Volume 615 Week 50 - Wednesday 3 March 2004 
Volume 615 Week 50 - Wednesday 3 March 2004 
[Volume:615;Page:11495] 
Wednesday 3 March 2004 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Business of Select Committees 
Meetings 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I seek leave for the Law and Order Committee to meet in Australia from 7 to 13 March and to adopt such procedures and practices as are considered suitable for the conduct of its business. 
Mr SPEAKER 
: Is there any objection to that course being followed? There appears to be not. 
Speaker’s Rulings 
Questions for Oral Answer—Ministers' Answers 
Mr SPEAKER 
: Before I start on questions I want to refer to two matters that I said I would rule on this week. Last week the Hon Peter Dunne asked me to reflect on points of order inviting the Speaker to rule on whether Ministers have answered questions. I have given a number of rulings on that subject during my term in office including detailed rulings on 12 September 2001 and 1 May 2003. Summaries of those rulings are contained in the latest edition of  
Speakers’ Rulings 
. I do not intend to go over them in detail today. I merely wish to emphasise that the Speaker is not the judge of whether a Minister answers a question correctly or adequately. That is a matter for political debate and criticism. 
I reiterate what I said on 12 September 2001 in  
Hansard 
 Vol. 595 at page 11634: “Any answer given by a Minister must address the question asked. That means that the answer must be a direct response to the question; it cannot be on an unrelated matter that it suits the Minister to introduce. But it does not mean that the answer will be satisfactory to the questioner or that it will actually answer the question. Whether it does or not will always be a matter of opinion and the Speaker cannot force a Minister to give a reply that is satisfactory to everyone.” 
Maori Language—Interpretation 
Mr SPEAKER 
: During question No. 11 on 26 February which was last Thursday a number of points arose out of the interpretation of a reply by the Minister of Maori Affairs and I undertook to respond to them. The Hon Roger Sowry raised the question of whether a member whose speech has been incorrectly interpreted is under an obligation to correct that interpretation. If the member gives his or her own interpretation then the answer is yes. In the same way that any member who gives wrong information to the House is under an obligation to clear the matter up as soon as the error is appreciated—Speaker’s ruling 163/6—a member who gives an incorrect interpretation must do so too but where the interpretation is given by an interpreter I cannot hold that any such onus falls on the member. As Speaker’s ruling 34/3 makes plain members do not own the interpretations of their speeches and are not responsible for them. I would hope however that members would on a point of order clear up any misunderstanding arising out of an interpretation of a speech. 
A further point was raised as to whether when the Minister’s speech was translated for inclusion in  
Hansard 
 I would come back to the House if it revealed any unparliamentary language. There was unparliamentary language used—the Minister addressed another member in the second person—but the Minister cleared this up himself by a personal explanation later in the day. That matter is now closed. 
I wish to add some general remarks about interpretation. As Speakers’ rulings 34/4 and 34/5 make clear an interpretation especially one given off the cuff is always liable to be rough and ready. Members must make allowance for that. We must appreciate too that the process of interpretation is not merely a matter of transliterating word for word from one language into another. Especially with languages as different in their origins as English and Maori this is not possible. I am satisfied that the interpretation given last week did convey the broad sense of what the Minister said. 
The one deficiency was a peculiarly parliamentary point—the personal pronoun the Minister used was not conveyed. In most settings whether someone is speaking in the second person or the third person is unimportant; in this Chamber it can be critical. The Clerk has spoken to the interpreters about the particular parliamentary context in which an interpretation is given and attention will be paid to that in the future. If members would like a copy of either ruling the Clerk will provide it to them. 
GERRY BROWNLEE (Deputy Leader—National) 
: 
 I raise a point of order Mr Speaker. There was also the matter raised yesterday by the Hon Bill English. 
Mr SPEAKER 
: I am still coming back on that one. I had quite a bit to do on those two today. I will come back on that one. 
Hon KEN SHIRLEY (Deputy Leader—ACT) 
: 
 I raise a point of order Mr Speaker. It relates to the ruling you have just given to the House but also to Speaker’s ruling 34/5 which I note is also a ruling of yours made in 2002. The difficulty as I see it is this: where a member responds in Maori as a member certainly might particularly a Minister replying to a question and the member breaches the Standing Orders in so doing—and the rest of the House is not aware of that and the interpreter does not make it clear in his interpretation that the Standing Orders have been breached—then as the ruling stands now we have an obligation to take a point of order immediately. But it might be some time before we learn of the breach of the Standing Orders that was not contained in the interpreter’s translation. What remedy and recourse do we have to raise that point of order at a later time when under normal rulings it would be regarded as out of time? 
Mr SPEAKER 
: Firstly in relation to that last sentence of course a member would be able to do so at a later time because that is an exceptional circumstance. I referred to Speaker’s ruling 34/5 in my ruling; the other matter is addressed in that ruling. 
Points of Order—Minister’s Answers 
Hon PETER DUNNE (Leader—United Future) 
: 
 I raise a point of order Mr Speaker. This is a quick issue that arises from your ruling on the point of order I raised with you. I want to seek some clarification. I am grateful for your ruling but if I look at Speaker’s ruling 145/7 in your name I see that it states: “Any answer must address the question asked. The answer must be a direct response;” etc. and then I contrast that with Speaker’s ruling 144/3: “It is not obligatory on a Minister to answer a question.” and Speaker’s ruling 144/4: “The Speaker cannot force a Minister to give an answer to a question …”. I want to be clear in my mind that you are saying that in addressing a question a Minister has to give a response—but you as Speaker have no responsibility for the quality of that response—and the response somehow has to address the question itself despite the fact that those other rulings say there is no obligation on a Minister to actually answer the question. I think that that is at the heart of a lot of the current disputes. 
Mr SPEAKER 
: I thank the member because it is a useful point of order. Those two instances I am advised were when the Minister said: “No I will not answer.” It was just: “No I will not answer.” and that was way back in 1968 and 1972 I think. The ruling I gave refers to the fact that a Minister must address the question. The answer might not be satisfactory to the person who asked the question but that answer has to be given. 
Tabling of Documents 
Question No. 2 to Minister 2 March 
Hon TREVOR MALLARD (Minister of Education) 
: 
 As many members are aware yesterday in this House I was accused by the Hon Bill English of suppressing documents. I now seek to table a letter from his office to me my reply to his office and the documents he alleged I suppressed—which are not at all related to the request he made. 
Documents by leave laid on the Table of the House. 
Questions to Ministers 
Treaty Claims—Settlement 
1. Hon RICHARD PREBBLE (Leader—ACT) 
 to the  
Minister of Maori Affairs 
: Does he agree with the Minister for Social Development and Employment the Hon Steve Maharey that: “It is perhaps time to set a date when all grievances must be settled so we can all move on”; if not why not? 
Hon PAREKURA HOROMIA (Minister of Maori Affairs) 
: 
 Yes. The settlement process needs to be sped up but I have not considered a deadline. 
Hon Richard Prebble 
: Would the Minister advise Parliament whether this answer means that he has done a U-turn on treaty policies and the policy is now different in which case in what way; and if he has made no U-turn on the settlement of treaty grievances can we conclude that it is business as usual? 
Hon PAREKURA HOROMIA 
: I have been consistent. As I said in a media statement on 3 April 2003: “It is in everyone’s interests that a process for resolving claims happens as quickly as possible”. There is no U-turn from this Minister. 
Dave Hereora 
: Does the Minister consider that the treaty will still be relevant in 20 years’ time? 
Hon PAREKURA HOROMIA 
: Yes. Even when all historical claims are settled the Crown continues to have an ongoing obligation to Maori under the treaty. This is an obligation that this Government takes seriously. 
Gerry Brownlee 
: Did the Minister see the  
One News 
 item last night in which the Prime Minister said on this matter: “I neither support nor don’t support it.” and then did he see—[ 
Interruption 
] 
Mr SPEAKER 
: That is the one warning about interjecting while questions are being asked and that is the only warning today. 
Gerry Brownlee 
: Did the Minister see last night’s  
One News 
 in which the Prime Minister was quoted on this matter as saying: “I neither support nor don’t support it.”; then did he read this morning her changed position when she said: “I didn’t get where I am today without being concerned about public opinion.” and does he think that that may in fact indicate that this Minister soon will be doing a U-turn? 
Hon PAREKURA HOROMIA 
: No I did not see the news because I was very busy as a Maori Minister doing other things nor did I read the newspaper this morning because I was again busy doing other things. I tell that member that there is no U-turn from this Minister of Maori Affairs but I am interested in what the spokesperson for Maori Affairs in that party is on about. Tell me about your policy. 
Mr SPEAKER 
: The last sentence is out of order. It is not in order to ask a member to tell another member about his policy. That can come in the course of debate. 
Gerry Brownlee 
: I raise a point of order Mr Speaker. I understand the Minister’s intention. Notwithstanding the comment you just made I therefore seek leave to indicate to the House the National Party’s exact policy direction in that matter. 
Mr SPEAKER 
: Leave is sought to do that. Is there any objection? There is. [ 
Interruption 
] That is for me to say but I agree with the member. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. With respect the Minister erred not because he asked Mr Brownlee a question but because he asked you about your Maori Affairs policy. I know you have one but that party does not. 
Mr SPEAKER 
: I am flattered to think that after 36 years I have had the odd comment to make about the odd thing but I think the member was technically correct. We will now move on. 
Metiria Turei 
: Does the Minister agree that the treaty settlement process is about providing just resolution to our nation’s historical conflicts so should not be subject to a unilaterally imposed time limit whether it be the totally unreasonable 2008 deadline of the ACT party or the more generous but still unachievable 10 years opined by the Hon Steve Maharey? 
Hon PAREKURA HOROMIA 
: This Government will not compromise the integrity of the process as we want settlements to be fair and durable and to be understood by the two partners in this country brought together by the Treaty of Waitangi. 
Pita Paraone 
: Would it not be preferable for all New Zealanders that the time frame spoken about be applied to the lodging of claims rather than that mentioned by the Minister’s colleague the Minister for Social Development and Employment the Hon Steve Maharey as that would allow for fair and enduring settlements to be negotiated unconstrained by time; if not why not? 
Hon PAREKURA HOROMIA 
: I say to my learned friend from Ngapuhi that most certainly it is something we need to consider. 
Hon Peter Dunne 
: In light of the Minister’s comments yesterday will he be taking specific proposals to Cabinet at some point in the future to give effect to his support for a specific limit being introduced? 
Hon PAREKURA HOROMIA 
: That is for the Minister in charge of Treaty of Waitangi Negotiations to forward. We continually have good discussions in Cabinet about the treaty. 
Hon Ken Shirley 
: In light of the Minister’s comment that neither he nor his Cabinet have engaged in a U-turn and that they are conducting business as usual how does he reconcile the statement made by his colleague the Attorney-General who a week and a half ago said that a time limit was impossible with the statements made by Minister Steve Maharey who said that we must have a time limit? How can he reconcile those two positions and call them “business as usual”? 
Hon PAREKURA HOROMIA 
: As with leadership U-turns Ministers can have separate opinions. That is what makes this Government strong. 
Rt Hon Winston Peters 
: Has the Minister received any reports on the viability of such suggestions made previously as best evidenced by these comments: “National completely rejects the separatist policies pursued by Labour. Our goal must be over time to eliminate all legislation based on race.”—a quotation from a speech made at Orewa by Jim Bolger on 23 January 1990? 
Hon PAREKURA HOROMIA 
: Yes. 
Metiria Turei 
: Does the Minister agree with comments made yesterday by Shane Jones and other Maori leaders that it is not just Maori but also the Crown that drags the chain on the settlement of historical wrongs? 
Hon PAREKURA HOROMIA 
: That is correct. From time to time that is right. 
Rt Hon Winston Peters 
: I ask the Minister again what reports has he had on the viability of such commitments and promises as best evidenced in historic terms by these comments: “From this point on my Government will maintain a non-racist stance by pursuing policies that deal with disadvantage solely on the basis of need not race.” in an “I have a dream” speech by Jim Bolger on 23 January 1990—for the  
New Zealand Herald 
’s sake? 
Mr SPEAKER 
: What were the member’s first words? 
Rt Hon Winston Peters 
: “Has he had any reports on the viability”— 
Mr SPEAKER 
: Members can ask that. 
Hon PAREKURA HOROMIA 
: The notion nuances and development of the fiscal envelope by that party are well known. 
Rodney Hide 
: Is the House to take from the Minister’s answers today that the Government’s policy is to speed up the treaty settlement process but to do so without an end date in mind and so therefore to speed up the process and keep it going for ever and a day? 
Hon PAREKURA HOROMIA 
: The member may wish that but no. 
Rt Hon Winston Peters 
: I seek leave to table the “I have a dream” speech made on 23 January 1990 at of all places Orewa where all these things seemed to be so new. 
Document by leave laid on the Table of the House. 
Hon Richard Prebble 
: Is the House to conclude from the Minister’s remarks that he has been working as hard as he can to make settlements as fast as he can that he will continue to be busy busy and that settlements will be made no faster in the future than they were in the past? 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. We have now gone a fair way from the original question. We now have the Minister being asked a question for which he is not responsible. The Minister in charge of Treaty of Waitangi Negotiations is responsible for treaty settlements not the Minister of Maori Affairs. 
Hon Richard Prebble 
: Of course the House knows that is not so. The Minister of Maori Affairs has a significant role in the settlement process. His officials give advice and he gives advice—in fact he has just told us that he might be one of the Ministers who has been dragging the chain. If he can say that about himself why can I not ask questions about his performance? 
Mr SPEAKER 
: I will settle it this way. The Minister can answer in so far as his responsibilities allow him to do so on this particular issue. 
Hon PAREKURA HOROMIA 
: As usual the Government is making its best endeavours and we act in the collective here. There is no U-turn about that. 
Crimes Act—Gangs 
2.  
MARC ALEXANDER (United Future) 
 to the  
Minister of Justice 
: Is he confident that section 98A of the Crimes Act 1961 concerning participation in a criminal gang is being utilised effectively to combat the spread of gangs and their related criminal activities; if so why? 
Hon MARGARET WILSON (Acting Minister of Justice) 
: 
 Yes. Since the Government made changes to section 98A in 2002 the number of prosecutions brought by the police has increased dramatically. Last year 76 prosecutions under section 98A were brought compared with a total of 16 for the 5 years previously. So far 10 of those charges have resulted in convictions for that offence. Some of the remaining cases presumably are yet to be determined by the courts. 
Marc Alexander 
: Noting the Minister’s answer— 
Mr SPEAKER 
: The member should start his question with a question word. That is not a question word. We had that issue raised quite properly by Mr Brownlee last week. I have ruled that supplementary questions have to begin with a question word. 
Marc Alexander 
: Why is it that in the last 4 years only a pathetic 12 people have actually been convicted of participation in a criminal gang when the Government’s own figures suggest there are at least 10000 gang members out there and what possible confidence can the public have that the Government is doing anything to halt the rise of gangs and the gang-controlled drug industry in particular the P epidemic when the average period of imprisonment for those 12 people was a paltry 16½ months? 
Hon MARGARET WILSON 
: The statistics relating to convictions are a matter for the courts. In the process I understand that although charges are frequently brought under section 98A they are normally brought in conjunction with other charges. That is why there are fewer convictions. Presumably during the period charges are sometimes withdrawn or not proceeded with when convictions are already received for other offences. 
Tim Barnett 
: What was the nature of the changes made by the Government in 2002 to section 98A of the Crimes Act? 
Hon MARGARET WILSON 
: The changes made to section 98A simplified the legal test for what constituted an organised criminal group. It broadened the scope of who could be considered to be a member of that group and it increased the maximum penalty for participation in a criminal gang from 3 to 5 years’ imprisonment. Police noted that the changes made by the Government to that section made the law “more relevant to the gang situation within New Zealand” and anticipated an increase in the use of this charge as the statistics show. 
Richard Worth 
: Why does the Government not get serious about organised crime and breaking up the criminal gangs rather than saying—as it has been since 31 July 2003—that it is still reviewing the Proceeds of Crime Act; when does dithering stop and action begin? 
Hon MARGARET WILSON 
: The Government has been considering this matter and it hopes a bill will be introduced by the middle of the year. This Government has a policy of consultation and not imposing its will on others without consultation. 
Ron Mark 
: Is it not the case that in November 1997 the New Zealand First - National coalition Government passed the Harassment and Criminal Associations Bill which significantly increased the powers of the police and the courts so that society could better deal with gangs and organised crime and is it further not the case that the only reason section 98A of the Crimes Act has not been enforced is that as indicated by the Minister’s own figures the police have no confidence in many of the trendy liberal-minded judges who are more concerned about civil liberties than they are about the safety of the public? 
Mr SPEAKER 
: Criticism of the judiciary is to be regarded very carefully but the first part of the question is certainly in order. 
Hon MARGARET WILSON 
: I understand there are a variety of reasons as to why in fact prosecutions do not lead to conviction and that frequently depends upon the nature of the trial and the types of offences that are brought. 
Marc Alexander 
: Does the Minister consider that 5 years is a sufficient maximum penalty for gang members when in one particular case a convicted offender received no sentence of imprisonment at all; if so what is the point of legislation when it provides such completely ineffectual results? 
Hon MARGARET WILSON 
: Under our system of criminal justice it is for the courts to hear the facts in the particular case and to determine it according to those circumstances not for Parliament to make a predetermination on the basis of facts unknown. 
Marc Alexander 
: Has the Minister considered any proposals to remedy the obvious failures of the current law dealing with gangs such as a tougher property confiscation regime that removes the profit incentive from gang-related criminal activity along the lines of the Western Australian model as proposed by United Future; if not why not? 
Hon MARGARET WILSON 
: We are aware of United Future’s support for the Western Australian scheme and that has been one of the proposals looked at. The bill will be introduced we hope by the middle of this year or certainly shortly thereafter. 
Schools—Closures Invercargill 
3.  
Hon BILL ENGLISH (National—Clutha-Southland) 
 to the  
Minister of Education 
: What will be the difference between the process followed by the ministry facilitator and the process to be followed by the mediator with respect to the proposed closure of 13 Invercargill schools? 
Hon TREVOR MALLARD (Minister of Education) 
: 
 I am pleased that the member asked me this question. During the two previous education reviews while he was in Government whenever there was a meeting in Invercargill that member used to head for Auckland— 
Mr SPEAKER 
: Now the Minister will answer the question. 
Hon TREVOR MALLARD 
: As the member is aware—because he attended the meeting—the facilitator consulted with the community and developed possible models for future schooling provision. The ministry then used this information to form recommendations to me and I made decisions that became the proposals announced in January. The mediator will review those proposals any alternative proposals lodged as part of the submissions and community views then make a recommendation. I do welcome the member’s interest at last. 
Hon Bill English 
: If the facilitator has already consulted with the community as the ministry’s website says he will has developed alternatives has presented data and information and passes that on ultimately to the Minister for decision why should schools engage with a mediator for whom there are no terms of reference and who can follow only the same process of consultation and presentation of alternative models? 
Hon TREVOR MALLARD 
: Because I think that they think and communities around the country are thinking that they will get better results. There are alternatives. Simon Power is aware for example that that member’s policy could be applied to Taihape and of the 10 schools there one of which will be merged there will be one fewer school according to my approach; according to Bill English’s approach there will be nine fewer schools. They will be down to one school in Taihape under his policy. 
Hon Bill English 
: I raise a point of order Mr Speaker. I want to raise two points. The first is that in response to the primary question the member was out of order. He does that habitually and I suggest that there needs to be some sanction on him from the Chair; otherwise he will just keep doing it. The second point is that in respect of the matter the Minister raises he is consistently misrepresenting material that he has read somewhere. He continues to do it each question time. I have the right as a member of this Parliament to have my word accepted; how he represents it is simply wrong and he should not be allowed to continue to do so—and in any case it is not his responsibility. 
Mr SPEAKER 
: I just want to say to the member that as far as I am concerned if a member states something then his word is accepted and I accept the member’s word. 
Hon TREVOR MALLARD 
: I seek leave to table two documents. The first document outlines the Bill English position on education development initiatives which has been published. 
Mr SPEAKER 
: It is sought to be tabled. Is there any objection? There is objection. 
Hon TREVOR MALLARD 
: The second document is an application of that policy to the current education development initiative areas that shows that significantly more schools would close. 
Document by leave laid on the Table of the House. 
Lynne Pillay 
: What alternative approaches to reviews has he seen and does he intend to adopt them? 
Hon TREVOR MALLARD 
: I have seen a number of approaches to reviews. The one that is loudest the one that is most coherent and the one that has some elements of logic behind it is that one of Bill English’s and I think it stinks. 
Hon Bill English 
: What do they think of yours? [ 
Interruption 
] 
Mr SPEAKER 
: I think the riposte was a suitable response. 
Rod Donald 
: Does the Minister agree that with the benefit of hindsight he could have avoided the current school review shambles by adopting a whole-of-Government approach that took account of the economic and social costs of possible closures on the wider community and will he guarantee that those costs will now be treated seriously in the reviews that he is still determined to proceed with? 
Hon TREVOR MALLARD 
: The very firm feedback I have had from a number of areas is that weak and failing schools are a major reason for population decline. I want to avoid that. 
Hon Bill English 
: Is the Minister aware of a Budget paper headed “Proposal: Network Reviews” dated 19 June 2003 which sets out in great detail his plans to review over 5 years 500 schools and close 200 of them; and does he now still stand by his statement that he had not kept his Cabinet colleagues apprised of his actions; and does he agree that the Prime Minister can say she never knew what was proposed? 
Hon TREVOR MALLARD 
: Our Prime Minister knows quite a lot. She does not know the detail of all the discussions between Dr Cullen and me. 
Hon Bill English 
: Can the Minister confirm that the true position is that he had informed his colleagues that they did know—including the Prime Minister—that he planned to review 500 schools and close up to 200 of them and that the Prime Minister and he have both made misleading public statements to cover up a very messy back-down where they have both been defeated by public opinion? 
Hon TREVOR MALLARD 
: No I do not accept that because it is incorrect. I would remind the member that the number he suggested is less than the number that were closed in the 1990s. 
Hon Bill English 
: I seek leave to table a document headed “Vote: Education” and “Proposal: Network Reviews”—[ 
Interruption 
] 
Document by leave laid on the Table of the House. 
