. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 When the House adjourned the other night we had just listened to contributions from the Hon Harry Duynhoven Brian Connell from National and the Minister the Hon Pete Hodgson. I would like to open by complimenting Brian Connell in particular. The man has a remarkable skill. He can stand and talk for 10 minutes without pausing or taking a breath and without an “um” or an “ah” and say nothing at all. I tried desperately hard to work out what message he was delivering but I could not work it out. If Don Brash had been listening he would have made a mental note or noted on his jotter pad: “For goodness’ sake don’t let Roger Sowry go just yet.” He would have written that on his pad. 
I wish to enlighten that National Party member that the free market such as was established for electricity by the Bradford reforms does not work in so far as it does not have a social conscience. That is particularly so with a commodity like electricity of which we barely produce enough to get by. We need regulation to ensure there is fair distribution. New Zealand First made that clear to Max Bradford at the time in 1998 but he did not implement it. He put a provision in an Act—which I think ACT supported from memory—that acknowledged there could be regulation but he did not put in any regulation at all. In particular he desperately wanted to amend the provisions concerning control on lines companies just before the 1999 election. I repeat the free market does not have a social conscience. We need regulation to cover that aspect. 
New Zealand First has looked long and hard at this bill. We believe that something has to be done about our electricity industry because people are hurting. We asked ourselves whether this bill addresses three specific questions. The first is whether it addresses security of supply concerns. Well it does. Whatever we say about the bill it certainly does that by giving “teeth” for want of a better term to the Electricity Commission so that the commission can ensure that all participants work for the common good. 
The second is whether the bill delivers electricity at a reasonable and fair price. New Zealanders want electricity at the flick of a switch delivered at a reasonable and fair price. 
Hon Ken Shirley 
: Market price. 
PETER BROWN 
: The honourable member is talking through his head—through the top of it not the front of it. 
This bill does nothing to ensure that electricity will be delivered at a reasonable and fair price. The Minister is about to introduce a compulsory reduced line-charge of 30c a day plus GST. People who elect to go on that will pay more for their power on a unit basis but will win in the longer run if they use less than 8000 kilowatts a year. That is a reasonable move for low-paid people or people on fixed incomes like retired folk. But in general this bill will not deliver electricity at a reasonable and fair price. 
The third question New Zealand First asks is whether the bill encourages investment so as to ensure ever-increasing capacity. We have some doubts about that. It is essential that more and more electricity is generated each year. The required estimate is something like 150 megawatts a year but we doubt whether the bill will do a great deal in ensuring supply in that respect. 
A question which we should endeavour to answer arose in the Commerce Committee of whether lines companies should be allowed to invest in electricity generation again. Members will recall that the Bradford reforms segregated lines from generation and now a good argument exists that lines companies should be allowed to come back and invest in generation. Basically put the argument is that they have the money and if they are not allowed to invest in electricity in this country then they will invest in electricity probably in Australia or worse still they will invest in some other type of industry altogether rather than in generation. So there is a good argument for allowing lines companies once again to play a major role in generating electricity. I note that Roger Sowry has announced that that is what the National Party stands for and what it will be promoting. New Zealand First is not yet convinced that that is the way to go but we do recognise it is an area of concern that we should be looking at. 
We also should acknowledge that currently lines companies can produce a little bit of electricity generation but it is very small. This bill will allow them to increase their generation somewhat but it will still be very limited. The question we should be asking ourselves as MPs representing New Zealanders is whether we should allow lines companies back in to invest in generation in an unlimited manner. In other words should we remove the cap totally? 
New Zealand First believes that this country should make better use of coal. The Government in particular tends to treat coal as a poor cousin but we have oodles of coal—something like 15 billion tonnes. Of that 15 billion it is estimated that close to 9 billion can be accessed with reasonable ease and delivered at a reasonable price. New Zealand First believes that New Zealand should be further investigating the use of coal as a fuel to generate electricity. That will not please the “greenies” or some of the other people who have concerns about it but my understanding is that most of the “nasties” for want of a better term can be taken care of—the major problem with coal is carbon dioxide. I also understand that in Australia a group has been set up to investigate modern technologies in the hope that in a few years’ time carbon dioxide can be taken care of. My understanding is that both Solid Energy and Genesis Energy pay into that. I think it is right and proper that we should be investing in research because we should be making better use of coal. 
New Zealand First desperately wants the electricity concerns in this country addressed. We know it is of major concern to retired folk and people living on fixed incomes but we do not believe that this bill as written will do it. I am hopeful the Minister will make some amendments to it in the Committee stage but at this point New Zealand First cannot support the bill. 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 I acknowledge the touching faith of my colleague Peter Brown in the Australian research into carbon sequestration. He hopes it will work. I guess we all hope it will work otherwise we are going to be living on an uninhabitable planet. But some of us believe it would be prudent to do more than just hope. Some of us believe it would be prudent to have an alternative strategy so that we move towards renewables if in fact coal sequestration does not work. 
We already have 50 years of experience of the nuclear industry saying: “We haven’t solved the waste disposal problem yet but let’s just go ahead and build the stations and then sometime in the future we will solve the waste disposal problem and we’ll just store it until we do.” Well they are still storing it and they are no closer to solving the waste disposal problem than they were 50 years ago when they started building nukes. Let us not do that with carbon dioxide.  
However I move on to the subject of this bill. The Greens welcome a regulator for the electricity industry. We predicted in 2000 when the self-regulating industry governing board was set up that it was unlikely to work but agreed to give it the benefit of the doubt for a while provided there were backstop provisions in the Act. An interesting analysis was published in the Christchurch  
Press 
 recently by a couple of academics from that city pointing out that it is obvious under economic theory that in an industry such as electricity competition is going to have to compete on price and that competition will prevent investing in security of supply because that raises costs. Nobody will do that and stay in the market and therefore eventual shortages are inevitable. This is what has happened in the electricity market.  
It is also noteworthy that over recent years we have moved away from competition to the establishment of virtual regional monopolies in the electricity industry as companies have retrenched to the areas where they can make the most profits and moved out of others. So we really do not have a competitive industry any longer. We also have experience of various ways in which the market can be gamed and there has been no regulator to take care of that.  
We have a very good Government policy statement in terms of what is wanted from the electricity industry but absolutely no indication that the industry unregulated can deliver those outcomes. The Government policy statement asks for energy efficiency it asks for minimizing greenhouse gases it asks for safeguarding security of supply it asks for moving towards renewables and distributed generation and to demand-side participation in the market. None of those things happened at all while the industry was in charge of itself and in the end even the industry could not agree on what the rules should be. So now we have a regulator and I am glad that we do. Of course the jury is still out on whether the commission itself will be able to deliver on those outcomes but I have a lot more confidence that it will than I did when we were looking at self-regulation.  
Let us look first at the question of security of supply which is one of the biggies. Under the bill the commission may contract for reserve generation to ensure that the lights do not go out in a dry winter and that is a very good thing. In the meantime the Government has taken some steps it tells us to secure supply by building a 155 megawatt power station at Whirinaki which is ironically replacing a very similar power station that was there until very recently. It was sold off by Contact Energy as surplus to requirements when the National Government sold Contact Energy and it was thinking only of the short term and not of long-term security of supply. However the Whirinaki station has been re-established and we are told that is for security in dry years. In fact Mr Hodgson tells us it is designed not to be used yet in this very wet year when the hydro lakes are way above their normal capacity it has already been run 12 times we learnt from the  
Dominion Post 
 recently.  
So clearly security of supply is not triggering the Whirinaki power station but price is and I have to say this is not now reserve generation that is there for use in a dry winter. It has become part of a normal operating scheduling of stations when the price looks like going up a little bit. That gives me real concern about what will happen next year if it is in fact dry. However in the absence of this legislation the commission has not had the power to set criteria for the running of Whirinaki. With this legislation in place maybe it will do so and maybe it will return to being what it was designed to be and that is a station for security of supply rather than just for keeping prices down.  
I note that the commission under this bill is empowered to levy for providing greater energy efficiency and that it has the power to put some of that money itself directly into encouraging energy efficiency on customers’ premises. We have therefore a very confused situation under law. We have a small Crown entity set up in the year 2000 under its own Act—which I must say I introduced to Parliament—which required it to develop a national energy efficiency and conservation strategy which it has done with only $12 million a year in funding and a great deal to do. Now we have a large and better funded organisation with a mandate for energy efficiency but with no guidelines at all as to how it carries that out. We assume that it will be subject to the National Energy Efficiency and Conservation Strategy but we do not know—there is no guidance at all in the legislation—and they are reduced to developing their own memorandum of understanding with the Energy Efficiency and Conservation Authority as to who is to do what in this new environment. I think that leads to a lot of operational uncertainty and I think the Government needs to tell the commission what its role is meant to be in energy efficiency rather than leaving a turf war perhaps to eventuate between its two Crown entities.  
On the question of transmission Transpower is under the amendments to this bill able to contract for distributed generation and this is exactly the sort of cost-benefit analysis and trade-off that we desperately need to have happen. Many speeches are made in this House and elsewhere about how we need to expand transmission lines because we have transmission constraints. Well in some areas we do but in other areas there is a very much cheaper and more reliable way of overcoming those constraints and that is by building small-scale capacity close to where the end-users are. There needs to be a proper analysis of each proposal to expand the lines to see which is the best way to overcome that particular constraint and I hope that will be done under this legislation.  
Finally I have to say that I do not understand why the select committee finds it necessary to allow lines companies to build generation of any kind up to 50 megawatts. We already provided in the 2000 legislation for them to have unlimited scope to build new renewable generation because that is something the Government wants to promote. The non-renewable—in other words diesel sets—were constrained to 10 megawatts or 10 percent of their load. Now all of a sudden they are to be allowed to build quite sizable fossil fuel – fired plants and given that they are capital rich and have a wish to expand I really wonder whether this will take us further from our sustainability objective and from our greenhouse gas agreements. 
Hon KEN SHIRLEY (ACT) 
: 
 The ACT party opposes the Electricity and Gas Industries Bill. In doing so we note that in many respects we are ending up with the worst of both worlds. For any country energy security is important particularly for an island nation such as New Zealand. It is fine for Germany which can import nuclear energy from across the border in France and indeed for the UK which can import energy from Europe very readily through the tunnel or whatever. But as an island nation that is quite remote we are on our own. Therefore energy security—something we have always taken for granted certainly in recent decades—is critical to us. 
 The reason I say we have the worst of both worlds is that we have abandoned the central integrated model that was run by the State up until corporatisation and market reforms in energy. That model did give security but at a price. The price was that it was inflexible. It lacked innovation and more particularly optimal pricing. We never knew whether we were doing it in an efficient optimal way because there was no pricing mechanism. The State ran it and supplied it. People say that we had cheap power. But that is a myth because it was subsidised. We had price control and it was paid for by the taxpayer. Nothing is free; it is a question of how it is paid for. We had an inefficient sector with its inefficiencies disguised through price control subsidised through taxation. That is why we were paying up to 66c in the dollar in tax. In fact many people would have been paying more indirectly for their electricity. So we embarked on the market reforms starting in 1989 and continuing through the 1990s. The problem is that those reforms were not carried through. 
We are now in a hiatus situation where we do not have competition—and we know that it is competition in markets that ensures that supply meets demand at optimal pricing—because we have ended up with State monopolies again. This Government has ensured that about 70 percent of generation is held by the State-owned enterprises—Meridian Energy Mighty River Power and Genesis Energy—which have monopolies. It gets worse. Those generating monopolies have swapped and traded the energy supply base and now are “gentailers”—generators and retailers—with regional monopolies. There is no competition. The private sector which was emerging with TransAlta and other foreign firms that were starting to invest in the New Zealand electricity sector has been driven out. The main reason those firms have left is because of Government interference—heavy-handed regulation and the Government trying to pick winners. One cannot beat city hall and one cannot compete with the State. This Government sent the signal that it would confiscate property rights and it is not alone. 
The Bradford reforms which I believe were good for the most part had some serious deficiencies. The forced split between energy companies and lines companies was not necessary. Property rights were confiscated without compensation and drove foreign investors out of this country. We should welcome foreign investment in our energy sector as our country has been built by foreign investment. Our dairy and meat industries were built by foreign investment. Vestey’s Borthwicks and all of those other big names invested in New Zealand and gave us a world-competitive meat industry. It is the same with the energy sector. We need to bring in managerial skills innovation and new technologies instead of having this xenophobic “fortress New Zealand” attitude with regard to energy. 
Regrettably this bill is heavy-handed regulation and brings in more State control. It is really a step back to what we had in the past and it will not do the job. It is a step back to heavy-handed regulation. I was appalled at what Peter Brown from the New Zealand First Party said—that markets have no social conscience. He implied that the State will somehow get it right but that has never been the case. I reiterate that the best way to have supply meet demand at an optimal price is through healthy competition. That is what we do not have in our energy sector. It is not a lack of market; we need more market and less Government if we are to have a successful energy sector. This bill is a major step back down that wrong path of more regulation and the Government trying to pick the winners. 
We have a looming energy crisis in this country and it is partly structural. We have the problems I have just outlined where we have the worst of both worlds in the situation we are in now but we also have a growing fuel problem. We know that in dry years hydropower which we are dependent on cannot sustain us. It is unreliable. It is also clear that New Zealanders do not want to dam any more rivers—as was seen in the reaction to Project Aqua. I find it a bit rich in this debate for Jeanette Fitzsimons to say that we need more local generation because we had such a proposal for the West Coast. TrustPower identified a site at Card Creek in Dobson on the West Coast where an existing power station could be upgraded from 5 megawatts to 65 megawatts. This would have made the coast self-sufficient and obviate the need to upgrade the transmission line from Kikiwa and Islington. We know of the crisis that exists in the lines situation north of Christchurch. All the West Coast is fed north of that critical node. So it was what Jeanette Fitzsimons was advocating but it was the Green Party together with the Government that condemned that very sensible sustainable renewable energy source on the West Coast. It was in a water-rich area and would not have suffered the constraints we see across the divide in the Waitaki and other Canterbury catchments. That is absolute hypocrisy. 
The Greens should walk the talk. If they say that they want local renewable hydro-energy schemes it is no good condemning a proposal such as the one outlined because it might drown a few gorse and broom bushes. They cannot have it both ways. That is the problem with the energy debate in this country—we do not want to dam our rivers we do not want to use our coal we turn our backs on the nuclear option and will not even consider it and we say that wind will provide the answer. But if we quadrupled our wind generators the energy produced would not be even 2 percent of our generation capacity. The interesting thing about wind generation is that it is more intermittent and less reliable than water. At least we can predict when it will be dry; we cannot predict when the wind will not blow. Therefore we would have to match wind generation with equivalent thermal generation to back it up. 
There are other issues. Windmills are noisy and in many people’s eyes a blot on the landscape. So there will be those who will oppose them under the Resource Management Act. The other problem as people are finding all around the world is that wind generators chop up birds. Where they are built in the flight path of our native birds large numbers will be chopped up when they fly through them. There are some serious environmental problems with windmills. The Green Party advocates for wind power and says that everything is great with wind. But I assure members that whatever option is chosen in the energy sector there are problems. That is why we need a clear direction and a clear policy. 
In conclusion the market will find the best way of supply meeting demand at optimal prices so that this country can have a competitive energy sector. This bill is a step in the wrong direction back to more heavy-handed regulation. The ACT party will be opposing it. 
GORDON COPELAND (United Future) 
: 
 United Future will support the second and subsequent readings of the Electricity and Gas Industries Bill. However as I will explain that does not in and of itself signal that we believe all is well with the electricity sector. I will refer first to some specifics arising from the bill. Following the cancellation of Meridian Energy’s Project Aqua I called upon the Hon Pete Hodgson Minister of Energy to move the 25 megawatt limitation in this bill in relation to non-renewable generation investment by lines companies. I was pleased that by way of immediate response the Minister signalled his willingness to double the figure to 50 megawatts and the bill has been amended accordingly. 
Following further discussion with the lines companies however I went back to the Minister and suggested that given the critical importance of bringing new generation on stream—whether renewable or otherwise—as quickly as possible he should look at the total removal of any limits on lines companies. In my subsequent discussions with the Minister he indicated that he maintains an open mind on that question and would be prepared on a case by case basis to look at investment above 50 megawatts by one or more lines companies but with the important proviso that it must relate to new generation. I agree with the Minister’s sentiments in that regard. The purpose of increasing the old 5 megawatt limit is to encourage new generation rather than simply to reshuffle the ownership of present generating capacity. 
 I am in constant touch with all the major players in the electricity sector and it is very clearly their consensus view that New Zealand is likely to face electricity shortages beginning in either 2006 or 2007. In addition it appears inevitable for reasons that I will mention that the price of electricity to all our industrial commercial and residential consumers looks set to rise quite appreciably also from around that date. Those dates are significant if only because they are on the other side of the 2005 election and therefore may tempt the Government into some complacency secure in the knowledge that the crisis should it occur would be blamed upon the next Government be it National-led or Labour-led. 
Any such complacency however must be dispelled immediately because this issue has the potential to seriously impede New Zealand’s economic growth and to create real hardship for our citizens. If supply were disrupted everything from the use of our computers and cellphones through to home heating and the running of our manufacturing enterprises would be disrupted and the entire engine of our economy would begin to splutter. Real jobs could be lost and New Zealand’s international competitiveness seriously eroded. Therefore these are matters of the gravest concern—indeed in my opinion they are the single greatest risk to our economic growth and prosperity in the years ahead. 
I want to identify two problems now and move on to a third in my third reading speech. The first is a shortage of fuel to meet the demand for new electricity. To meet that demand Bryan Leyland has recently estimated that we will need an average of 320 megawatts per year of new generation for the next 20 years. That is a whopping 6400 megawatts of new generation—80 percent of all that we have in service now. It is estimated that at least 4000 megawatts of that will have to come from coal large hydro or nuclear generation. Gas wind and small hydro generation—good as they may be—will come nowhere near to filling the gap. 
We may be able to lower demand growth through energy efficiency measures—and they of course have my full support and the full support of any fair-minded person—but until we actually project concrete gains from that activity into the estimates that I have mentioned then we must squarely face up to the problems that confront us. The Government must ensure that all opportunities that exist are carefully examined. Nothing must be ruled out of the mix. With that in mind I renew my call for the Government to revisit the Conservation Act of 1987 to allow potential major hydro projects to move to resource hearings where all the conservation and other factors can be exhaustively and objectively evaluated. Unless we do that we are playing Russian roulette with our own economy and it makes no sense. 
We have to get away from the false dichotomy of suggesting that conservation values and hydro schemes cannot coexist. All the evidence points the other way for we already have hydro schemes in Fiordland National Park and Tongariro National Park to mention just a couple. The Government may rest assured that I in conjunction with major players in the industry will not give up on this demand either before the 2005 election or afterwards. We cannot given the critical future that the sector faces. 
Our second major challenge is to do with the transmission grid. Our best energy resources—coal hydro and gas—are in the lower South Island. The demand growth is from one end of the country to the other but with the greatest chunk in the North Island. We need a transmission system to get electricity from the point of generation to the consumer just as we need roads to transport oil for example from our ports to the consumer. Most of the existing transmission system was built 40 years ago and is now in need of significant refurbishment and upgrading. The total bill will run into billions of dollars. This year already we have faced a crisis in the Nelson region with the spot price of electricity going as high as $10000 per kilowatt hour. That is a direct result of capacity constraints in the transmission grid in that area. I was astonished to see that occur and have asked industry players—since everyone has known that the Nelson region has grown rapidly—why on earth no one had the foresight to put in place the new transmission grid that was necessary. Their response has been along the lines that yes they knew demand was growing and that they had already gone to capacity but that no one could agree on who should pay for the necessary new lines. What a tragic and pathetic response that is. 
I can tell the House today exactly who will pay for new transmission lines: it will be either the electricity consumer through higher prices or the taxpayer. That is the reality and the Government and others should do the nation a service by being frank concerning that reality. Simply saying that the problem will be fixed does not make it so. 
The Electricity Commission established under this bill will assist that process but the Government too should examine carefully how price impacts can be mitigated in the interests of all New Zealanders and our economy. I suggest for example that the Government look at the possibility of converting Transpower from a State-owned enterprise to a Crown entity. The Government would then need to borrow the funds necessary to upgrade the transmission grid at the cheapest possible rate and to stretch the repayments over about 30 years so that the servicing of the debt would minimise impacts on electricity prices and on the overall health of our economy. 