John Carter 
: I raise a point of order Mr Speaker. I was going to raise this matter at the end of this question but I am pleased that in fact we have had the situation where Mr English sought to table a paper. Earlier on during this particular question the Minister of Education Mr Mallard sought to table two papers. He was allowed without interruption from you to say all that he wanted to say and then you asked whether there was any objection. In the case of Mr English he was part-way through and you interrupted. It seems that often when we are looking to table papers we are interrupted but the Minister or Ministers are not. I wonder whether we can have a situation where someone who seeks leave gives purely just the title of the document or else the person can finish his or her request to table. 
Mr SPEAKER 
: If the document has been referred to by way of a supplementary question and everyone is well aware of the document concerned as I think I was and everyone else was then I do not need to have its description entirely repeated. 
Hon Bill English 
: I raise a point of order Mr Speaker. You are going to have to go a bit further than that. Before question time the Minister of Education got up and asked for leave to table some documents and in the process of simply asking for leave before any question had been asked made a debating point about the content of those documents. You ignored it. 
Mr SPEAKER 
: I made a mistake and I apologise to the member. 
Hon Bill English 
: I raise a point of order Mr Speaker. Do we therefore have your assurance that in the case of Mr Mallard he will be treated in the same way as the rest of the House in respect of requesting leave to table documents? 
Mr SPEAKER 
: Absolutely. 
Regulations—Complaints 
4.  
CLAYTON COSGROVE (Labour—Waimakariri) 
 to the  
Minister of Finance 
: Has he received any reports recording complaints about the level of regulation in New Zealand? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 Indeed I get a lot of such reports particularly from the National Party from ACT from the Business Roundtable and from Business New Zealand complaining continually that the Government is choking off growth in the economy by excessive regulation. They do that despite the strong economic performance of recent years despite record levels of employment and despite the effect their comments may have on deterring foreign investment in New Zealand. 
Clayton Cosgrove 
: Has he seen any independent commentary on New Zealand as a place to do business? 
Hon Dr MICHAEL CULLEN 
: Yes just by chance I have. There is indeed a new independent report out that compares countries with each other as opposed to taking an absolutist view and it has been carried out by the World Bank which I think Dr Brash used to work for at one point. In a survey covering more than 130 countries New Zealand was rated as the least regulated economy and as one of the easiest places to start a new business. That assessment is in line with recent reports from Moody’s and Standard and Poor’s and I tell the Opposition to wait a bit longer for an IMF report that is coming out soon too. 
John Key 
: Does the Minister acknowledge that the current Government’s policies in relation to holidays and employment law will in the future lead to a deterioration in New Zealand’s performance as measured by the World Bank today; and if growth is important to this Government can he tell the House why on earth the Government has appointed Margaret Wilson as Minister of Commerce? 
Rodney Hide 
: I raise a point of order Mr Speaker. I am sorry to interrupt but when a member on the Opposition side of the House called out during a question you said very firmly that that would be the last time that would be happening in the House. We have had the entire Government front bench calling out and all you did was to call out “Order!”. I suggest that we need some consistency between the Opposition benches and the Government benches. 
Mr SPEAKER 
: I think I do my very best to maintain consistency. Occasionally during an answer a somewhat witty comment is made and one cannot rule out a little bit of laughter. I thought the member was asking a very good question and he was making his point extremely well. The Minister is not responsible for the appointment of Ministers; that is the Prime Minister’s job. [ 
Interruption 
] The first part of the question is in order. 
Hon Dr MICHAEL CULLEN 
: I can quote from the World Bank report: “Good regulation does not mean zero regulation.” This Government is committed to needs-based regulation. 
Paul Adams 
: Is the Minister aware of the legion of small and medium sized business owners who despite not having the facility to produce a glossy report are none the less wholly discontent with the current suffocating regime of regulations compliance with which demands considerable time that otherwise could be spent on growing their businesses; if so what does he plan to do to ease their strain? 
Hon Dr MICHAEL CULLEN 
: I refer to another press statement reported in this morning’s  
New Zealand Herald 
 from my excellent colleague Mr David Cunliffe. We have announced obviously that we are having a 6.7 percent discount for the early payment of provisional tax in the first year. Work is proceeding in areas in relation to aligning GST with provisional tax payments and on a number of other moves to simplify taxation for small business. This is needs-based deregulation. 
Question No. 3 to Minister 
Hon TREVOR MALLARD (Minister of Education) 
: 
 I raise a point of order Mr Speaker. I have now had the opportunity to review the document that was tabled by Mr English and I now want to invite him to correct the statement that he made when he told the House a lie. 
Mr SPEAKER 
: That point of order is out of order. It is a debating point. We are to have a Budget Policy Statement debate shortly and I suggest that that is the time to raise that particular matter or by letter to me for another particular offence thatis not mentioned in this House. 
Hon TREVOR MALLARD (Minister of Education) 
: 
 I raise a point of order Mr Speaker. Can I ask you to ask the member for Clutha-Southland whether he intends to table the document that he described because he has not. 
Mr SPEAKER 
: The Hon Bill English sought to table a document he was given leave and he tabled it. [ 
Interruption 
] I will not be interrupted while I am on my feet. I do not care who the person is. As far as I am concerned I accept that the member asked for the document to be tabled. He has tabled it and that is the end of the matter. There are other ways of dealing with this matter as the Minister well knows. 
Hon Trevor Mallard 
: We’re off to the Privileges Committee. 
Mr SPEAKER 
: I now ask the Minister to leave the Chamber. I will not have any more interjections like that. 
Hon Trevor Mallard withdrew from the Chamber. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 I raise a point of order Mr Speaker. I think there is some difficulty with your answer in that we are no wiser as to what the course of action should be for a member to take. In this circumstance if for example someone says that he or she intends to table Shakespeare and tables something entirely different from the document that was described what is the course of action that the House should take in respect of that member? 
Mr SPEAKER 
: Speaker’s ruling 127/4 states that members must sufficiently describe the document they intend to table. If they deliberately mislead the House that is dealt with in a different way and that is by writing to me. However I judged that the member asked to table a document it was accepted in good faith and I accept that he tabled what he asked to table. 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I raise a point of order Mr Speaker. I take it from that last comment that you are not prejudging any letter you may receive because I see you have not seen the document that was tabled and therefore cannot make a judgment that it was in fact the document that was sought to be tabled. 
Mr SPEAKER 
: Absolutely! I have not seen the document and if I have any further business in this I will most certainly read it very very carefully. It has been handed only to the Clerk; it has not been handed to me. 
GERRY BROWNLEE (Deputy Leader—National) 
: 
 I raise a point of order Mr Speaker. I remind you that our senior whip John Carter in fact took the issue up with you in relation to how well the document in question was described. I am sure that you will take into account the  
Hansard 
 description as far as it was able to be given by Mr English. It could well be that Mr Mallard understood that a different document was being tabled from the one that was actually being requested for tabling given that that full request was not heard. 
Mr SPEAKER 
: That is hypothetical and I will deal with the situation if I have to. 
Hon RICHARD PREBBLE (Leader—ACT) 
: 
 I raise a point of order Mr Speaker. I will not ask you to have Mr Mallard back but perhaps you might decide that you do want to have him back. On dealing with matters of disorder especially when a member makes an allegation across the House that by innuendo implies that a member has misled or lied to the House Speakers have required that allegation to be withdrawn and apologised for. In this case there is no doubt about that. When a member calls out “You’re off to the Privileges Committee.” there is a clear understanding that he is saying that a member has misled the House. That is a most grossly disorderly statement. In fact what should have happened is that the Minister should have been required to rise withdraw and apologise been given an appropriate warning and then sent out. I just say to you that we are now in a position where Mr Mallard has been able to make a grossly disorderly comment and it has been allowed to stand on the record. He has not been required to withdraw and apologise. I regard that as a very unsatisfactory situation. 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 I raise a point of order Mr Speaker. Mr Prebble has covered the innuendo raised by Mr Mallard about my tabling of a document. I raise the additional point that Mr Mallard called me a liar certainly within your earshot as he sat in his chair. That further compounds the problem raised by Mr Prebble. It is not my intention to allow Trevor Mallard to bully me into submission or this side of the House. I am sure he will continue to use those tactics; however we will need your intervention as Speaker sometimes to ensure that he is required to comply with the conventions of this House. One convention is that if a member labels another member a liar that has to be withdrawn and there has to be an apology. He then also has to withdraw and apologise for the matter raised by Mr Prebble. 
Hon RICHARD PREBBLE (Leader—ACT) 
: 
 I raise a point of order Mr Speaker. I do not think that we want to see Mr Mallard at the moment. I think the proper answer is for you to rule that before Mr Mallard can resume his seat he must raise a point of order and withdraw and apologise. I did not realise that he started to call the right honourable gentleman a liar. However if that is the case it most certainly cannot stand and he most certainly should withdraw and apologise to the whole House for making those two statements. 
Mr SPEAKER 
: I did not hear him use that word. If I had I would have required him to withdraw and apologise immediately and then he would have been sent out. The member is perfectly correct. When the Minister comes into the Chamber next he will be asked to withdraw and apologise for that comment. He will be asked whether he made that statement. If he says that he did make that statement then he will have to withdraw and apologise for it. I will not call him back until he comes back. At that point he will have to do something. 
Question No. 2 to Minister 
RON MARK (NZ First) 
: 
 I raise a point of order Mr Speaker. I thank you for your forbearance. It is something totally different and I am just taking the opportunity during this pause. At the end of my supplementary question to question No. 2 you cautioned me quite appropriately as to the appropriateness and the acceptability of my breaching conventions by criticising the judiciary. I fully accept that. With that in mind I seek the leave of the House to table the sentencing notes by Judge Durie on the trial and conviction of Warwick Whare Reuben Kershaw the man who murdered that wee 3-year-old girl Anahera. 
Mr SPEAKER 
: Leave has been asked to table those. Is there any objection? 
Hon RICHARD PREBBLE (Leader—ACT) 
: 
 I raise a point of order Mr Speaker. We must object to that. The member by implication is saying that he is correct to criticise the judiciary. He most certainly cannot use the House to do that. 
Mr SPEAKER 
: The member is seeking leave. Any member can object. Objection is raised. 
Economic Development—Limited Employment Locations 
5.  
SUE BRADFORD (Green) 
 to the  
Minister for Social Development and Employment 
: Is he confident that all 265 towns named by Work and Income as limited employment locations offer no job prospects and no potential for local economic development? 
Hon STEVE MAHAREY (Minister for Social Development and Employment) 
: 
 The 259 localities released today—and for the most part they are not towns—were selected having considered the following: the number of local people already looking for work; the number of job placements made in the area over the last year; the local employment opportunities and the availability of local transport to travel to work. The alert list is a live list that will be regularly reviewed. If new opportunities are created in a locality—and with the Government’s regional development policies I am sure they will be—that locality will be removed from the list forthwith. 
Sue Bradford 
: Can the Minister confirm that in the light of the announcement today that should it have been a real situation Pikea’s father in  
Whale Rider 
 would not have been able to return to Whangara which has been placed firmly on the no-go list? 
Hon STEVE MAHAREY 
: There are of course no no-go lists or dead-zone lists or whatever words the member wants to call them. It would depend on whether he or she could pass the job seeker requirements. I do not know why anybody in this House would want a benefit paid to somebody who is an active job seeker if they have said that they have no way of meeting the job seeker test. 
Hon Richard Prebble 
: Before we pursue this much further the member should be asked to authenticate those statements. I saw the movie and there was no sign that he was on an unemployment benefit. 
Mr SPEAKER 
: Is the member talking about the Minister or the member? 
Hon Richard Prebble 
: The member. 
Mr SPEAKER 
: The member in her supplementary question does not have to authenticate in the way she has to for the original question 
Georgina Beyer 
: How will the Government’s limited employment locations policy assist unemployed people seeking work? 
Hon STEVE MAHAREY 
: We have a very low unemployment rate in this country and we want to ensure that everybody gets a job. The policy is designed to encourage people to seek work in locations where there are good work opportunities discourage people from moving to locations where there are few or no opportunities and ensure that local people already seeking work are not further disadvantaged by having other job seekers move to that area. 
Judith Collins 
: Why should this House believe that Work and Income New Zealand will apply this policy when not one person who has moved to a remote area within the past 5 years has failed any work-test requirement? 
Hon STEVE MAHAREY 
: The member might like to know that Work and Income New Zealand changed its name to Work and Income some years ago. It is worth keeping up. [ 
Interruption 
] I am just saying— 
Mr SPEAKER 
: Answer the question please. 
Hon STEVE MAHAREY 
: I think we can have a great deal of faith in Work and Income ensuring that people get jobs. It has been participating in reducing the unemployment rate to the fifth lowest in the developed world and it will carry on doing so. 
Dr Muriel Newman 
: If the Government is not prepared to pay the dole to people who want to move to blacklisted communities where there are no jobs can the Minister explain to the House exactly why it is that the Labour Government is prepared to pay the dole to a fit and healthy 18-year-old who already lives in such a community and who plans to stay there until he retires? 
Hon STEVE MAHAREY 
: I should repeat that there are no blacklisted areas of the country. The member raises a hypothetical question about a young fit and healthy person. I say that young fit and healthy person will probably be visited in the very near future by one of the mobile units from Work and Income taking the service to his or her doorstep. That person will get a job as well. 
Judy Turner 
: Does the Minister agree that this policy has been misrepresented to imply that those who already live in limited employment locations will lose their benefit when in reality it will only sanction beneficiaries who move into these areas without a job lined up first; if so does he not think it better that these areas do not foster a reputation as a haven for hardened lifestyle dole recipients? 
Hon STEVE MAHAREY 
: I agree that this policy has been misrepresented. I just stress that once again we are trying with this policy to ensure that people get jobs. That is the point of it. We are in a situation in this country where employers are calling out for labour and in some cases cannot find people to work in their businesses. We are trying to make sure that people are in the right place to get the right job at the right time. 
Sue Bradford 
: Is it true that the Jobs Jolt announcement today makes it clear that tangata whenua returning to papakainga areas will be treated no differently from anyone else and why is the Government reverting to the pre-1985 remote areas policy? 
Hon STEVE MAHAREY 
: This is not the remote areas policy at all which for example said that the whole of the West Coast was an area that people could not move to. This is a policy based on case by case analysis of whether people can meet the job seeker requirements that they should be meeting. That is what the policy is about. 
Sue Bradford 
: If it is a case by case situation why on earth are 259 limited employment locations being created? 
Hon STEVE MAHAREY 
: I read out the criteria at the beginning—and I will not do it again—which set out the notion that people are moving to an area where there are jobs. I said to the member that our outstanding regional development policies spearheaded by my colleague Mr Jim Anderton would undoubtedly see many of these areas grow and move off that list in the near future. 
Sue Bradford 
: Why is Blackball on the list of limited employment locations when it happens to have a thriving community that has just saved its local school from closure and is within commuting distance of Greymouth? [ 
Interruption 
] 
Mr SPEAKER 
: I have cautioned members about interjecting during questions. That member is very lucky indeed. 
Hon STEVE MAHAREY 
: I read out the criteria before and they will apply to Blackball but can I also reassure the House that every locality on this list is there as a result of consultation. It has taken place over the last 3 months with people in local areas and that is why they support this policy. 
Sue Bradford 
: Why is the Minister planning to go ahead with this scheme despite the concerns of mayors like John Forbes in Opotiki and Graham Ramsay in Kaipara who are worried that labelling parts of their districts as economically unviable will have a detrimental impact on their great efforts towards local and regional development? 
Hon STEVE MAHAREY 
: I imagine that those mayors find it extremely unhelpful to have Sue Bradford label them that way. The Government has not. Our regional development policies are ones that are valued by those very mayors and will carry on making their districts even more vibrant in the future. 
Crown Forestry Rental Trust—Costs 
6.  
Rt Hon WINSTON PETERS (Leader—NZ First) 
 to the  
Minister of Finance 
: What are the total costs including legal disbursements or consultants’ fees since 1 January 1998 paid by the Crown Forestry Rental Trust in association with the Volcanic Interior Plateau Project Taumata and to what matters do those costs refer? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 My role in the trust is limited to the appointment of three Crown trustees. I have no power over or direction capacity in relation to the trust an organisation independent of Government control. As a consequence neither my office nor Treasury holds the information the member seeks. I can refer the member to the trust’s latest report which shows it disbursed $10.581 million to the Volcanic Interior Plateau Project between 1990 and 31 March 2003 roughly half of which was in the last 2 years of that period. It is not possible to determine from the report how the disbursements have been applied or whether other expenditure by the trust has directly or indirectly benefited the project. 
Rt Hon Winston Peters 
: Does the Minister consider that it is in any way remotely reasonable for the beneficiaries or potential beneficiaries of this trust to be given no accounting whatsoever as to the detail of their expenditure even to the extent that certain claimants as proprietors have never been informed of what portion of their claim in terms of itemised costs is against their account and how can that be fair in respect of the Maori people or for that matter the taxpayers of this country? 
Hon Dr MICHAEL CULLEN 
: The taxpayers do not provide funding now to the trust and have not done so for a long time. Its income comes off the old Crown forest and the rentals thereon. There have been a number of questions surrounding the operations of the trust and the select committee did an excellent inquiry into that. There have as I am sure the member is aware been some recent significant changes in the operations of the trust. External governance advice has been brought in and certainly I will be maintaining closer contact with the Crown-appointed trustees over the next year to ensure that those reforms continue. 
Employment Relations Law Reform Bill—Reports 
7.  
Hon ROGER SOWRY (National) 
 to the  
Minister of Labour 
: Has he received any reports that the Employment Relations Law Reform Bill will create more jobs; if so who were those reports from? 
Hon PAUL SWAIN (Minister of Labour) 
: 
 The purpose of the Employment Relations Act and the Employment Relations Law Reform Bill is to build productive employment relationships in the workplace. I have had a report from the New Zealand Council of Trade Unions stating that good work relationships can have a positive effect on economic and job growth. However I have also seen a report from the New Zealand Business Roundtable stating that there is likely to be a negative impact on jobs as a result of the reform bill. I have also received reports stating that since the Employment Relations Act was introduced in 2001 New Zealand has had the lowest unemployment figures for almost 16 years. 
Hon Roger Sowry 
: Does the Minister also agree with the Treasury statement on the transfer clauses in the bill which states: “The imposition of this requirement will not just affect the price paid for businesses or contracts but will impact on firms’ investment or expansion decisions.”; if not why not? 
Hon PAUL SWAIN 
: Yes I have seen the comments of Treasury around that matter and the member will know that it is a big issue that I imagine the select committee will consider. However I do note that Treasury did state that overall the impact of the proposed changes to the collective bargaining provisions is assessed as modest. Treasury probably stated similar things in 2001 but the facts did not bear out some of the concerns. 
Hon Mark Gosche 
: Does the Minister recall claims being made that the Employment Relations Act would increase labour costs industrial action and unemployment? 
Hon PAUL SWAIN 
: Yes I do. The fact is that none of those claims have been proved to be correct. As I have said New Zealand has its lowest unemployment rate for almost 16 years. In addition work stoppage figures are steadily declining and it has been confirmed as the Minister of Finance has said that New Zealand is one of the easiest places in the world to start up a new business. 
Peter Brown 
: If nothing else changes and the Employment Relations Law Reform Bill passes as it is does the Minister believe that there will be greater incentive or less incentive for employers to engage people permanently or casually—or does he not know? 
Hon PAUL SWAIN 
: It is too early to say that there will be no changes to the bill. That is what the select committee is doing. I think the member is a member of the committee; he will hear the arguments. Ultimately the committee’s report will come back to Parliament about the views that have been expressed by the people who came to the committee. 
Hon Roger Sowry 
: Does the Minister agree with the Treasury paper of 21 March 2003 on the transfer clauses which states: “Increasing the cost of workforce adjustment will lead to a greater reluctance to hire workers.”; if not why not? 
Hon PAUL SWAIN 
: I have seen many of those Treasury reports over the years. I imagine that they stated similar things a couple of years ago and of course the reality of what has happened is that we have high employment growth at the moment in New Zealand. 
Hon Roger Sowry 
: Does the Minister have any evidence that the Employment Relations Law Reform Bill will increase employment or is he just choosing not to agree with the Treasury paper because it is from Treasury? 
Hon PAUL SWAIN 
: Of course evidence around things that may happen in the future is not possible to get but the reality is that those claims were made in 2001 as the member has stated and what has happened is that employment growth is high and unemployment is at its lowest level in 16 years. 
World Trade Organization—Multilateral Negotiations 
8.  
Dr ASHRAF CHOUDHARY (Labour) 
 to the  
Minister for Trade Negotiations 
: What progress can he report on multilateral negotiations at the World Trade Organization? 
Hon JIM SUTTON (Minister for Trade Negotiations) 
: 
 I have recently returned from an excellent Cairns group meeting in Costa Rica. Group members are determined to reinvigorate the World Trade Organization negotiations in order to secure a substantial agricultural reform. Additionally we are committed to a coordinated work programme with the G20 group with whom we share many objectives. 
Dr Ashraf Choudhary 
: Why is that important? 
Hon JIM SUTTON 
: The multilateral negotiations offer us the best opportunities as a trading nation. It is the only arena in which we can effectively combat export subsidies for example—the most pernicious barrier to our trade. 
Dr the Hon Lockwood Smith 
: What progress can the Minister report on reinvigorating New Zealand’s free-trade agreement negotiations with the US following his recent talks with US Trade Representative Robert Zoellick or did he come home empty-handed? 
Hon JIM SUTTON 
: I suppose that is connected in some way with the World Trade Organization negotiations which was the subject of the primary question. I can inform the member that I had another successful meeting with Mr Zoellick—at which we spent a lot of time discussing the World Trade Organization round as a matter of fact—and I certainly did not come home empty-handed. New Zealand made further headway in developing our constituency in Washington DC—on the hill and in the US business community—in support of bilateral negotiation with New Zealand. 
Dail Jones 
: What action will the Minister be taking following the World Trade Organization’s report that New Zealand apples are not a pathway for transmission of fire blight; and when can New Zealand apple growers expect to see the minority Labour Government Minister for Trade Negotiations doing something personally to end the devious Australian trade practice of prohibiting New Zealand apple exports to Australia or will he just keep on swanning around the world empty-handed? 
Hon JIM SUTTON 
: There are some members here who recall that I have done a great deal personally starting in 1990 when I was Minister of Agriculture. I was dismayed to find in 1999 when I came back into office that a great deal of progress made previously had gone backwards under the National Government. Nevertheless we are now heading forward again. The Australian Government the other day produced a new import health standard—which is out for a 6-week consultation as required by Australian law—and I am confident that we will move this matter forward despite it being election year in Australia. 
Disputes Tribunal—Referee Unavailability 
9.  
SIMON POWER (National—Rangitikei) 
 to the  
Minister for Courts 
: How many cases have been deferred by the disputes tribunal over the past week because of referee unavailability? 
Hon RICK BARKER (Minister for Courts) 
: 
 Figures made available to me by the Ministry of Justice indicate that 92 cases have been deferred. 
Simon Power 
: Can the Minister confirm that through the general manager of the courts he has ordered court officials not to tell those applicants to the disputes tribunal the true reason for the deferment of their dispute cases which is that the referees are on strike because he is refusing in bad faith to meet with them to discuss their concerns; and is that not just another case of a Government department “denying in unison”? 
Hon RICK BARKER 
: I absolutely deny that. That is completely and utterly untrue and that member knows it. No such order has ever been given by me or anybody else. 
Mr SPEAKER 
: The member cannot say that it is untrue and that the member knows it. He will withdraw and apologise for that. 
Hon RICK BARKER 
: I withdraw and apologise. 
Hon Richard Prebble 
: I raise a point of order Mr Speaker. When the Minister says that something is utterly untrue I think he is under an obligation to let us know what is untrue. Is he saying that the referees are not on strike or that he has not told anyone that they are not 
on strike or that the court has not told anyone that they are not 
on strike? Just saying that it is untrue leaves the House completely confused. 
Mr SPEAKER 
: No. The Minister addressed the question. He was asked a question and his answer was that that was untrue. He is entitled to give that as an answer but it can lead to further supplementary questions. 
Russell Fairbrother 
: What steps has the Minister taken in relation to the daily rate of disputes tribunal referees? 
Hon RICK BARKER 
: I have taken a number of steps. A paper has been to Cabinet that addresses the two main issues of concern raised by the referees—the first being the level of the daily fee and the second being the frequency of fee review. The referees’ executive association which represents a number of the referees was given the opportunity for a face-to-face meeting with me. Regrettably it declined that opportunity. I find it somewhat frustrating in trying to resolve this matter because one party to the issue declines an opportunity to meet and discuss the issues. 
Simon Power 
: What action is the Minister undertaking to ensure that more applicants to the disputes tribunals will not be turned away for up to 3 months before their cases can be heard; and do any of these actions involve his keeping his word and undertaking to negotiate in good faith with these judicial officers? 
Hon RICK BARKER 
: I always keep my word and I act in good faith. I resent any implication by any member of this House to the contrary. I undertook to the referees to go to Cabinet with a paper. I have done so. I have a result. I rang and asked the referees for a meeting in response to their letter and so far they have declined to meet. I cannot force people into my office. I would dearly like to meet them to resolve this matter. 
Murray Smith 
: Can the Minister confirm that in May 2002 the referees’ association was told by the general manager of special jurisdictions within the Department for Courts that a fee review would commence in late June 2002 and be completed by 30 September 2002 and that that has been a major factor in the huge frustration among referees? 
Hon RICK BARKER 
: In general terms I think that is correct although I cannot be absolutely certain about the specifics. I understand and have heard the extreme frustration of the disputes tribunals referees and I am doing my very best to respond to that. I would like to sit down and discuss the matter with them. 
Murray Smith 
: I seek leave to table a letter to the general manager from the chairperson of the disputes tribunals’ referees association dated 2 April 2003 expressing the referees’ concern and frustration in terms of getting a final recommendation made in terms of fees. 
Document by leave laid on the Table of the House. 
Tourism—International Media Profile 
10.  
H V ROSS ROBERTSON (Labour—Manukau East) 
 to the  
Minister of Tourism 
: What reports has he received about New Zealand’s international media profile as a premier visitor destination? 
Hon MARK BURTON (Minister of Tourism) 
: 
 Tourism New Zealand has already won several prestigious international awards this year for the successful “100 Percent Pure New Zealand” campaign. This Government’s $15 million tactical investment in extending the campaign in North America has been money that was well spent. That is particularly the case given the ongoing leveraging work on the hugely successful  
The Lord of the Rings  
project. Tourism New Zealand has continued its leveraging with full-page “100 Percent Pure New Zealand” advertisements—I have a couple of copies of them here—in the  
Los Angeles Times 
 and the  
New York Times 
. Once again this Government’s partnership with industry has promoted success. 
H V Ross Robertson 
: What is the current state of the tourism market in New Zealand—in particular with reference to visitor arrivals and foreign exchange earnings? 
Hon MARK BURTON 
: I have received reports showing that Tourism New Zealand’s highly successful targeting of the interactive traveller has more than proved its worth. Two thousand and three was another record year for tourism with over 2.1 million international visitor arrivals—3 percent up on 2002’s all-time high of 2 million visitor arrivals. That ended a year marked by Sars terrorism and international conflict in positive growth mode and it is yet another illustration that the Government’s strong partnership with the sector is working. Although the serious weather events of recent weeks are likely to have some negative effect the trend is obviously increasing in 2004 with an amazing 11 percent increase in visitor arrivals in January 2004 compared with January of last year. That is worth an additional $60 million in foreign exchange earnings to the Minister of Finance just for that one month. As my colleague the Minister of Finance noted—[ 
Interruption 
] But there is so much more Mr Speaker. 
Mr SPEAKER 
: I know there is. 
Resource Management Act—MaoriParticipation 
11.  
Dr WAYNE MAPP (National—North Shore) 
 to the  
Associate Minister of Justice 
: Why is the Government establishing 16 working-groups with local authorities and whanau hapu and iwi to “enhance participation opportunities … in decision making processes affecting the coastal marine area” given her statement on 18 February that Maori will only have “the methods of communication that are already provided for in the Resource Management Act”? 
Hon MARGARET WILSON (Associate Minister of Justice) 
: 
 The Government is currently reviewing a number of options to improve decision making under the Resource Management Act. 
Dr Wayne Mapp 
: How can the Minister state that Maori will have no more consultation rights than they already have when paragraph 97 of the December proposals specifically refers to the establishing of the 16 working-groups to “enhance participation opportunities”? 
Hon MARGARET WILSON 
: That statement referred to existing obligations to consult with tangata whenua and to making them more effective which is what is being required by everyone. 
Mita Ririnui 
: What are the current requirements of the Resource Management Act in relation to consultation with tangata whenua? 
Hon MARGARET WILSON 
: Clause 3(d) of the first schedule states that during the preparation of a proposed policy statement or plan the local authority shall consult amongst others the tangata whenua of the area who may be so affected through iwi authorities and tribal runanga. I do note that that legislation was passed in 1991. 
Rt Hon Winston Peters 
: In the interests of consistency would the Minister tell the House whether there is any difference in principle or substance between the Government’s policy in this area and the Mahi a Iwi policy which “involves working in partnership with iwi or tribal groups” as enunciated by the National Party in 1999? 
Mr SPEAKER 
: Could the member just repeat the question so that I can see that it is in order and that the Minister has responsibility. 
Rt Hon Winston Peters 
: I am asking the Minister whether there is any difference in principle or substance between the Government’s policy as enunciated here and the Mahi a Iwi policy involving “working in partnership with iwi or tribal groups” as established by the National Government in 1999. 
Hon MARGARET WILSON 
: No. In principle it is the same policy which is why I am surprised at the Opposition’s questioning. The only explanation I can give is that we do want to improve it and the Opposition wants mediocrity. 
Deborah Coddington 
: Will Pakeha marine farmers and private jetty owners—for example families who own baches in the Marlborough Sounds—be included in these working-groups now that the Government is telling us that it has abandoned race distinctions and is looking only at need; if not why not? 
Hon MARGARET WILSON 
: Under the current legislation upon which the Government’s proposals are based a local authority can consult anyone and does and that is best practice. Precisely how local authorities do that varies from council to council and that is why central government is endeavouring to assist the councils to improve consultation for everyone. 
Dr Wayne Mapp 
: How can the Government maintain this fiction that all it is doing is improving the Resource Management Act when in fact it is establishing Maori customary title over virtually the entire coastline? 
Hon MARGARET WILSON 
: Maori already have customary title over the whole coastline. The member is again confusing customary title with customary rights. 
Stephen Franks 
: Under what authority or court decision does the Minister decide that Maori already have customary title over most or all of the coastline and if that is now going to be written into further legislation when will the Government move to remove the race discrimination in the Resource Management Act or any other legislation? 
Hon MARGARET WILSON 
: According to Maori customary rights they have a connection with particular areas of the coastline. In that sense it does not need legislation from their perspective. [ 
Interruption 
] Well it does not. [ 
Interruption 
] Good exactly. However we have been endeavouring to give an opportunity to clarify that so that we can improve their participation in decision making relating to the management of it. It is as simple as that. 
Dr Wayne Mapp 
: Could the Minister now explain then why the Government is even proposing legislation as it appears from her previous answer that Maori say they already have customary title? 
Hon MARGARET WILSON 
: That is because the whole issue is about customary rights not customary title. 
Rt Hon Winston Peters 
: In the interests of exposing the DNA behind this policy I seek leave to table National’s 1999 action plan. 
Document by leave laid on the Table of the House. 
Gerry Brownlee 
: On the basis that Margaret Wilson the Attorney-General has today told the House that the Government believes that Maori currently have customary title to the seabed and foreshore—a revelation that I am sure comes as news to most people in this House and indeed to most of those who have been commentating on this issue since the outset—I seek leave for there to be an urgent debate on this matter immediately following question time. 
Mr SPEAKER 
: Leave is sought for that. Is there any objection? There is. 
Films Videos and Publications Classification Amendment Bill—Reclassification 
12.  
PETER BROWN (Deputy Leader—NZ First) 
 to the  
Minister of Internal Affairs 
: Is he supportive of proposals to reclassify the use of urine or excrement in association with degrading or dehumanising or sexual conduct as being no longer “objectionable”; if so why? 
Hon Dr MICHAEL CULLEN (Leader of the House) 
 on behalf of the 
 Minister of Internal Affairs 
: Unlike all the other matters listed in section 3(2)) of the Films Videos and Publications Classification Act which are automatically deemed to be objectionable the use of urine or excrement in association with sexual conduct is not itself a serious criminal offence. In the light of the increases in the maximum penalties proposed in the Films Videos and Publications Classification Amendment Bill for the supply of section 3(2) material to a maximum of 10 years’ imprisonment retaining section 3(2)(d) covering the matters referred to could be seen as potentially excessive. 
Peter Brown 
: Is he telling the House that it is Government policy that films or videos that depict the use of urine or excrement in association with degrading or dehumanising or sexual conduct are not objectionable in themselves; has Cabinet signed up to this and have his coalition partners and support parties signed up to it also? 
Hon Dr MICHAEL CULLEN 
: Such material can still be classified as objectionable. Indeed this particular matter has been transferred to section 3(3)(a) of the principal Act. It is not removed from the principal Act but removed from section 3(2) to section 3(3)(a). No doubt the select— 
Peter Brown 
: No no—you’ve got it wrong. 
Hon Dr MICHAEL CULLEN 
: Yes yes—I am sorry but that is true. The member will have to read the bill more carefully. No doubt the select committee will give careful consideration to this matter. 
Peter Brown 
: Who does the Minister believe will benefit from this type of legislation? Who will be rubbing their hands with glee—the weirdos or wonder boys or the average New Zealander? Does the Minister agree that the average New Zealander will be appalled by this amendment to the legislation? 
Hon Dr MICHAEL CULLEN 
: I think this is one of those issues where we simply have to talk through carefully what is proposed. To retain this material in section 3(2) as opposed to section 3(3) could involve somebody who is actually transferring such a video to another person—and a maximum penalty of 10 years—when unlike all the other material in section 3(2) the use of urine and excrement in association with sexual conduct is not itself a serious criminal offence. If the member wants to introduce a member’s bill to do that then that is a different matter. I have no doubt that the vast majority of people—and I assume the vast majority of members of this House—would find such association objectionable. 
Questions to Members 
Employment Relations Law Reform Bill—Submissions 
1.  
Hon ROGER SOWRY (National) 
 to the  
Chairperson of the Transport and Industrial Relations Committee 
: How many submissions have been received by the committee on the Employment Relations Law Reform Bill? 
Hon MARK GOSCHE (Chairperson of the Transport and Industrial Relations Committee) 
: 
 At the end of the closing date for submissions which was Friday 27 February 241 submissions had been received. A number of further submissions are being processed and it is estimated that the final total will be about 320. 
Hon Roger Sowry 
: Will the chair ensure that submissions are not heard in the same way as those on the original Employment Relations Bill when business was heard late at night and unions were heard in media-friendly time zones during the day? 
Hon MARK GOSCHE 
: The committee will hear submissions in the way in which the clerks organise them. Just to give the member an assurance tomorrow Business New Zealand will be at the committee along with one union between 11 a.m. and 12 midday. That shows that this committee is switched on and knows how to do it. 
Questions to Ministers 
Question No. 2 to Minister 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 Earlier this afternoon my colleague Ron Mark was stopped from tabling a document. During that time Mr Prebble raised an objection to comments made in respect of the judiciary. I fear that members are not having regard to Standing Order 113 which states: “A member may not use offensive words against the House or against any member of the judiciary.” and to Speaker’s ruling 31/6. There is a world of difference between saying something that is derogatory of the judiciary and saying that a judge has got it wrong has made a mistake or in fact has misdirected himself on the matters before him. I think my colleague is entitled to say what he said. That being the case his comments not being in my view—on the Speaker’s ruling and the Standing Order I cited—out of order we seek leave to table the document which is the sentencing judgment of Durie J in the Warwick Whare Reuben Kershaw case. 
Mr SPEAKER 
: It does not matter what Mr Prebble’s reasons were he is entitled to deny leave. Any member in this House can deny leave. The member has now asked for leave to be granted to table a further document. Is there any objection? 
Hon RICHARD PREBBLE (Leader—ACT) 
: 
 I raise a point of order Mr Speaker. I object to being put in this position because as a general rule I do not object to members tabling documents. Indeed if you look through  
Speakers’ Rulings 
 you will find that reading from a court judgment is not out of order. Tabling a court judgment by itself is not out of order. What is out of order is making a reflection against the judiciary. The point I asked you to look at which I do not think you did was to do with what I believed I heard Mr Ron Mark say when he was raising his original question. I thought he was making a reflection against the judiciary. The words I thought he said were “soft sentencing by judges”—or reflections of that sort—which you ruled out of order. Subsequently he wanted to table a document which I took to be a direct challenge to you Mr Speaker that was in fact showing that here was a judge who was behaving in a way that this House should reprimand. You then said that by leave he could do that. I put it to you that that is not so. The House cannot give leave to criticise a judge. It is actually prohibited from doing that in the Standing Orders. We would have to suspend the Standing Orders to be able to do that. But if you are ruling that he is not criticising a judge then at that point I will have no objection to the member tabling a judgment; but if he is then it is your duty not to allow him to do so—and he cannot do it by innuendo either. 
Mr SPEAKER 
: As usual the member has raised a very valid point of order and what he said is perfectly correct. The House is not concerned with a member’s reason for objecting to leave to table a document—members should not give reasons they should merely object. As far as I am concerned I do not know what is in the judgment nor could I be expected to know what is in the judgment. Leave was sought to table a particular judgment. I did not take that as a reflection on my ruling. I took it as a member wanting to table a document. A member is perfectly entitled to seek the leave of the House not to do virtually anything but to do things that are within the Standing Orders of this House. I wonder whether the member wanted to make any further comment on that. 
Hon RICHARD PREBBLE (Leader—ACT) 
: 
 Provided that I get an assurance from the right honourable gentleman that New Zealand First is not making a reflection on the judiciary then I have no objection. 
Mr SPEAKER 
: If the member wants to give that assurance— 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 Mr Speaker regardless of what you just heard the fact is that they are two totally separate and different events. Seeking leave to table a judgment of the court that is perhaps though public not known by members is a totally separate matter from one’s view of a decision a judge might have made. It is up to members to distinguish between offensive behaviour in respect of a judge and criticising a judgment. They are two different things. My fear was that Mr Prebble had unknowingly misled the House as to the import of what Mr Ron Mark had said when he sought leave at that time and nothing in seeking leave relates to what he said at a prior time. It is a different exercise in his rights as a member of Parliament. 
Mr SPEAKER 
: I think the best way to solve this is to ask for leave to table the particular judgment that the member wanted to table. 
Hon RICHARD PREBBLE (Leader—ACT) 
: 
 I am afraid that will not do. If the member is prepared to give an assurance to the House that he is not seeking to make a reflection on the judiciary then I have no objection but his failure to do so does I think raise a real suspicion in our minds and we do have a duty in this House to uphold the rule of law. 
Mr SPEAKER 
: Exactly and I support that rule but I have no way of knowing myself what is in the judgment. If the member does not give the assurance then anybody is perfectly at liberty to deny leave to table it. I think that the best thing as I said before is to ask whether there is any objection. If Mr Mark does not want to make any further comment— 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 Again I seek leave to table this judgment by Judge Durie in the Kershaw case and although it is totally unprecedented in tabling the judgment we in New Zealand First make no comment at this time on it. 
Mr SPEAKER 
: Leave is sought to table the judgement. Is there any objection? There is objection. 
Debate on Budget Policy Statement 
Mr SPEAKER 
: There are twelve 10-minute speeches. I still have one issue to resolve about one call. There will be one split speech between New Zealand First and National towards the end of the debate. I have ruled that that is in order. I will give a bell at the end of 5 minutes.  
CLAYTON COSGROVE (Chairperson of the Finance and Expenditure Committee) 
: 
 I move  
That the House take note of the Budget Policy Statement and the report on it of the Finance and Expenditure Committee 
. Firstly I want to commend the members of the Finance and Expenditure Committee for their robust review of the Budget Policy Statement for 2004. The committee examined 14 submissions. A couple were from what my colleague John Tamihere has described as the “big end of town”—that is the Business Roundtable and Business New Zealand. But also—and I think this is very positive—there were a large number from the social organisations that are at the coalface of trying to deal with and assist people in need in our community. They had many positive things to say about the direction of this Government and the direction of the upcoming Budget as signalled in the Budget Policy Statement.  
To quote from the statement: “The Budget Policy Statement sets out the overarching fiscal parameters that will guide Budget 2004 and outlines the Government’s policy focus.” That focus is unchanged. It is about providing for those on low and middle incomes who are in need. It is about providing stability and providing the necessary ingredients to continue the growth we have seen in this economy. 
We are here to focus on the Budget Policy Statement and also on the issues that are foreshadowed within it for the upcoming Budget. This is an economic debate. It gives us the opportunity also to look at the economic progress and social progress of our country. But I have to ask given that this debate is an economic debate why it is that the National Party since our return to the House this year has failed and has refused even to engage in debate on economic policy. There is a simple answer to that. When it comes to economic policy Dr Brash and his team look at the statistics and they are outflanked. They are completely outflanked in terms of economic growth in terms of employment statistics and in terms of growth in the numbers in apprenticeships and training. They are outflanked directly on economic policy. 
Let us have a look at some of the good news. Since this Government came to office 170000 new jobs have been created. 
John Key 
: I raise a point of order Mr Speaker. I am sorry to interrupt the honourable member’s speech but obviously he has not been paying attention during a number of speeches I have given in the House on the economy including the speech I made during the Address in Reply debate. I am happy to table it. 
Mr SPEAKER 
: The member knows that that is interrupting the debate. It is a debating point and it can be used as a debating point when the time comes. 
John Key 
: I seek leave to table it. 
Mr SPEAKER 
: The member is seeking leave to table a document. This is not the appropriate time to seek leave. Is there any objection? There is. 
CLAYTON COSGROVE 
: Mr Speaker thank you for your protection but when it comes to that member I have no requirement for it. That little act simply illustrates for the people of New Zealand the reason that those members are outflanked. Some junior member from somewhere no one has heard about who lives in Auckland and commutes to his seat now and again stands up and makes those sorts of statements. 
I think this is a serious debate. It is a debate about the economy which members on that side will not engage in. They will not engage in it because they are beaten at every turn. Since we came into office 170000 new jobs have been created. “Beat that!” I say to the Opposition. If we look at our growth rate we can see that annual growth rates on average for the past 3 years have been 3.4 percent compared with an OECD average growth rate of 1 percent. What do we get out of that? It means we are well ahead. The member can laugh but we are well ahead on the OECD rankings and we are doing well internationally as a country despite the difficult international conditions that we face and will face in the future. 
So the National Party will not engage in debate and the question we have to ask is why? Here they are Dr Brash the self-confessed economic expert and John Key another self-confessed economic expert but they will not engage in debate on economic policy because they have no economic policy because they are outflanked and because they cannot compete with the good news and the positive achievements that this Government has provided in terms of the economy. That party is all about privilege. The only policy—[ 
Interruption 
] They have a couple of policies. Apart from the spurious race debate that they have tried to ignite—and that is unethical—they have given us two policies. Dr Brash’s tax policy will give somebody on his salary 168 bucks a week and I think the figure is about 9c a week for the average working person. If that is not based on privilege I do not know what is. 
The other policy that people are now starting to switch on to and listen to is his pledge on superannuation. He will hike the age of eligibility and cut the pension. We on this side of the House are happy to engage in the economic arguments because those members get skewered every time they put them up. I hope they start articulating their economic policy and then we will show them up for what they are. 
If we look at the Budget Policy Statement the fifth that this Government will deliver we can see that it shows a commitment to leadership and partnership and growth innovation fairness and security for all our people. What we are about is assisting those in need. The centrepiece of this Budget as outlined by the Minister of Finance will be the Future Directions policy. Its measures are about for instance assisting those in need to gain affordable housing. I refer to single parents and low-income families. We are going to give incentives obviously to move those people from welfare into employment. 