Transmission lines have a long life so it is right and proper to stretch that debt servicing on to an inter-generational basis. Recently about 35 MPs spent a day with Genesis Energy. We were taken in a bus down the southern motorway from Auckland to visit the Huntly Power Station. On the right hand side of that highway one can see two parallel sets of transmission lines which are part of the national transmission grid. We want to upgrade those from 220 KV to I think it is 400 KV per hour. Unbelievably underneath one of those transmission grids right now as we speak brand new houses are being built. I understand that the building of brand new houses underneath the transmission grid happens nowhere else in the world. Putting those houses there means that we will be unable to upgrade those lines to the necessary capacity because it would be dangerous to the residents. As Murray Jackson the Chief Executive Officer of Genesis Energy informed us we have two options. We will either have to pull the houses down or go underground. 
So there are tremendous problems in terms of the transmission lines and the transmission grids. We need therefore to concentrate on the cash flows and address the issue of return on capital employed as we do for roads rather than through a State-owned enterprise structure because as I have already pointed out the transmission grid is the electricity equivalent. The Government cannot afford to sit back and expect the Electricity Commission to resolve these issues on its own. 
MOANA MACKEY (Labour) 
: 
 I am very happy to rise to support the second reading of the Electricity and Gas Industries Bill. I think it is fair to say that like most members of Parliament electricity is probably the single issue I get the most correspondence about—in particular correspondence around the issues of consumer protection competition and security of supply. It is for that reason that I am proud to support this bill. In particular I indicate the work that has been done by the Commerce Committee. 
This bill puts in place the decisions made by the Government this year about electricity supply security and about the governance of the electricity and gas industries. The bill will provide certainty and stability in the electricity and gas markets. It contains measures to promote the security of supply to give consumer protection competition and to improve the governance of the electricity and gas industries. In particular I draw attention to the fact that this bill updates the Electricity Act to reflect the establishment of the Electricity Commission. The Electricity Commission has come under fire from opponents to this bill but I believe that through information provision and contracting it will be able to meet its primary objectives. I think the commission will have to resort to using its regulation-making powers very infrequently. This bill is a good step in the Government’s commitment towards greater energy efficiency and a sustainable energy future and I look forward to its passage through the House. 
Hon ROGER SOWRY (National) 
: 
 It is apparent that that member has never read the bill. This bill is a shocking piece of work—an absolutely shocking piece of work. It is OK for United Future members to get up and waffle on about why they support this legislation but this bill does nothing at all to drive up investment in our infrastructure and electricity and lines companies to guarantee security of supply to see new generation facilities built to create a proper hedge market or to sort out problems that are now occurring with the market. What it does is establish a massive bureaucracy over our electricity industry. 
I want to bring to Government members’ attention the submissions from Dr Graham Scott. I wonder whether the Government member who spoke before me Ms Moana Mackey who got up to say this was a great bill has read those submissions. [ 
Interruption 
] No she has not. Well Dr Graham Scott on behalf of all the electricity companies all the generators and most of the lines companies— 
Moana Mackey 
: He’s biased. 
Hon ROGER SOWRY 
: Oh she says that he is biased. I tell the member that the lines company in the seat she wishes to stand for says—and I quote from the submission—that it has seen this legislation before “in the Eastern European nations that grew out of the Soviet Union”. That is what it thinks of this bill. 
Dr Graham Scott an eminent New Zealander who is a former Secretary to the Treasury came before the Commerce Committee and said that this legislation makes him think of legislation he has seen from the nations in Eastern Europe that came out of the old Soviet Union—and Moana Mackey stood in the House and said the bill is good and United Future members say they will support it. 
National strongly opposes this bill. We oppose the fact that the Minister can give directions to the commission so it is not independent. We oppose the fact that the commission makes the rules interprets the rules and then makes the judgment on whether an energy company has broken the rules. That is outrageous. We oppose the fact that the Minister makes decisions on what the commission must do but can then ignore the commission’s recommendations and does not have to follow them at all. We oppose the fact that under this bill Labour is corrupting the independence of the Commerce Commission by appointing members to the Commerce Commission who are joint members of the Commerce Commission and the Electricity Commission. I ask the Labour Government: who outside the Labour Party supports that? Those members should name one submission. 
Hon John Tamihere 
: Everyone. 
Hon ROGER SOWRY 
: Well Mr Tamihere who is about to launch his book says “everyone”. He should name one. None—he cannot name one because not one person outside the commission or the Labour Party supports cross-accreditation of the Commerce Commission and the Electricity Commission. So the Commerce Commission using its independent powers has to sit and make decisions on lines companies’ charges and the same members sit on the Electricity Commission making recommendations and taking orders from the Minister about those charges. It is a nonsense and it borders on corruption. It will not work and it will have to be repealed within 12 months. It simply will not work. 
No one in the industry is prepared to say it will work—not one company; not one of the State-owned generators. The Government appoints its own lackeys to the State-owned generators. The president of the Labour Party sits on the board of Genesis Power. 
Darren Hughes 
: Good fella! 
Hon ROGER SOWRY 
: The junior Government whip says he is a good fella. Well his company made a submission totally opposing this bill. Genesis Power is totally opposed to this bill. So did the president of the Labour Party tick off on the submission? Oh those members do not know about that. They are not sure about that. Perhaps he is not such a good bloke after all. 
Also this bill does not go far enough. The Minister wimped out about lines companies and decided not to let them enter into full generation. He kept a cap on them thereby giving the monopoly to the existing State generators. That is what the Minister has done; he has kept the monopoly with the existing State generators. 
But even worse is what this bill does to the gas industry. At a time when this nation desperately needs another gas find and desperately needs investment in gas infrastructure can members of Parliament believe that Labour and United Future are supporting a bill whereby if an explorer discovers gas brings the gas on shore builds the processing plant to process the gas and is using it and another explorer finds gas and wants access to the first processing plant but cannot negotiate it the Government will deem access to be given? 
So the bill effectively nationalises the gas infrastructure. Large gas explorers have been into this Parliament sat in Labour MPs’ offices and told them they will not invest in exploring while this legislation is on the books. Labour MPs have said: “We’ll go and see Harry Duynhoven about that. This cannot be right we’ll go and see Harry Duynhoven about it.” Well they might have seen Harry Duynhoven but he has done what he does best—not a thing! He has sat on his hands and hidden away and that is why this bill is such a disaster. 
I am very surprised that United Future support this legislation given the assurances that we were told those members had given people in the industry but it is not uncommon for that Christian-based party to give one assurance to one person and another assurance to a different person. That is something that those members have to live with themselves. 
The next National Government will repeal this bill. This bill is a nonsense it is growing a massive bureaucracy and it is not supported by one player in the industry or by any of our major industry groups. The major energy users in this country do not support the bill. 
Moana Mackey 
: What about the public? 
Hon ROGER SOWRY 
: Well I tell the member that we received precisely no submissions from members of the public on this bill—not one. 
Moana Mackey 
: That’s not surprising. 
Hon ROGER SOWRY 
: Oh she says that is not surprising. Well the public did not make submissions on this bill because it harms industry and does not provide competition. In her district her own energy company strongly opposes this bill. 
Darren Hughes 
: What do the consumers think about it? 
Hon ROGER SOWRY 
: Consumers thought that the part concerning consumer complaints—which is two clauses—was good. They thought the rest was nonsense and that it would do nothing for extra generation nothing for competition and nothing to drive prices down but that it would do everything to create a massive bureaucracy. That is why we oppose the bill. 
CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I rise to support the bill and all I can say to that member after that contribution is: “Isn’t Hannah’s looking good?”. Today as members look at this bill and analyse it I want to tell the truth about that member because he forgets that he sat in Cabinet and said “Yes”. He was like one of those little dolls with a spring in their necks that just nod in agreement all the time. He could not wait to say “Yes” to Max Bradford’s reforms. He was led by the nose and backed them and he still backs them—although judging from some of his quotes he does not quite know what he backs. Now he has not even been reshuffled—he has been put out to grass. He has cut and run. The energy spokesperson for the National Party on the cusp of being put out to grass to wade through a few daisies suddenly finds a voice and some intestinal fortitude on energy policy. It is great that he has done that but it is a pity he could not have done it 3 or 6 years ago. [ 
Interruption 
] Oh no. To assist the member I said that he did have and has found some intestinal fortitude. I did not say that he has none—that would have been unparliamentary. That member was the shadow leader of the House before he was put out to grass. He has found his voice though. 
We know that that National Party is split over its energy policy. The spokesperson on energy Mr Sowry said in a speech to the Electricity Industry Reform Conference on 31 May 2004 that he will “support lines companies being able to enter in generation with no limit on the amount of generation they may own”. 
Hon Roger Sowry 
: That’s right. 
CLAYTON COSGROVE 
: I am glad the member confirmed that. Yet that amounts to a repeal of National’s Bradford reforms of the 1990s. The member forgot about those yet he said “That’s right.” So now he is against the Bradford reforms. His Government and he like Noddy nodded yes to Mr Bradford. Now he has undergone a “road to Damascus” experience. He has seen the light and— 
Government Member 
: Flip-flop! 
CLAYTON COSGROVE 
: He has seen the light and has flip-flopped just days weeks or months before he wanders back to a Hannah’s shoe store and asks for his old job back. 
I ask him where his credibility on this issue is. For 5 years in Opposition Mr Sowry has sat and done nothing. Now he stands up refers to the Electricity and Gas Industries Bill and tries to shed the cloak of what he was in a National Government—a yes-man. The problem is that Mr Sowry could never learn and that is why he got done like the proverbial dog’s dinner twice by my red-headed—or red-blooded—colleague Mr Darren Hughes. He was done like dog tucker because he thinks that New Zealand communities are stupid. The problem is that they are brighter than that member will ever be and they saw through him three or four times. But today he stood up and attempted to throw off the cloak of the yes-man under the Max Bradford reforms. He told people that he has changed his mind and that his Government had got it wrong. Then he poured cold water and scorn on a bill that attempts to put right the stupidity and mismanagement of the Government that he was a senior member in. 
I ask what credibility that member has. I suggest he sit there and attempt to listen to what this bill is trying to do. The purpose of the bill is to update the Electricity Act and to reflect the establishment of the Electricity Commission. The bill is interesting. It talks about regulation. Well what the Government expects out of the Electricity Commission is for it to achieve its objectives primarily through information and contracting. Regulation-making will become a last resort. 
As I conclude I say to that member that I support this bill. I suggest he go back down his hole to his office pick up his  
Hansard 
 and read some of the things he said but that he now contradicts in this House. Mr Hughes I am sure will support me in saying that Mr Sowry should go back to the people of the electorate he once represented for a short time—Otaki—and apologise to them for the disgrace he was as a Minister and as a member of Parliament over the mismanagement of the electricity sector. 
I conclude that the truth on the matter is that if we had been having this debate with that member still in Government as a Minister we would be having it under candlelight not under light bulbs. That is the situation that his mismanagement would have produced. I invite the people of Otaki and the people of New Zealand to reflect on that member’s speech and render their verdict again—as they have done two or three times already on that member—as to the level of credibility he has even to rise and take a breath in this debate. 
PHIL HEATLEY (National—Whangarei) 
: 
 The biggest favour and the bravest favour that the National Party can do when it is elected to Government next year is to repeal this legislation. Sadly although Clayton Cosgrove says that “it attempts to fix some of the problems” in the electricity and energy industry I say that it fails. Mr Cosgrove is quite right in saying that it does attempt to put it right but I am correct too in saying that it fails—which is a sad thing. 
I was reading over the introductory speeches to the bill made by Labour Party members. There were only two sentences from a number of members but David Cunliffe launched forth with more than two; he risked more. He said—and sadly this was in November 2003: “We want the lights on. That is why we cannot afford to have another 2 years of dilly-dallying. Let us get this bill passed.” That member and his more inexperienced colleague Mr Cosgrove should be reminded that they were part of the Government for the 3 years leading up to the time of that speech. They were in the Government that Mr Cunliffe refers to as “dilly-dallying” and they were among the Government members who have come through with this bill. After those years of dilly-dallying and after 12 months of absurd bureaucracy coming together they have achieved nothing. 
This Electricity and Gas Industries Bill will determine the legislative framework for the electricity and gas industries for the foreseeable future. That is true and it is a sad thing indeed. Firstly and probably most important the bill puts together the Electricity Commission and the legislation that will underpin that commission to be an authoritative but ineffective body. The problem is: how authoritative and how effective will that body be? My concern which I would like to put to the House is how this bill—and it is a good question—promotes investment in the sector. It does not. How does this bill promote investment for security of supply? It does not. How does this bill expand compliance costs? It certainly achieves that. 
I would like to address the issue of compliance costs first. The Electricity Commission’s design creates an institution with advisory operational and regulatory roles which will place it at risk of serious performance failure and judicial review. Under the Act the commission has to be a policy adviser a proposer of regulations and rules and a purchaser or provider of market operations. That is three things. It also has to be a purchaser of reserve power and a seller of electricity in dry years. It has to be an adjudicator of fines and penalties and an industry facilitator. It has to be a promoter of energy conservation. That is eight roles. The ninth role is that it has to be a decision maker over the investment services and prices of State-owned enterprises. The tenth role is that under the Commerce Act it has to be a regulator of the prices and services of distribution and transmission companies. 
There are 10 roles. Which of those will it focus on and which ones will it bill the electricity and energy companies for? Who will fund all this? That is a good question to ask. We know that it will be the industry and ultimately the consumer. Who will determine out of those ten roles which are the priorities? Well we can see the Indians coming over the hill. We can see the levies skyrocketing. They will become taxes and there is no way that the Electricity Commission will be able to track back to the levy-payer—who ultimately will become a taxpayer—what the levies are for what roles they fund whether those roles are worthwhile funding and what value comes from it. The levy provisions are currently proposed to look far more like a tax than a cost-recovery levy and the costs imposed on the industry will be unrelated to the services provided. 
 I can tell the House that I am sure the Regulations Review Committee which I believe Richard Worth chairs at this time will be very very busy after the passage of this bill. The combination of poorly defined objectives and roles—and there are 10 of them—an open-ended power to impose levies and a limited discipline on the commission to attribute costs to services directly will see a rapid rise in the costs of operating the commission. We will see bureaucracy grow upon bureaucracy and regulation grow upon regulation and ultimately the power consumer will pay. We will keep a close eye on matters and ensure that the costs recovered from the industry are only those related to services provided to that industry—in other words the levy payer gets the benefit from the levies—and exclude services provided to the Government such as policy advice. 
Why should electricity companies and those out in the power sector be paying levies to drive the Labour Party’s policy machine? Why should they be there to drive the National Party’s policy machine or any party’s policy machine? Those levies should be related only to services provided to the industry. 
Our second major concern about the bill relates not just to compliance costs but also to issues of investment. We are quite concerned about how this bill provides very little in the way of safeguarding against the regulator changing rules related to political waxes and wanes leaping from here to there. When investment is committed by the companies they need security; they need to know what the regulations are today and what they will be in the future. If they know that a Government is going to interfere in some way—and through this bill of course the Government can having appointees to the Electricity Commission and not being subject necessarily to its recommendations—once investments are made those investments will be undermined. Therefore we ask where the incentive is to invest. 
National will not be supporting this bill. It does not support investment for security of supply. It ratchets up compliance costs and that is absolutely unacceptable to the consumer. We oppose this bill. 
A party vote was called for on the question  
That the amendments recommended by the Commerce Committee by majority be agreed to. 
Ayes 70 
New Zealand Labour 51; Green Party 9; United Future 8; Progressive 2. 
Noes 50 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; Maori Party 1; Independent: Awatere Huata. 
Question agreed to. 
A party vote was called for on the question  
That the Electricity and Gas Industries Bill be now read a second time. 
Ayes 70 
New Zealand Labour 51; Green Party 9; United Future 8; Progressive 2. 
Noes 50 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; Maori Party 1; Independent: Awatere Huata. 
Bill read a second time. 
Education (Export Education Levy) Amendment Bill 
Instruction to Committee 
Hon TREVOR MALLARD (Minister of Education) 
: 
 I move  
That it be an instruction to the Committee of the whole House on the Education (Export Education Levy) Amendment Bill that it consider the bill part by part. 
Motion agreed to. 
Building Bill 
Instruction to Committee 
Hon TREVOR MALLARD (Minister of Education) 
 on behalf of the 
 Associate Minister of Commerce 
: I move  
That it be an instruction to the Committee of the whole House on the Building Bill that it consider the bill part by part. 
Motion agreed to. 
Education (Export Education Levy) Amendment Bill 
In Committee 
Part 1 Amendments to principal Act 
PANSY WONG (National) 
: 
 The Education (Export Education Levy) Amendment Bill is the title of this bill but I believe that it does not convey the substance of the bill. When the export education levy was first established it was clear that the purposes that the fund or levy could be put to were to develop and promote quality assurance in the export education sector. Those purposes may include professional development marketing the implementation of scholarships research resource development and support or they may relate to other bodies engaged in the development the administration and the audit of the co-care or pastoral care of students and the general administration of the levy and associated purposes. 
The title of this bill is not very informative to the public. In fact the Government proposes to increase one category of levy and that particular levy will be charged to private education providers only. It will not be a levy imposed on the whole export education sector. That levy will be restricted to the private providers of the export education levy and it will then be used to reimburse students’ fees or accommodation expenses and other expenses in cases where private education providers fail. We were told that was to be so whether the reimbursement was first paid out by ministries or departments—by the Crown. 
All the submitters to the Education and Science Committee were unanimously against that. I could not summarise the opposition to the increased levy better than by referring to the submission made by the Association of Private Providers of English Language. Its representatives believed that the real priority if the Labour Government was trying to give protection to students’ fees paid in advance would not be achieved by punishing private education providers but by improving enforcement. Those providers told us that if they believed that this bill would have an impact only every few years—that is if the New Zealand Qualifications Authority did its monitoring job properly and institutions that had not adhered to the proper guidelines were put on notice and had effective action taken against them—then they might not be hesitant to support this particular additional levy. But the fact is that in the last 10 months there were not one and not two but three major collapses of private educational institutions and in all of those collapses according to those providers questions can be raised about the enforcement or lack of enforcement by the New Zealand Qualifications Authority. 
 When the private export education providers have no confidence in the enforcement agency or gatekeeper doing its job then the export education additional levy that is to be charged on them will not be fair. The title “Education (Export Education Levy) Amendment Bill” should be a bit more— 
The CHAIRPERSON (Ann Hartley) 
: This is not the title debate. 
Hon Trevor Mallard 
: Part 1. 
PANSY WONG 
: We still believe that the title is not informative. However in terms of the substance of the bill it has been pointed out by private providers that if the gatekeeper the New Zealand Qualifications Authority had done its job when people informed it that certain institutions had not adhered to the guidelines or if it had used a robust auditing procedure then some of the earlier high-profile collapses could have been prevented. 
DEBORAH CODDINGTON (ACT) 
: 
 On behalf of the ACT party I rise to oppose this legislation and in particular Part 1. New section 238I(1A) inserted by clause 4(2) states that: “Subsection (1B) applies if—(a) an international student is or was enrolled with a private training establishment”. That is the whole ideological thrust behind this legislation and is one of the reasons why we oppose it. This is yet another example of how private enterprise is being punished by this Government. The legislation does not apply to public tertiary training establishments. It does not apply to any public education establishments but only to private training establishments. Yes some private tertiary establishments have let their students down really badly and in a reprehensible way. But why do we have to punish all of them because of the actions of a few? Why is the Minister not applying the same sanctions against public tertiary institutions that have taken money to which they were not entitled? They will be let off with a slap on the back of the wrist with a wet bus ticket. Where is it stated that this Government will tax all the other public tertiary institutions to make up for what Christchurch Polytechnic has done in the last few weeks? In exposing that matter I give credit to the National spokesperson on education the Hon Bill English because if he had not brought it to the Government’s attention absolutely nothing would have been done about it. 