If we look at the health budget we see that the health funding pathway continues to be rolled out through the primary health organisations and in further investments in our district health boards. Here is one that I would love the Opposition spokesperson on health to engage in. We have increased Vote Health steadily since we have been in office: from $6.9 billion in 1999-2000 to $9.9 billion in the current financial year. That is an effective increase of 43 percent over 5 years. But do we hear any policy on health from Lynda Scott the National Party part-time spokesperson on health? Do we hear a health policy—a starter for 10? There is none. I ask Lynda Scott to stand up take a call and let us have a debate on the $9.9 billion in health funding in the current financial year. 
I want also to refer to the point that Dr Cullen made in answer to a question today. We hear from the Opposition that we are over-regulated there is too much compliance cost and everything is negative. Then we read the World Bank survey which covers more than 130 countries that rated New Zealand the least-regulated economy and one of the easiest places to start a new business. Based on that I ask the Opposition what is its small-business policy. What is its compliance cost policy? Let us engage in that debate. Let us leave all the spurious race relations provocative stuffto one side—the naked grab for a vote—and let us talk about the economic fundamentals that Dr Brash and John Key say they are such experts on. 
Let us look at education. Operating and capital expenditure on education will increase as foreshadowed in the Budget Policy Statement. The focus of course will be on progressing the early childhood education strategy and improving quality teaching. If we go back and look at the finances the debt track as outlined in the Budget Policy Statement is well under the Government’s 30 percent of gross domestic product (GDP). The operating balance excluding revaluations and accounting changes is forecast at $5.2 billion or 3.8 percent of GDP in the current year rising to $6.3 billion or 4.4 percent of GDP in the years 2004 and 2005. 
The Government in economic terms is continuing to focus on achieving higher sustainable rates of long-term growth. I do not apologise for Dr Cullen being a bit tight on the purse strings. If we asked people around the country and some people in this Chamber the $5.6 billion surplus would be spent three hundred or four hundred times over. But we have to ascertain whether those surpluses are locked in or whether they are cyclical. Dr Cullen has to look across the water see what is happening internationally and ensure that we have insulation to protect our people especially those on low incomes. 
I want to look also at what Mr Ralph Waters Chief Executive Officer of Fletcher Building said when he made a comparison as the National Party always does between New Zealand’s taxation rates and those of Australia. Because that is the other big pitch that Dr Brash puts in. He says that we are overtaxed compared to Australia. But if we actually look at it and do a comparison between our company tax rates and those of Australia and there is an accurate representation they stack up very badly against New Zealand. I have lived there and paid taxes there. When someone rolls into the Australian tax system there are other taxes such as capital gains tax payroll tax etc. What did Mr Ralph Waters say? He said that Australia’s company tax rate advantage is a myth. Do not believe me and I do not expect the Opposition to believe me but believe one of the big guns in one of our big companies when he says that Australia’s company tax advantage is a myth. 
I want to conclude by challenging the Opposition today to put up or shut up. I challenge Opposition members today—Mr Key will obviously be the next speaker and I challenge Dr Brash to take a call—to put up their policy alternatives to match the statistics I have outlined and let us have a real debate on economic policy. I predict that they will not do that because they know they will lose. 
Debate interrupted. 
Points of Order 
Question No. 3 to Minister—Comment 
Hon TREVOR MALLARD (Minister of Education) 
: 
 I raise a point of order Mr Speaker. I want to share with the House a slight dilemma that I have. I heard your comment after I left the Chamber that you did not hear me making a particular comment. I have checked with the junior Government whip. I have listened to the tape which has a number of my interjections quite clearly on it but not the one complained of. My problem is that it is the view of both Mr English and Dr Cullen that I made a remark. I have no recollection of that; if I did I withdraw and apologise. I think it is also worth saying that I was probably unfair on Mr English in some of my comments and I apologise for that too. 
Mr SPEAKER 
: I thank the member and there that matter rests. 
Debate on Budget Policy Statement 
Debate resumed. 
JOHN KEY (National—Helensville) 
: 
 That was one of the poorer and more confused speeches I have ever heard from the member for Waimakariri and quite frankly I was pretty disappointed. I had higher hopes for the member. I see him in action on the Finance and Expenditure Committee but I was very disappointed indeed in that speech. I think when he goes back and reads his  
Hansard  
tonight—because he will be the only person in New Zealand reading it—he will reflect on my comments and probably ring me in my office later on this evening with a personal apology. 
Mr Cosgrove spent the entire time telling us firstly that National did not have policies; then he told us that National did have policies but that he did not like them. He went on to tell us that New Zealand is doing pretty well in the OECD. Well I do not want to point out to the member that we are 20th in the world in the OECD—20th out of 30 places. We have gone up one place—we have gone past Spain by a few thousand dollars. We are 20th and the Minister of Finance Dr Michael Cullen himself told the Finance and Expenditure Committee that we would have to go a long way before we ever went up from that number again—a long long way. He said the void was so great. 
Then the member rolled out Ralph Waters the Chief Executive Officer of Fletcher Building and his comments about corporate taxation. Ralph Waters is a very respected chief executive officer in New Zealand and I think he has done a wonderful job with Fletcher Building but I simply point out that if that is the best the member can roll out then I suggest I should deliver to Mr Cosgrove’s office the OECD reports on New Zealand the IMF reports on New Zealand and about 3 miles of Treasury reports on New Zealand that counter all the comments he made. 
The 2004 Budget will be an absolute disgrace for anyone caring about New Zealand and for anyone wanting higher living standards for New Zealand because it will deliver one thing and one thing alone—that is the tax-and-spend policies of the Labour Parties of old because this is a desperate Government that is going to spend up big. It is in free fall in the polls. The Minister outlined the Government’s $2.1 billion of new spending. Will it be going to pro-growth initiatives? Will it be going on things to drive productivity in New Zealand? The Government itself admits that productivity is so poor it intends to set up a productivity commission but the only reason it has not announced the commission is that no one can be found in the private sector who wants to stump up and go on it. That is how hopeless this Government has been. Government members are quiet because they know that that is the truth—I tell Mr Mallard that that is absolutely the truth—and they should go and have a look at why the productivity commission has not been rolled out. 
This Government is going to spend a lot of money that is for sure; but it will spend it on beneficiaries. This Government should be ashamed that despite the economic growth that has taken place in this country we have 300000 New Zealanders out of work and on a benefit—in spite of the best conditions and in spite of themselves. That is how woeful it has been. 
We are not going to see pro-growth policies on infrastructure. We are not going to see spending on infrastructure. What we did see was the Minister of Finance jacking up tax rates by 5c in the litre to pay for new roads in Auckland because the Government wants to spend the money on dishing out more to beneficiaries. That is what the Future Directions package will deliver and that member knows it very well. The financial markets are so worried that the Bank of New Zealand’s economist came out just 2 days ago and told the Minister in no uncertain terms what is likely to happen—that the Minister’s own over-spending to save this Government in free fall in the polls will be reflected in an increase in interest rates. That is what the financial markets think of this Budget. 
I want to point for a moment to the issue of growth. The Government introduced the Budget Policy Statement by giving us some pro-growth statement we were meant to buy into. Let us look at the facts for just one moment. Growth in New Zealand between 1993 and 2003 on a per capita basis was at a rate of 2.4 percent. For every man woman and child this country grew by 2.4 percent. Treasury’s forecast for the next 10 years is an average of less than 2 percent and by year 10 it is 1.4 percent. Clayton Cosgrove had the audacity to come down here and tell us: “We are going to do better and be in the top half of the OECD.” when his own Government has stopped printing the propaganda it used to print. His own Minister is banned from making promises about when we will get there because he knows as I know that to get back into the top half of the OECD any time in the next 10 years will take a growth rate of 4.1 percent per capita. With policies like those of this Government it does not have a hope in Hades of producing it—not a hope in hell of getting us back into the top half of the OECD with those growth rates. 
It is not just about the area of tax. Let us look at that area and speak about it for a moment. The budget for the operating balance excluding revaluations and accounting changes will be around $6 billion—that is 4 percent of GDP. But have we seen any comment at all about a tax refund for hard-working New Zealanders? No there has not been a single one. Why should New Zealand families be worried about their tax bill? 
Clayton Cosgrove 
: Give us a quarter of a policy. 
JOHN KEY 
: Let me point out to the member a little fact that may have eluded him because he is so tied up in the Labour spin machine. Since 1999 in the 4 years this Government has been in power every family in New Zealand has spent $2600 a year more on tax. Every family is worse off because of the policies of this Government so its members should not tell us they are doing a lot for hard-working families in New Zealand. This Government is doing nothing for those families. It is taking money from the working and productive sector and buying votes to try to stay in power. That will not work because the people of New Zealand have seen through the Government’s race-based policies and now they will see through its economic policies. It simply will not work. 
For a moment I want to touch on the issue of the exchange rate because it has been rising against the US dollar. It has caused concern for our exporters and it was a major part of the Budget Policy Statement. 
Clayton Cosgrove 
: What would that member do? 
JOHN KEY 
: We would not intervene. Let me tell members about the confused thinking the Minister of Finance Dr Michael Cullen has had. He came to the Finance and Expenditure Committee in November and told us he was not without options. The Minister of Finance signalled about five different positions during the course of the next 3 months but last week came his crème de la crème statement: he told the country through the media that he would intervene through the exchange rate and that he would do it with a policy similar to that of Australia. Clayton Cosgrove smiles. He knows how ridiculous that is because he was there when Michael Cullen while telling the select committee about the Budget Policy Statement said that it was a hopeless policy that it did not stop and change the direction and that it would not do anything. 
I want to point out just a small fact because it may have missed the Minister’s attention. At the start of 2003—this relates to the very policy from Australia he wants to follow—Australia’s cash foreign exchange reserves were $30 billion. By the end of last year in 12 months they had risen to $40 billion. Australia stole $10 billion smoothing and intervening—[ 
Interruption 
] If Mr Peters wants to know why we would not get involved it is because the mark-to-market loss for Australia was $3.7 billion last year. If New Zealand had had the same policy and the same amount of reserves we would have lost three-quarters of a billion dollars. 
Rt Hon Winston Peters 
: Which country does nothing? 
JOHN KEY 
: I know that Winston Peters is a lot smarter than that. He can find ways to spend three-quarters of a billion dollars on hard-working New Zealanders in ways that would be better than giving it to the rich guys at the top end of town in foreign exchange markets. That is what the Government wants to do; it would be one of the most retrograde steps our country could see—when Michael Cullen thinks he is the next George Soros. He should focus on building a pro-growth economy for New Zealand on lowering tax rates on fixing the Resource Management Act on fixing occupational health and safety legislation on keeping Margaret Wilson out of anything that has to do with business and on scrapping the Employment Relations Act. 
It will be a very disappointing Budget and a very expensive Budget for New Zealand. When we look back—just as we were disappointed with Clayton Cosgrove’s speech—we will see that the people of New Zealand were very disappointed with Budget 2004. 
Hon JIM ANDERTON (Minister for Economic Development) 
: 
 If John Keys the National spokesperson on finance said that Mr Cosgrove’s speech was uninteresting I would think the people of New Zealand who listened to that if any did would hear that the National Party’s response to the Budget Policy Statement and the state of the economy is just a joke. 
John Key 
: Why? 
Hon JIM ANDERTON 
: Here is one reason why. He said that this Government would find it hard to get New Zealand’s economy into the top 10 of the OECD. That is absolutely true but here is the important fact that the National Party has to stare in the mirror about. This Government has had to stop the economy that we inherited from the National Party falling off the OECD tables. We were slipping down and at least the member had the reasonableness to say that we had moved New Zealand’s economy up. We had to stop New Zealand’s economy falling off the edge of the world. That was the reality. 
In the context of this Budget Policy Statement—which is as the introduction states to advance the Government’s policy programme in a whole range of areas; that is health education growth innovation and so on while maintaining appropriate levels of capital investment—in that context what is the reality about the New Zealand economy now? Let us look at a few facts and let them get in the way of our prejudice. Last year New Zealand was one of the best-performing and fastest-growing economies in the OECD. 
John Key 
: Why? 
Hon JIM ANDERTON 
: The member asks: “Why?”; he does not deny it yet we have just heard his speech that said how terrible we all are when in fact last year the economy of New Zealand was one of the fastest growing in the OECD. 
John Key 
: Why? 
Hon JIM ANDERTON 
: The first reason is that we have a Government that is interested in economic development. This Government is interested in economic development; the former National Government was interested in economic deconstruction. That is what actually happened. 
I would hate to put the facts in the way of anyone’s prejudice here but the second thing is that when that annual growth rate is measured in each quarter for every single region of New Zealand it shows that every region in New Zealand has registered positive growth for 18 consecutive quarters. There must be a really terrible Government to actually get every region in New Zealand growing for the whole time that it has been in Government quarter on quarter on quarter! Is that an accident? Did we just get lucky? We were lucky for 18 consecutive quarters. Gee whiz does that mean that for 27 consecutive quarters the National Government was unlucky? It was unlucky for 27 quarters on end and we got real lucky when we were here for 18 consecutive quarters. It does not make sense; nor does the member’s speech. 
The unofficial unemployment rate—just to give the House some more good news—was 4.6 percent in the December 2003 quarter. That was up from 4.4 percent in the previous quarter but it was still very favourable in terms of every other OECD economy. 
I know we have been celebrating  
The Lord of the Rings 
 and I have to say that there is a bit of an irony in that. The front page of the Christchurch 
 Press 
 had a big celebratory thing in relation to the Oscars and  
The Lord of the Rings 
. It failed to mention of course in all of this celebratory stuff that successive Governments and the people of New Zealand have paid a fortune for this—and that is fair enough; one could say one could write it off against all the image for New Zealand. 
Rt Hon Winston Peters 
: Subsidy! 
Hon JIM ANDERTON 
: Absolutely! Everyone is celebrating it. But on the front page of the Christchurch  
Press 
 right alongside all of what has cost hundreds of millions of dollars there is a column attacking the $20000 that was spent on Navman for an investment of $50 million—not a subsidy but an investment. I had to run that past me again because over here we are celebrating in full page after full page the hundreds of millions of New Zealand dollars going into a film—and that is good and we are all celebrating the 11 Oscars; good on us. But $20000 of investment in Navman to get a $50 million investment; I do not know—wake me up and smell the coffee! I cannot quite see or understand that. 
In Christchurch last night I was at the premiere of the musical—and maybe members may eat their hearts out but I was representing the Prime Minister— 
Once were Warriors 
. I tell members quite seriously that I will write a letter—and I was one who was probably pretty sceptical about how what I thought was a pretty violent film which was a reflection of some elements in New Zealand society could be turned— 
Rt Hon Winston Peters 
: It’s a documentary. 
Hon JIM ANDERTON 
: But nevertheless it was pretty harrowing. I found it pretty harrowing. I wondered how on earth a musical could be made out of that. I tell the House that that musical is the most impressive musical I have seen since I saw  
West Side Story 
 as a kid. It is a  
West Side Story 
 of New Zealand written by New Zealanders. The music is written by New Zealanders the whole thing is by New Zealanders including its choreography lyrics and everything else. Apart from Tina Cross who is magnificent the musical is performed by at-risk street kids Maori and Pakeha together. While the theme is about a very dysfunctional family and all the rest of it the thing that comes out of it is the incredible optimism of that story for the future—the cooperation partnership caring and honesty of those kids and everything around them and what they did for New Zealand. I think that it almost should be a commitment on every parliamentarian in this House to see that show. I cannot believe that any member of Parliament could see that show and then talk about division between Maori and Pakeha in this country or use any kind of racial division to gain some cheap political points. In that musical we have the best of New Zealand and the worst warts and all. 
Hon Trevor Mallard 
: Where’s it on? 
Hon JIM ANDERTON 
: It is in Christchurch. It is coming to Wellington and it is going to Auckland and Dunedin. 
Hon Trevor Mallard 
: The Minister might circulate the dates. 
Hon JIM ANDERTON 
: I will circulate the dates and I will write to every member of Parliament. Last night I spoke for a few minutes on behalf of the Prime Minister and said I would say in Parliament today that I would invite every member of the New Zealand Parliament to see that musical. They would not fail to be moved or extraordinarily proud. I was more proud—and I have to say this and Peter Jackson can eat his heart out; he will not care anyway; it does not matter to him what I think—however of that production last night than the  
Lord of the Rings 
. Fundamentally that musical is about New Zealand. It is written by New Zealanders and is about us. It was written magnificently in the first instance but the musical is tremendous. Jim Moriarty is a hero in New Zealand. 
Here is the thing. I was giving that speech and in the middle of it the kids—and there were dozens of them—suddenly turned around and did the haka. I thought: “What have I said?” but actually Jim Moriarty had just walked up the stairs and was coming in and they were paying tribute to him. He is an icon New Zealander. He is someone who has turned those kids around and their heads are up. One of the VIP drivers said to me that he had been in with one of the Ministers to see the musical in rehearsal and the kids were shaking hands with him and their heads were down. They could not look him in the eye. At the time the musical started the kids had their heads up and when they shook people’s hands they were looking them in the eye. 
I say that because in a sense the Budget and all the stuff around it is about economics fiscal balances and everything else; however the real New Zealand was in Christchurch last night. Those kids were the real New Zealand. They are the future of our country and I think that everything we do here should be done to empower those kids. Fundamentally they are the future of New Zealand. By the year 2050 40 percent of our workforce will be of Maori and Pacific Island extraction. If those kids fail we fail. That is it. Last night they were getting education credits for their future as they went through that production. I recommend the musical to this House. I interpolate it in a speech in the Budget debate to remind members of the real New Zealand out there and how we have hope and optimism and we have reason to be hopeful and optimistic after I saw what I saw last night. I hope that members can experience that too in due course. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 If there was ever a time for leadership and vision to unite this country it is now. Common cause is sought now. This is a budget policy debate about the forgotten people of New Zealand—the ordinary New Zealanders and I will describe who they are. They are people trying to raise and educate their families in a hostile environment; they are people trying to survive in a low-wage economy as against the First World; they are people trying to survive old age on a low pension in a rising tide of prices particularly in the urban sector. People in this country are trying to get cancer operations cataract or hip operations and they cannot. People are trying to grow exports that are desperately needed in this country’s economy in a hostile environment of indifference neglect and misunderstanding. 
Unfortunately this too is a case of a Government of sectional interests. It is not a Government for real New Zealanders or all New Zealand. This is a Government made up of people who believe that fiscal drag is a fashion statement and that fiscal updates were legalised along with prostitution. 
Today members heard nothing whatsoever from the National Party. Mr Key made it very clear that National would do nothing whatsoever and repeat the huge mistakes of Ruth Richardson between 1990 and 1993 when she took a party with the biggest majority in this country’s history to a hung Parliament on election night 3 years later. Mr Key has outlined the fact that National has learnt nothing knows nothing and will do nothing in an environment where every other First World economy would have Ministers of Finance and Opposition spokespeople who would understand the need for action. 
We are concerned that there is nothing in the statement before the House today and that fiscal updates have nothing in respect of an economic vision or any plan for this country’s future. We are on a slide to the Third World and every member of this Parliament knows that. Any economist who knows anything about the international stage knows it as well. There is nothing here to arrest our slide into the Third World because we are spending more overseas than we earn. The answer is not to be found in a mixture of massive immigration—that is National’s policy as well—it is not to be found in social engineering and it is not to be found in political correctness. Through those disastrous policies the Government has created a consumer-driven economy and a consumptive economy not a productive one based on rising house prices and a retail shopping frenzy. 
The real economy is being strangled by a high dollar. I want to show members a graph of how things have been since 1986 until 2004. The graph shows the figures under National all the way until New Zealand First got control of the Treasury benches back in 1996. There is the huge drop. That is why New Zealand had a massive economic recovery. It is all in the graphs. Labour gets back in power in 2001 and the graph is going through the roof again. The absolute tragedy— 
John Key 
: What did you do? 
Rt Hon WINSTON PETERS 
: I shall tell Mr Key what I did. We changed the Budget Policy Statement in October 1996 and the dramatic turn-round began shortly after. The graph shows members what happened. However there is Labour supported by National on an indifferent apathetic policy that sees our dollar now going through the roof. The charts are all there. There are the alarm bells. It is 2003 and even then we could see the dollar going past 54c and Labour did and will do nothing. For 14 long years when Don Brash was in charge of that sort of policy at the Reserve Bank he did absolutely nothing. 
Of course Don Brash is famous. All the problems of this country are based on Maori indulgence and demand upon the public purse! I shall ask members a question. Do they remember when the Bank of New Zealand was in a terrible mess and we bailed it out twice with billions of dollars? Don Brash was in charge of prudential supervision of the Reserve Bank in respect of the Bank of New Zealand. What did he do against those cheats and fraudsters? He did not even raise a finger and he was in charge. 
It is easy to blame Maori but what about those friends of his and financial backers of the National Party? That is his track record and by his record members will know him. Exporters are in meltdown. They are going to the wall. The floods of this country— 
Hon Trevor Mallard 
: I raise a point of order Madam Speaker. I apologise to the member for interrupting. However I have noted that the senior Opposition whip was on the phone and other experienced members are not present. I think there is a clear implication in the member’s speech that there were financial reasons for the National Party not intervening in the Reserve Bank. That is a very serious accusation for the member to make—that effectively the National Party was taking money not to intervene as appropriate. I think that that should not be allowed to continue. 
Hon Richard Prebble 
: I think the point of order being raised by Mr Mallard ranks as about the worst a member could do. Mr Peters had made no such statements—a National Party person would have raised it if he had. Instead we have a bogus point of order. The statements made by Mr Mallard are completely out of order. He has stood up pretending to be supporting the National Party then accusing the National Party of financial impropriety over the collapse of the BNZ. That is ludicrous because the BNZ collapsed under the Labour Government when Mr Mallard was in charge. I will certainly not reply by suggesting innuendos against that Labour Government because I was a member of it too. [ 
Interruption 
] No. I am saying this very seriously. I am raising a very serious point of order. 
Madam DEPUTY SPEAKER 
: Please be seated. 
Hon Richard Prebble 
: No I will not be seated. I have not finished my point of order and I am entitled to do so. 