The Minister is hell-bent on getting the private sector out of education in this country. We have seen that with regard to tertiary education and early childhood education. Not only are private providers being prejudiced but parents who want to send their children to private providers are being disadvantaged. The other thing with regard to this bill is that it is not just the providers that are private tertiary establishments that will be damaged by this legislation. Consumers will be damaged as well. This legislation reduces the choice for students because the inevitable result of imposing the levy on all private providers is that they will have to put up their fees. That is one result the Minister will be quite happy about because he will be able to herd more people into public institutions where outcomes do not matter. It is a matter of statistics; it is just a matter of bums on seats. This afternoon in question time in the House the Government crowed about the drop in the unemployment figures. We do not hear it crow about the number of students who enrol in dodgy polytech courses. They are enticed into those courses and that hides and distorts the statistics of the number of people who are unemployed. It is just a matter of statistics; it is not about outcomes and measuring achievement at all. 
Hon Trevor Mallard 
: I raise a point of order Madam Chairperson. I am aware that we are on Part 1 and that it is the broadest part of the bill. However a general discussion on alleged dodgy polytechnics and the unemployment rate is beyond Part 1. 
The CHAIRPERSON (Ann Hartley) 
: I ask the member to stick to Part 1. 
DEBORAH CODDINGTON 
: Part 1 does deal with private training establishments that cannot have not or will not provide in whole or in part the course of study or training. My point is that we oppose this legislation because it applies only to private establishments and does not apply to public establishments. That is a gross omission from the legislation. 
As I said this legislation is ideologically driven. Why are we imposing this tax—because that is what it is? It is a tax because it can be used for all sorts of reasons such as making refunds once twice or three times. It opens the way for double-dipping. That has not been cut off. Why are we imposing this legislation on private establishments which have no say over who enters the industry? The gatekeeper will be the New Zealand Qualifications Authority. It is the very gatekeeper that failed to do proper checks on private establishments that could not did not or would not provide courses to students leading to the introduction of this legislation. The Minister should take a call instead of taking a point of order to explain why the New Zealand Qualifications Authority can be trusted. 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 This legislation is another Mallard mess mop-up. As far as I am aware the Minister has been in charge of the education portfolio for about 5 years. He has some remarkable achievements in his name. For instance each time he goes to China to talk about international education in New Zealand student numbers here drop. I recommend that he stay at home and do his job properly. 
We would not need Part 1 if the Minister had done his job properly. He has a public agency the New Zealand Qualifications Authority whose express function is to ensure the security of funds paid by overseas students and it simply has failed in that function and I might say it has failed in it for quite a long time. Going back to the 1990s the authority did not do that job well and as far as we can see it is still not doing that job well. The other agency that has failed for which failure every other private training establishment will pay the price is the Tertiary Education Commission. The most prominent collapse of recent times which involved Carich and international students was in circumstances known in detail for many months by the Tertiary Education Commission. In fact the decisions it made over how to handle that organisation were directly related to its collapse. So the Minister should stay home he should not go overseas and frighten off our potential customers he should not be bullied by the Chinese Government into picking on one form of institution—that is private training providers—and he should get public agencies to do properly the job they are meant to do. 
Along with the ACT party I share a concern about the way in which this legislation picks on private training establishments. In the Government’s mind they are marginal organisations that should not really exist and that do all sorts of dodgy things. If the Minister has not noticed he needs to know that public organisations in education are doing much more damage to the reputation of this country and his policy than private training establishments are at the moment. Christchurch Polytechnic is just one of half a dozen New Zealand polytechnics all of which have foreign fee-paying students that have indulged in the worst sort of unprofessional and ruthless exploitation of the Government’s slack policies and weak education Ministers. 
And those polytechnics are doing it without any punishment. That is the odd thing that is going on. The private training establishments are all being punished because of the actions of one and they will all have to pay their levies but in the polytechs the offenders are getting away with it and all the polytechs that have kept the rules are getting punished. So at least that is consistent: whether one is in the public sector or the private sector with this Government if one does the wrong thing nothing happens but if one does the right thing one gets it in the neck—and in the case of the polytechs to the tune of millions of dollars. I would like the Minister to explain that. 
I am very pleased that the select committee dropped out clause 5—another defeat for the Minister and one of any number that he has had to deal with. He is a Minister who usually overreaches with his policy then gets a whack on the nose and has to pull back. Part 1 originally set out to levy private training establishments for just the year 2004 in a way that was grossly unfair bad public policy and unsustainable. I want the Minister to tell me how it ever got into the legislation. How did it ever get through the officials process past a Cabinet committee and into this legislation when it was so demonstrably unacceptable? It met almost no criteria of good public policy. One can only assume that once again the mighty pair of Mallard and Maharey sat in their offices one night and thought: “How can we really hit someone we don’t like?”. 
Hon BRIAN DONNELLY (NZ First) 
: 
 When I came down this week I received a note from one of the major players in the export education field. It thanked New Zealand First for the work that it had done in getting this particular legislation as right as it possibly could be. The final point was interesting: “Let us hope that this is the last time this Government and this Minister actually tries to get the export education levy right.” This is about the third crack that he has had at it. It started off under the Education Standards Bill with a levy on monitoring pastoral care. Then a Tertiary Education Reform Bill was ready for deliberation by the Education and Science Committee—there was 1 day to go—and the Minister threw on board an Education (Export Education Levy) Amendment Bill that contravened the principles in the Tertiary Education Reform Bill. 
When that bill went to the select committee—the Minister did not want it to go to the select committee—we ended up with only two parties actually agreeing with it. One was the Government and the other was the Education New Zealand Trust. The Education New Zealand Trust was supposed to be representative of all the providers yet the providers came along in their own groups representing themselves and absolutely and utterly opposed the bill. The export education levy had not been laid down in front of them by the Minister. There had been no consultation and no buy-in. Of course we know what happened. Although some parties tried to get it as good as it possibly could be—and that meant some modifications of that legislation to make sure there was at least an element of consultation—it still was not good enough and when Carich and the Modern Age Institute of Learning fell over the Minister thought he would use the levy to cover the costs that the Government incurred in getting those people out of a ditch. That is not to mention the simple fact that in particular in the case of Modern Age the real villain was the Government’s monitoring agent the New Zealand Qualifications Authority which did not recognise that the activities Modern Age was getting up to signalled there was danger ahead. 
So the Minister decided to dig into the export education levy. There was only one little problem: it was ultra vires. He was not allowed to do it. So he decided that there was only one way to do it: “This is Clyde Dam stuff. We will do what the Nats have done in the past: we’ll just change the law and we will change it retrospectively.” That has been mentioned. Even though the regulations that went through in December 2003 set a 0.45 percent levy on all providers the Minister came along with this legislation which set a 0.7 percent levy. It is a completely new regime. I think both sides of the House were very uncomfortable with this particular issue and finally the Minister saw that he had perhaps overreacted— 
Hon Trevor Mallard 
: Good discussions with Brian Donnelly. 
Hon BRIAN DONNELLY 
: Maybe it was a little bit like the Panoho case. But in fairness I think the worst excesses were caught in the end—[ 
Interruption 
] 
Hon Trevor Mallard 
: I raise a point of order Madam Chairperson. I think the suggestion that a member in this Committee is a lapdog is certainly out of order. Mr English made that suggestion. 
Dr Wayne Mapp 
: I listened very carefully to my learned colleague Mr English and he made no such imputation about an individual so there is simply no point of order. 
The CHAIRPERSON (Ann Hartley) 
: Did the member make such a remark? 
Hon Bill English 
: I was referring to the collective of New Zealand First and certainly not to an individual. You will notice that I used the plural which was “lapdogs” —not “lapdog” —so clearly the comment was in order. 
The CHAIRPERSON (Ann Hartley) 
: A reference to a party is treated in the same way. It was not appropriate. The member should stand and withdraw that remark. 
Hon Bill English 
: Could you just explain that again? I am not exactly sure what the ruling is. I hope you are not suggesting that it is out of order to make a derogatory remark about another party in this Houseouse. That seems to me to be part of the business of Parliament. 
The CHAIRPERSON (Ann Hartley) 
: A party is made up of members of the House and the remark was not appropriate. The member will withdraw. 
Hon Bill English 
: I withdraw. I raise a point of order Madam Chairperson. Can I just get clarification on the ruling you have just made? Do we now take it that members cannot make a remark about a party that if applied to an individual would be regarded as out of order? 
The CHAIRPERSON (Ann Hartley) 
: I refer the member to Speaker’s ruling 47/1. If the member reads it he will see that it makes the situation quite clear. 
Dr Wayne Mapp 
: I raise a point of order— 
The CHAIRPERSON (Ann Hartley) 
: I have ruled on the matter. It is finished. 
Hon BRIAN DONNELLY 
: I guess that scenario demonstrates that New Zealand First is here to constructively make a difference for the good rather than to play petty little games of the kind just demonstrated. The question that— 
Hon Bill English 
: I raise a point of order Madam Chairperson. In terms of Speaker’s ruling 47/1 the member has just made a derogatory reference and used an offensive term. It was unparliamentary in my view. 
The CHAIRPERSON (Ann Hartley) 
: I am sorry but I did not hear it. Could the member clarify whether he used an offensive term? 
Hon BRIAN DONNELLY 
: Certainly to my mind I do not think I made an offensive remark at all. It certainly was not intended to be offensive. It was simply a description of some of the activity that was going on. I will withdraw it; I am quite happy to do that if it makes things easier. As I said we are here to be constructive not destructive. 
We already have a quite significant amendment that the Minister has put up on Supplementary Order Paper 240. He is inserting a whole paragraph as to what can be done with this levy which seems to me to get to the very intention of the bill in the first place. I ask the same question that was asked of me: has the Minister finished with this legislation or are there to be subsequent pieces of legislation? Have we finally got the export education levy operating in the manner that it should operate—that is serving the purpose of that particular industry? 
Hon Trevor Mallard 
: Does the member want to help us? 
Hon BRIAN DONNELLY 
: I ask the Minister to take a call and to give this Committee some sort of guarantee that we will not be back here again debating some of the issues around the export education levy which in the long run will make us less competitive in this particular industry. The Minister is aware it is a very important industry to New Zealand. We have to make sure we get it right. We certainly are not doing it by continuing to have legislation come back to this House. 
BERNIE OGILVY (United Future) 
: 
 I rise just to take a short call and to follow through on what my predecessor spoke on. The amendments that have been added by the Minister of Education now clarify what the bill is all about. Anyone can now see what the intention is—yes it is to penalise private training establishments—but also exactly how it will do that. I certainly concur with that. 
But contrary to the letters that the Hon Brian Donnelly has received I have received all sorts of emails and letters of “no thanks” on this particular bill. I have not received any that have given any thanks for it or that consider that it is worthy of taking up the time of this House and the Education and Science Committee. Everybody has been opposed to it and that worries me. The entire industry is against it and not only because of the way it has occurred—and the Hon Brian Donnelly laid out very well the historic flow of events and the surprise that was caused when the original bill was pushed upon everybody. 
I ask the same question: how many more times are we going to sit down to modify change strike out and/or correct legislation to somehow capture those who have enough enterprise to keep in business? It is a huge business that we are referring to. In my second reading speech I established that it is a massive business of over $2 billion a year. The Government takes a huge slice of that—at least 25 percent—by way of taxes. As a result the whole issue now is that as the Minister has brought forth to catch a little sparrow he is utilising a massive great big machine. The little levies that he is asking for add up to a bit over $3 million maybe $4 million. He by the same token in the recent Budget has just offered $10 million to export education. Why does he not just net it all out and give away $6.5 million to the private tertiary industry for it to establish itself work the whole process out and work through the angst and the issues associated with this matter thus getting all the establishments onside being cooperative and working together? 
I am concerned that if this bill goes through the House it will not solve the question marks that the industry has about it being penalised. I would be sad to see this bill go through the House because I think basically it is a disturbance to an industry that is trying to do its best is bringing umpteen hundreds of millions of dollars into the nation and is doing it very well. Having withdrawn certain clauses out of the original bill then today putting in a whole new paragraph by way of a Supplementary Order Paper the Government 
has literally mashed this bill around in such a way that it no longer resembles a clean bill. We will certainly not be supporting it. 
Dr WAYNE MAPP (National—North Shore) 
: 
 As is well known from the previous speakers and from our votes National is opposed to this bill. Fundamentally we are opposed to it because it is discriminatory and in addition reflects the lazy answer. It is the easiest answer the Government can come up with without really listening to the sector itself. Extensive evidence was given by various submitters to the Education and Science Committee about other options: insurance bonds trust funds and the like all of which were industry-based solutions as opposed to a Government-imposed solution. After all in other sectors where there are questions of protecting people affected by a particular industry or institution the result is a collective fund insurance policy or indemnity policy organised by the industry itself not controlled by the Government. That is the distinction is it not? That is the distinction between the Law Society and other similar entities and this solution. This is the Government solution—the statist solution. 
When that occurs there is a responsibility. For instance at the very least the sector should be able to rely on the governance entity the New Zealand Qualifications Authority to do its work properly. But it does not. For instance about 12 months ago the New Zealand Qualifications Authority knew that the Paramount Institute of Auckland which was a private tertiary provider was in trouble. At that point the deficiency was about $200000. Over the succeeding 10 months that deficiency grew to $800000 which effectively now becomes an impost on all other private tertiary providers. So the sector is caught in a bind. It has to pay this money which is mandated by the Government. It relies on the State entity the New Zealand Qualifications Authority to be the monitoring agency. If that agency was doing its job properly the funds represented by the levy would be reduced and therefore ultimately the levy would be reduced. So not only are the providers stuck with the levy but the bad supervision by the New Zealand Qualifications Authority which the Minister is well aware of causes the levy to be significantly higher than it otherwise would be. 
I listened to the various speakers on Part 1. A person tuning into the radio just to hear this debate might well think New Zealand First is supporting the Government and that has been referred to. But even those members and they are well-known these days to be the tail that is wagged by the Government dog—[ 
Interruption 
] Well that is a phrase we are apparently not allowed to use so I will say that they are the tail that is wagged by the Government dog. Even they see the deficiency. So one would think that the Government would take on board that all sensible parties in this House and I even include New Zealand First in that category for this particular purpose are voting against the bill with the exception of the Green Party—and everyone knows that that party is not sensible. 
So essentially the votes by the parties in this House demonstrate the bankruptcy of the Government’s solution here. The proper approach was to listen to the industry and look at the solutions that the industry was prepared to come up with—and it would check those with the Insurance Council in particular. That would have been a reasonable approach. Everyone recognises that there is a problem to be dealt with. What the industry does not want is the statist discriminatory approach—the lazy reversion to type by Labour—in imposing a centralised levy with poor supervision by the New Zealand Qualifications Authority. 
JANET MACKEY (Labour—East Coast) 
: 
 I move  
That the question be now put 
. 
PANSY WONG (National) 
: 
 I really appreciate the opportunity to make a second contribution because there is some very important information that I want to share with my fellow politicians about why even the Greens should not support this bill. The unanimous action by all the export education providers to not support this additional levy is because of the lack of confidence in the way the gatekeeper the New Zealand Qualifications Authority is doing the job which means that the private institutions that actually perform are punished. 
 Let me give two examples. I have some information in front of me concerning a high-profile college—the Paramount Institute of Auckland. On 14 November 2003 an ex - staff member wrote to the New Zealand Qualifications Authority about problems at the school and its lack of adherence to the authority’s criteria for providing good education. The person did not get much of a reply so on 26 November she again wrote to the authority. This time she provided three pages of details outlining where the school had failed in terms of individual students or collectively in adhering to the authority’s guidelines. On 27 November she received from the authority a reply to the three-page complaint thanking her and advising that if the authority were to act on the information she would have to lodge an official complaint. 
An official complaint form was attached for her. But how bureaucratic: a detailed complaint was lodged but not accepted because the correct form had not been used! Eventually on 1 December she wrote to another person at the New Zealand Qualifications Authority saying: “What do I need to do before the NZQA will take positive and decisive action?”. I ask the Minister to give us one good reason why we should have confidence in the gatekeeper and why we should be supporting this bill. 
I want to detail a train of events that happened in respect of the Modern Age Institute of Learning—-an example of another high-profile collapse. On 13 May 2002 the first financial statement filed by an accountant at that stage already showed that the balance of the trust fund held at the institute as at 31 December 2001 was $611054 while the accountant’s work paper indicated the amount should have been $1011714. One would have thought that by then alarm bells would be ringing. 
In February 2003 the New Zealand Qualifications Authority during its audit met a representative from a chartered accountancy firm expressing concern about the management of the trust fund but took it as an assurance at that stage that something was going to be done to fix the matter. That was February 2003 and we moved on to 16 May 2003 and once again the New Zealand Qualifications Authority found out that a new trustee had been appointed for the Modern Age Institute of Learning trust account and on 19 May the qualifications authority claimed it had obtained a written assurance from the new trustee that everything was fine. When I looked at that written assurance all it said was that the new trustees confirmed they would consent to the receipt of student fees which are to be held in trust in accordance with New Zealand Qualifications Authority quality assurance standard 1. It did not give any assurance whether the trust fund was operating or whether the funds in that trust were accounted for. 
DARREN HUGHES (Labour—Otaki) 
: 
 I move  
That the question be now put 
. 
Hon BRIAN DONNELLY (NZ First) 
: 
 I just want to refer briefly to the remarks made by Dr Wayne Mapp with regard to New Zealand First and I have to say he demonstrated that some parties have not got out of the first-past-the-post mode. They have not worked out that what we are actually here for is to end up with a better New Zealand; and that there will be opportunities presented from time to time for parties to be able to work together with the Government to get the best possible outcome. An opportunity was presented in this particular case with regard to retrospective taxation of the export education providers and we were able to work with the Minister to be able to get an outcome that I believe was in the best interests of all concerned. 
Had the National Party had its way of just opposing opposing opposing and saying “This is bad.” then the export education providers would have had to stump up with an extra $1.7 million. So National can go along and tell them that that is what they believe should have been done to them. New Zealand First said: “No let’s use the opportunities to come up with a better outcome.” 
The point is and it has been made by Dr Mapp New Zealand First does not support this bill and we have not supported the export education levy since it was first introduced. That is largely because it has been so poorly done. It has been introduced without the ownership of the providers themselves and it was tacked on to a bill that had an industry training levy fund in it. The principles are that the members had to be balloted if they wanted to impose a levy; 66 percent of all those balloted had to return; and there had to be a 66 percent response in favour of it. That was the principle that was applied to industry training levies. Yet when it came to the export education sector it was: “Whacko! We’re slamming this down on top of you. You’re not going to have any say and if we want to come along and run right over the top of regulations we’ll do that also.” 
As I say New Zealand First does not believe that this bill has been done well. It has not been done in the best interest of the industry itself. We believe that in the long run there is a real problem when as the Government agency that accredits those who can provide—in other words the export education providers the private training establishments—they have no say in who can provide this form of export education but when it comes to the monitoring agency failing in doing its duty they are left carrying the can. 
That is wrong. If there is to be accountability we either have to have the market running it all and that is it or we have to have a decent monitoring agency; in which case we do not need to have to use this sort of mechanism to provide the insurance policies. Unfortunately we have not had that. Therefore New Zealand First asks why those who are doing it right and doing it well should end up having to carry the can when the agency of the Government itself has not done its job properly. 
I know that a lot of work is being done on this but at this particular time it still leaves one with a sense of insecurity about whether we have in fact got all the pieces in place. If we have not got the pieces in place then more private providers will be falling over. The levy will be raised; purely and simply again next year we will be debating the whole issue the same principle that the Minister has tried to put into this bill. So New Zealand First is not supportive of the bill. However we used the opportunities to work constructively with the Government and I think got the best possible outcomes. We are very pleased and proud to be able to stand here and say that that is what we did rather than simply oppose for the sake of opposing and costing the industry $1.7 million. 
Hon JUDITH TIZARD (Minister of Consumer Affairs) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 71 
New Zealand Labour 51; Green Party 9; United Future 8; Progressive 2; Maori Party 1. 
Noes 49 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; Independent: Awatere Huata. 
Motion agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 240 in the name of the Hon Trevor Mallard to Part 1 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 63 
New Zealand Labour 51; Green Party 9; Progressive 2; Maori Party 1. 
Noes 57 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; United Future 8; Independent: Awatere Huata. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 1 as amended be agreed to. 
Ayes 63 
New Zealand Labour 51; Green Party 9; Progressive 2; Maori Party 1. 
Noes 57 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; United Future 8; Independent: Awatere Huata. 
Part 1 as amended agreed to. 
Part 2 Validation 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 I raise a point of order Mr Chairperson. I hope there is not going to be a presumption by the Chair that this is simply a narrow technical piece of legislation. You sat in the Chair and as far as I could see heard perhaps two contributions to the debate on Part 1 and then saw fit as is your right to bring that part of the debate to a close. I was seeking the call with new material and there was no indication actually that the debate had run out or become repetitive. This is not a narrow technical piece of legislation. It involves a number of aspects of significant public policy and I hope that fact will be taken into account in your consideration of the length of the debate for this part. 
The CHAIRPERSON (Hon Clem Simich) 
: I thank the honourable member for that. I had indicated on the call before that that would be the last speaker and I thought I gave a clear signal that it would be. I am conscious of the issues the member raises. 
Hon BILL ENGLISH 
: The clarity of your signal does not necessarily confirm its correctness. I will address clause 7 because this clause and clause 5 was meant to get rid of the retrospective nature of the legislation. But in the increasingly sloppy way in which we see the Government handling legislation clause 7 is actually retrospective. What it does as we see when we read it is that: “Any funds … that are unspent on the day that this Act comes into force may be used in accordance with the purposes specified in section 238I of the Education Act 1989 (as amended by this Act).” 
So what this says is that funds that were raised for one purpose quite specifically laid out in legislation are going to be used for a completely different purpose. That is what that clause means. It means that funds that were raised under section 238I for as subsection (1)(a) states: “the development promotion and quality assurance of the export education sector … ” and it goes through a list of purposes: “(i) professional and institutional development; and (ii) marketing; and (iii) implementation of scholarship schemes;” and so on. 
Then with some care subsection (2) of 238I states: “The funds of the levy must be kept in a separate bank account that is used only for the purposes of the levy.”—all the paraphernalia of a very specific purpose for which that fund was raised. I bet that there was significant discussion at the time—in fact I know there was—about the raising of this levy because it was new in the education export sector and they were not keen to pay it. They were suspicious as they should have been that the Government agency set up to use this levy would display all the weaknesses that generically funded industry-based organisations like that do. We were familiar with them right across our economy in the past and less so now. So they would have debated that at some length and many of them would have been persuaded by the purposes set out in the Act and in the end it was pretty hard to resort to civil disobedience over a levy that had such noble purposes as those laid out in section 238I of the Education Act. So they went along with it and they paid it as law-abiding citizens whether or not they agreed with the legislation Parliament had passed. Today or when this bill passes—but today is a step along the way—we are going to agree to change those purposes some considerable time after that money was paid to the Government. 
Dr Wayne Mapp 
: It’s outrageous. It’s retrospective. 
Hon BILL ENGLISH 
: It is—it is purely retrospective. There is absolutely no reason why this legislation should not replicate the provisions of section 238I(2) which states that “The funds of the levy must be kept in a separate bank account that is used only for the purposes of the levy.” So why do we not do that for this particular purpose? Why do we not say that the money levied for this purpose goes into a bank account to be used for the stated purpose in the legislation? That is what happened last time and people knew that when they paid their levy it went into that bank account to be used for that purpose. 
If the Government had not thought that mattered it would not have bothered taking up time and space in the statute to write it in. Quite frankly I was a bit surprised to see it there but there it is. It was put in there no doubt because people wanted it stated as clearly as that. They wanted to know that that bank account existed with that levy for that purpose and no one could mess around with it because they did not trust the Government. 
And what has happened? They have discovered that their mistrust was well placed. Now even though the money raised for that purpose went into the bank account specified in that section of that statute this Minister has decided to use it for something else. He has decided he has a better idea than he told them then. 
Lindsay Tisch 
: Sneaky. 
Hon BILL ENGLISH 
: Well it is sneaky but more important it is actually unnecessary. There is no need to further corrode the confidence of this sector in the Government by passing this particular measure. 
PANSY WONG (National) 
: 
 Well I have to say that the Hon Bill English absolutely put his finger on the pulse. Nobody can trust this Labour Government or especially this so-called Minister of Education. I think that the U-turns the subtle movements and the way the Minister rode roughshod over the industry and particularly over the export education sector is absolutely unprecedented. I would call on the Green Party members who always claim they have principles and that they support the rule of law to re-look at this situation. Otherwise I totally accept what my colleague Dr Wayne Mapp has pointed out—that the Greens never respect the rule of law. This action of theirs would confirm that. 
I also make this point: why should there be any levy funds left unspent on the day that this legislation comes into force? There are a few hundred thousand dollars left in the first six-monthly accounts of the export education levy. That is very concerning because a levy we are told is supposedly different from a tax. When the Government taxes people it is not sure what the money will be spent on. But the export education levy was meant to be imposed on the institutions for specific purposes. I think the Committee appreciates the fact that the Hon Brian Donnelly gave us a very detailed and good account of the history of the export education levy. The Minister did not bother to adhere to the rule of law in the process of getting the industry’s agreement to impose the levy. Then in the first year of the levy’s existence the Government reported a surplus. After reporting that surplus the Labour Government has introduced this legislation to the House in order to bring in another provision just in case the gatekeeper the New Zealand Qualifications Authority fails to do its job again and another college collapses. This additional levy would then be used for that purpose. 
The only other problem I have—and I think the Minister should take a call to assure the public on this—is that I would like to know whether with regard to all the existing private education providers the New Zealand Qualifications Authority has established that all of them are in a sound financial position. If not this levy is in effect retrospective because some educational institutions will be called upon once again to pay up for institutions that are already in existence and that are accredited and supposedly audited and monitored by the New Zealand Qualifications Authority. If such an institution goes into liquidation again it will mean that any new institution that has just joined the sector and the good performers and providers in the sector will be called upon to bail out an institution that was previously approved and accredited by the New Zealand Qualifications Authority. 
Although we were told by the Minister that he has removed part of this bill because he agrees with New Zealand First that it should not impose any retrospective provision I am afraid the Hon Brian Donnelly may not have done the whole deal—he may have just done part of the job. Part 2 certainly gives a very clear indication that it is retrospective. Not only can the existing levy be used for different purposes but we have not been reassured by the Minister or by the New Zealand Qualifications Authority that none of the existing institutions will fall over. 
Hon TREVOR MALLARD (Minister of Education) 
: 
 Although I do not want to refer to the previous part I think it is fair to say that it was slightly more substantive than this part which is technical. The regulations that were gazetted in 2002 had an error in them: they did not have a clause to spell out the purposes of collecting the levy and what it would be spent on which was required by the Act. No one ever complained about that asked for their money back or said that we should stop spending the money but we thought it was worth putting some belts with the braces and making sure we had that tidied up. It is a very narrow technical validation. 
DEBORAH CODDINGTON (ACT) 
: 
 We are now addressing Part 2 and I will look at clause 7 which the Hon Bill English has already pointed out is retrospective. Under section 238I of the Education Act the levy that was taken was to be held in trust accounts for certain purposes. We are now seeing this new legislation because two institutions in particular—the Modern Age Institute of Learning and the Carich Training Centre—took money for one purpose and used it for another purpose and the students were not able to do the courses that they had enrolled for. We now see the Government changing the legislation so that it can take money for one purpose and use it for another purpose. I do not think that is on. Mr Mallard can stand up and explain why he thinks that is justified. Referring back to Part 1 which we have already debated I note that one of the new uses for which the levy can be put is to reimburse the Crown for any expenses it may incur in refunding students or putting them back into the same position they were in before the institution they had enrolled at failed to provide their course. In other words it is just a tax. 
The Minister should come clean and say that this is not a fund or a levy to reimburse students who are out of pocket. He stood up earlier in the second reading debate and said that this legislation was necessary as he did not want to see students out on the street because they did not have accommodation. But in truth this legislation shows that it is just an excuse for a Crown entity—and in this case it is the New Zealand Qualifications Authority which I note is going through its resources at a rate of knots and probably does need propping up—to take money off the private providers and use it to justify its own expenses. We have a huge conflict of interest whereby the New Zealand Qualifications Authority sets and monitors the regulations and entry rules—specifies those who can and cannot come in from overseas—and is also responsible for setting students right when the institutions fail to provide the courses that they say they will provide and for which they take fees. That same Crown entity can then reimburse itself from those funds—not only from the new funds that will be collected from the date that this legislation is passed but from any funds that are already accumulated and not spent on the day this Act comes into force as is stated in clause 7. There is a name for that. It starts with “h” and I am not allowed to use it but the Minister knows what it is. 
I invite the Minister to take a call and justify why these funds which have been paid in for special purposes—marketing etc.—can be taken out of that named account and used to reimburse a Crown entity for money it has spent on reimbursing students or putting students back into a similar situation to that before they were disadvantaged by the failure of a private sector provider. The Minister can choose to take a call on that or he can choose not to but I think it is an important issue that has not been addressed. In the Education and Science Committee we got rid of the retrospective clauses in this bill but there is still a retrospective provision here in clause 7. 
Hon Trevor Mallard 
: Oh! 
DEBORAH CODDINGTON 
: The Minister is obviously bored by it all. It is absolutely unbelievable that the Minister is bored by all the worry and angst that he is causing the private education sector. He just does not care how heavily he tramples on the private sector. He will tax that sector and use it to prop up a Crown entity and he will be cavalier about the whole thing. 
Hon BRIAN DONNELLY (NZ First) 
: 
 My call will be brief but I will point out why New Zealand First has concerns with regard to this bill and the legislation that went before it. I mentioned that the last amendment upon which this bill is based and which it amends was put before the House 2 days before the Education and Science Committee was to deliberate on it. It was inevitable under those circumstances that we would get little hiccups in the process. When it comes to the law they are actually quite big hiccups as the Minister of Education who is also the Associate Minister of Finance knows. This bill is just an example of the need to correct that situation. 
I also take the opportunity to point out something else that seems to be escaping people. Everyone keeps saying that it will be the private providers that have to pay the levy. Ultimately in fact it will be the students who pay because the cost of the levy will be added on to the cost of courses. Whatever levy we impose will go on to the students and that will make our courses here in New Zealand less competitive with courses held elsewhere. Let us face it there is a very competitive market in export education. Back in 1997-98 we were trying to make that industry worth $1 billion per year—it is already worth $2 billion per year. The Australians are in the industry in a big way as are the Americans and the Canadians. In Britain the Government is subsiding and supporting the industry in a big way. New Zealand is actually pretty late off the block in that respect. 
When this levy was debated previously—and I said there was a lot of opposition to it—one of the problems mentioned was the fact that the providers were not necessarily opposed to an export education levy but were opposed to the purposes it would be put to. They did not necessarily accept that an export education levy should be used to give scholarships for example or agree with a number of the other purposes it would be used for. This part now states that if any money is left over from the levy and is not spent on the purposes outlined in the bill—and let us remember that it is money that has been levied on students—it can be used for some other purpose that is not stated in the bill. This part really is untidy. It leaves New Zealand First with a great feeling of discomfort about the whole progress of the legislation around the export education levy. Therefore that explains why New Zealand First will continue to oppose this legislation as it goes through Parliament. 
Dr WAYNE MAPP (National—North Shore) 
: 
 National is very concerned about Part 2 “Validation”. We have looked carefully at the regulations from 2002 and at the provisions of the Education Act. At the very minimum therefore we want some assurances from the Minister concerning the following issue. 
The regulations of 2002 which are being validated do not contain a purpose clause. That was stated to the Education and Science Committee by the ministry. Section 238I of the Education Act set out in the Reprinted Statutes of New Zealand volume 34 states that the purposes of the levy are the promotion development and quality assurance of the export education sector which may include professional development marketing the implementation of scholarship schemes research support etc. 
The one thing missing from that is essentially an indemnity provision whereby successful institutions would pay for unsuccessful institutions—which is the purpose of the current legislation. An indemnity provision is not contained in the regulations of 2002. It is not contained in the statutory provisions that were inserted in 2001. This new indemnity provision is being created only in the legislation before us now and it is worth noting as others have noted that there was an intention to apply this provision retrospectively. But that intention has gone and that is good. 
I question the Minister whether we are simply validating some regulations that have expired or whether the intention of the Government is—because we are voting against the regulations so we are not validating them—in a sense surreptitiously to achieve by way of the validation of the regulations what it has not achieved through the legislation. In other words has the Government sought to achieve through the regulations what it has not been able to achieve through the legislation? 
That is a very important issue. The sector will need an absolute assurance if that is the case. One would like to think that the only thing clause 7 does is simply confirm the types of expenditures that were set out in section 238I of the Act as passed in 2001—that section which did not have this indemnity provision. 
I want to make two points. Obviously National is opposed to the whole idea of the indemnity provision. We think that that statist solution is wrong and that there are better methods which were suggested by the sector itself. The Minister must know about those. 
The second thing is that National is opposed in principle to validating regulations that have expired and clause 7 at least on a narrow reading will validate the narrower expired regulations from 2001. Even that is bad enough because it means all the levies that were collected in 2001 2002 and 2003 were inappropriately used once the regulations had expired. The Government used the levies even though it did not have the authority to do so and now the Government has come to Parliament essentially to ask us to fix up its mistake. 
Frankly members on this side of the Chamber will not partake in that legislative charade. We think the proper course would be to pay the levies back. Is that not really the principled approach—instead of our having to come along with the pooper-scooper and fix up this problem for the Government? Well we will not play any part in that. 
BERNIE OGILVY (United Future) 
: 
 I want to speak to Part 2 and in particular to clause 7 “Use of export education levy” which everybody is touching on. One of the previous speakers talked about this clause as clearly being a retrospective take. I think it goes far further than that. I think that not only is this clause retrospective because a growth fund has been built up but it really is equivalent to a land grab. Here is a fund that no one owns and no provider has asked to take back its money—it is just left over. I would say that in today’s world people would be somewhat shocked if we did a little land grab around New Zealand at this stage especially given all the sensitivities we now have. Here is the equivalent of that; it is called a fund. The Government grabs all that is left over because no one has the right to get the money back and apportion it out to those who gave to the fund. 
I find something of a paradox in the way we are handling this provision. The solution given in clause 6 is simply to state that the collection of the levy is a lawful process. So be it but why not look at some of the other solutions to the problem rather than to see a levy as the only solution? Submitters to the Education and Science Committee had a numbers of solutions that would solidify the industry and make it work properly. I think it may be good to use this call to go over one or two of those solutions and to remind Parliament of what the industry thinks about this legislation. The industry thinks that yes there needs to be some security and that there needs to be proper accountability for any failure. Nobody had another view on that. But it is true that if there is no solution other than a levy we are left with what we have before us and I think that is the worst of all solutions because it is something no one has any control over. 
Some of the solutions proposed by submitters were arranged around for instance setting up a proper bonding regime. One or two submitters said that if the export education industry saw itself as being on a par with the airline industry just like the International Air Transport Association it would bond itself or even that if the industry saw itself as being on a par with another form of profession such as the legal profession it would take on board a fiduciary fund so it would be able to stand in the place of rescuing those who failed and there would be proper accountability in that manner. There was also the suggestion that some proper arrangements could be made through an insurance programme and there were examples given to us of such arrangements. If I recall matters rightly a firm by the name of InterGlobal Insurance Services was suggested as an insurance firm that would look after—and does look after and can cater for—the students. I think one of the previous speakers made it very clear that we are here to ensure that students get their education and that is it. So an insurance programme or a bonding programme would be in line with bringing about proper accountability for failure. 
United Future is of the mind that those sorts of solutions would be much better to place upon education providers than a levy. Once again I say United Future is unhappy about the process and the intention of Part 2 of this bill so we will vote against it. 
GEORGINA BEYER (Labour—Wairarapa) 
: 
 I move  
That the question be now put 
. 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 I want to speak to clause 6 which concerns me. First I reiterate the point made by my colleague Mr Mapp that if one looks at the regulations on the face of it one would see that the levy was payable once. If the Minister could tell members when the regulation was renewed that would be helpful. I understand the Act has generic provisions about the levy including the fact that it must be reviewed in 2006 but the regulation is not generic. It applies to the academic year 2003 and it specifies dates for payment. It is quite specific. So if regulations have been renewed or the process has been changed since then we would like to know about it because it is not in the book. 
The second question I raise is this: why is it that the people who write our legislation cannot get this sort of thing right? It is not as if raising a levy is something new to the Government—a Government of any sort. All Governments of all colours raise levies. They write legislation that allows a provision to write regulations and the Governor-General to promulgate them and the levy is thereby collected. But somehow in the middle of this machinery that writes all our law there is confusion about what is done when it comes to the purposes of a levy. 
So we have clause 6 here because when the draftsmen wrote the regulations they did not include a purpose for the levy. Presumably the argument was that the purpose of the levy was in the Act and so it did not need to be repeated in the regulations. Well whatever the argument was then it has now changed and it has been decided that that might not have been right. What is going on here? 
The Parliamentary Counsel Office writes regulations every day—in fact I think for about 23 hours of the day judging from the volume that comes out—and when its staff are not writing regulations they are writing bills. But apparently they do not know what is meant to be done about regulating the purposes of a levy. When are they going to find out? 
This clause does not even clear the issue up. It just says that whatever was in the regulation was valid—whatever was there. We had to legislate that those regulations themselves were valid because it was not clear that they were and it wastes the time of this Committee to pick up the work of some dopey draftsman who still does not know how to do it. 
So I want to know what Parliamentary Counsel Office policy is and its officials can tell the Minister while he sits there. What are the rules now? If one writes a set of purposes into legislation does one then have to repeat those purposes in the regulations—yes or no? I do not want to stand around in this Committee wasting time on this kind of mess-up again. If the dopey draftsman does not know the answer then presumably the expansively and interplanetary bright people who run the Parliamentary Counsel Office ought to know the answer. [ 
Interruption 
] Members might think it is trivial but it shows sloppiness. 
Levying that kind of money from free citizens of New Zealand is a serious business. The question of whether the levy is valid may not matter to the member for Otaki but it sure as anything matters to the people who pay it and that is part of the problem. That member does not care because as far as Labour is concerned this is costless regulation. To clean up a problem at no cost means at no cost to the Government but there is certainly cost to the payer. 
So I want to know whether the Parliamentary Counsel Office knows enough about levying levies to know whether regulations should have a purpose because this clause is not satisfactory as far as this Committee is concerned. All it says is that no matter what the dopey draftsman does the Government can always legislate later to make sure it is right. But surely there is a policy and a principle about how to do that. 
JANET MACKEY (Labour—East Coast) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 71 
New Zealand Labour 51; Green Party 9; United Future 8; Progressive 2; Maori Party 1. 
Noes 49 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; Independent: Awatere Huata. 
Motion agreed to. 
A party vote was called for on the question  
That Part 2 be agreed to. 
Ayes 63 
New Zealand Labour 51; Green Party 9; Progressive 2; Maori Party 1. 
Noes 57 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; United Future 8; Independent: Awatere Huata. 
Part 2 agreed to. 
Clauses 1 and 2 
PANSY WONG (National) 
: 
 When the original Education (Export Education Levy) Bill was introduced to the House members were told very positively by the Minister of Education that this was the bill that would fix everything in export education. He assured the public that the Labour Government cared for export education and that this export education levy would do the job. But hardly a year has gone by and we are here to fix up this— 
Hon Bill English 
: I raise a point of order Mr Chairperson. I did not want to interrupt my colleague but I intervene here only because I thought the comments made by the Minister were ones that the Parliament ought to take seriously. He said not quite in this order but certainly with the clear implication that a member of this Parliament was sabotaging that member’s country. I think he put it around the other way—“think of your country and stop sabotaging it” or something like that. Of course that is quite unparliamentary. There are not many worse or more offensive statements that can be made about a member of this Parliament. I ask that the Minister withdraw and apologise. 
The CHAIRPERSON (Hon Clem Simich) 
: Yes I heard that. 
Hon Trevor Mallard 
: I am happy to withdraw. 
PANSY WONG 
: When debating this bill one started to get used to taking personal insults from the Minister of Education which I always thought was using a very bullying tactic— 
The CHAIRPERSON (Hon Clem Simich) 
: That matter has been dealt with. 
PANSY WONG 
: As I say it is less than 1 year since we had the original version of the Education (Export Education Levy) Amendment Bill and we have just heard various debates on it. 