Madam DEPUTY SPEAKER 
: I have heard Mr Prebble’s point of order. 
Hon Richard Prebble 
: No you have not heard my point of order Madam Speaker. I wish to be heard upon it. 
Madam DEPUTY SPEAKER 
: Please be seated. 
Hon Richard Prebble 
: No. This is outrageous. 
Madam DEPUTY SPEAKER 
: Please be seated. I have heard your point of order. 
Hon Richard Prebble 
: You have not heard my point of order. 
Madam DEPUTY SPEAKER 
: I tell Mr Prebble that I will warn him once only. I am on my feet and the member does not interrupt while I am speaking. I have heard the member’s point of order. I accept his point of order. I am ruling in that way. I believe that there was not a point of order and I agree with the member. 
Hon Richard Prebble 
: I raise a point of order Madam Speaker. 
Dail Jones 
: I raise a point of order Madam Speaker. 
Madam DEPUTY SPEAKER 
: I have ruled on this point of order. That is the finish of the point of order. 
Hon Richard Prebble 
: I am raising a new point of order. 
Madam DEPUTY SPEAKER 
: If the member is raising a new point of order he may raise the new point of order. 
Dail Jones 
: Who is getting the call? It should be my turn. 
Madam DEPUTY SPEAKER 
: The Hon Richard Prebble. 
Hon Richard Prebble 
: My new point of order is that a member who breaks up a speech of this sort in that way not only should be asked to withdraw and apologise but I believe should be again sent from the House. 
Dail Jones 
: That is exactly what I was going to say. As a member for New Zealand First listening very carefully to what Mr Peters has to say I believe there was nothing in the Rt Hon Winston Peters’ speech that came close to the comment being made by Mr Mallard. He has already been ejected from the House once today. I suggest that you eject him again and for the rest of the day after he has withdrawn and apologised. He is a disgrace to this Parliament. 
Hon Trevor Mallard 
: Notwithstanding the lack of orders to that effect I withdraw and apologise. 
John Carter 
: I raise a point of order Madam Speaker. 
Madam DEPUTY SPEAKER 
: We have dealt with this point of order. 
John Carter 
: This is a new point of order. The fact is that other than you saying that you would rule in that way a request has been made now by Mr Prebble and stated more specifically by Mr Jones that this is one of the most disgraceful points of order particularly coming from a senior Cabinet Minister that this House can have. All that has happened now is having made the statement and denigrated the National Party put it on record the member now has just had a quiet “I withdraw and apologise.” That is not good enough. This needs to be dealt with quite severely and the request and suggestion has been made to you that he be asked to leave the Chamber for the rest of the day and I urge you to do so; otherwise this whole thing will lead to disorder. It is not appropriate and not acceptable in this Chamber. 
Madam DEPUTY SPEAKER 
: The member has withdrawn and apologised. The matter is dealt with. 
Rt Hon WINSTON PETERS 
: As I was saying before I was so rudely interrupted the future of this country and its people cannot be left to international currency speculators—those people worshipped and adored by the National Party and its bankers. Mr Key said he would do nothing. Mr Brash said he would do nothing. We thoroughly exposed to currency fluctuations have a Reserve Bank obsessed with Auckland house prices and inflation; and all of the rest of the economy in provincial New Zealand is paying for it. 
John Key 
: Name me one— 
Rt Hon WINSTON PETERS 
: I tell Mr Key that the official cash rate in America is today 1 percent. What is ours? Why it is 5 percent. Let me tell the Government that New Zealand First would support any move to shelter the Kiwi dollar at a lower level and still leave room for serious investment here. Most economies act against the highs and the lows of currency fluctuations. Look at this investigation by the Finance and Expenditure Committee of the Minister of Finance. Read the questions there from other members and see how inert and hopeless it is in the face of an exporters’ crisis. 
John Key 
: Name one country. 
Rt Hon WINSTON PETERS 
: Every country except one—New Zealand. New Zealand is the unique one. [ 
Interruption 
] I tell Mr Keys to get it right. Mr Keys said to name one country; I said every country does—but New Zealand. 
John Key 
: Name one that works. 
Rt Hon WINSTON PETERS 
: Now he changes the subject. Now he says to name one that works. Ireland Taiwan Singapore Malaysia—there is a recovery if ever I saw one. Mr Soros was shut out. I tell Mr Keys not to come back to New Zealand from the halcyon markets of other people’s money and tell us who have run an economy how to run an economy. I tell members this: one half of the B team sneaked into Tauranga today. 
Hon Member 
: Who was that? 
Rt Hon WINSTON PETERS 
: I cannot say. He had a telephone-booth meeting and tried to emulate the incumbent’s meeting in the Tauranga Red Square. The head economic puritan is not even speaking in this debate today. The B-team has swung back to the mad monetarism that nearly destroyed us in the 1980s and early 1990s. One half of the B team sneaked into Tauranga today and had a telephone-booth meeting so the B team is minus a B. I guess that makes them B-. They will be minus a whole lot of Bs before the next election is over. After listening to Labour and National today it is obvious that there is only one party that is prepared to take a stand on behalf of all New Zealanders and not just its narrow group of supporters. 
I tell Mr Key that Mr Brash can go to the Rotary Club he can bore New Zealanders witless he can go around stirring up apathy—but make no bones we know all about politics in this party and within 6 months their charts and polls will be humbug. We all know that. This man cannot sustain that sort of inertia and boredom. The people of Tauranga deserve better—not someone who is an example— 
John Key 
: That’s a very true statement. 
Rt Hon WINSTON PETERS 
: All right. Here is my challenge to Mr Key and his colleagues. Mr Brash says National will put up a high-profile candidate in Tauranga. I tell them to go ahead and put Don Brash up. We will have a showdown. Come on—bring on Don Brash and we will see what the people of Tauranga think of Don Brash and his policies on age care on 70 years for the retirement age on reducing retirement funding payments on privatising hospitals on privatising schools on user-pays in roading and every mad monetarist ACT policy. The president of the ACT party described him—not my words—as the ninth ACT party member. The ACT party call him the ninth ACT party member. Great news! My challenge to the National Party is to send Don Brash along to Tauranga and see what happens. I tell members this: if I cannot beat a man whom Gary Knapp beat twice I will resign. If I cannot beat a man whom Gary Knapp beat twice I will give up—and rightly so. 
Let me ask the question of National: is Don Brash coming to contest Tauranga? No. I say to stop bluffing the National supporters. As for the press gallery people I tell them to stop wasting everybody’s time because in 6 months’ time those of us who see politics like an instamatic picture know that as the picture emerges National will be in the doldrums again. 
ROD DONALD (Co-Leader—Green) 
: 
 I would like to begin by thanking all those organisations that made submissions to the Finance and Expenditure Committee on the Labour Government’s Budget Policy Statement. My gratitude even extends to Business New Zealand because by and large its submission serves to remind me that given half a chance it would take New Zealand in exactly the wrong direction in terms of where it should be going. 
For example Business New Zealand pointed out its opposition to four pieces of legislation passed in this term: the Local Government Act ratification of the Kyoto Protocol the Supreme Court Act and the Land Transport Act. These were all supported by the Greens and in two cases were passed only because of our votes. Business New Zealand’s call for a cut in the corporate tax rate to 20 percent fails to acknowledge both the obligation that the business community has to society and the extensive services that the Government provides the business community with in return. It also conveniently ignores the corporate welfare that businesses receive through the support that the Government is obliged to provide low and middle income workers through for example the accommodation supplement tax credits family support and childcare subsidies because too many businesses do not pay their workers enough to live on. 
There are even some things where the Greens and Business New Zealand share a common view. One in particular is our joint opposition to the New Zealand Superannuation Fund. We also broadly agree on the need for the Government to reduce its debt levels. 
However the Greens share a lot more in common with a number of other submitters. In particular I mention the Public Health Association Barnardos Caritas the Save the Children Fund Unicef Action for Children and Youth Aotearoa the Refugee and Migrant Service the New Zealand University Students Association the Downtown Community Ministry and the National Council of Women. There was a consistent message coming through from those frontline organisations which have to bear the brunt of the negative impacts of harsh Government policies. I am grateful that for several years they have balanced the pro - free market submissions of the business lobby and have helped to pressure the Government to properly address child poverty in New Zealand. Like the Greens they have high hopes that the Government has finally listened to their pleas with Dr Cullen’s announcement that the centrepiece of this year’s Budget will be a Future Directions package that will in his own words “give priority to low- and middle-income families enhancing their living standards and their ability to give their children real opportunity and security.” 
Time and time again we have said that a Budget surplus is not real if it is built on the backs of children living in poverty. It is an indictment on all of us but particularly on Labour members who despite their history of standing up for the poor and the downtrodden have taken 4 years to decide that the time is right to tackle seriously the fact that 30 percent of New Zealand’s children are living in poverty. It may be financially prudent to do as the Minister says and wait for good economic and fiscal conditions before increasing income support and incentives to move into paid work as well as making housing more affordable but it is socially irresponsible to have waited as long as this. It is also socially irresponsible and downright discriminatory to penalise children because of the income source of their parents or caregivers. Yet despite the strong submissions from all the social service and welfare organisations that the child tax credit be available to all families below the appropriate income threshold Dr Cullen remains determined to penalise the children of beneficiaries and superannuitants. That earned a rare unanimous rebuke from the multiparty Finance and Expenditure Committee. Not known for our unanimity we all agreed that while we do support incentives to move people from welfare to employment the Future Directions package should ensure that “… appropriate assistance is also made available to children who are dependent on a sole parent superannuitant or beneficiary”. 
The Greens are adamant that the Government must remove the discriminatory aspects of the family assistance packages. If Helen Clark were serious about funding services on a basis of need then the one in four children in New Zealand whose parents or caregivers rely on a benefit or superannuation would no longer be excluded from the child tax credit. Michael Cullen repeated today that this Government is committed to needs-based regulation; this is his chance to make his rhetoric a reality. Although the payment is only a maximum of $15 a week per child it could make a real difference to the quality of life and material well-being of those children. It would also lift the morale of those families who are dependent on the State. At the moment the message they get is that the Government thinks it is sufficient for single parents with one child to live on $231.53 a week or $14500 a year before tax but if parents are in paid employment it is OK for them to earn $30000 and receive that tax credit—a tax credit that single parents on the benefit are not eligible for. We believe it is unconscionable that the Government deems that one child deserves a better start in life than another child especially when we are talking about a quarter of this country’s children. 
It also raises the concern that the Government will increase its targeting mechanisms in the Future Directions package. Make no mistake: the Greens are all for reducing the poverty trap so that beneficiaries do not face a drop in income when they enter or return to the workforce but there are real problems with the targeted system currently in place. The evidence shows that the move to targeting has not increased the welfare of the poorest in our society but has instead enabled successive Governments to keep tax rates low for the well-off. Targeting mechanisms are costly to administer as well and they are often so complicated that many families in need do not apply. The current family support package has serious problems with families incurring large debts because they underestimate their annual family income and therefore receive too much assistance. This estimation of income is particularly difficult for low-income parents who may work several jobs in a year because they are forced to undertake casual work. 
That is why we are promoting a universal child benefit and why we are looking for support from members in the House for Sue Bradford’s member’s bill which is currently on the Order Paper. This universal benefit is similar to the old family benefit which would have provided many of the MPs in this House with a real start to life by in many cases enabling their parents to buy their first family home. Several other countries have maintained universal benefits throughout the new-right period—even the United Kingdom. Its child benefit is worth approximately $47 per week for the first child. 
As well as calling for the end to discrimination against children the submission of the Public Health Association highlighted that about one-third of all hospital admissions could be avoided if more funding was specifically invested in health—that is in preventing illness. We agree. We also support the concern of the association that avoidable hospital admissions of Maori are 60 percent higher than those of other New Zealanders and that those of Pacific people are 70 percent higher. I asked the submitters whether those rates could be reduced if the health system adopted Dr Brash’s colour-blind approach. In a very thoughtful answer Dr Gay Keating said that while focusing solely on socio-economic factors would have a significant impact on reducing admission rates there was also an indisputable ethnic factor. In other words Maori of the same socio-economic status as Pakeha are more likely to be admitted to hospital for illnesses that could be avoided. That puts paid to the rubbish coming from the National Opposition that ethnicity should not be a factor when addressing needs. If we are serious about ensuring equal opportunity then whatever criteria that work must be applied to ensure that outcomes are fair. 
I am glad that the Labour Government continues to recognise this reality but I am surprised to have just listened to the Minister for Economic Development Jim Anderton refuse to acknowledge some home truths about the New Zealand economy. The Government’s accounts may look good but the rest of the economy is struggling. Dr Cullen may feel like the king in his counting house counting all his money—whether in cash or on paper—but outside people are feeling the squeeze. Workers bosses and farmers are all struggling largely because of the high dollar. Jim Anderton when he was in Opposition used to highlight important economic indicators like the trade deficit the current account deficit and the national debt but today there was not a word about those. I would like to offer a reality check to this House. This country’s national debt is now over $102 billion. Our current account deficit is forecast to rise to $7.3 billion this year $8.5 billion next year and $8.6 billion for the 3 years after that. The January trade deficit was $571 million—28 percent of exports. The trade deficit for the year was $3622 million the largest since records began in 1961. 
The New Zealand economy is sick. The New Zealand economy is unsustainable. A cynical view is that the Future Directions package is more about trying to pump up a sagging economy and shore up Labour’s core support in the lead-up to the election than a heartfelt commitment to helping the less well-off. 
Hon RICHARD PREBBLE (Leader—ACT) 
: 
 I rise to speak to the Budget Policy Statement for this year. It is a statement that is presented by the Government looked at by a select committee then debated. It is a matter of regret that we have stopped having debates in this House. What we get instead is a series of statements that are nothing to do with what was held before and people do not even have the decency to at least debate what has been put forward. 
I would like briefly to debate all the comments made in this debate. Mr Rod Donald from the Green Party put forward the proposition that we should take the $6 billion surplus and spend it all on children and in particular on benefits. He said that we should do that because—and he is quite right—there is a growing number of children who are in benefit families. It is a great shame that the Green Party does not take any interest in economics. If it did its members would realise that people—even their supporters—respond to incentives. If we were to follow his advice we would have more people in benefit-led families. As he just eloquently told us those people who are on benefits do not enjoy a good standard of living; they actually end up in dependency. If the Greens ever do end up in power—and at the moment the Labour Party’s only prospect of being in Government is to be with that extreme-left group—we will have a New Zealand in which more and more New Zealanders are on benefits. Somehow he tells us that would be a sounder economy. It is a shame he does not know any of the history of the last 50 years. The countries that have followed the advice he suggests are in terrible shape. 
Then we had Mr Peters making a vitriolic attack on Mr Brash. We discovered why: apparently Mr Brash visited Tauranga. Well so what? But then Mr Peters put forward a rather novel notion. He said that when he was Treasurer he drove down the dollar. I thought to myself I wonder who the Governor of the Reserve Bank was when the dollar reached 39c and did that governor intervene? We all know that Don Brash was the governor at that point. When Mr Peters—who now tells us that Don Brash was a 14-year failure—was Treasurer did he replace the Governor of the Reserve Bank? Did he make any changes to Reserve Bank policy? Of course he did not. That had to be one of the sillier speeches made by Mr Peters. The other statements that he put together showed that what might have had an influence on economic policy was his being economicallyilliterate. 
We had a contribution from Mr Anderton who told us that we should go to a musical— 
Once Were Warriors. 
 No doubt it is a moving musical. Of course Mr Anderton apparently can watch the whole of that musical without realising that it was written by a Mr Alan Duff and without realising that Mr Duff is making a protest against the sort of social welfarism that Mr Anderton and Mr Rod Donald put forward and is pointing out that it has put Maori into a terrible poverty trap. Mr Anderton watched the whole musical and missed the entire point of the musical the book and the film! 
John Key 
: That was the real New Zealand. 
Hon RICHARD PREBBLE 
: And that was real New Zealand! Then we had contributions by Mr Key and by Clayton Cosgrove who argued about the country’s economy. Let me try to make a contribution there. Mr Cosgrove said that the economy grew well last year—which is true—and took total credit for it. Then Mr Key said that perhaps there might be some other reasons and pointed out something that Mr Cosgrove did not get around to mentioning—that one of the things the Budget Policy Statement does is project what growth there will be. I make the point to the whole House that the growth that the Government gets has been inherited. Where do those policies come from? If we look at the OECD an independent source we find that in December last year the OECD said that the economic growth in New Zealand at the moment goes all the way back to the reforms that happened in the 1980s and early 1990s—under Roger Douglas and Ruth Richardson. That was what the OECD stated and I invite the member to read that report. I ask the same member whether he accepts the policy projections that are in that document. [ 
Interruption 
] He does? That is progress. If he decides to read it— 
John Key 
: Growth to 1.5 percent. 
Hon RICHARD PREBBLE 
: Mr Key is absolutely right. Treasury predicts that economic growth will fall and states that it will actually fall under the policies introduced by this Government to 1.5 percent. The Government cannot be happy with that. [ 
Interruption 
] Well I do not think the Minister has actually read the policy statement because growth is the priority of his own Government. It sees its most important task as building the conditions for increasing New Zealand’s long-term sustainable rate of economic growth. The Government is failing in its own target of lifting economic growth. 
How can that be? I suspect that it is because the policies this Government is introducing do not assist growth. Let us have a look at some of the policy statements. The most recent a decision that is clearly productivity reducing is to give everyone another week’s leave. Even Mr Cunliffe can work out that if we were to do that it would affect productivity by 2 percent. That is a measure done by this Government. But lower production will also lower the utilisation of capital. 
Then there is the question of tax rates. We have had a bit of debate about that. Our Minister of Finance likes to point out that the tax cuts under National did not result in an increase in productivity. Therefore he says tax cuts do not work. There might be another answer might there not? Those two tax cuts made by National were targeted at lower-income families something this Government says it will do again. Given what we now know tax cuts having been done twice does anybody in the House think that such a tax cut when the Government does it in the Budget will improve productivity? Well does it matter? This Government says that its No. 1 economic goal is to increase economic growth yet it will introduce a tax cut that—as the Government itself knows—is the politics of redistribution not the politics of growth. 
It is worth asking the House why growth and prosperity are important. It is simply that—and it is something that even Mr Peters grasps—one cannot have a first-class education system or health system without a first-class economy. It is also worth noting that the $6 billion surplus—a huge amount of money—came from taxpayers. The vast majority of taxes in this country are paid by middle-income New Zealanders. If this Government really wants to get the economy going and to have some fairness we should have a tax cut aimed at middle-income New Zealanders. I say to National that a tax of 30c in the dollar is a good move but it will not cut it. We should look at what the McLeod report stated. The Government paid $1 million for it and I understand that Dr Cullen threw it at the wall asking why he had paid $1 million to get a report that he could have got free from the ACT party. That report told him that if he wants to improve the economy he has to cut the taxes of the people who invest in and grow the economy and a flat rate of tax is best. 
I say to the Government that if it is serious about wanting to improve growth and productivity—and it knows it ought to—it should give that $6 billion of taxpayers’ money back to the people who own it and they are the taxpayers. If one finds a purse full of dollars in the middle of the road one gives it back to the owner. This Government finds itself with Treasury’s purse bursting with money. Why do we not give it back to the owners? The great advantage of that is we would get economic growth and prosperity and the sort of New Zealand that most members of this House actually want to see. 
GORDON COPELAND (United Future) 
: 
 I am delighted that the Budget Policy Statement signals that financial assistance for low and middle-income families to enhance their living standards and improve opportunities and security for their children will be the centrepiece of this year’s Budget. I was both surprised and delighted that when presenting evidence to the Finance and Expenditure Committee the Minister of Finance Dr Cullen advised that once it is fully rolled out and implemented this assistance would total more than $1 billion per annum. 
Assistance at that level if skilfully delivered has the potential to make an enormously positive contribution to the income and therefore to the welfare of hundreds of thousands of New Zealand families. United Future is 1000 percent behind the initiative. We cannot afford as a nation to continue blindly down a pathway that sees an estimated 20 to 25 percent of our children living in relative poverty. In my view it should remain a central goal of our nation to put our children first. We need to ensure that each and every child in this country—regardless of ethnicity the level of parental income or even the source of that income—is provided with the opportunity to receive world-class health-care and educational opportunities during the transition from infancy to adulthood. 
That goal should be at the top of the list because it represents the cumulative aspiration of all of those who have come to New Zealand over the centuries—namely that of a brighter future for their children. I see no reason why the total elimination of child poverty should not be achievable in New Zealand and the Future Directions package will hopefully have that outcome. In addition to the benefits to children themselves the package also represents an investment in the future of our country. 
The Future Directions package may appear in the Budget as Government expenditure but in reality it is a social and economic investment. I am hopeful that the package will take into account the number of children who are dependent on each family’s income provide clear incentives to favour paid employment over welfare and iron out the appalling mess that we inherited from the 1991 benefit cuts in relation to effective marginal tax rates arising from a very badly-thought-through abatements regime. 
The 1991 benefit cuts adopted a slash-and-burn approach which has produced some woefully perverse outcomes. For example in some circumstances the optimal income point for a family arises when the breadwinner works 20 hours a week. A worker is not a single cent better off until he or she works 50 hours a week. Likewise people re-entering the workforce find that in net terms—particularly when account is taken of costs arising from transport and clothing etc.—they are worse off than if they had stayed on the benefit. Such anomalies and disincentives must not be allowed to continue. 
I hope also that the package will include those people who are caring for children but who are not for one reason or another actively involved in the paid workforce. For example a group that has hitherto been neglected is grandparents raising grandchildren. If they are superannuitants then even though they have taken on that responsibility for the sake of their grandchildren they are ineligible for support from the Government. That needs to change. 
I want to make a statement about why I believe it is important that we look at this Future Directions package and give additional support to low and middle-income families in this country. The package is based on a fundamental principle of social justice—that people should be able to fittingly support themselves and their dependants from the wages they earn. That is a goal of social justice. We all know that people are paid as individuals—and that is right because they are paid for the work they do. But it is also true that having earned a pay packet some people look after just themselves while others are faced with the necessity of supporting perhaps a spouse and one or more dependent children. Therefore it is very important that we look at ways and means of ensuring that they also can achieve that goal of care for their dependants. 