I think the title of the bill should be “Education (Export Education) to Fix the Failure Bill” because this bill intends to fix three types of failure. First of all it is meant to punish the private educational institutions that perform well for the failure of their competitors even though those successful institutions have no control over which providers can join the export education sector. That control is in the hand of the New Zealand Qualifications Authority. The second type of failure was by the New Zealand Qualifications Authority and the related part of the Ministry of Education. The authority is the gatekeeper—the only one that can accredit an institution—and it is supposed to monitor and audit the behaviour of those institutions. In a previous debate I outlined two cases where problems were identified a year before the collapse of those high-profile institutions. Those collapses led in effect to New Zealand’s export education sector’s reputation suffering. The third failure we were told about was the one that goes to the heart of this version of the bill—the inability of the Government to get the first version right. We are now told that the first Education (Export Education Levy) Regulations were not quite in order so therefore part of the time spent on this bill has to be devoted to fixing the original regulations. 
The National Party’s Hon Bill English and Dr Wayne Mapp have today pointed out some serious problems but we still do not have the Minister reassuring us during the passage of this bill. We will not support it but unfortunately the very unprincipled Green Party will support the Labour Government in punishing the private sector. So we are still not reassured by the Minister through his officials as to whether this bill really will fix all those previous drafting errors. 
DEBORAH CODDINGTON (ACT) 
: 
 There are two important things missing from the part of the bill that contains the title and the commencement date. The first is that the legislation does not bind the Crown and the other is that the title does not reflect the true intent of the bill. The title should actually be “Education (Export Education Private Providers Levy) Amendment Bill” because it does not relate to all providers of export education. It relates only to private exporters of education. I have huge difficulty with that term anyway. 
We have reached the situation in New Zealand where we have forgotten that we are actually dealing with human beings in terms of export education. We are starting to think along the lines of fattening cattle for beef. That is something that gets lost in the economics of this sort of legislation and it is only the private providers that are punished by such legislation. There is absolutely no need for this legislation. If members looked at what was in place before it came into being they would see that the New Zealand Qualifications Authority had suggested that private tertiary educators were not being responsible—they were shirking their responsibilities—when it came to assuring students that tuition fees were safe. But that is absolutely not the case. If we go back to the history we find that the combined registered English language schools—CRELS as they were known—comprised a voluntary organisation they all belonged to. They all agreed without being forced by Government and without this sort of legislation that they would take on the students from fellow members of their organisation if those providers got into financial difficulty and could not provide their courses. That agreement was reaffirmed as being in place a week before the Modern Age Institute of Learning folded. The members knew that that institute was going to fold yet they stuck by the deal they had made whereby they would take on those students. 
Those were private institutions that were already acting responsibly. They are now going to be punished by this legislation. That is why if this title were a true reflection of the bill the words “private providers” should be in the title or there should be the clause in the bill that provides: “This Act binds the Crown.” It is the public institutions that will be allowed to get away with doing exactly what they have been doing. Many of the polytechs—not all; places like Unitec are not included in the association of polytechs—have been getting away with taking money for purposes and not using it for those purposes. It is the policy the Minister has set up. 
I would strongly argue that this title is misleading and any claims that private providers have behaved irresponsibly and should be punished are ridiculous. In fact the combined registered English language schools have actually had a legal opinion from Geoffrey Palmer that they had no extra liability after Modern Age collapsed and that they had fulfilled all their obligations in taking on those students. Even though they knew that Modern Age was going to collapse they still took them on. Yet this Minister is intent on bringing in this legislation that will punish them. Not only that the bill is being put through with a totally misleading title and it is allowing public institutions to be let off the hook. The bill is not necessary and it should be thrown out. 
Dr WAYNE MAPP (National—North Shore) 
: 
 This part is essentially the summary in a wide-ranging debate and National wants once again to restate its fundamental opposition to this legislation. It is statist. It is the sort of legislation one would expect from a Government that stems from a socialist background. I see the members across the Chamber are proud of the fact that they believe in a statist socialist background. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
Dr WAYNE MAPP 
: As I was saying prior to the dinner break National has profound objections to this bill and we have these profound objections because of the Labour Government’s knee-jerk approach to dealing with a genuine problem. I think everyone would acknowledge there is a real problem involved in the question of how we protect consumers particularly overseas students in the event of failure of the institution they attend. 
Labour’s solution is the classic statist solution that we have grown to expect from this Government. Of course it is the reason why so many New Zealanders have come to the view that this Government has really run out of steam; that this Government has now just simply when confronted with a problem taken the easy way out. What is the easy way out for a Government of Labour’s heritage? The easy way out is more regulation more statutes and in particular more cost on the private sector. 
The private sector as the Government will know did not want this bill. The private sector is opposed to this bill. The private sector does not just oppose it because it does not want to do anything about the problem. It actually came up with realistic solutions that in fact all the speakers thus far have referred to. Members spoke about bonds as one particular option about insurance as another possible option and about better prudential supervision as a third option. They even spoke about self-regulation as probably the worst of all those private sector approaches where they would manage a levy system themselves. 
This was clearly not seen as the most desirable outcome but all three of those solutions were seen as better than the statist solution—the solution that is always the recourse of the neo-socialist such as the Minister sitting in the chair today the Hon Chris Carter who I am sure will be voting for this bill in just a few minutes. He and his Green mates in that other party that no one would recognise as a sensible party are from the only two parties in this entire Parliament that support this kind of State lunacy. Every other party is opposed including their erstwhile coalition partners of a sort the United Future party including the New Zealand First Party with which National has considerable differences these days and including the ACT party. All of those parties coming to the issue from different perspectives have all concluded that the statist solution is fundamentally wrong particularly when there are better options available. 
So even when the Government removed the retrospective nature of the bill that could not and did not fix its fundamental flaws—the fundamental flaw is the statist approach. This will not fix the problem in an effective way. There were better ways available to the Government. It should have listened to the sector and we would not be confronted with this bill which I guess reflects more than any other bill that we have debated today the fundamental divide between the old-fashioned statist solution and the contemporary approach which is to trust the private sector. Let the private sector organise its own solution maybe with a bit of State guidance and assistance in a prudential supervisory way but not the old-fashioned: “Let’s just levy them; make them pay; we’ll organise it and trust the New Zealand Qualifications Authority to deal with it.” 
PANSY WONG (National) 
: 
 I would like to continue the theme started by my colleague Dr Wayne Mapp. There is a problem in the export education sector. Actually the biggest problem is the Labour Government because 2 years ago— 
Hon Dover Samuels 
: What’s wrong with that? 
PANSY WONG 
: The member asks a good question. The Labour Minister has not even bothered to brief his own colleague on what the problem is. The problem is that a Labour Minister brought in some legislation 3 years ago and told all political parties that if they supported the Government in passing the Code of Practice for the Pastoral Care of International Students then export education would be fine. In the next minute we were told that if the Education (Export Education Levy) Amendment Bill was also passed the export education sector would be an absolutely top performer. 
Actually the export education sector was performing without the Labour Government. In fact it was doing very well. In 2003 it was one of the top five export earners for New Zealand. 
Then successively we had two very high-profile collapses. The problems of those two institutions—the Modern Age Institute of Learning and Carich New Zealand—had in some cases been detected a year before they hit the media and before harm was done to New Zealand’s export education industry’s reputation. 
The Labour Government’s remedy was first of all to shift the blame. So instead of the Government admitting that it was the fault of the gatekeeper—the New Zealand Qualifications Authority; the organisation authorised to accredit institutions that could enrol international students—it shifted the blame and said: “Well if only good students came to New Zealand and if only good schools existed in New Zealand then none of those problems would exist.” But the truth is that if the gatekeeper the New Zealand Qualifications Authority had done its job a lot of the problems even if they had happened would have been minimised. 
In this case passing a bill to charge for an extra levy—to punish private education providers for the failure of their competitors—is not providing any solution to the problem. If the Labour Government is serious about trying to fix the problem in the export education sector it has to engage the sector in carrying out a proper inquiry into the New Zealand Qualifications Authority to see whether the authority has the expertise and the competence to carry out its monitoring role. 
In my previous speeches in respect of staff from institutions that had collapsed I provided examples of how staff had tried to alert the New Zealand Qualifications Authority to problems in those institutions. So either the authority was reluctant to implement or it was not capable of implementing quick actions to stop New Zealand’s export education sector from suffering those high-profile collapses. 
The passage of the export education levy legislation will certainly not solve the problem. I urge Labour members to rethink because this bill concerns a very important sector and its passage is not supported by members on the Opposition benches—that is almost all members apart from the Greens who have a problem philosophically with private institutions. The Greens are against anything that is private which is a shame in this case because I do not think they have the good of international students at heart. If we are really serious about wanting to enhance New Zealand’s reputation in international education we should not pass this bill. 
DIANNE YATES (Labour—Hamilton East) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 71 
New Zealand Labour 51; Green Party 9; United Future 8; Progressive 2; Maori Party 1. 
Noes 47 
New Zealand National 27; New Zealand First 13; ACT New Zealand 7. 
Motion agreed to. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 63 
New Zealand Labour 51; Green Party 9; Progressive 2; Maori Party 1. 
Noes 55 
New Zealand National 27; New Zealand First 13; ACT New Zealand 7; United Future 8. 
Clause 1 agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 63 
New Zealand Labour 51; Green Party 9; Progressive 2; Maori Party 1. 
Noes 55 
New Zealand National 27; New Zealand First 13; ACT New Zealand 7; United Future 8. 
Clause 2 agreed to. 
Bill reported with amendment. 
Building Bill 
In Committee 
Part 1 Preliminary provisions 
LINDSAY TISCH (National—Piako) 
: 
 National is opposing this legislation. It has become over-prescriptive. The bill is 358 pages long. It is raising the bar and it does absolutely nothing for consumer confidence or protection. My first reading speech the other day identified some of the reasons why National is opposed to this legislation. Part 1 which we are now debating has some major discrepancies and at the time I brought the Government Administration Committee’s attention to why stopbanks were not included under the definition of “dam”. Members will find a definition of “dam” in clause 6 which mentions artificial barriers flood control dams natural features and canals but paragraph (c) states: “does not include a stopbank designed to control floodwaters”. I would have thought that with the current floods in areas like the southern North Island Rangitikei Manawatu and Wanganui stopbanks would be an integral part of the protection for the surrounding land property and lives that were affected and I argued in the select committee that stopbanks should have been included or covered by this legislation. I have yet to hear any reason why stopbanks should not be included. 
Bearing in mind the floods I have just mentioned and also the recent floods in the Whakatane area—and I have visited both those flood-prone areas—I do not know why stopbanks are excluded especially as there are provisions for the other points I mentioned that are in clause 6. If the Minister is able to tell me why stopbanks are excluded then that would certainly satisfy the interest I have in that particular area. 
I have a press release that is a consequence of what has happened in the Bay of Plenty area and Environment BOP has commissioned an independent investigation to find out why the Rangitikei river stopbank breached during the flooding in the Eastern Bay of Plenty. The chief executive of Environment BOP Jeff Jones said that it needs to know exactly what happened so that it can take steps to make sure that it does not happen again. It is extremely important both to Environment BOP and the communities living in the shadow of its stopbanks. Stopbanks are designed to hold flood water not to fail. The Rangitikei stopbank should not have breached as it did even with the huge amount of pressure on it. It did not fail because water overtopped it as can sometimes happen; it just blew out. 
That is where property and lives have been affected. This is a serious matter and I would like to know from the Minister why stopbanks in this particular case—and I have visited the sites and seen what has happened—are not included under the other measures that refer to constructions to hold back water or other fluids under constant pressure so that they can form a reservoir or whatever. 
A lot of stopbanks have been used as a means to get irrigation water on to farms so in that sense stopbanks are holding water. Canals are included and I would have thought that a canal would have a measure of support around it to stop it from overflowing. That would be a stopbank. Canals are included but stopbanks specifically are not included. It is interesting to note that with the devastation that happened in the Rangitikei area a farmer will be suing the regional council. 
Hon DAVID CARTER (National) 
: 
 I rise to support my colleague Lindsay Tisch and the National Party’s opposition to the Building Bill. In my mind it is the most cynical useless legislation that the Labour Government and its supporting parties of New Zealand First and United Future will be involved in during this term of Government. The bill is now before Parliament— 
Hon Richard Prebble 
: The most useless bill. 
Hon DAVID CARTER 
: Richard Prebble interjects. [ 
Interruption 
] I suspect that this will be the most useless legislation. It affects so many New Zealanders and it is just such disastrous legislation designed entirely to take the leaking-home problem off the front pages of the newspaper. The Government’s response to that problem is 350-odd pages of legislation. We do not have builders any more. They have to be licensed building practitioners! This sort of nonsense will only add to the cost of building homes. We now have a situation where it is becoming more and more difficult for people to purchase their first homes and the Government is passing legislation that will make it worse. When I look at the commencement date of this legislation—this goes to show the mess and the disarray this Government is in—it states that the provisions come into force on 1 July 2004. I do not think we will have this bill through by 1 July 2004 considering that that was about 6 weeks ago. 
Murray Smith 
: Have a look at the Supplementary Order Paper. 
Hon DAVID CARTER 
: I have had a look at the Supplementary Order Paper and it states that we will pass it by November. This legislation was originally brought into the House under the name of the Hon Lianne Dalziel. She has not been a Minister for some time. What a disastrous response from a Government to put a huge piece of legislation into the House cynically to try to allay the fears of the owners of these leaky homes! It does nothing to do that. All the Government has achieved is to take that scandal off the front pages of the papers and try to tell those people who own leaky homes that the problem is under control and new legislation is on its way that will fix the problem. 
This legislation does nothing to fix those problems. All it does is to make it far worse from now on for anybody to try to buy his or her first home. Government Administration Committee members were told that it cost $6000 for a relatively small first home and typical of what New Zealanders buy as their first dwelling—that is an additional $6000 of red tape that delivers nothing. 
Lindsay Tisch 
: Probably closer to $10000 now. 
Hon DAVID CARTER 
: Lindsay Tisch and Shane Ardern were the members of the National caucus on the select committee. They did the work when Government members would not do the work. 
Hon Dover Samuels 
: They agreed with it. 
Hon DAVID CARTER 
: They do not agree with it. They think it is just a crock. This sort of legislation should really be given due scrutiny by the Government or at least the Government should acknowledge that it will not solve the problems for the people who have leaky homes—$10000 of additional costs. One has only to look at clause 3 which is the purpose of the legislation. Clause 3 contains a whole lot of words that mean very very little. It is my contention that the purposes as listed in clause 3 will not be at all satisfied by this legislation. Mark my words shortly after the next general election when National is in Government—after we have passed all the other important stuff—this will be some of the first legislation we will have to come back and tidy up because the Government is simply intent on conning New Zealanders with this legislation. 
BRENT CATCHPOLE (NZ First) 
: 
 As David Carter rightly pointed out the catalyst for the rewrite of the Building Act was the leaky homes problem. We had a rather extensive inquiry into that and we highlighted a large number of issues that were desperately needed to try to alleviate the problem of additional people becoming caught by leaky homes. Sadly Mr Carter who was not on the Government Administration Committee has basically rubbished all of those people— 
Hon Dover Samuels 
: I thought he was. 
BRENT CATCHPOLE 
: No he definitely was not on the committee he did not take part in the inquiry nor was he part of the committee that looked into the rewrite of this Building Bill. Therefore he was just blowing hot air when he said that this would not solve any problems for people in the future. He obviously does not care whether people in the future have a leaky home. He would rather see those people who have bought a leaky home now be able to flick it on later and hide it under the carpet. 
It is sad that he has taken that approach because this bill has tried to sort out the leaky homes problem. Maybe we will not get it right this first time but we have gone a long way to ensure that there are not tens of thousands more people who will have leaky homes built for them in the future. Just the threat of this bill coming through Parliament has meant that the territorial authorities have tightened up on their requirements for buildings and therefore the bill has already achieved a great deal. 
We see further expansion in this bill on a number of issues and I will talk about those later on. One of the issues that I would like to pick up on is the one that Lindsay Tisch mentioned to do with stopbanks. Although it was discussed during the select committee we did not believe that the stopbanks should have been in there and I think that was a mistake. We have just seen some major issues with stopbanks giving way both in the Manawatu and in the Bay of Plenty. In both cases stopbanks gave way and in the case of the one in the Bay of Plenty it was a dam. A lot of work has been done on it and under this bill the servicing of that dam will now be required and the local territorial authorities along with the dam examination team will be looking at different ways of ensuring that existing dams are up to standard—once again an issue that this bill is addressing and will address further in the future because of the way it is structured. 
It is a case where the bill has set a goal to try to prevent more leaky homes and also look at ways of preventing structures like dams giving way. I believe that the stopbanks should have been part of those structures. The immediate area around the dam is part of that but beyond the dam and the immediate area those stopbanks should have been looked at and considered more deeply in this bill. I look forward to bringing up some of those issues later on. 
SUE KEDGLEY (Green) 
: 
 This very substantial bill offers consumer protection and it was extraordinary to hear the member from the National Party sort of dismiss it and say that it might add $10000 or something to the building of a new home—never mind that we had submitters come to the Government Administration Committee who had lost $100000. It has gone right down the tubes because they had bought shoddy houses the result of which is that people have a home that is worth absolutely nothing. So we do need consumer protection and the overwhelming majority of submitters wanted that and strongly supported it. I think that National is right out on a limb in that regard. 
We are very pleased with many aspects of this bill; particularly we are pleased that sustainable development and health have been added to the purpose clause. When we look at the principles we see a whole raft of them many of them as a result of Green Party amendments and we are absolutely delighted that they are. I would like to talk about one where we say we need to ensure that any harmful effect on human health resulting from the use of particular building methods or products of a particular building design or building work is prevented or minimised. 
 Until this moment in time there have been no regulations looking at the health effects of building materials in our homes. Basically we know that we use many many toxic materials in building our homes but nobody has actually assessed whether the building materials that we are using in our homes might have adverse effects—indeed might even in some cases be slowly poisoning us. We know that there are literally thousands—we are assured thousands—of building materials used and many of them resins glues and flame retardants give off a gas formaldehyde which was recently classified as a carcinogen and so forth but none of these have ever been assessed. When I asked the question: “How many of these building products are registered and how many of these are assessed for their health effects?” the answer to my astonishment came back: “Absolutely none.” 
So this is really a major step forward that we are finally requiring that the new building department will have to take account of the health effects of building materials. We spend 80 percent of our time inside buildings and so it is quite extraordinary that we have ignored this quite major contributor I am certain to ill health. 
The other thing the bill deals with and many of these issues were Green amendments are heritage energy conservation energy efficiency the use of renewal energy and so forth. These things are absolutely fundamental and it is extraordinary that we did not have something as fundamental in the building code as energy efficiency. It is quite extraordinary that half of our houses in New Zealand are not even properly insulated. Here we are trying to build new dams and damming the remaining rivers in New Zealand but what about something as basic as insulating our homes so that we reduce the energy usage? 
Any energy efficiency that we make in building our homes will be cost-effective because we will over time be reducing our energy bill at a time when we know that energy shortages are becoming a way of life. It is extraordinary that we are ignoring such fundamental things as the energy usage in our homes. We would like the bill to go further. We are happy with it as far as it goes but we think we need a system of energy ratings for all new homes so that anyone buying a home knows how energy efficient or inefficient it is and other issues such as that. We also believe that any significant alterations to existing homes should be required to match the energy efficiency standards in the building code just as they match the fire safety disability and access standards. We will be moving amendments to that effect. The other area where we will be moving an amendment is to enable territorial authorities if they wish to set standards. 
Hon KEN SHIRLEY (ACT) 
: 
 The ACT party is opposing this bill. We believe it is thoroughly bad legislation. It is unnecessary and like so much of what this Government produces it is an overreaction and a faulty analysis of the problem. 
The Government says that this bill is to overcome the leaky homes syndrome but there is nothing in it that really addresses that issue. The pernicious provisions in the bill which virtually outlaw the traditional Kiwi do-it-yourself attitude are appalling. They reflect really restrictive trade practice which is what this bill is substantially about. 
It is little wonder that the building industry welcomes the bill because this compliant Government has dished up the industry’s wish list of constraint more regulation and restrictive trade entry so that those who are already in the trade have a natural advantage. That is not sensible. 
The issue of leaky buildings has substantially been mis-analysed because like it or not New Zealand has a cool temperate wet climate and our houses are cold and damp relative to other countries. Visitors from overseas shiver in our winter. They cannot believe we are so hardy—and we are—that we live in those cold damp wet houses. I believe New Zealand’s high incidence of asthma is actually a direct reflection of the cold damp wet housing we have in this country. 
We used to have the traditional Kiwi bungalow that served us well when we had big roaring log fires and all the rest of it. But what happened in the 1970s and 1980s? Progressively because of concerns over energy conservation we moved towards tighter insulation and vapour-proof barriers. The one salvation that our traditional housing had was that air could move pretty freely actually between the inside and the outside. That is partly why houses were so cold. But as soon as we tightened up on our insulation and enforced that with vapour-proof barriers we moved to having that damp air being heated condensing on that vapour-proof barrier and rotting inside the frame cavity of our housing—and now the problem has been totally misdiagnosed. 
The other aspect is that we thought we would ban the treatment of timber. People used to think we did copper chrome arsenate treatment of our framing. We never did. We only ever did boric treatment which is boron treatment for insects. That treatment did nothing against fungi and algae but it worked indirectly because in the boric bath treatment we also used to give the timber pentachlorophenol which is an anti-sap stain and very effective. We did that for cosmetic reasons we thought because the market did not like the blue stain in the wood. But once we banned pentachlorophenol in treating our wood we discovered that that was what had been killing the mould and the algae. 
Since about 1990 there has been no pentachlorophenol used because of the Green lobby whose members said it was bad it was terrible and it was a persistent organochlorine. It is very persistent but it is not particularly toxic. It is very persistent in the environment and it is not nice stuff but I tell members that those natural moulds and algae now in our wood frames give off a lot more natural toxins that are much more deadly and much more toxic than is the risk of pentachlorophenol—the organochlorine. That is the reality of the situation. 
We in this country now have an appalling situation. We have misdiagnosed it and now we have this other layer of bureaucracy control and regulation. Some people feel warm and fuzzy inside that this bill will solve the problem. Let me tell members that it will not. All this bill represents is restrictive trade practice and limitations on entry to the industry. 
The way that this bill pings the traditional do-it-yourself Kiwi I think is appalling. I built my first house at about age 20 and many other Kiwis have done the same thing. My house is still standing and it is very robust. 
MURRAY SMITH (United Future) 
: 
 All we have heard from National and ACT members tonight is railing against this bill without actually looking at it and coming up with some alternative solutions that they may want. In fact it was quite hilarious when Mr Carter was speaking. He said “When National gets in we’re going to we’re going to”—I was waiting for the word “repeal” but it did not come—“we’re going to make amendments to this bill.” I think that inevitably there will need to be amendments when the new Act settles down. With a piece of legislation that is as far-reaching as this and changes so many facets of life in this country it is naive to think that we will not have a bedding-down process and that there will not need to be some adjustments and changes come through. So I think National’s bet on that is really an even-odds bet. 
However as the bill stands what has been produced by the Government and refined heavily by the Government Administration Committee—and I worked out that we had actually changed over 100 clauses in this bill—is I think a very good start towards addressing a very key problem that we have in New Zealand. The problem is that prior to 1990 we had a very prescriptive regime that would not allow flexibility and required homes to be built in the same sort of manner everywhere. Then after 1990 we just opened the floodgates without adequate regulation or oversight despite the intentions at that time that there would be such oversight. History has proved that the oversight of the industry by the Building Industry Authority was inadequate but that was not necessarily all its fault; there was a lack of legislative power as well. So it was a laissez-faire situation where anything went. As the euphemism went—and it was repeated dozens and dozens of times—all one needed in order to be a builder was a ute a dog and a radio. That was very true in terms of the way that we built things. 
It was important and the weathertight homes inquiry showed that it was important for us to redress the situation not just because of the weathertightness issue but because that issue was symptomatic of the fact that our building controls had failed generally. If it were not for this bill coming through we would find that after the weathertightness issue suddenly we would be hit with another issue that had not been dealt with and we would be faced with exactly the same problems in terms of that issue. So it was important to address the weathertightness issue. That has taken a long time because this is a big bill and it makes a big change in the way that things are done in our society. The Government Administration Committee tried carefully to get a balance that would provide a situation that was not too prescriptive but was not laissez-faire. I think the bill provides a good balance. 
The purpose clause sets out very very clearly exactly what is expected of everybody—people will all know their roles. The lack of clarity in terms of roles was part of the confusion before whereby the Building Industry Authority did not recognise its role and the important part it played in oversight and auditing and local authorities were remiss in addressing their obligations. So there were big gaps. The purpose clause sets out clearly the key issues. The legislation is to ensure that buildings can be used safely by people and without endangering their health that buildings have attributes that contribute appropriately to people’s health physical independence and well-being that buildings provide adequate fire protection and also that sustainable development is promoted. So the purpose clause contains the key aspects of what we are trying to achieve in terms of our built structures. 
The select committee inserted new clause 3A setting out a wide range of principles that the chief executive has to look at and that local authorities have to take cognisance of. It is a holistic approach. The committee was very ready to add provisions to the clause to cope with the wide range of considerations that should be taken into account in New Zealand design and construction and the considerations needed in order to build holistic environments for people to live in. Some key provisions include the importance of the effect on human health the importance of durability—and this is something that will appeal to the National and ACT league—the importance of enabling innovation in design and construction and also the importance of taking note of the costs of building. The principles also provide for people with disabilities as well. 
Some of the key provisions that United Future strongly supported are firstly those concerning heritage. In my role in Petone which has one of the foremost heritage streets in the country I was very conscious of the deficiencies in the building code in terms of heritage. 
SIMON POWER (National—Rangitikei) 
: 
 In looking at Part 1 of the bill I am just astonished that we are dealing with a bill that in its first draft is 358 pages long with a raft of Supplementary Order Papers and amendments on the Table. I would have thought and maybe I am a bit optimistic that in 358 pages the Government might get it right and that the need for Supplementary Order Papers at the last minute would be very small indeed. But no it appears that despite 358 pages of definitions and clauses the Government did not get the legislation right and has been forced once this bill came out of the Government Administration Committee to table a number of Supplementary Order Papers and amendments. I can only imagine the disappointment of the officials who will be crushed by the fact that they have worked on this behemoth of a bill for months on end only to have Supplementary Order Papers thrown in at the last minute. 
Let us turn to Part 1 and have a quick look at some of the provisions. My colleague Lindsay Tisch informs me—and I checked this myself because I have to confess I did not believe him—that the definition of “dam” does not include a stopbank. 
Jill Pettis 
: In Wanganui they worked very well. 
SIMON POWER 
: Let me just explain to the members present in the Chamber how much effect—in my electorate of Rangitikei in the Manawatu and in the chief Government whip’s electorate of Whanganui—stopbanks and the way that they are built put together monitored and the like had during the February floods in our areas. 
Jill Pettis 
: In Wanganui they worked very well. 
SIMON POWER 
: That may be the case but let me just say that farmers in my electorate had no compunction in driving bulldozers through the stopbanks when they needed to ensure the waters flowed properly across the other—- 
Jill Pettis 
: In Wanganui they worked very well. 
SIMON POWER 
: I am pleased to hear that. The question for Mrs Pettis is why this legislation does not include stopbanks. If they worked so well—and I take the member at her word—why not throw them into the definition of “dam” and allow the bill to operate in a way that covers off those types of situations? 
I can tell Government members that any legislation like this operates in a practical working environment—like construction stopbank work flood protection dams and the like. This bill just relating to lifting is going to be the bane of every developer every builder and every home handyperson in New Zealand. How on earth can people who are practically inclined get on with the job at hand in respect of a building construction a lean-to on the farm or stopbanks and the like during flooding situations? The Minister should answer those questions and tell us how such individuals will deal with and work under legislation that requires two people to lift. There is no way that practical working people who want to put a lean-to up against the cowshed to protect themselves from the rain—and I am sure we will hear more on this from Shane Ardern later in the debate—are going to get by with legislation such as this. 
The tighter that the Government squeezes the industry with the bigger and more complex legislation it puts forward the more will slip through that grasp. That worries me because this bill is another indication that this Government does not trust individuals to get it right. This Government does not trust the fact that other people can make decisions about the quality of buildings dams and the like without the Goody Two-Shoes Labour Government producing 358 pages plus Supplementary Order Papers to tell them how to do that. 
Dr WAYNE MAPP (National—North Shore) 
: 
 This bill as many of my colleagues and indeed I guess even the Government would acknowledge has its genesis in the leaky buildings crisis. At that time I was heavily involved in that issue. It would be fair to say that I have had several different portfolio responsibilities! This particular report was comprehensive and it had a lot of recommendations. One of them the final one recommendation 63 said there ought to be a review of the Building Act so that an amendment to the Act could be completed. Prior to that it talked about the role of the Building Industry Authority and recommended that it be reviewed so that it had overall responsibility for the administration of the Act. That was where the solution lay. Everyone would acknowledge I think that the 1991 legislation did have some problems. It was perhaps part of the over— 
Lindsay Tisch 
: I raise a point of order Madam Chairperson. I do not like to interrupt my colleague’s speech but a member is standing and talking to another member. It is interrupting his flow. 
The CHAIRPERSON (Ann Hartley) 
: Would the member please be seated when he is talking to another member. 
Dr WAYNE MAPP 
: Thank you. I would like to thank Mr Tisch for assisting me in that regard and producing order in the Chamber when order was required. 
A solution was suggested by the inquiry of the Government Administration Committee into the weathertightness of buildings. It was essentially an amendment to the Act to strengthen the role of the Building Industry Authority and to provide better prudential supervision. That would not have required and did not require the level of reform that the Government has in fact produced. In fact part of the reform is effectively to abolish the Building Industry Authority and bring control back into the ministry. The weakness is as the Minister in the chair Dover Samuels will recognise the classic statist solution that we have seen so much of from this Government. In fact the previous debate was precisely about statist solutions. Here we are presented with yet another statist solution where the idea is to have massive volumes of regulation and statute and to centralise the management of this matter into the Ministry of Economic Development. That is not the right way. National in the course of this extended Committee debate will be putting forward the way that we think this issue needs to be fixed. We will put forward a modest and reasonable amendment to strengthen the Building Industry Authority help the independent certifiers do their job more effectively and provide clearer guidance to local authorities as part and parcel of their process. 
Frankly a lot of the issues are not legislatively based in any event. Much of the solution actually rests on the quality and skills of the people in the industry. This piece of legislation will not fix that. What is required is a more proactive approach through the industry training organisation and through the polytechnics to boost the skills of the workforce. That is what the weathertightness inquiry recommended and we do not need legislation to do that. We simply have to fix the educational issues and strengthen the industry training organisation itself. If we do that we solve a whole lot of other problems simultaneously because the weathertightness issue had multiple causes but perhaps the most apparent to those on the inquiry and to those in the industry was a lack of knowledge on the part of the people in the industry. That reflects the fact that skills had declined through the 1980s and the 1990s. That can be repaired. In addition there are practical measures around design solutions—the sort of thing in fact that the Building Industry Authority was actually empowered to do. 
MURRAY SMITH (United Future) 
: 
 When I was speaking before I talked about some of the principles in the bill that United Future was particularly glad to see. I referred to heritage and to the importance of the chief executive and local authorities when looking at building regulations and the building code taking note of the important role that heritage plays in our society. 
Other issues are energy efficiency and energy conservation which are mentioned in subclause (2)(m) of clause 3A. That is also an area where we as a nation have to address some key problems. We all know about the problems we are having in terms of the generation of energy supply in New Zealand and also its transportation around the country. Those problems as the select committee found when we went to Australia are things that the Australians are very closely aware of as well. They have actually made further strides in energy efficiency than we have particularly in New South Wales where houses have to comply with a certain level of energy efficiency. Whether we want to go to that level of prescription I have real questions about. I am always one for not being too prescriptive unless there is an important need to do so. But certainly we cannot ignore that issue and this bill does provide a first step in terms of the chief executive’s principle that requires that this whole area of energy efficiency and energy conservation be taken into account in the way we design our houses. It will become a more and more important area. 
Water efficiency and water conservation are also areas that United Future is pleased to see in the bill. We do need to be very conscious of the environmental impacts of our living. We cannot just take things for granted. In New Zealand we have been privileged to have unlimited supplies of water and I think it is important that we do not just take that for granted. We need to realise that as with any resource water does have some limitations. 
One of the very very key issues one of the hinge provisions in this bill—and it has been referred to by other people already—is the definition of “restricted building work” in clause 6. If there is one area that exercised the select committee perhaps more than almost any other it is this whole idea that we do not want to create something that is too restrictive of New Zealanders. We recognise that New Zealand does indeed as some have said have a culture of owner-builders. How can we provide enough flexibility to enable people to construct their own homes to work on their designs and to have that degree of freedom and innovation but at the same time protect future generations and our housing stock generally? This bill is not about just the immediate owner of a house; this bill is about the housing stock of New Zealand and ensuring that our housing generally maintains standards for the benefit of future purchasers of homes and for the benefit of our society in general. It is not good for our society to have leaky homes and therefore extensive damage to buildings. It is disruptive to our society. It is important we have a regime that provides ongoing protection for our society. 
What the select committee has come up with in terms of restricted building work is to confine the building work that has to be signed off to building work that “relates to an element of a building that is critical to the integrity of the building and the health and safety of its occupants;”. That is the test. Areas that are critical to the building and critical to health and safety are the areas that have to be signed off. It is not the case that everything—as some who are misinformed about this bill have said—has to be signed off by a licensed building practitioner. There are substantial areas in terms of construction that do not meet that criteria and that people will be free to deal with. But I think that in terms of confining this issue what we need to do is make sure that the structures of houses and the building envelope are sound and that means that although we want flexibility for people to build their own places it is important that we build houses that professionals licensed building practitioners can look at and say that yes at least the envelope and the integrity of the building on the outside are up to a certain standard. Then we let people do work beyond that. I think that is a good balance. Obviously some people will not be happy with it. There are very competent home builders who are not licensed building practitioners who will be affected by it. But there are also home builders who are not competent to do that work. 
Hon DOVER SAMUELS (Minister of State) 
: 
 I move  
That the question be now put 
. 
BRENT CATCHPOLE (NZ First) 
: 
 I will expand upon the issue of stopbanks which Lindsay Tisch mentioned. Stopbanks are quite different from dams as many people will realise. A dam controls the continuous flow of water in a river whereas stopbanks may well be alongside a river that has no water in it at all. They are there for flood control. There are occasions when floods as we have seen recently exceed the abilities of those stopbanks. The same can happen with a dam but stopbanks are there for flood control and can be along a river that has no water in it at all for most of the year. Occasionally the river will fill up and then those banks come into effect. 
Another issue that I will pick up on and one that we laboured long and hard over is the description of cable cars. There is some confusion as to whether a private cable car falls into the same category as those in public buildings because the description in the bill at the moment does not clarify that. I hope something will be put in before the end of this whole—[ 
Interruption 
] There is no point in voting against it over one small point as a National member was suggesting; there are a number of issues that this bill really does solve and we would not vote against it for the sake of one small issue. I would ask the officials to clarify the description of a private cable car and whether it falls into the same category as a cable car in a public building. 
Another point that I will pick up on quickly is to do with the private building certifiers. Opinion was divided as to whether they should be included. We were of the opinion that private building certifiers do play a very valid part in the whole process and therefore they have been retained in this bill. That I believe was a sound move. The only problem that private building certifiers have is to do with the insurance that is required and there lies an issue. At the time of the discussions I wanted us to look into the possibilities of changing the liability status from joint and several to proportional but that was quickly thrown out unfortunately. I would have liked to see it explored a lot further but sadly it was not. Therefore private building certifiers have an issue with getting insurance. In the past the Building Industry Authority was charged with finding run-off insurance. Well that never happened as the authority was never able to do it. To chop private building certifiers at this very point would leave exposed the very large volume of work that they have done in the past because it would cut off the only possible recourse they have at this point of time. To do that immediately on the instigation of this legislation would be a tragedy because they have certified a huge volume—in the billions of dollars—of buildings. 
I must add that out of all the complaints we could not find anybody who could show that the private building certifiers were the cause of the problems. The Building Industry Authority said that it monitored only the private building certifiers and that it did not monitor complaints about the territorial authorities so there was absolutely no comparative opportunity there. I think the authority did itself a disservice by not monitoring both sides to get a fairer deal. 
SHANE ARDERN (National—Taranaki-King Country) 
: 
 It was very good of my colleague Wayne Mapp to introduce a few facts into this debate a few moments ago. It was quite refreshing to see that somebody had taken the time to read some of the detail. 
The Building Bill came about as a result of the leaky houses inquiry. That inquiry described the problem as systemic. A number of issues had caused the problem. The answer to the problem according to the socialists on the other side of the House is 358 pages of bureaucratic nonsense that do not actually address the issues identified in the inquiry. Those of us on this side of the House find that to be quite amazing. 
Dr Wayne Mapp 
: United thinks the same. 
SHANE ARDERN 
: Well it is interesting that United Future is voting for the bill. I say to its member who spoke recently Murray Smith that I am pleased he has kept up his legal ability to read through the 358 mindless pages because he will need it after the next election. Certainly I wish him luck in his future law profession. The bill came about as a result— 
Hon Ken Shirley 
: It came about from the select committee inquiry. 
SHANE ARDERN 
: That is exactly right. The bill came about as a result of the leaky houses inquiry. Over 220000 building consents were issued in the previous decade with an average value of $132000 per consent. Forty-two percent of those building consents were in the Auckland region. So we have here a bill that tries to fix what was primarily an Auckland problem where big developers came in and employed substandard contractors who then used substandard materials in a way that those materials were never designed— 
Jill Pettis 
: Give us the solution then. 
SHANE ARDERN 
: The member over there is carping on. Monolithic coatings and no eaves— 
Jill Pettis 
: Give us the solution. 
SHANE ARDERN 
: The member cries out for the solution. If she holds her horses I will tell her the solution. The solution is to put some investment into our industry training organisations and upskill our builders. We admit that the 1991 Act had some deficiencies and needed to be addressed. It had become too lax in terms of regulation. But 358 pages of bureaucratic regulation are not the answer. 
Jill Pettis 
: What’s the answer? 
SHANE ARDERN 
: The answer is to give the Building Industry Authority the teeth to carry out the job that it was intended to do. It never had the legislative power to do it. Therein lies the answer. We had a select committee process where a whole heap of submitters came in and said just that; that if the Building Industry Authority was given the depth to go forward regulate and self-govern a lot of these problems would be fixed. So this legislation is absolutely unnecessary. 
I note with interest the comments from the Green member who touched on the fact that the legislation does not cover a lot of the safety aspects of building particularly around health. She is right to a certain extent but the leaky building inquiry identified that the most problematic issue regarding health was toxic mould growing on rotting timber that had not been treated. On the other hand the Green member said we should not treat timber because the chemical used is a toxin in itself. But the overwhelming evidence from the inquiry is that when untreated  
Pinus radiata 
 used anywhere in a building gets damp it rots and emits a toxic mould that creates health problems. It also creates a hazard of course because people can fall through the floor the wall the balcony or whatever it might be. It also causes the building to become very unstable. So she is right in one sense but the proposals that she put forward are in direct contrast to the line that the Green Party would take and that is that we should not allow tanalising and other chemicals to be used to preserve  
Pinus radiata 
 which is the main material used today in the frames of all of our houses. I am not sure how the Green Party will get round that one. It is an interesting issue. 
 The second issue she raised was that of insulation. Well she was right again. Houses that are insulated are more healthy. I think there is an overwhelming amount of evidence on that and nothing that I know of in this legislation requires houses now to be insulated up to a certain standard. 
DIANNE YATES (Labour—Hamilton East) 
: 
 I chair the Government Administration Committee that looked into this legislation and I tell members that we have a large piece of legislation before us. But I am somewhat disappointed by members of the committee who I believe are putting themselves down in this debate. I thank the members of the committee—Mr Lindsay Tisch Mr Shane Ardern Mr Murray Smith Mr Brent Catchpole and Ms Kedgley—for the contributions they made because the committee worked hard and long. 