There was a speech earlier from the Hon Richard Prebble—and I think John Key mentioned it too—about the need to cut income tax rates. Consistent with the principle I have outlined I would like once again to commend to the House United Future’s policy concerning income splitting for families. That would reduce tax rates dramatically for people in the middle and higher-income brackets of New Zealand but would do so based on the criterion they are in a partnership with another human being—a man and a woman raising children which is the most important job that we can do on this earth. 
New Zealand’s exporting capacity has now reached a most critical point. Our trade deficit for 2003 was three times higher than in 2002. Our trade deficit for January was the highest monthly total since 1986. The Budget Policy Statement forecasts an increase in the current account deficit from 3.9 percent of gross domestic product in 2003 to 6 percent by 2005. 
A lot of print and airwave space has been so far taken up in discussing the rapid appreciation of the New Zealand dollar against the US dollar and there has been an almost ad nauseam debate about whether there is anything either the Minister of Finance or the Governor of the Reserve Bank can do about it. A lot of this represents huff and puff. The reality is that the value of the US dollar reflects events in the USA and any action the Government takes is unlikely to alter that reality. 
Why do we not all accept that and concentrate on doing something constructive to rescue our perilous exporting situation? I believe there are a number of things that the Government can and therefore should do as a matter of urgency. These include abandoning the idea of recovering some $12 million in border security costs from exporters providing accelerated depreciation allowances for tax purposes on all plant and machinery that is used principally to produce exports and using a Buy New Zealand Made campaign to reduce imports. I am amazed that New Zealanders buy imported pet food biscuits barbeque fuel cheese coal and even timber. Let us appeal to their patriotism and ask them to buy New Zealand made. 
We need to continue our efforts to add value prior to export particularly in products such as timber; to upskill and train people in international marketing; to end policy blockages that are unnecessarily forcing up the cost of electricity—and I particularly refer to the urgent need to overhaul the Conservation Act so that hydroelectricity schemes can go ahead—and to widen the scope of infrastructure bonds to fund such initiatives as irrigation on the Canterbury plains. 
The Government also needs to continue to pursue vigorously the Doha round of trade liberalisation negotiations in agricultural products and to conclude free-trade agreements with China the USA and others as quickly as possible. Dr Michael Cullen has signalled that the Budget will address a number of these and similar issues. I urge the Government to make that a matter of priority. We must never overlook the fact that the continuance of our essential health and educational services—a point the Hon Richard Prebble has also made—is dependent on strong productive vigorous and growing farming and business communities and especially on the private sector’s exporting capacity. 
Finally I will say a few words about general taxation. United Future continues in complete harmony with the business sector of this country to argue for a reduction in the company tax rate from the present 33 percent to 30 percent—the rate that presently applies in Australia. Comparability with Australia is however only part of the equation. A more important goal in my mind is to encourage capital investment in productive enterprises within New Zealand. Our nation’s savings such as they are are still concentrated in owner-occupied and rental housing. People do need somewhere to live but we have gone a long way beyond that basic requirement in New Zealand and have made housing a preferred investment for many New Zealanders. 
However priority needs to be given to the productive part of our economy and a reduction in the corporate tax rate would I believe attract more investment and capital accumulation into our all-important productive sector. It would immediately lower the cost of capital for our companies by raising the after-tax return to investors. I continue to hope that the Government might yet begin to listen to United Future’s advocacy in that regard. 
Hon STEVE MAHAREY (Minister for Social Development and Employment) 
: 
 I should say to Mr Copeland as he takes his seat that the Government always listens very closely to all the good ideas that come from United Future. We are working on one together at the present time in the form of the Families Commission. We are a listening Government. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I am sorry to interrupt the Minister but I remind members that running commentaries are out of order. 
Hon STEVE MAHAREY 
: The report card for this Government that comes through from the Budget Policy Statement is very good. It tells us we have growth in the economy. We have companies doing things they could not do in the 1990s—that is grow and employ people in their firms. On the social side we are able to report that in almost every measure we are better housed better educated healthier—one after another we can tick off the social progress we are making and it is reflected in this Budget Policy Statement. 
Prior to this Government coming to power in 1999—I refer back to the period that people like Rodney Hide a supposed economist would tell us was the heyday of the kinds of policies he stands for—we were performing as an economy below the OECD average. We are often told this was just bad luck. It went on year after year after year but the National Government was the unluckiest Government. Right through the 1990s year after year its luck just did not change. It seemed to not be able to get above that OECD average. With all the good things it was doing nothing seemed to change. In 1999 National tells us luck changed. National says that we were an extraordinarily lucky Government and that if we really want to say why things have been so good we should say that the 1980s and 1990s policies of Rogernomics Ruthonomics etc. were the policies that really laid the foundation for the growth. I have to say that that is just absolute nonsense. 
In 1999 the thing that changed was the Government and the changes were the changes in the policies the country followed. Instead of just running the kind of free-market neo-liberal policies that someone like John Key wants to run we had an interventionist Government that maintained an open trading market economy but was prepared to do the things to make that economy profitable—employing people growing firms and growing the economy. That was the change. It was not luck but a change to the kinds of policies that people on this side of the House had been arguing for frankly right through the 1980s Rogernomics era and through the 1990s. 
There is one last statistic worth leaving with the House. People who argue against these policies say they want to return us to the top half of the OECD and that we would do it by returning to those very policies we have left behind. The fact of life is that the last time we were in the top half of the OECD was 1985. We introduced the kinds of policies these people wanted. We dropped below the OECD average and stayed there until we changed them again and then we went above it. When we approach this kind of debate let us talk about what works not what is supposed to work. People like Mr Key are the kinds of theorists and academics who like to say: “By God the model would work if we would just go further.” We should go a little further says the academic Mr John Key who is out of touch with the real world. He says: “If you just go a little further you would get this kind of growth.” I am saying to him that he should stay in his cloistered academic gown hopelessly out of touch with the real economy. He should carry on doing that and on this side of the House we will spend our time on policy that really works. We are in touch with reality. 
One of the things that we were left with in 1999 as a result of the failed policies of people like Mr John Key was a social deficit. One of the things that that National Government would not do was invest in social issues because it said we should get the economy right first and then all the social investment could take place. It was a case of “Drive the engine”—unfortunately the Government could not get out of first gear—“and once we have got up to full speed we will start paying for health and education and all those social investments.” Unfortunately that Government not only failed to drive the economy but also left us with a social deficit in housing health and education. There was a lack of spending and investment. 
The OECD said something very interesting the other day. We need to understand it said that if we do not have social development we do not get economic development. In other words it comes first it said. We have to have a healthy educated population. Otherwise we do not have the foundation for the kind of modern economy we are trying to form. So what has this Government done? In the last 4 years we have begun to re-invest in social areas. We have invested in childcare we have invested in early childhood education and we have invested in schools universities and polytechs. We have invested in the health system in housing and in families. It has been for the last 4 years an absolute revelation for the country to finally have back a group of people who understand that investing in people is the first step towards getting the kind of future we want for this country. It has been signalled that in this Budget we will carry on with that pattern of investment in jobs health education housing families and children. It will be another Budget for that. 
Specifically as Mr Copeland just pointed out one of the major features of this Budget will run under the title of Future Directions—it will be called something different by the time we get there but it is running under that title right now. The Ministry of Social Development has been leading that policy development for the last couple of years. Members will remember that during a previous term we said that in this term we would have a major focus on these kinds of issues and we are going to do that in this particular Budget. I am delighted to hear United Future members on the back of the discussion they had with Dr Cullen at the select committee saying they fully support what they are hearing. They are hearing that four key things will happen in that package. One is that we will be having a look at the level of income of working families and other low-income families in this country. We are going to say to those families that it is time they got a share of what is going on in this country’s growing prosperity. We want to make sure they feel better off when they go to work that there is money in their pocket that they feel their kids are well fed and that there is enough money coming into the house. We will begin addressing that issue in even greater clumps in this Budget. We have done it before with income-related rents. We have increased incomes but in this Budget we intend to go further. 
We intend to have a look at affordable housing. We have said that is our second bit. We want to make sure that we do have affordable housing particularly in areas like Auckland and Nelson where people have found a lot of housing pressure driving up the costs of housing. We want to address that kind of issue. We want thirdly to make work pay. It must pay people to take that step into work. It is not an ideological thing; it is a practical thing. If people go to work and find suddenly that the cost of transport feeding the kids and making sure someone is around to look after them after school takes up all their wages they begin to drift back into the benefit system. Work must pay. It must put money in people’s pockets and in this Budget we want to make sure we are doing something about that. 
Fourthly we have said we want to simplify the benefit system. When benefits were changed in 1991 and people’s incomes were reduced by about 30 percent and they were expected to live on that and could not—the food bank industry came from the cuts from Jenny Shipley and the National Party—even that Government could not sustain them and it had to introduce other tiers of the benefit system. We now have a three-tiered complicated mess of a benefit system that we want to begin seriously changing at this Budget time and over the next 3 years so that we finish up with essentially a single benefit system with people having additions to their benefit for their specific circumstances. So we will see those changes start then. We are targeting this assistance. The National Party and the ACT party would like tax cuts. They want trickle-up. They want to give out the money in tax cuts—they want to tell people who are well off that they can have another $160 a week and tell people who are getting an average income that they can have 19c a week. That is what we figured out Dr Brash was operating on. We are not going to do that. We are going to make sure this money is focused on low-income families so that they get the money the kids get the money and they get the money to go to work. 
That is where we are going to put our money and I know what New Zealanders will want. How would the country pay for what Dr Brash wants—tax cuts? I guess one of the things he has told us already is that it will be superannuation cuts. He has already signalled heavily to older New Zealanders that superannuation cuts are coming. He has already warned people that if they are under 50 they should get ready for these kinds of cuts. They will happen. People should not trust the National Party. They have to find money from somewhere they are saying to be able to pay for these tax cuts for the rich and they will take it out of superannuation. But by extension it is coming out of social services—the old place. People should look for it to come out of health education and all the other areas of large spending and investment by this Government. 
We have a clear choice now. They have demonstrated on that side of the House what they do when they are in. They create a social deficit. We have spent 4 years beginning to restore that and we have made a very real difference. New Zealanders can look at this Budget Policy Statement and know this Government will do even more for investing in people. Dr Brash has told them his intention is to do less. 
PANSY WONG (National) 
: 
 At least with that single clap after that speech we can arrive at the conclusion that not all members on the Labour benches are mad and we can be glad about that. New Zealanders certainly know that we cannot afford this Labour Government. For a start I think the Minister should take another call and explain to the people of Christchurch why the Canterbury District Health Board is going to close wards. New Zealanders nowadays cannot afford to get sick because if they do they will not get treatment. I would like the next speaker from the Government side of the House to explain to the public why they should have to feel so vulnerable. I have just received an email from the spouse of a seriously ill man—which I may forward to the Minister and ask her to explain—who wrote to me stating that the Auckland District Health Board has delayed her husband’s surgery four times. Our cancer patients are being sent to Australia for treatment. The Canterbury health board has just announced that due to a shortage of funding it will close wards. New Zealand’s health service is very sick because of this Government’s mismanagement. We were told a few weeks ago by one of the district health boards—I think in Auckland—that a patient suffering from gallstones had to have four attacks suffering much pain and blacking out twice before being able to have the gallstones removed. Those are Third World health standards. The Minister of Health should take a call and explain that to New Zealanders. They are worrying themselves sick—and they had better not get sick because this Government has mismanaged the health service. 
However I want to address the Budget Policy Statement. It is with some sadness that I take part in this debate because this is the last time that the Budget Policy Statement will be presented in its current form. I am very sceptical about this Labour Government which has introduced a public finance bill stating that in future the Budget Policy Statement will concentrate only on the priorities of the upcoming Budget. It will actually divorce the Budget Policy Statement from the fiscal strategy outlook although they have usually been presented together. The Fiscal Strategy Report will detail high-level long-term fiscal strategy which means that in future the Budget Policy Statement will concentrate only on the next 12 months’ spending. Now that the longer-term financial position of the Government’s accounts will not be presented at the same time as the Budget Policy Statement people will just concentrate on where the Government is going to spend the money without having a framework of reference in terms of a longer time-span as to how that will affect the overall financial situation. 
I would like to remind the public of why the Minister of Finance wants to remove the fiscal strategy outlook from the Budget Policy Statement. On page 4 of the statement that we are currently debating he states: “Spending in the 2004 Budget is expected to be greater than forecast in the Fiscal Strategy Report 2003 with $2.1 billion of new operating spending committed for 2004/5 rising to $3.3 billion in future years.” Basically in future by removing that longer-term outlook the Government will just concentrate on and continue with its tax-and-spend philosophy. By and large I think the public resigns itself to the fact that the Government is a tax-and-spend Government. However this Labour Government should also be very careful if it wants to continue to tax and spend because for a start it has to have profitable businesses and individuals in employment to derive the taxation revenue from. For the remainder of my speech I want to concentrate on the profitability of our small-business sector mainly because right now the Labour Government is on a roadshow that champions and celebrates small business in New Zealand. 
Let me share the statistics with the public. Eighty-seven percent of businesses in New Zealand are small which means that they employ five staff or fewer. I would like to share with the public what the Hon John Tamihere had to say about those small businesses while on the Labour’s roadshow with that sector. Apparently even the Hon John Tamihere has heard that small businesses’ concerns fall into four areas: the Holidays Act taxation the Employment Relations Act and compliance costs. When I explore each of those areas and how the Labour Government has performed in it I think the public will really appreciate how out of touch this Labour Government is with business.  
For a start small businesses say they object to the policy of 4 weeks’ annual leave. John Tamihere said in his speech that the Labour Government was unable to deliver on that particular promise and would back away from introducing 4 weeks’ leave but that it would do the next-best thing: it would specify the year of its introduction. Small businesses say they do not want the 4 weeks’ leave provisions so the Labour Government says it will do the next-best thing and tell them when 4 weeks’ leave will be introduced. 
The next thing that small businesses ask for is a cut in taxation and the Hon John Tamihere once again says the Government cannot deliver a cut in taxation so it will deliver the next-best thing. Can members guess what that is? The Government proposes giving businesses a subsidy so they can have their payroll tax prepared by an agent thereby introducing welfare into the business sector. So instead of the Government saying it will make it simpler for businesses to pay the tax it says no it will subside businesses by paying them to employ somebody to do the job. 
The other thing that the small-business sector complains about is the Employment Relations Act. At least the Hon John Tamihere is honest compared with the rest of the Labour bench. When as Minister for Small Business he was asked in the House what support he had received from small business for the Employment Relations Law Reform Bill he said there had been none. But the Government is still going to go for that legislation— 
Judith Collins 
: At least he’s honest. 
PANSY WONG 
: At least he is honest as my very good colleague reminds us. 
Lastly when small businesses complain to the Government about high compliance costs can members guess what its response to the sector is? The Government’s response is to say that it will set up a tool on the website called the “Employment Agreement Builder”. When small businesses complain that they do not have the time to get on with their business the Government tells them not to worry about that because it will give them a software package they can log on to that will take them through the procedure so they will know how to comply. That shows just how out of touch this Labour Government is with the business sector. It has 
absolutely no idea about how to encourage and help small businesses to grow into medium-sized business and then into big businesses so that they can actually pay a fair share of tax. We all know that this Government believes in a tax-and-spend philosophy but even if we believe in that we have to make sure we have individuals who earn good money and businesses that are profitable. One does not kill the goose just to get the golden eggs in a one-off situation. 
There is nothing to celebrate in this Budget Policy Statement. I hope that the next Labour speaker who gets up will explain why the Government is not listening to small business. 
DAVID PARKER (Labour—Otago) 
: 
 I will gladly deal with economic matters in this speech. It seems strange to me that National often ignores the economy and chooses to attack the Government on race issues instead. I reflect on why that is. Why is it that the self-appointed economic guru Dr Brash seldom deals with matters of our economy? Why is that? It is because I know this House knows and most of the public know that our economy is performing well. Dr Brash knows that our economy is prospering under the wise stewardship of this Government. I am not one of those people who say we do not face challenges. We are facing challenges as a consequence of the drop in the exchange rate of the US dollar. The US dollar has been plummeting and that does make the situation difficult for exporters. We acknowledge that. [ 
Interruption 
] The fact that it is the US dollar that is plummeting is obvious to those people like Mr Key who wish to take an interest in the matter. The exchange rate of the New Zealand dollar has not increased as steeply against either the euro or the British pound as it has against the US dollar. So the challenge posed by the exchange rate of our dollar is real but it has not hurt significant parts of the economy such as inbound tourism for example which is one of the strongest contributors to our economy now. Inbound tourism is at record numbers. 
Why is it that Dr Brash does not focus on the economy but instead attacks the Government on race issues? It is because our economy under the wise stewardship of Dr Cullen has become one of the strongest in the OECD. We run a Budget surplus. We prudently collect more from taxes than we spend—that is a good idea is it not; no one could disagree with that—and that is even after we put away about $2 billion per annum to fund future superannuation payments. We have even been able to reduce Government debt while doing that. Gross Government debt was 36 percent of gross domestic product (GDP) when we took over in 1999. It is now down to 28 percent of GDP and still dropping. The Budget Policy Statement shows that it is projected to drop to close to 20 percent of GDP over the forecast period. The projection for net debt is even better but does Dr Brash talk about that? No he does not because it is factual and it is good news. 
What about unemployment? Does Dr Brash talk about that? Not much. Unemployment has dropped to less than 5 percent of the workforce. Does he celebrate that? Our unemployment rate is the lowest in 16 years and is one of the best in the OECD. Does Dr Brash give us any credit for that? No he does not. What about economic growth? In recent years the growth rate in New Zealand has been amongst the best in the OECD. 
John Key 
: Relative. 
DAVID PARKER 
: Relative to the rest of the OECD. Is that not good enough for the member? 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I am sorry to interrupt the member. While interjections are permitted I cannot let members drown out the speaker. I can hardly hear him. I refer members to Speaker’s ruling 56/1. Interjections should be rare reasonable and relevant. They should not be like a running commentary and that is what we are getting at the moment. 
Rodney Hide 
: I raise a point of order Mr Speaker. I accept fully your ruling but I think also that the member should be discussing the Budget Policy Statement and not speaking entirely about Dr Don Brash. I know that he and the Government are running scared particularly in Otago about the success of the National Party but we are here to hear about the Budget Policy Statement and not what a great job Don Brash is doing. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I thank the member for that. 
DAVID PARKER 
: It is interesting that when the facts are put before Parliament there is a harangue from the Opposition benches as those members try to drown out the simple facts recorded in the Budget Policy Statement. In terms of growth we heard Mr Prebble tell us before that the Budget Policy Statement projected growth of 1.5 percent per annum. I say to Mr Prebble that that is wrong. I point him to table 1.1 on page 15 of the December Economic and Fiscal Update. Mr Prebble did not actually have to read very far through the document to get the right figures. He obviously did not bother to do that and he made up a figure. He says the figure is 1.5 percent. The projection is 2.8 percent for this year rising to 3.4 percent in 2006 and 2007 and 3 percent in 2008. The figure of 1.5 percent does not appear. I am looking at table 1.1 on page 15. 
Mr Prebble’s making up of figures is comparable to Dr Brash’s selective memory when quoting historical figures. Dr Brash keeps going on about how a gap has arisen between the fortunes of New Zealand and Australia in OECD per capita GDP figures. He has talked about the gap and last year—and I have mentioned this before—around the time of the Budget he said: “The rate of growth was too slow to narrow the large gap in living standards between New Zealand and Australia that emerged during the 1970s and 1980s.” Those are his words not mine and I am quoting from an article that he authored in the  
Dominion Post 
. The reality is that Dr Brash misses out the 1990s which is pretty strange. When one is looking back from the year 2004 it is pretty strange to look at the 1970s and 1980s but to forget about the 1990s. The reason Dr Brash does that is that the statistics do not make out his case; they show the opposite of that. In the 1980s Australia was ranked 10thin the OECD’s per capita rankings and New Zealand was ranked at 18. At the end of that decade under the wise stewardship of Labour New Zealand had gone back one place and Australia had charged back six places. During the 1990s the decade of Dr Brash’s stewardship of the Reserve Bank and of the National Party’s stewardship of the Government Australia went forward four places while New Zealand went back one place. It is no wonder that Dr Brash ignores the 1990s. 
In the Labour Party we have a different philosophy from that of National and ACT. We think that issues of income distribution and economic efficiency cannot be separated. The National and ACT members do not care whether there is a great disparity between high-income earners and low-income earners. We do care about that. That is a matter of basic philosophy where we differ from National and ACT. We do not think that the economy performs as well when there are those great income disparities. We think that social cohesiveness and equality of opportunity are important to our overall economic prosperity and to our personal security. If we share income around we all prosper. If we concentrate income and wealth as National and ACT did in the 1990s and would do again the top 10 percent prospers but the economy as a whole suffers. That is why we focus on need not privilege and why the Budget will again do that this year. It will focus on need not privilege. What would National and ACT members on the Opposition side of the House do if they became the Government? They are saying they would have one standard of citizenship but we all know that they really mean tax cuts for the rich. 
In contrast with National and ACT Labour believes in policy that is based on needs not privilege. If we look at what is signalled in this Budget Policy Statement we can see we are seeing that through because of the increased support that is signalled this year for the likes of family support. We will actually be giving an effective tax break to low to middle income families. That is where a responsible Government should apply the Budget surplus and that is where it will be applied because we focus on needs not on privilege and tax cuts for the rich. 
I will deal with another issue that Pansy Wong has just referred to and that is the concern about compliance costs. Compliance costs have been a thorny old issue that National members have rattled on about for the last 2 or 3 years. But again on that issue they have been shown to overplay their hand. Survey after survey by international bodies that are independent of New Zealand and recognised for their rigour all say that New Zealand runs a very unregulated low - compliance cost economy. The latest survey out this week is the World Bank survey. It is a survey of 130 countries—not one or two. Now where does New Zealand rank in compliance costs in those 130 countries? 
Judith Collins 
: That’s historical. 