I also note that Mr Mapp made a speech. He came to the inquiry on weathertightness and I noticed that when the cameras were there he had a considerable contribution to make. But we did not see hide nor hair of him—which is a pity really—during the whole of the consideration of the legislation. I would have thought that Mr Mapp would make a much greater effort to be on that committee during that consideration where I am sure he could have shared with us his experience of being on the inquiry and his experience of being a lawyer. 
I thank Mr Tisch and Mr Ardern in particular and Mr Catchpole and Mr Murray Smith. People worked very very hard on this legislation. Ms Kedgley made a considerable contribution. I also thank the officials who worked extremely hard as well. It is a very technical and long piece of legislation. The committee had a lot to consider and I think it did an extremely good job. 
As Mr Mapp just pointed out a number of issues needed to be corrected. They came from the general atmosphere of 10 years’ deregulation under the previous Government. Since the building boom and the development that has gone on in Auckland and Tauranga with their rapid growth in homes we have seen that there is a need to bring in tighter legislation and a greater degree of regulation in order for Kiwis to have sustainable housing. Most Kiwis still believe that the greatest investment of their life is their home. They want to buy a home that they know has been built by skilled builders and that is built out of good materials. They want a home that will last them and their families. I believe too that they should be able to have a home that will last them at least for more than one generation. 
That is why I thank all Government Administration Committee members. I know that tonight members of the committee have to grandstand and make speeches because they belong to a certain political party and feel they must oppose the bill. But I say to those Opposition members on the select committee that when they were present they made considerable and useful contributions to this bill—which I believe is a very good bill. 
The bill deals with skills training materials design and qualifications and it is a very very large bill. We know that the building code and the regulations that will follow from it will also be long and complex but they are very important to Kiwi families who are building or who own their homes. The members of the committee as well as all those who made submissions shared their experiences. Professional people ordinary people and homeowners all shared their experiences. 
I have heard tonight about things that are not in the bill. We have heard about dams. The committee went to great trouble to listen to people who made submissions both from local government and from dam owners with hydro dams. We visited hydro dams— 
Lindsay Tisch 
: We never talked about those sorts of dams. 
DIANNE YATES 
: I say to Mr Tisch that we went to a considerable deal of trouble. He was there too. We went to considerable trouble to find out a lot of detail about the bill. We also learned about the Building Industry Authority and about some of the problems it had had under Sir George Chapman who was a National Party chairperson. I think some people on the other side of the Chamber now have a very selective memory about what happened not only in the weathertightness inquiry and in the select committee stage but in their own personal contributions about which I will take a constructive view tonight and say that all members during the committee stage contributed extremely well to the committee. 
I especially say a big thankyou to the staff who went back and back to get all the expertise; we asked loads of questions throughout the inquiry. I particularly thank those who were involved in the weathertightness inquiry. The work done by committee members was extremely difficult but I must say very interesting. 
LINDSAY TISCH (National—Piako) 
: 
 It is interesting that the chair of the Government Administration Committee has just told us to wait for the regulations to come out because they will be long. They will be long all right because that is the nature of this bill. The regulations and the costs associated with it will be horrendous but that is not in the bill. The regulations will be absolutely horrendous and that is one of the reasons why National will not support the bill. 
The compliance cost regime in this bill is quite outrageous. When we consider what is actually entailed we see that it is absolute overkill and as Dr Mapp said it is a consequence of the leaky homes situation and the weathertightness report. 
I want to pay a tribute to the advisers. They spent a lot of time on the legislation and gave a lot of advice to the committee. National appreciates that. Although they did that we did not agree with the bill so during the process we brought up questions. We did not agree with the outcomes and we voted against the bill when we deliberated. So it is not new that National is opposing the bill now because in the select committee deliberation we voted against it and voted against it right through—[ 
Interruption 
] I raise a point of order Madam Chairperson. 
The CHAIRPERSON (Ann Hartley) 
: I apologise Mr Tisch. I say to members that if they want to talk to other members would they please keep away from the speaker and give him the opportunity to speak. 
LINDSAY TISCH 
: I want to draw attention to the definition of “natural hazard”. Clause 6 states: “natural hazard has the meaning given to it by section 159.” Specifically clause 159(3) mentions a number of points that relate to what a “natural hazard” is: erosion; falling debris be it soil rocks snow or ice; flooding—and that is why we mentioned stopbanks earlier on—overland flow storm surge tidal effects and ponding; and slippage. But it does not include—as is currently included in the Building Act of 1991—land subsidence and geothermal hazards. 
I know that the Minister has a Supplementary Order Paper that includes subsidence but it does not cover geothermal hazards—or “hot ground” as it is called—in those areas that have geothermal activity. I have put forward a Supplementary Order Paper that includes an amendment on subsidence and geothermal hazards because in some parts of the country those are major issues. It is all very well for members to say that this bill will protect people because it will do A B C D and E. If people can build on subsiding land and if people can build where there are geothermal activities and hazards it does not matter how good the building is or what the building is made of because it will disappear. One of the major concerns National has about this bill is that those areas are not covered. 
As an afterthought the Minister in the chair John Tamihere has come up with a Supplementary Order Paper. He might like to comment on why he includes subsidence in his Supplementary Order Paper but has not considered geothermal hazards. The Taupo District Council in particular is very concerned about geothermal activity in its area. It has already had to pay out on what is called “differential subsidence” and that is also the concern of other areas. In my electorate we have problems in the Huntly area which are a consequence of the shafts in former coal mines. Over in Waihi in Sandra Goudie’s electorate of Coromandel there are problems. We know where houses have disappeared and where there have been huge payouts to re-house affected people. The things we are talking about are not included in this bill. 
So it does not matter how good the bill may be at trying to protect the consumer in relation to building materials or the way in which houses are to be built. If district councils and city councils are still able to give consents—and that is what the bill allows—to build on those particular types of land there is no guarantee of protection. One of the major concerns we have about the bill is that that protection is not included. 
Hon RICK BARKER (Minister for Courts) 
: 
 I move  
That the question be now put 
. 
Hon DAVID CARTER (National) 
: 
 I have been listening to the debate and particularly to the contributions from United Future members and the very odd contributions from Labour members and they keep talking about this legislation offering protection to the consumer. That sounds pretty good if that is what it does. Murray Smith particularly spoke about licensed building practitioners. Then when I look at clause 2 “Commencement” I am puzzled to find that some significant sections of the legislation come into effect on 30 November 2009—5½ years away. That will be well after the Labour Government has been defeated at the polls and well after many of those speaking in this debate tonight have ceased to be members of Parliament. 
Dianne Yates 
: It gives time for you to complete your apprenticeship. 
Hon DAVID CARTER 
: Well Dianne Yates has the reason! I was wondering what the reason was; it is for me to complete my apprenticeship. I have news for that member. I am not about to embark on an apprenticeship but that member may well need to. She comes from one of those marginal Hamilton seats. 
Darren Hughes 
: Like Banks Peninsula. 
Hon DAVID CARTER 
: Banks Peninsula is very marginalised. I thank the junior Government whip for his contribution. It is a very marginal electorate; we are looking forward to the battle. 
But back to the Building Bill and I would really like a contribution from the Minister. The Hon John Tamihere is now in the chair so that is the third Minister we have had in about an hour of this debate—three of them. Not one of them has stood to answer a question and I have a very serious question for John Tamihere to answer. 
Dr Wayne Mapp 
: He does not know anything about the bill. 
Hon DAVID CARTER 
: My colleague Dr Wayne Mapp says that Mr Tamihere does not know anything about it but Supplementary Order Paper 241 is in his name. So I think he has a duty to rise and explain to members because it is a genuine question I am raising. I was not involved in the Government Administration Committee and all I want to know is why members are debating legislation now when a significant portion of it does not come into effect until the end of 2009. I cannot recall other legislation such as this bill being debated with a 5-year enactment path. I just cannot believe that members of the Government supported by United Future can stand and say hand on heart that this legislation is all about delivering protection to those people who are suffering from leaky homes and can then say: “Oh and by the way we won’t be doing much about it until 2009.” I just do not think that is appropriate. 
It reinforces the first point I made that this legislation is designed for no other purpose than to try to con the public of New Zealand that the leaky home saga has now been resolved and put to bed by the Building Bill because that is clearly not the case. So I ask the Minister in the chair the Hon John Tamihere to rise to his feet. I would appreciate a very clear concise simple—and no doubt it will be simple; there is no doubt about that if it comes from the Minister—explanation as to why any portion of this legislation requires 5½ years before it comes into effect. 
DARREN HUGHES (Labour—Otaki) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 70 
New Zealand Labour 51; Green Party 9; United Future 8; Progressive 2. 
Noes 49 
New Zealand National 27; New Zealand First 13; ACT New Zealand 7; Maori Party 1; Independent: Awatere Huata. 
Motion agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 241 in the name of the Hon John Tamihere to Part 1 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 83 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8; Progressive 2. 
Noes 36 
New Zealand National 27; ACT New Zealand 7; Maori Party 1; Independent: Awatere Huata. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 1 as amended be agreed to. 
Ayes 83 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8; Progressive 2. 
Noes 36 
New Zealand National 27; ACT New Zealand 7; Maori Party 1; Independent: Awatere Huata. 
Part 1 as amended agreed to. 
Part 1A Building 
The CHAIRPERSON (Hon Clem Simich) 
: This part comprises clauses 116 to 242F and includes debate on schedules 1 and 2. I also mention that the part includes eight very extensive subparts.  
Dr WAYNE MAPP (National—North Shore) 
: 
 I am most appreciative that the Chair should mention how extensive this part is with its numerous subparts—hundreds of clauses in fact—because in many ways it is the core of the bill. So we on this side of the Chamber are looking forward to a detailed and forensic examination of these provisions noting their worthwhile features and also noting their numerous and extensive deficiencies. 
I guess it would be remiss of me if I did not acknowledge the Minister’s Supplementary Order Papers. He has filed at least four and quite extraordinarily Supplementary Order Paper 241 is dated Tuesday 10 August 2004. Members should note that; it is today’s date. Yet even before we got to vote on it a further amendment was filed which is noted as the proposed amendment to Supplementary Order Paper 241. So here we have a Government that puts a bill into the House and on the day it is to be debated in the Committee stage the Government puts down a Supplementary Order Paper. That is not so unusual but what is unusual—and I guess it tells us something about the management by the Minister of the ministry—is that he has to have a Supplementary Order Paper to amend the Supplementary Order Paper filed literally within hours of the first one. I think that that speaks volumes about the whole tenor of this bill. 
Now contained within this part are two things: the role of the ministry and extensive provisions. Essentially it is the replacement of the Building Industry Authority but as we have noted previously it is very much the statist solution. Perhaps of greatest concern however to members on this side of the Chamber is the whole idea of the comprehensive and bureaucratic system of the registration of building practitioners. That is where the bill falls down. This is the part that will kill that great and fine tradition of do-it-yourself New Zealanders. They have been doing that for over a century but now will be caught by the bill. They will have to pay hundreds if not thousands of dollars to have their work approved by registered building practitioners. 
Dianne Yates 
: So? 
Dr WAYNE MAPP 
: There was a reference—which the interjector from the other side will well know—about a saying in relation to weathertightness. We referred somewhat colloquially to “the man his dog his radio and his ute”—that being the classic start-up position of many many successful New Zealand builders. The Government has now put in place a regulatory regime that will stifle those people. That is exactly what it is doing. 
This is an industry that has been available for people to enter provided they have a trade certificate. That is one of the things that is desirable and that is typically all that is really wanted. A guy—occasionally a girl—who has a trade certificate can get into the industry and start building for consumers. Their good name will get around quite quickly. Many of those people grow their businesses from the one-person business to one of two three or five people or indeed in many cases to a business of hundreds of people. That is the epitome of the Kiwi dream—the person who builds his or her own business the person whom the Minister keeps saying he supports. 
The Minister fancies himself as the advocate for small New Zealand businesses—those hard-working entrepreneurs—yet here tonight he is presiding over legislation that will make it very difficult for those people to get ahead. This is a Minister who is killing initiative by this legislation. Maybe he does not recognise that. Maybe that is a possibility. Maybe he does not know what he is doing. 
LINDSAY TISCH (National—Piako) 
: 
 I will be seeking a number of calls because as Dr Mapp said this is a very important part of the bill. I want to carry on from the point I made earlier about clause 159 “Building on land subject to natural hazards”. I said the bill does not include land subsidence or geothermal hazards and although the Minister has indicated in a Supplementary Order Paper that he will include a provision for subsidence I say it is very very important that the Committee accepts my amendment which does include land subsidence and geothermal hazards. 
In areas like Taupo where there has been major geothermal activity caused through man-made activities rather than natural causes—the bill talks only of natural hazards—a number of activities have adversely affected property. They have adversely affected the value of property and in that area they have also caused a major change in compliance costs for the local authority. 
It is interesting to note from the submission the Taupo District Council made to the Government Administration Committee that the council referred to subsidence areas: underground mining; dewatering of quarries and mines; rubbish dump sites; areas of geothermal and volcanic activity—this bill does not cover volcanic activity—compaction of poorly consolidated fill; and compaction of weak sedimentary layers such as peat. So there are plenty of examples around the Taupo region. As I mentioned in an earlier debate areas like Huntly are also affected by this issue as is the Waihi area in particular. There are plenty of examples of what has happened in those areas. 
I draw the attention of members to geothermal hazards. Although the Minister has indicated that subsidence is in his Supplementary Order Paper there is no mention of geothermal hazards. Those words encompass defined areas of what is known as hot ground but there is also the prospect of emerging geothermal hazards which in some cases might possibly be identified through appropriate monitoring. The issue is that there is no protection for the local authority. There is no way a local authority can say that it cannot grant a building consent for that property because of subsidence or geothermal activity. That is a real issue. 
When we are talking about consumer protection there is no protection from liability which is a major defect in this whole bill. If in the current Building Act we were to look at section 36 we would see that it says there is protection; and clause 159 in this bill is meant to carry over from that. But if members have ever had a section 36 slapped on the title of their properties they would know exactly what that means. We saw it in the Rangitikei area when Simon Power and I went through the devastation there and where local authorities after the floods were able to slap a section 36 on the title which simply meant the Earthquake Commission would not cover the properties. Insurance companies were turning down applications for insurance because local authorities were slapping a section 36 on the property titles. 
 This bill does not protect the local authority from that and this is a two-edged sword. Those properties were affected subsequent to the flooding. It was no fault of the owners that their properties were flooded. But subsequently they were caught by the current legislation when the local authority came through and put a section 36 on those titles. Clause 159 in this bill carries that on but the protection against liability that is not in this part and which councils will pay and at the end of the day ratepayers will pay relates to land subsidence and geothermal hazards. They are missed out and that is a major defect with this bill. 
SUE KEDGLEY (Green) 
: 
 I would just like to speak briefly to two amendments that the Green Party has to Part 1A. Firstly we would like to amend clause 119C to insert a subclause (1) that states that solely for reasons of resource conservation a territorial authority may require building work to achieve performance criteria in addition to that of the building code. It would empower territorial authorities to ensure that buildings built in their geographic region could be adjusted to the resource conditions of their area for example related to water shortages or heat loss in cold climates. One could imagine that in parts of the South Island a territorial authority might want higher insulation rates. In other parts for example in Marlborough one might want mandatory water tanks or something such as that but unfortunately under the provisions of this bill that is prohibited. 
The amendment will not set different standards for different parts of the country—it would only allow a variation for specific reasons of resource conservation that would enable an authority to require some additional work to achieve various performance criteria. So I think that if we do not introduce such an amendment we will live to regret it. I believe that territorial authorities will wish to have this power. We have already had some territorial authorities contacting us to support this amendment very strongly. 
The second amendment to add a subparagraph (iii) after clause 195(1)(a)(ii) is simply saying that if one is going to undertake significant alterations to existing buildings they should comply as nearly as is reasonably practical with the provisions of the building 
code related to energy efficiency and energy conservation. Basically all we are saying is that if one is going to do significant work in a building—and only significant work that requires a resource consent—the energy efficiency provisions should apply to those alterations just as much for example as they will have to apply in relation to fire safety and disability access standards. So really all this amendment is doing is saying that energy efficiency standards have to apply to significant alterations. 
Once again it seems to us that this is just basic common sense. When we are as we know at a stage where energy shortage is fast becoming a way of life where we are looking at damming rivers by building hydro stations and so forth why are we not doing basic things such as properly insulating and applying energy efficiency to our homes? Half of our houses are not even properly insulated so why would we not do something as simple and as logical as requiring simple energy efficiency principles standards to be applied when we are doing significant alterations? It simply does not make sense to build new dams at great cost before we have done simple things such as trying to introduce energy efficiency not just into new homes but also into substantial alterations to existing homes. 
As I have previously said we would have liked to see further energy efficiency requirements in new homes but at least let us apply the existing energy efficiency requirements and energy conservation requirements to significant alterations. So we will be seeking those two amendments to this part. 
BRENT CATCHPOLE (NZ First) 
: 
 As was pointed out this particular part is a substantial one and I flag now that I intend to take a number of calls on it. At the start of this call I would like to thank some people it was remiss of me not to thank in my first call. 
First I acknowledge the enormous amount of work that the chairperson Dianne Yates did on this bill. Without her input the whole bill would probably never have got to this stage so early. Dianne Yates and the other members of the Government Administration Committee have already been mentioned but I also acknowledge all the work carried out by the clerks and the officials. We constantly sent them away with reams and reams of questions and issues to revisit and they came back with the answers very quickly. I thank them very much for all the work they put into the bill. 
The New Zealand First minority view highlights some particular issues we had with this bill. We feel that it is a sound bill—as sound as the Building Act of 1991 which was basically adequate for the construction of the day. The only problem with the old Act was that it was very light-handed and relied too heavily on regulation in the name of the building code. It was that building code that was very poorly administered by the Building Industry Authority which failed to pick up on some major issues. 
It is sad that the original Minister who began the inquiry into the weathertightness of buildings was of the opinion that if a house was built to the building code it would never leak. But everybody in New Zealand knows that every single building develops a leak in it at some stage in its lifetime—if it is not a leak in the roof it is a leak from a water cylinder inside the walls. Every building will leak at some stage during its life so to think the building code will solve that problem is pretty far-fetched. 
Unfortunately the Building Industry Authority did not have the teeth to administer the building code to the extent expected and the building code therefore is to be rewritten. I know for a fact that large parts of it are already under the pen at this very moment because of issues that are starting to come out. Technically that rewrite is supposed to be completed within 2 years of this bill being enacted but I hope it is completed long before that because some parts of the building code really need to be rejigged to prevent the problems that came up in relation to weathertight homes. 
Compliance documents are another area that is heavily canvassed within this bill. In the past compliance documents have been found wanting. In fact during the time of submissions on the Building Bill we asked territorial authorities and local councils how many outstanding cases there were in relation to codes of compliance and we heard that there were literally tens of thousands outstanding where the building work done had not matched up to the consents given at the start of the work. It was an issue that desperately needed to be tidied up and this bill does tidy it up in a significant way. 
 There is a particular region that has a large number of substandard houses. Unfortunately this bill puts that region in the awkward position of having to identify all those homes and to progress towards getting them up to standard. Technically many of those houses need to be bulldozed and rebuilt but I would hate to see the occupants of those homes thrown out because of the strong conditions in the bill on that one issue. I believe that councils are working through it now to try to match the requirements in the bill with the requirements of their areas. I will not name that one particular area because it would not be fair to it but I say it is essential that codes of compliance documents are in place. 
CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I rise to speak in support of the bill. This bill is a most important bill and we are speaking to Part 1A. Most MPs on both sides in Parliament would acknowledge that a Kiwi has no greater asset than the family home so I think we should keep politics out of this bill. I know that some landed gentry over on that side of the Chamber have multi-home ownership and multi-ranch ownership and they do not like it when we point that out. However as we refer to Part 1A we know that the average Kiwi man and woman in this country— 
Dianne Yates 
: All their life savings. 
CLAYTON COSGROVE 
:—have all their life savings invested in the family home as my colleague said. The next biggest asset is probably the family car. Unlike Mr Carter the average Kiwi family does not have four four-wheel drives three BMWs a couple of Porsches—or a tractor; they have the family home. 
I commend the Minister in the chair Mr Tamihere who has inherited this bill. It is a clarion call to the DIY’er and the Kiwi battler who wants high standards in building practice. A builder in my electorate who was a builder of 30 years’ experience and a tradesperson brought up under the old apprenticeship laws—which of course that mob over there abolished thanks to Lockwood Smith but which we reintroduced so now have 9000 young apprentices on the go—told me that he did not want shonky builders in his industry because that would lower his professionalism and tar all builders with the same brush. It is a bit like politicians—a bit like Don Brash who with his substandard behaviour tars the whole National Party with the same brush. 
This legislation is about preserving high standards in Kiwi workmanship. It is about a clarion call to Kiwis. The age of a building does not matter—contrary to what we heard Opposition members talking about today. We want high standards in building practice and tradespersonship. That is what this legislation is about despite all the bleating from some Opposition members. 
I know that Shane Ardern is always placed in the difficult position of saying firstly either what he believes or secondly what the new whip Simon Power—who has put a gun to Mr Ardern’s head—has told him he has to say. I know that Shane Ardern is from good old-fashioned Kiwi stock and is a good old-fashioned farmer who has employed a number of tradespersons in his life. He knows that average Kiwi battlers out there want some assurance that their homes are their castles that they are of a high standard and that they will be preserved for them. 
That is what this legislation is all about despite the politics and all the puffery around this Chamber. That is the fundamental issue that Part 1A is about—as is this entire bill. I support this bill and I invite Opposition members to get off their high horses—or out of the Land Rovers Range Rovers and BMWs that a few of them over there have along with three or four homes and a bach in the Sounds—and think of the ordinary Kiwi battler who has put $50000 $60000 $100000 or $200000 into his or her own home and who says “This is my castle. I want to ensure that I am looked after. I want to ensure that what I’ve invested for my family and maybe what I hand on to the kids is a solid resource that is looked after and is of a high standard and that I don’t have to go back to look for the developer the architect or the three or four “subbies” who did not do a good job and who maybe ripped me off.” 
Tonight Part 1A is about a Government and a Minister saying that they will stand behind the Kiwi battler and provide some guarantees where others would not. I tell that crew over there that if they are going to stand up for the ordinary Kiwi then I pose the question: why after 9 years did they not do something? Why did they not do anything? Why did they not hunt down the architect the developer the “subbie” or the contractor and look after the ordinary Kiwi? 
After this legislation is passed I tell members that in my electorate—the fastest-growing electorate in the South Island with lots of buildings developments and subdivisions—the average Kiwi man and woman will sleep a lot easier in their beds knowing that there are some minimum standards that their homes will be their castles and that the Government will look after them. 
I support the bill. I commend the Minister who inherited the bill. I ask those who stand up from now on to front up for the ordinary Kiwi man and woman in the street and tell us as my colleague said what their policy is on this bill. 
Hon KEN SHIRLEY (ACT) 
: 
 The member who just resumed his seat is suffering from severe delusions. I am sure he is genuine in what he said but it just exposes his delusions. He said this legislation is a clarion call in favour of the do-it-yourselfer. Nothing could be further from the truth. This bill absolutely dumps on the traditional Kiwi do-it-yourselfer. Far from being a clarion call it is a bell falling on their head. It is an outrage. The member said the bill will protect the greatest asset of the average Kiwi and his good folk in Waimakariri—Mike Moore’s battlers. He forgets that the building industry has been operating under a highly regulated regime. We already had all these registered plumbers builders local body building inspectors and their signed-off plans yet the leaky building syndrome happened under those regulations. It is actually a function of regulation. To suggest that somehow this bill with its new layer of heavy-handed regulation is the answer is deeply worrying. 
The speaker from the Green Party made an interesting contribution focusing on energy and saying that we had to have legislated insulation requirements up and down the country. That does not make sense either. The best way to get good insulation is to have proper pricing mechanisms in energy rather than just relying on the Energy Efficiency and Conservation Authority and public relations programmes. The best way is to think about the problem; whether Invercargill requires the same standard as Kaitaia. I do not think so. There are differences throughout the country. 
I would like to hear from the Minister in the chair the Hon John Tamihere. He is a good Kiwi battler and that is what we like about him. Let us hear about when he was running the Waipareira Trust and representing the good “westies”. What do they think about this bill? They would say it is an outrage. It stops them being that good Kiwi do-it-yourselfer; the red-blooded heterosexual—what was the rest of that saying? They are the very people whom this bill dumps on. It emasculates the good old red-blooded heterosexual Kiwi male. What does Mr Tamihere have to say about that? All the namby-pambies and his colleagues like Mr Cosgrove think it is wonderful but it is very very damaging to the traditional red-blooded heterosexual Kiwi “do-it-yourselfer” bloke ethos. 
We want to hear from Mr Tamihere on this. He speaks out about the subject but we want to hear from him in relation to the Building Bill. That is where the rubber hits the road. This bill is one of the most draconian heavy-handed regulatory frameworks that I have seen in this Parliament. 
Clayton Cosgrove 
: Looking after your mates. 
Hon KEN SHIRLEY 
: No it is not about looking after my mates. This bill introduces restrictive trade practices. Why do members think the building industry is welcoming it. I have spoken to chiefs of major construction companies and they said: “Philosophically we think it’s rubbish but we love it. We love it because this is all about restrictive trade practice and new entries.” 
This bill will slap more costs on for Kiwi battlers and make it more difficult for them to get into their first home. It is absolute bureaucratic pap. It is a misdiagnosis and a misanalysis of the leaky home syndrome. The Government wants to be seen to be doing something and as a typical Labour Party it can only think of heavy-handed regulation. It cannot think smarter. It takes the approach: “If there’s a problem make a law to ban it and somehow it will go away.” That has never worked. It is nonsense but that is what this bill is all about. 
Mr Cosgrove contradicted himself at every turn. Every time he uttered a new sentence he contradicted himself. He is not representing the battlers of Waimakariri; he is working against their interests. He is not protecting New Zealand society from rapacious industry people; he is actually protecting those rapacious industry people who are now locked in and have added protection. 
Hon DAVID CARTER (National) 
: 
 I too have to take a call following the contribution made by the Labour member Clayton Cosgrove. I note his whips have been trying to silence him since to make sure that he does not take another call. 
Let me raise a couple of points against Clayton Cosgrove’s argument. The first thing he said was that National did not do anything about it and had 9 long years to do it. I take the opportunity of reminding the member that this problem actually came to light in 2000. In the year 2000 the leaky home saga hit the headlines. That was a time when the Labour member was part of the Labour Government so it is the Labour Government’s problem. The second point I make is that if that member is so keen to help solve the problem why is it 9 years before parts of this bill are enacted? Some of the commencement dates are in 2009. 
The other point he raised was that this legislation was designed to help the battler obtain his or her first home. I had a call an hour or so ago from a man called Stan Scorringe. He is the Mayor of the Mackenzie District Council. That council has met over the last 2 days and tried to analyse the cost it thinks this legislation will impose on the average dwelling. He confirmed to me today—independent of the work done by the members on the select committee—that the council estimates that on average a house price will increase by $7000 because of this restrictive legislation. I ask Clayton Cosgrove how that will help the Kiwi battlers whom he says he is here to represent obtain their first home. 
I want to address a question to the Minister in the chair the Hon John Tamihere who at this stage obviously does not have Helen Clark’s permission to answer a question but I will try. I refer in particular to clause 175 “Licensed building practitioner to certify restricted building work”. When I go back to the definitions and look at how “restricted building work” is defined I see that it is defined as any building work that requires a building consent. That suggests to me that effectively all the do-it-yourself work—which the member Clayton Cosgrove said this legislation supports—under that definition becomes restricted building work and therefore it can no longer be done by the do-it-yourself person or in fact by his mate who might have been a builder for 10 or 20 years but may never have gone through a formal qualification. 
Murray Smith 
: Read on! 
Hon DAVID CARTER 
: I have read on and I raised the point earlier and the Minister has not answered. I carried out a significant renovation a few years ago—and I do not want to make the member Clayton Cosgrove any more jealous and spiteful than he was—and when we undertook that renovation we used a builder who has never done an apprenticeship but had had about 10 years’ experience and the building does not leak by the way. He will not now be able to carry on doing that work because he is no longer a licensed building practitioner. I say to that member— 
Lianne Dalziel 
: Did you pay him under the table? 
Hon DAVID CARTER 
: No I certainly did not pay him under the table nor would I have done so. Those sorts of filthy tricks are the things one would expect from the Lianne Dalziels of this world. I would not operate that way. The point I want to make is that while there seem to be very imperfect definitions of restricted building work I note that a discussion document came across my desk this morning in the name of the Hon John Tamihere. He now proposes to go out to the industry and say: “Help us to define what restricted building work is.” Here we are passing the legislation now and the Minister by his own admission does not have a definition for “restricted building work”. So we are going to ask the industry: “Should a hayshed be a restricted building work?”. Does that mean to say that a farmer can build it with his mate and pay correctly or does he have to have a licensed building practitioner? What about a carport? That was mentioned in the Minister’s own discussion document. He himself does not have a clue whether a carport is a restricted building work. This is a mess. 
MURRAY SMITH (United Future) 
: 
 I think it is quite amusing to listen to some of these speakers who clearly either have not read the bill or if they have read it have misunderstood it and Mr Carter’s contribution falls directly into the latter category. If he looks at the definition of restricted building work he will see that it is building work that requires a building consent relates to an element of a building that is critical to the integrity of the building and the health and safety of its occupants and is declared by the Governor-General to be restricted building work. That means that if it does not require a building consent it is not building work; if it requires a building consent but it does not relate to an element of the building that is critical to the integrity of the building and the health and safety of the occupants it is not building work that is restricted; and if it is not those two things and is declared by Order in Council it is not restricted. That is a very restrictive definition. 
It is disingenuous for National to tell the public that restricted building work is all building work that requires a building consent. That is just totally misleading the public. Every time that members of ACT have spoken in this debate—in the second reading debate as well as in the Committee stage—they too have demonstrated that they have simply not read the bill and if they have read it they simply have not understood what it is all about. A lot of bluster has come through in terms of what ACT is saying with regard to the situation and it is quite clear that they do not understand what this legislation is trying to achieve.  
I reiterate that United Future believes this is a responsible and restrained way of going about having some criteria within our building system that provide a measure of safety for the public and the ongoing building of the housing stock in this country. For the benefit of those members who clearly have not read the bill I want to point out some of the other benefits that are contained in this bill and in particular in this part. One of the areas that I think is a really good development is this whole area of compliance documents. Up until now we have had a situation where people can apply and get approved solutions so the fact that the building work or the material is an approved thing by the Building Industry Authority means it can be used without criticism in building work but very few people have done that. Very few people have done that because of the cost of doing that. So hardly any of those approved building solutions have gone through.  
Having compliance documents in here means—we in United Future believe and think it will be proved; and clearly the Government believes it—that compliance documents will become the norm. We will get into a situation where local authorities when they are confronted with a design that is a little out of the ordinary will say: “Does this methodology in terms of building or does this product qualify in terms of being compliant as far as the chief executive is concerned?” If the answer is no I would expect that most local authorities will take a much closer look probably at some cost in terms of determining whether they believe it will meet the building code. That will slow the process down and prove more costly. If suppliers of products and suppliers of systems have got compliance through the chief executive they will already have that there upfront so when they go to the local authority they can say: “This complies the chief executive says it does and you can sign off on this without any worry.” The bill provides that if in fact there is a compliance document with regard to it then it is deemed to comply.  
I hope that that will turn this whole situation round and we will see some of these new systems—and the monolithic cladding system is the classic one—having compliance recognised by the chief executive before they go on the market so that the suppliers can more easily market their products so that there is an investigation into those systems at an early stage to see whether they will meet the requirements of the building code and so that will not get the retrospective problems where somewhere down the chain we find all of a sudden that they do not meet the requirements and we have massive problems on our hands.  
There is also a provision in the bill for mandatory requirements—and that was a bit lacking in the old bill as well—where the chief executive can in fact make compliance mandatory. It is intended that that will be used very rarely. But nevertheless it is an important tool in the chief executive’s box. 
SHANE ARDERN (National—Taranaki-King Country) 
: 
 Can I just start by acknowledging the fine work of the officials. They did a lot of work for the National Party as well as for the rest of the Government Administration Committee in terms of answering questions during the select committee process. Can I also acknowledge the rest of the committee who worked hard under the chairmanship of Dianne Yates. There is no doubt that they went through hours of work—and then came up with this 358 pages of bureaucratic nonsense. Can I also challenge the member Clayton Cosgrove for his comments earlier on about sticking up for the Kiwi battler. Because here is the interesting thing. On the  
Holmes  
show last night I saw a Kiwi battler; a young mother who had lost her husband at a very early age in the member’s electorate— 
Hon Member 
: Where was it? 
SHANE ARDERN 
: It was on the  
Holmes  
show last night. Because of the fine work she had done for the community post the death of her husband under very tight circumstances the community came together in a voluntary capacity and did her house up—did a major update of her house. Now the question I need to ask the Minister in the chair John Tamihere and the officials is: “Could they have done that work post this bill being passed?”. The answer is “No they could not.” That group of volunteers who went into that member’s electorate and upgraded that lady’s house would be severely compromised in doing their work under this legislation. That is the test; that is where the acid test hits the road. We have the do-it-yourselfers like the group that went in over a weekend and completely rebuilt that house. They would now be put under so much red tape and regulation that that fine piece of community work could not take place. 
I say to the Minister in the chair John Tamihere—and I have not read his book yet; I promise that I will—that in his book I am sure it will refer to the Kiwi battler; the poor person who grew up in poor housing. Let me tell members that in no way could the sharemilker’s cottage of 800 square feet that I grew up in be described as a castle. The old man used to say that when one opened the fridge door the cold air rushed in! I know that that was one of the ways the cottage was described; but it was never described as a castle I can tell members that! 
Let me tell members that this legislation would make that very substantial dwelling of 800 square feet much more expensive. Let me tell members that it leaked like a sieve was full of mould and it was the most horrible house that one could live in during one’s life. This legislation will not stop that from happening. That house was built with untreated rimu with the cladding of the time which was rusticated weatherboard with eaves with sash windows and a corrugated iron roof. It would have met all the standards that this bill meets in terms of a building standard. There was no insulation. 
Dr Wayne Mapp 
: It was well ventilated! 
SHANE ARDERN 
: Well when the southerly wind blew one had to stand on the carpet to hold it down otherwise it was up around one’s ears! Certainly the curtains moved when the wind blew from one direction or the other. 
This bill will not improve that house one iota. In fact if the Green Party had its way the house would be treated as a heritage building and we would not be allowed even to alter it. It would have to stay in its original state. 
Stopbanks are another issue. We have had this horrendous flood up in the Bay of Plenty and also in the Manawatu. We look for reasons why that happened—apart from the fact that it rained for 3 days on end which is something the Government cannot be blamed for unfortunately otherwise we would although we may be able to figure out a way to do that. The reason so much land went under water was that the stopbanks failed. As my colleague the member from Karapiro said nowhere does this bill mention faulty stopbanks or the construction of stopbanks. Clearly that issue could have been addressed but was not. 
Small business is the backbone of this country and it is interesting to note that the Minister in the chair the Hon John Tamihere is also the Minister for Small Business. For the benefit of Clayton Cosgrove “small business” describes the man with the ute the radio and the dog. He is the Kiwi battler out there; the very person we are talking about but he will not be able to survive under these heavy regulations. Imagine a copy of this legislation on the seat of the ute underneath the dog! 
LIANNE DALZIEL (Labour—Christchurch East) 
: 
 As someone who had a particular interest in this legislation I am very pleased to be able to speak to it in the Committee stage. I have listened to Opposition members with an increasing sense of incredulity. Who was in Government when the Building Act was passed in 1991? I wonder who that was! It is amazing hearing all these speeches coming across the Chamber laying blame at the feet of the Government. But it is this Government that has had to pick up the pieces. Who ignored the warnings of many of the old hands in the industry who said the laissez-faire approach was going to be a disaster especially when one coupled it with the demise of the apprenticeship system in this country? I wonder who presided over that legislation? 
Hon Rick Barker 
: Bill Birch. 
LIANNE DALZIEL 
: It was Bill Birch. The repeal of the Apprenticeship Act was done by Mr Bill Birch— 
Hon Rick Barker 
: And Lockwood Smith. 
LIANNE DALZIEL 
: —and Lockwood Smith managed to deal to the industry training sector at the same time. 
I have heard both the ACT party and the National Party say: “Let the market decide. Let the market determine all these matters.” Will we expect to see the market protecting homes from leaking? I wonder whether the market is capable of actually doing that. Is the market now some form of umbrella that is going to sit over and above shoddy workmanship that has not been properly undertaken and has not been properly inspected under the laissez-faire attitude that the previous Government introduced? 
I am not prepared to trust the market in this case because there is not an equivalent in the relationship between the consumer and the professional involved. The professional involved knows about building knows about the quality of the product knows about the processes that have to be put in place. As consumers how on earth are ordinary New Zealanders—the Kiwi battlers whom my colleague spoke about—supposed to be able to protect themselves when they do not know whether the particular product they are buying will stand up for the purpose? I prefer skilled tradespeople doing the job they are supposed to do and inspection processes in place to protect as well. 
My colleague Clayton Cosgrove I thought made one of the most telling points in this debate thus far. He talked about the level of investment that ordinary Kiwis make in their home. He is absolutely right. It is the largest single investment that most people will make. The second-largest is usually the car as my colleague pointed out. But with a car one has to have a warrant of fitness look after the car get the warrant of fitness renewed on a regular basis. But with a house what does one get from the real estate agent from the builder? 
 What do people get in order to ensure that they keep their houses up to standard? Actually there is a partnership that occurs post the purchase of a building and it is important that consumers know what they have to do to maintain their properties both inside and outside to ensure that those properties are able to retain their fitness for purpose. I think it is amazing that there are still many people—and I am guilty of this myself—who have invested thousands of dollars into a property and did not have it inspected by a builder. But I would not buy a car without having it inspected by the Automobile Association. I think that is a culture change an attitude change that we need to see in this country so that people get properties checked out for fitness for purpose before they actually invest that degree of money. 
One of the things I am very concerned about—and I think one of things that this bill is trying to do—is to provide protection for consumers the ordinary Kiwis. I have heard nothing from the Opposition that expresses any concern for ordinary New Zealanders who have been caught out in a situation where the legislation has not provided sufficient protection. 
As for those who are volunteers or do-it-yourselfers it is important to know that the house they build for themselves may be the home of someone else one day and that person is entitled to have a protection and what the legislation says is that if it is being built by a do-it-yourselfer and it does meet the criteria that my colleague quite rightly read out to the Committee then it is important that a registered building practitioner oversees the process. 
Dr WAYNE MAPP (National—North Shore) 
: 
 One of things I should perhaps remind the previous speaker Lianne Dalziel about is that she voted for the Building Act 1991. It is worth getting one’s history right is it not? The legislation was introduced by the Labour Government of 1984-90 as a result of an inquiry. The Labour Party not surprisingly in 1991 voted for the legislation. Those members cannot disown their past and they need to get their history right. I am not going to talk about incidents that Lianne Dalziel was involved in earlier this year but it does seem that collective amnesia is a fault on her part. 
We have heard a great deal about protecting Kiwi battlers—homeowners. That is a good thing. We agree with that. That is why we have said that there needed to be improvements to the Building Act. We wanted the Building Industry Authority strengthened so that it could undertake its supervisory role more fully. We wanted to have the quality of workmanship improved. Those are the practical measures that are required not this huge piece of legislation that throws out the good with the bad—which is fundamentally what this bill does. It simply pretends that the past did not exist chucks it all out and tries to start again. Well that is the way of tears. 
 I will turn now to the contribution so-called of Mr Smith from United Future. That was not very good. He calls himself a lawyer and he went on about the sort of work that would be covered by restricted building work. The importance of that of course is that only building practitioners can do it. He made a great song and dance about the fact that it required a building consent; and related to an element of the building that is critical to the integrity of the building; and that it is declared by the Governor-General by Order in Council to be restricted building work. They have produced a discussion document on this issue. The blunt point is this: the reality is that any work that is likely to be covered by a building consent will involve some structural integrity. That is why people get building consents—that is the reality. 
Progress reported. 
The House adjourned at 9.56 p.m.