DAVID PARKER 
: Oh that is historical I hear. Well we are not getting any assistance from the Opposition benches now. Where were we ranked? No. 1. We had the lowest compliance costs of those 130 countries. Was that a one-off freak event? No it was not. The  
Wall Street Journal  
recently commissioned a similar study. What was the answer in that study? Again New Zealand was right up there at the top with one of the lowest levels of regulation and compliance costs. One would think members on the Opposition side of the House would celebrate that. No they do not; they try to deny reality. Just as they try to ignore the reality of the 1990s when under their stewardship the gap arose between Australia’s and New Zealand’s well-being and wealth they now try to say that those international surveys are rubbish. 
The electorate is on to National and ACT. How do I know that? I had a letter given to me recently by a concerned constituent. National had written to the person to beg for money as usual. The letter states that National has plans to tackle areas like reducing the gap in living standards between New Zealand and Australia. The constituent sent that letter to me because that person was aware of how misleading that statement was. That gap arose under National because of National’s policies and we will fix it. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Just before I call the next member I tell members I have been advised that the next speech is to be shared fifty-fifty. There will be 5 minutes for National and 5 minutes for New Zealand First. I will ring the bell at 4 minutes. 
JUDITH COLLINS (National—Clevedon) 
: 
 That was a most amusing speech from the soon-to-be former MP for Otago because once Katherine Rich goes in there he will be out. 
This year’s Budget will be known as the vote-buying Budget. Labour is in a desperate situation. Its caucus is in disarray. Its Ministers are talking about joining other parties. It has to look to its old foe Winston Peters to try to help it out in question time against the National Party—and he is always happy to help out. Its race-based rhetoric is being thrown to the winds its Ministers have contorted themselves inside and out through U-turn after U-turn—and having listened through Mr Parker’s speech boy we can see U-turn following U-turn. 
What is the Prime Minister doing? What is she going to do for ordinary New Zealanders in this Budget? This Government’s Prime Minister is going to try to show that not only are she and her Government gay-friendly but now they are traditional family - friendly as well. Not only is she atheist-friendly but now her Labour-voting bishops in the Anglican and Catholic churches are rushing to show she is also God-fearing - friendly as well. My goodness she is friendly! She is rushing to appease the anti-immigration vote and enlisting New Zealand First to help out—and bringing in their ridiculous new policies—and at the same time she is rushing to appease the migrant vote particularly the migrant women’s vote. 
How has this self-proclaimed popular and competent Prime Minister tried to achieve that? I will tell members. She employed in her electorate office a person whose job is described by the Labour Party as an ethnic coordinator. 
Hon Brian Donnelly 
: A what? 
JUDITH COLLINS 
: An ethnic coordinator. I thought New Zealand First would like to hear that. That is the same electorate office that supposedly sent the— 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. While there is a tradition that these debates are relatively wide ranging it is quite clear that many of the matters recently raised by the member have absolutely no bearing on the Budget Policy Statement at all. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: That is a debatable matter but I would ask the member to come to the point. 
JUDITH COLLINS 
: Speaking to the point of order I just mention that this point is about the Budget and of course about the use of Parliamentary Service taxpayers’ money in the Budget. 
That is the same electorate office that supposedly sent the “guinea-pig” letter—not once not twice but three times to the parliamentary office of Lianne Dalziel. 
The ethnic coordinator is Farida Sultana. She worked in Helen Clark’s electorate office signing up migrant women to the Labour Party. It is alleged she was setting up a migrant women’s Labour Party branch at the same time as running the Shakti migrant women’s centre and merging the two. I want to know whether that sort of behaviour will be acceptable under this Budget. Has this woman working in Helen Clark’s office been setting up a migrant women’s branch of the Labour Party and has she been paid by the taxpayer through the Parliamentary Service? This House is entitled to know. Ms Sultana has told the media they can check with the Parliamentary Service but of course the service has refused to answer the media because of privacy issues. 
It is because of Helen Clark’s own knowledge of her staff member’s purpose that she has done her very best to keep her friend Ms Sultana out of the limelight. This is the same Ms Sultana who has now come out and said that her group was the conduit for the “guinea-pig” letter—that it is her organisation with its access to the Mangere Refugee Resettlement Centre that somehow got the letter. But Ms Sultana would have us believe that not only did she pass the letter to Helen Clark’s electorate office but that somehow she got it from the girl’s lawyer. Now we are expected to believe that not only do pigs fly but guinea pigs do too. The lawyer never did have that letter. We know that. 
The plot gets murkier. Now we have not one not two but three of Helen Clark’s office staff involved and all the time the Prime Minister wants us to believe she did not know what they were doing. That is not one not two but three people employed by the Prime Minister’s electorate office—three of her closest friends—who are involved in this matter. Helen Clark is up to her eyeballs in it just as she was up to her eyeballs in this Government’s money-for-race schemes just as she was up to her eyeballs in the Prostitution Reform Bill and just as she is up to her eyeballs in plans to take taxpayers’ hard-earned money and spend it up in trying to keep this Labour Government in power. 
I seek leave of the House to table a copy of the Labour 2003 directory showing that Ms Sultana is a member of Helen Clark’s staff. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Is there any objection to that course of action— 
Hon Mark Burton 
: Could I please clarify something? I am seeking clarification as to whether that document has a list of phone numbers as well. 
JUDITH COLLINS 
: It does. 
Hon Mark Burton 
: Well I object to that. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I will put the question again. Is there any objection to that course of action being taken? There is objection. 
RODNEY HIDE (ACT) 
: 
 I raise a point of order Mr Speaker. There has become an unfortunate tendency for Ministers of this Government to address the Speaker while sitting in their chairs and engaging in conversations across the House. That is not the proper way to do it. We saw that behaviour from the Hon Trevor Mallard during question time today and we have just seen it from the Hon Mark Burton. The proper way to address the Chair is to stand and take a point of order—not to shout out a series of questions or give advice as we have just seen. I say that it brings the House into disrepute because we stand here with some respect for the Speaker’s Chair. You should make it quite plain to the Hon Mark Burton that if he wants to address the Speaker in the House he is to stand and take a point of order or else move across and speak to the Speaker not lounge around in his chair making comments. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The member has made his point. 
Hon MARK BURTON (Deputy Leader of the House) 
: 
 I raise a point of order Mr Speaker. I was seeking clarification before but it was quite inappropriate that I did not rise to my feet. I was working on some papers on my desk and I should have put them aside stood properly and sought to get your attention in the appropriate manner. I apologise to you. You did not raise it with me as is your right rather than the right of another member from the floor but I happily apologise to you and indeed to the House for not showing proper respect. 
Hon BRIAN DONNELLY (NZ First) 
: 
 In speaking to the Budget Policy Statement I want to make the point that Governments have a responsibility to ensure that the taxes extracted from its citizens are used wisely efficiently and effectively. New Zealanders do not so much mind being taxed but they hate to see their taxes wasted and going down the gurgler for no good purpose. That is what New Zealanders hate. Therefore it is the ultimate irony that the Associate Minister of Revenue Trevor Mallard has joint responsibility with Michael Cullen to ensure there is no wastage in Government expenditure. It is Trevor Mallard who in his other portfolio as Minister of Education has squandered literally hundreds of millions of taxpayers’ dollars through sheer mismanagement. 
Let us just take industrial relations. In 1997 and 1998 the National - New Zealand First team had long drawn-out negotiations—reasonably bitter—with the Post Primary Teachers Association and the New Zealand Educational Institute yet not one day’s learning was lost through strike action relating to those negotiations. I have to ask this House: how many days were lost when Trevor Mallard negotiated with a Labour-leaning Post Primary Teachers Association? 
But here is the rub. The situation was handled so badly that when those teachers went on strike many of them still got paid. I kid you not! The Minister now has to bring special legislation forward to ensure that this will not happen again this year. 
But what was the result? The Government ended up by paying secondary teachers a whole lot more than they were claiming in the first place and far far more than they were prepared to settle for. It reminds one of the ASB Goldstein advertisement where he ends up paying more than the sales girl was asking and still claiming: “I’m the man.” Members should watch that advertisement and think: “Trevor Mallard”. Over the years that fiasco will cost taxpayers hundreds of millions of dollars and we have ended up with an industrial mess over qualifications of monumental proportions. It is so bad that the Minister anticipates industrial action from both primary and secondary teachers in the salary rounds that take place this year—hence the rush for the legislation. 
What about his handling of the school network reviews? In order to curry favour with the unions before the 1999 elections he offered gold-plated staffing schedules for small primary schools. In doing so he clearly put them in the sights of Treasury because of their disproportionate per-pupil costs—hence the mad rush to close down as many schools as possible in the earliest possible time frame. 
But Trevor Mallard does not do anything by halves. If he is going to stuff up then he will stuff up big time. Not content to look at areas where there were smaller schools with unsustainable rolls Trevor Mallard decided to hit provincial towns and cities. He wanted to consult with parents eyeball-to-eyeball as I did in Oamaru in 1998. But when I came away from the anger that existed because parents felt predetermined decisions had been made that anger had been quelled. In Trevor Mallard’s case all he did was to stir things up wherever he went. Between 1996 and 1999 95 schools were shut. There was not one march on Parliament yet in these particular rounds we have already seen two marches on Parliament—one from south Taranaki and one from the Upper Hutt communities—on two separate occasions. 
Trevor Mallard bit off more than he could chew or the system could accommodate. It took some time for reality to sink in but finally he realised he was going too far too fast. I will give him credit for that. He announced he would back up a bit and slow the process down. That was the wise thing to do. Some fine-tuning of the current review decisions could have been made but then what did he do? He announced a moratorium. What happened to all his fine speeches about eradicating wastage? Suddenly wastage of taxpayers’ money became all right because of two unfavourable polls but worse he set up an expectation from schools that had been through the process that they had been given a stay of execution. After all the enormously expensive work through the network process what has he done? He has actually set the process backwards so that most of those schools now hope for a reversal. 
If his decisions were the right ones 2 weeks ago why are they not the right ones now? The Minister has got himself into a real mess but—and this is the unfortunate situation—like the secondary schools teacher situation he will spend whatever is necessary to extricate himself from that mess. 
Hon MARK GOSCHE (Labour—Maungakiekie) 
: 
 I want to do something unusual in this debate and actually talk about the Budget Policy Statement and the report from the select committee of which I am a member. I would like people who bothered to read it to look at page 7 headed “Corporate Taxation”. The committee sought some information which I will table at the end of this speech about the level of subsidy that Government makes to business by way of wage subsidy—and I use that term loosely because in many respects it is a subsidy to low and medium-income earners. Seven hundred and sixty three million dollars of subsidy has been identified by Treasury as the amount of money that Government spent in the year 2002-03. 
Jill Pettis 
: How many million? 
Hon MARK GOSCHE 
: Seven hundred and sixty three million dollars. That is a large amount of money and it is important that businesses in New Zealand know it is of enormous direct benefit to them. Seven hundred and sixty three million dollars is spent on programmes such as family support which cost $330 million in that financial year; a child tax credit of $143 million; paid parental leave costs which at that point were $56.5 million; a family tax credit of $15.6 million and parental-tax credits of $11.7 million. 
That is a total of $557 million administered by the Inland Revenue Department for low-income earners who work for New Zealand businesses. New Zealand businesses therefore are not met with the challenge of paying a wage that meets the costs of living for a substantial number of New Zealand workers. So when we get submissions from employer peak bodies—religiously each time and identical—they do not go back and consult their members as they demand when employment relations law is beforeParliament. They trot them off the word processor and say: “We must have tax cuts and we must have less Government spending.” 
But in that debate do we ever hear from those employer peak organisations—and I am deliberately talking about them and not the average hard-working New Zealand business person—about what the Government spends in subsidising the wages of New Zealand workers? No we never hear that from those business commentators—people who do not employ anybody but work for employer organisations. It is time we did. It is time those people were challenged when they just turn up to a select committee and chant the mantra: “Tax cuts and lower Government spending.” 
Another $205 million is administered by Work and Income by way of direct wage subsidies and that is a good thing. I have been meeting small-business people in my electorate who tell me they are very pleased with the people they have employed in the past using those wage subsidies—people who have gone on to perform magnificently in their businesses and are key and crucial members of their staff. Those people might never have got those jobs if it were not for the initial wage subsidy. 
An accommodation supplement is also paid to wage earners who cannot afford to pay the rent or the mortgage out of their wage packet. That tells us there is an enormous level of subsidy and I am not complaining about it. It is very necessary and it is of major assistance to New Zealand business so I celebrate it. I very much enjoyed the opportunity to have a little discussion in the select committee about that very important issue. 
I repeat again—$763 million in the financial year 2002-03. In the Budget Policy Statement the Minister of Finance and this Government have signalled that we can expect that figure to be even larger once this Budget is put through later this year. I challenge some of those business leaders to get up and say whether that is the Government spending they want cut and will they meet the real cost for those workers to live in New Zealand pay the rent and bring up their children? I think not. I do not think we will see the Business Roundtable Business New Zealand and that strange organisation in Auckland called the Employers and Manufacturers Association demanding that we cut those wage subsidies that taxpayers pay. 
But we need to hear the view of ordinary business. I know from my discussions that ordinary business greatly appreciates the fact that it can get assistance with childcare for their employees for people with a disability who require some assistance to get into a job. Ordinary business people greatly appreciate that an employer can turn to the Government for that sort of assistance. They know there is an awful lot more money being spent by Government than the $763 million I have just isolated here. If we look into the area of industry development promotion of New Zealand business overseas tourism training and the Modern Apprenticeships scheme we will see that all of those things are of major and direct benefit to New Zealand business. It is time we started to look at that and say: “Is it a good thing or a bad thing?”. 
I have not heard a single Opposition speaker talk about those issues. They are all into the scurrilous nonsense we heard from the likes of Judith Collins. If Don Brash is the anaesthetist then she is in training to be the mortician but she has none of the warmth and kindliness of the morticians I have met. 
However I digress. I want to get back to this very business-friendly Government and its Budget Policy Statement and the things that are of direct benefit to business. I will say it again—the $763 million is of direct benefit to business and we are talking a couple of years ago compared to what it will be later this year. 
We have to face up to some of the submitters and as a country be able to say that it is not right that it is not good enough for New Zealand workers to be paid a wage that would keep them in poverty; that it is not good enough that we have businesses that actually rely on the taxpayer to prop up the wages they pay. Somewhere down the track we will have to face up to that reality because the taxpayer is paying three-quarters of a billion dollars in direct wage subsidy. I guess that if one did the figures—and we hear a lot about getting the corporate tax rate down from 33c to 30c—that is probably $763 million more than businesses would get from that reduction in tax. 
Let us have that debate with the Opposition parties and see which way they go. But no Opposition members have had their chance in the last 2 hours to debate economic policy and what they believe in. We heard from the very renowned assistant spokesperson on finance Mr Key whom I have a lot of respect for because he is somebody who knows about business. But we heard nothing about National Party policy. Has it got any? No not on that stuff not on business and not on the economy. A bit of slagging-off goes on but did we hear one piece of policy from the National Party? I did not hear any. 
John Key 
: It’s your Budget. 
Hon MARK GOSCHE 
: That is absolutely correct but when a party is in Opposition it is paid by the taxpayer to come up with alternatives. That lot over there have no alternatives. They would have trouble criticising some of this policy—like the child tax credit. Did not the National Party have something to do with the introduction of that? Will it continue with it? 
Pansy Wong spoke about the terrible thing of allowing workers 4 weeks’ holiday. Would the National Party take that off workers? Mr Key says yes—National will take away the fourth week of annual holiday when it gets into power. It will do it in the first week probably. When it last had a chance back in 1990 it took away pay equity in the first week. National will not be giving people 11 weeks to submit on an industrial relations amendment bill. It did not do that with the Employment Contracts Act. It slammed that legislation through so fast that people were barely able to blink let alone make a decent submission on it. National has a very short memory when it comes to those sorts of things. 
I remind members in this debate that there is a very good report from the committee dealing with some important issues. Those submitters who want tax cuts and lower Government spending had better tell New Zealanders what that means in reality. It is like the National Party saying it is terrible that the Government is putting money aside for superannuation but will it tell elderly New Zealanders that it will put the age up to 70 and cut the level of superannuation? It will not so how will Dr Brash fund it when he cuts tax? Will he raise the age of eligibility or will he cut the level? We do not hear any of that from the National Party because it wants to pretend that that is not its policy but we know it is. 
As Mr Mark pointed out National will privatise anything and everything that has not already been privatised. The National Party is devoid of policy on the economy and does not want to debate. It sloganises and carries on but the reality is that this Government puts an awful lot of cash into the hands of business. It does that in many many ways and I congratulate it on doing so. It is a good way to relieve pressure on business but it also makes sure that New Zealanders can have a decent standard of living. 
I seek leave to table a letter from Dr Michael Cullen Minister of Finance dated 27 February to the Finance and Expenditure Committee outlining the figures I spoke about in my speech during the debate. 
Document by leave laid on the Table of the House. 
Motion agreed to. 
Status of Redundancy Payments Bill 
Instruction to Committee 
MARK PECK (Labour—Invercargill) 
: 
 I move  
That it be an instruction to the Committee of the whole House on the Status of Redundancy Payments Bill that it take the bill part by part 
. 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 71 
New Zealand Labour 52; Green Party 9; United Future 8; Progressive 2. 
Noes 47 
New Zealand National 25; New Zealand First 13; ACT New Zealand 8; Independent: Awatere Huata. 
Motion agreed to. 
In Committee 
Part 1 Amendments to Companies Act 1993 
MARK PECK (Labour—Invercargill) 
: 
 I want to go through Part 1 quickly but take the opportunity at this stage to thank my colleague Rick Barker the author of the original bill for the work he did in the initial stages on putting this legislation together. I am sure he will be as delighted as I am that we have reached the Committee stage in the House where we can scrutinise the provisions recommended unanimously by the select committee which we are seeking to progress today. 
I also take the opportunity to thank New Zealand First for the support it has given to this bill. In particular I acknowledge the contribution of Peter Brown to the debate. Peter Brown is a well-known employer in the shipping industry in New Zealand and he certainly does not deal lightly with industrial relations matters. He is a man for whom I have considerable respect and I certainly want to pass on my thanks to him for the very careful way he has worked through the issues in this bill. 
Part 1 deals with the changes to the Companies Act that are required and with some definitions in terms of the meaning of “director” and amends the seventh schedule of the Companies Act to bring about the changes that are necessary. When one goes through the changes that are being looked at in this particular bill one sees it is about raising the cap on redundancy payments that can be claimed in the case of an insolvency from $6000 to $15000. If one goes further one finds that the amendments to the seventh schedule are about ensuring that that particular sum of money keeps pace with inflation. 
Employees face this particular problem where a company goes belly up—that is employees who have negotiated a redundancy settlement. I do make that particular point clear to the Committee now. We are dealing with a situation where employees have bargained to have a redundancy provision within a contract of employment. In the process of doing so they have probably traded away other things. In other words there has been consideration along the way that redundancy provisions will be included in an employment contract in exchange for other things. Often there can be a lesser wage increase as a result of that. 
By and large one is talking about large industries that have the capacity to be sunset industries. The freezing industry is a classic case in point. This bill picks up on the collapse of the Weddel freezing works in particular but this matter was an issue in my own electorate with the reorganisation of the Alliance freezing works back in the 1980s the move of Southland Frozen Meat to PPCS and ultimately the Alliance and the reduction of the number of chains necessary the change in work methods and things of that ilk. So we are talking about industries where redundancy deals have been negotiated. This bill seeks to ensure that the sums negotiated do not lose their value over time through inflation. 
I do not want to say much more about Part 1 other than that but again I say to the Committee that these particular changes bring this part of the law up to date and recognise the amount of money that people need at a time like that as they try to put their lives back together. It is a sad thing that when a company goes belly up and there are problems with the payment of compensation workers get badly hurt in the process. This bill recognises that and ensures they are entitled to claim a rate of money over and above $6000 which was the previous maximum. 
It is about time the House addressed this particular matter. I know that the Government is doing further work on insolvency law and will send a bill to the House at some time in the future. I am looking forward as the chair of the Commerce Committee to receiving some of that work so that our committee can get on with it. 
I think Part 1 deals with those particular matters quite well and I thank the members who contributed to that during the debate in the select committee. 
The CHAIRPERSON (Ann Hartley) 
: I call Paul Adams. 
RODNEY HIDE (ACT) 
: 
 I raise a point of order Madam Chairperson. I would like you to explain your rationale for allocating the call. 
The CHAIRPERSON (Ann Hartley) 
: Mr Adams was the first member to stand up. That is what it was. 
Hon ROGER SOWRY (National) 
:  
I raise a point of order Madam Chairperson. For the Chair to ascertain who stood up first requires her to move her head around and look. I was standing here while the member was still speaking and I called and you just did not look. 
The CHAIRPERSON (Ann Hartley) 
: Mr Sowry I did not hear you call and I apologise for that but I have called Mr Adams. 
PAUL ADAMS (United Future) 
: 
 As an ex - racing driver I am always very quick off the mark. Madam Chairperson you are correct; I was the first one on my feet. 
United Future will not be supporting the Status of Redundancy Payments Bill. The report from the Commerce Committee is of considerable concern to me. It states: “We considered the issues raised and on reflection felt that the financial dependence of employees on their employer is greater than that of other creditors who are likely to have many sources of income.” I was very concerned when I read that passage written by members of the Commerce Committee. I believe that the statement that creditors are “likely”—that is a key word—“to have many sources of income” is a ridiculous statement to have come from the Commerce Committee and committee members should be ashamed to have made it. 
Let us talk about that issue. What is a redundant worker? A redundant worker is one who is deprived of his or her job because it is no longer necessary. In contrast a creditor is a commercial enterprise or a person to whom money is owed. 
Brian Connell 
: Are you opposing the bill? 
PAUL ADAMS 
: Yes we are. Will employees be paid for all the work they have done up to the point of redundancy? Yes they will. Will those employees have many other sources that they are likely to be able to apply to for work and then again to receive payment from for work that is done? 
Hon Richard Prebble 
: Including welfare. 
PAUL ADAMS 
: Yes the member is correct—including welfare. But what about a poor old sole trader who becomes the creditor of a failed company? I agree with Mark Peck that nobody likes to see a company fail. But here we have sole traders—in other words people who have chosen to work for themselves and take the risk of undertaking work for a company. Just as a worker expects to be paid for work that is done a sole trader also expects when he or she quotes for a contract to be paid for the work that is done. 
Hon Richard Prebble 
: And is the bank sympathetic? 
PAUL ADAMS 
: No the banks are not sympathetic. Will sole traders be paid for the work they have done when this legislation is passed? No they will not. In most cases a small sole trader will not have many sources of other income—absolutely not! What is worse is that the sole trader will possibly be so financially crippled that he or she will be unable to continue working as a sole trader and may in fact face financial disaster. 
I ask the sponsor of this bill Mark Peck where his mercy and compassion is—I hear about that so often from this Government—for those people. Any leader must maintain a good balance between two things: truth and mercy. Both of those factors are totally missing from this legislation. The qualities of being true genuine actual or factual are important—not wondering what one can say that people may perceive as being true. Mercy is the compassionate treatment of a person who is in our care. I believe that this legislation discriminates between a wage earner and a contractor. Both the employee and the sole trader are human beings with families to feed and both want to work for a living. Discrimination is the unfair treatment of a person based on prejudice. 
I have seen it time and time again that in the Government’s eyes there are two groups of people in this country. It is discriminating against one of the groups and I believe that must stop. Both groups are made up of New Zealanders who are trying to earn a living and trying to feed their families but one group has made the big mistake in this Government’s eyes of deciding to go it alone and call themselves self-employed. This Government has a totally mistaken view of what being self-employed is all about. 
Hon ROGER SOWRY (National) 
:  
There is nothing like having a new president of a political party and polling at 1 percent to get that party suddenly to decide that it is on the wrong side of the fence. I am sure that a speech like Mr Adams’ will not go unnoticed as that member tries to find his new place on the list that he is sliding down at the moment. 
Paul Adams 
:I raise a point of order Madam Chairperson. I would like to point out that we have never said we are on one side of the fence or the other. We are in the centre. 
The CHAIRPERSON (Ann Hartley) 
: The point of order is not correct. It is a debatable point. 
Hon ROGER SOWRY 
: Exactly. That is the problem that United Future has. It has never been on one side of the fence or the other. It has voted with one side and talked the other way—but do not worry because the president is sorting it out. Mr Blumsky is going to fix it and that member will be fixed along with that problem so he will not have to worry about what side of the fence he is on in the future. He was on Inky Tulloch’s side of the fence so he is history. 
This is terrible legislation. This legislation does one thing: it says to small businesses that supply large businesses that their money takes a lower priority in the case of an insolvency than the redundancy agreements of the staff who are employed in the business. To put it quite simply when the freezing works goes broke the staff will get their redundancy which has been union negotiated before the contract electrician gets the money that he is owed. So the electrician goes belly-up but the staff will get their redundancy. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
Hon ROGER SOWRY 
: The Status of Redundancy Payments Bill puts payment of redundancies for workers who are working for a firm that goes bankrupt ahead of payments for other creditors. That means that the bill and this part which is part of the ordering process says to somebody who has provided goods and services to a business that is insolvent that not only will the staff who have lost their jobs in that business be paid the wages and holiday leave owing to them—and National has no problem with that—but they will be paid redundancy. National totally opposes that ordering because it will force many other small businesses to go under. 
I gave an example of this earlier in the debate where a business that I know of went into insolvency. Under this bill the staff would all get redundancy payments but all the people who had been providing services—the electricians and the people who had sent goods and were owed money—would get nothing. In many cases particularly where they are small firms and have a lot of money owed to them they will now get nothing their priority is reduced and they will go under. 
So employees will walk away with redundancy but a whole lot of other people lose their employment. That does not make economic sense. Businesses do not support this legislation at all and I do not know why this Labour Government is so hell-bent on making it as difficult as it can for business. Why is it? What is it that makes Labour politicians get up in the morning and decide: “We must do something more to put small businesses at risk. We must—” 
Hon Member 
: It’s about worker fairness. 
Hon ROGER SOWRY 
: The Labour member says it is about worker fairness. Well the Labour member does not understand that there is no job for the worker without people who put their money on the line and take the risk. For those sorts of businesses this bill will stop that. 
There are a couple of other points I will make about this later on in the debate. In fact I will make one of them now; as it was such a good point I could see my colleagues were very keen to hear me out on this. The other point I want to make is that this bill like all these Labour Government bills that are anti-business will change the way businesses behave. For example if a supplier is supplying a company that it knows or hears from the rumour mill is going through a bit of a bad patch the supplier will say: “I will come and service your machine but it is cash up front otherwise I will not do it. Because if I front up and fix the machine and then you go belly-up your workers will all be paid redundancy and I will not get anything and I will go belly-up.” 
Winnie Laban thinks that is a good idea and laughs about it. She thinks it is very very funny. In her electorate there is a business that went through this process: Hills Hats. She might not know that or have been there but it went through this process. If this law had been in place that business would not be there now. It went through the insolvency and came out the other end because the creditors managed their way through it. I say to Ms Laban that this bill would have put them under. Is she aware of that? Yes she is. She is aware of that and happy to see it go ahead and vote for it—and happy to sit there and laugh about it—even though in her constituency she knows this bill would have put the business under. 
It is the same with large firms such as Lakeview Farms freezing works in Dannevirke in the member for Wairarapa’s electorate. What would this bill have done to it? Has she talked to the Everton family about it? No she has not. Has she talked to the managers of Lakeview about it? 
Georgina Beyer 
: Have they talked to me? 
Hon ROGER SOWRY 
: Oh they have not come to her. She says they have not talked to her so that is fine. She will ignore it. What do members think about this? She is part of the Maori caucus. Has she talked to the new Maori owners of Lakeview in Levin? 
Georgina Beyer 
: No I haven’t. 
Hon ROGER SOWRY 
: No she has not talked to them. I want to say to her that if she had— 
Georgina Beyer 
: Why would I? 
Hon ROGER SOWRY 
: Because if this bill had been in place Georgina Beyer would know that Lakeview in Dannevirke would not have got through its difficulties a couple of years ago. Is she aware of that? 
Georgina Beyer 
: I am. 
Hon ROGER SOWRY 
: She is aware of it. So she is aware that if the bill had been in place then that business would not have got through its difficulties. So why is she voting for it? 
Georgina Beyer 
: Because I support the bill. 
Hon ROGER SOWRY 
: Oh she is voting for it because she supports the bill. Georgina Beyer has not talked to the owners or the managers even though it is in her electorate. She has not talked to them about the bill at all. She knows and admits in the House that if the bill had been passed the firm would not have got through its difficulties but she will vote for the bill because she supports it. Well that is fantastic logic. That is the arrogance that this Government faces. If one is Georgina Beyer MP one does not have to get down off one’s high horse and talk to some manager in Dannevirke or some owner of a freezing works that is providing a whole lot of jobs. She says that they should come to her. This is the regal approach to politics. That is the arrogance that has this Labour Government in so much trouble. She is not listening caring or worrying but doing what Helen Clark has told her to do. She says: “I support the bill so I am voting for it. I do not care about the consequences.” I want to say to those Labour members that when the next firm is insolvent—and there will be one—and it pays out its redundancy to its workers Labour members will be responsible for other firms going broke. 
Hon RICHARD PREBBLE (Leader—ACT) 
: 
 I rise to speak to the Committee stage of the Status of Redundancy Payments Bill which is a member’s bill in the name of Mr Peck who is a Labour member of Parliament. May I first say to the Committee that I think that this is an abuse of member’s day because it appears that what we are actually having is a Government bill put through on a member’s day. The public and those who made submissions did not expect such a silly bill to go through and if they had known that this was happening I think they would have lobbied more strongly. 
The second thing I want to say to members opposite is that we are dealing with a situation of insolvency which means there is not enough money. So somebody will miss out and what we in Parliament are deciding is who will miss out. The argument appears to be a class argument. The people who are on wages are somehow more meritorious than those who have supplied goods. I am pinching this line from Mr John Key but he made a point to me that I think is a very good one. If one thinks about it creditors who are private contractors and people who have supplied goods have done the work. He pointed out to me that by definition redundancy is work that has not been done. One is being compensated for something that has not happened and may never happen. As was pointed out by Mr Adams—and he is absolutely right—under the present law workers are guaranteed the first bite of the apple which is $6000. For a person on the average wage that is a couple of months’ income. 
 People not only get that guaranteed ahead of creditors but also if all else fails and people are unable to find jobs Parliament offers them another safety-net—welfare. But if people are contractors or suppliers of goods they have already paid that money out so they are lost. Can they go along to Work and Income and say that their businesses have gone insolvent? As Mr Adams said try putting that argument to the bank and see how sympathetic it is! 
This bill is very unfair. But in addition it is out of date. Over a third of the population now earn income not from wages but from outputs. People are in the business themselves—as owner-operators of trucks for example. They are not in the wage and salary business but this Government is suddenly saying to them that it is going to treat them very harshly. I say to Mr Peck that if he had gone back and done some research and had had a look at the number of people who have gone bankrupt as the result of another bankruptcy he would have found very few wage and salary earners. He would have found many many small businesses—second only to the Inland Revenue Department. 
Mr Peck should have done that research but he did not. He could have done something else. He could have looked at the Government’s own research because it did a study the Insolvency Law Review which was put out by the civil service. That looked at whether we should alter the priority. The Government’s own civil servants told it not to make this change. I ask Mr Peck whether he bothered to go and talk to those civil servants. Did he bother to read the report? Did he bother to find out what research they had done? No. This bill is trying to save a member who is facing redundancy in Invercargill. Instead he ought to do something about schools being made redundant. That would do something for him. 
Hon Rick Barker 
: Watch out Richard! 
Hon RICHARD PREBBLE 
: There is Mr Barker calling out. What is the member’s interjection? 
Hon Rick Barker 
: I am just saying “Watch your back.”; Mr Hide is watching. 
Hon RICHARD PREBBLE 
: Mr Hide most certainly is looking after my back. He is also looking after the interests of the taxpayer. I ask Mr Barker what he will say to small businesses in Hastings that find that they will get no money from the next insolvency because he voted for this bill so that the workers can get the money. Let me make this clear to members. When one reads the bill carefully one sees that middle management—the people who made the business bankrupt and have the worst claim morally—can make a claim under this bill too. 
MARK PECK (Labour—Invercargill) 
: 
 I thank members who have contributed to the debate so far because they have raised a number of issues that set some clear delineated points between the parties. Again I thank Peter Brown for the work that New Zealand First has done in coming to its position on this bill and for supporting the bill tonight. 
I want to go through one or two of the arguments that have been put up. First of all there were the arguments from Mr Adams about sole traders and about the position of contractors and the conditions they face as and when difficulties arise. I say to the Committee that the Government has addressed that matter at least in part. There may be other work still to be done that I am not privy to but I do know that the Construction Contracts Act—which recently passed through the House and if I am not mistaken was opposed by the Opposition—dealt with the issue of what happens to subcontractors when a contract gets into trouble. Essentially that legislation attempted to deal with that particular issue upfront before it became an issue at the end of the day. In other words contractors would be able—[ 
Interruption 
]; if the member will let me finish—to be paid throughout the process and to get progress payments for the work they were doing. That was done in response to the very real and tragic circumstances many contractors have faced when they have taken on work as subcontractors on major sites. 
I want to come to the issue of sole traders and independent contractors. I remember when we debated the Employment Relations Bill there was huge debate on the other side of the House about including anything at all about independent contractors in the industrial relations legislation. One of the things about this legislation is that it does not attempt to address the issue of small businesses that are facing problems; it is unashamedly to do with employees. The current Government does support the principle of pari passu which Richard Prebble knows well. In other words it means that like creditors should be treated equally. In this case we are dealing with employees. We are dealing with workers who have the least ability to mitigate their losses in a situation like this. The legislation will apply only to those who as I said earlier tonight have negotiated redundancy agreements into their employment agreements—and in the process of doing so have probably given something away to get that consideration. 
I would hazard a guess that most people who work in mum and dad’s coffee bar or in a business with two or three employees do not have redundancy deals. If the business goes belly up they take their chances like everybody does at the Work and Income office and—hopefully—find a new job. But we are dealing with industries in which there is the possibility of sunrise and sunset. We have talked about the freezing industry. I am pleased to tell the Committee tonight that in my electorate people are talking about building a new freezing works. This bill will not put them off doing that. They will go ahead with it and so they should. 
I want to deal with the issue Roger Sowry brought up. In 10 minutes of debate the only issue he brought up was that of compliance costs. I just want to remind him that today it was revealed that the World Bank survey shows New Zealand to be one of the most favourable regimes in which business can operate. Indeed in spite of the rhetoric of the Opposition we have a very business-friendly regime and this legislation most certainly will not cause any employers to have sleepless nights. It is true to say that in the submission process we heard from the Business Roundtable and Business New Zealand which were opposed to the bill—surprise surprise—but what we did not hear was any grumbling at all from other businesses that may or may not be affected by the legislation. 
I finish on one point which was made by Peter Brown in one of his contributions the last time we debated this bill. If employers do not want a redundancy deal they should not enter into one. But if employers enter into one they should be prepared to pay because that is what it is about; it is about agreements between employees and their employers. That is what it is about. It is not about a Government saying what the obligations should be. 
This bill deals with the unhappy situation that occurs when a business finally goes under. Nobody wants to see that but neither does anybody want to see what happens to workers when they get thrown on the scrap heap. I know that Rick Barker and others on this side of the Chamber have had to deal with what happens to people when they lose their employment through no fault of their own and have to try to pay the mortgage and look after their families. In addition those workers face very long stand-downs. When I was involved with the Ocean Beach freezing works redundancy I had to deal with tradespeople who had stand-downs of 52 weeks before they could get any income. Had they not received a redundancy package along the way—which by the way they agreed to take in a couple of hits in order to assist the company to get out of its difficulties—they would not have been able to meet their commitments at all. 
Not one major business has come to see me to tell me not to go ahead with this bill. They understand the Peter Brown principle: if they are going to have a deal they are going to honour it. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I listened with interest to the member’s speech and I think he has very largely hit the nail on the head. I listened also to the members from the National Party and ACT. They made some valid points and I give them some credence but I would give them even more credence if they had had the strength of character—I will not say gumption—to record in the commentary of the Commerce Committee that they oppose this bill. There has been not a word of opposition to this bill from anybody. The commentary states: “We”—that is the whole select committee—“recommend that redundancy entitlements be included within the employee priority. We consider that such entitlements form part of a contractually negotiated package for employees which may have included trade-offs in relation to wages or salary.” It goes on to state: “We considered the issues raised and on reflection felt that the financial dependence of employees on their employer is greater than that of other creditors who are likely to have many sources of income. We also recommend the exclusion of company directors and controllers from the employee priority.” 
The select committee got it 100 percent right. This bill is about an employment contract in total having priority—not half of it not just wages and holiday pay but in total. Wages holiday pay and any redundancy agreement that is put in a contract will have the same priority. As Mark Peck just said—he echoed my thoughts from before—if the employer does not want to pay redundancy in such situations he or she should have the gumption not to put a redundancy provision in the contract. 
I have been an employer in a major industry and I know the feelings of working people when they are laid off. It is awful. I know that many workers in many industries are prepared to take a lower wage rise or have poorer conditions to ensure they have a redundancy package if things go bad. I heard Roger Sowry talk about creditors and I have some sympathy for creditors particularly those that are adversely affected by such circumstances. But they are in the minority. Many creditors have other ongoing business at the same time but the working people in a particular industry lose totally. Some people who have reached a rather mature age do not get any further. They have nothing. 
John Key 
: Are you supporting it? 
PETER BROWN 
: I say to Mr Key that yes I am supporting it. I will stand up for the working people of this country. If somebody from this side of the Chamber is not prepared to do that then I think that is pretty shameful. In this country working people work pretty damn hard. I come from a country that has suffered from the actions and inaction of people who wanted demarcation and I am absolutely proud to be part of a country where working people are prepared to put their backs in prepared to do things and prepared to look after the employers’ interests. 
I heard the Hon Richard Prebble say that Mr Hide is looking after the taxpayer. If he really wants to look after the taxpayer he will support this bill. When people get a redundancy payment they cannot go on the dole for quite some time—in some cases Mr Peck said for 52 weeks. There is a minimum time when people who have a redundancy package cannot get the dole. That saves taxpayers’ money. This bill helps the taxpayer. 
This bill is genuine and needs to be considered properly. I suggest that the select committee did that. There is no inkling in the commentary that there was any dissent at the select committee. The National Party in particular was well represented on the select committee; its deputy leader and the Hon Maurice Williamson were on it and neither of them is a slouch when it comes to having a say and expressing his concerns. The ACT party was represented by Rodney Hide— 
Hon Richard Prebble 
: He was looking after the taxpayer. 
PETER BROWN 
: He was looking after the taxpayer. Is the ACT party’s support split on this? I would like to think that perhaps someone in the ACT party is thinking a little bit further about the taxpayer and about the working people of this country. This bill delivers something that I think working people are entitled to. But I repeat: if employers do not want to pay out redundancy and are nervous about having a redundancy agreement then they should not put it in a contract. They have a choice. Employers believe it or not are not a pack of fools. They know what the industry is about. They know about tough negotiating. They are not bowled over by trade unionists or by anybody else who comes into the room—they do not keel over like a feather. I know that first hand because I was one of them. For many years I was a negotiator for waterfront employers. 
Hon RICK BARKER (Associate Minister for Social Development and Employment) 
: 
 Curiously I did the original draft of the Status of Redundancy Payments Bill. I say to Mr Prebble that the people of Tukituki—which was then the seat of Hastings—know full well about this bill. I told them some time ago that I would move this bill and I am really proud to see that my mate Mark Peck is bringing it to a conclusion—something that I could not do. The very reason that this bill exists is the closure of the Tomoana Freezing Works. The Tomoana Freezing Works is a very interesting example of an insolvency. I want to correct one thing that Mr Prebble has got very wrong. The workers at the Tomoana Freezing Works were offered a wage increase one year but they said that they did not want a wage increase and would prefer a redundancy agreement. They had some discussions with the boss and in the end forewent a wage increase in return for a redundancy agreement. They paid for their redundancy agreement year after year and they lost it because of a piece of Tory legislation written by the National Party for its mates. National wrote legislation to cut out the redundancy payment that workers could get so that creditors—the National Party’s mates: big business and big banks—could get more in an insolvency situation. 
It is a well-known fact in Hastings that the workers at the Tomoana Freezing Works lost thousands of dollars in wages holiday pay and all the rest that was owed to them. Yet the company that financed the freezing works Weddel received all its money. The banks received every cent owed to them; they lost not one cent. Mr Prebble will say that this bill is bad legislation because it would give money to workers and deny it to small legitimate business. The truth of the matter—and Mr Prebble knows this—is that the people who win the most in insolvency situations are the big banks. All the major trading banks in New Zealand were owed money by Weddel and all those banks received their money in full. The only people who did not receive their money were the workers. They were restricted because a piece of Tory legislation stated that they could be paid no more than $6000. I think that is terribly wrong and we will change it. 
I congratulate Mark Peck and the Commerce Committee on their excellent report which states that the maximum for preferential claims now will be $15000. I would have liked that figure to be higher than it is because if people are owed money by way of wages then they have made their contribution. They have cut the throats of all those sheep have dressed them have broken them down have put them through the freezers and the product has been sold. Someone has benefited from that. The people who have not benefited are the people who made it happen: the workers. In my view they are entitled to be paid for their labours. I think it is a shameful position for anybody in this Chamber to say that people who have done the work are not entitled to be paid their wages. I will argue against that anywhere. Mr Prebble is welcome to come to Hastings on any occasion and we will have a debate about it. I will get together the 1600 or 2000 workers who were at the Tomoana Freezing Works and Mr Prebble can get up and say to them that the banks deserved all the money they received and that the workers deserved nothing—and in fact that the $6000 the workers received was too much. That is his position. 
I say to Mr Prebble that the 2000 workers who were at the Tomoana Freezing Works do not believe that for one moment. He is trying to visit poverty upon people like them. He does not care about their lifestyle. I saw much poverty as a result of the closure of the Tomoana Freezing Works. What happened to people’s lives was shattering. Richard Prebble does not care about that as long as the banks have their money because the banks support the ACT party. As far as I am concerned the Labour Party is here for ordinary New Zealanders. We are here for everybody. We want to make sure that people get a fair deal and that is why we support this bill. 
I was really pleased that Peter Brown gave the speech that he did—I thought it was fantastic. It showed that he is concerned about ordinary New Zealanders and wants to make sure that their conditions are protected. This issue is not about the vested interest of the banks. If the National Party continues on that path then I say good luck to it. It will need the Status of Redundancy Payments Bill—and so will Mr Prebble with ACT at 1 percent in the polls and falling. Mr Prebble’s main supporter Rodney Hide told the Chamber people should vote for National because ACT does not need any more support—it is happy to go below 1 percent. I say to ACT that it will need the Status of Redundancy Payments Bill at some time in the future. Redundancy payments in this place are around 3 months’ pay—that is it; members cannot get any more. I say “good on you” to the ACT party and that it should keep to that line of argument. It shows that the ACT party is a narrow sectional-interest party. 
LINDSAY TISCH (National—Piako) 
: 
 Is it not extraordinary to hear a party that has no understanding—no comprehension at all—of what makes economies and communities work? That party thinks that money just grows on trees and is there for the picking. If we do not have the risk takers if we do not have the people who are prepared to take risks and invest their money we do not get the growth or the jobs that this Government wants to protect the whole time. I have no difficulty in telling somebody he or she is entitled to X number of dollars. That is because that person has put the effort in and should be rewarded for those efforts. But I object to that becoming a very one-sided issue. After the investment has been made if people are going to lose their shirts this Government says it will forget about those people their families and the staff they employ because it has to look after the vulnerable worker. 
We have just experienced probably the biggest flood disaster we have ever known in this country. I have just come from a meeting attended by growers from the Rangitikei and the Manawatu who will have absolutely no income at all this year. The potato crops have been lost and the pumpkin and squash crops are hanging on the fences—and I have seen them there. And this bill states to those people who have made the investment and got no income—and who are not likely to get any income next year either because it will probably take them 5 years to get back to square one and recover the position they would have had if the flood had not happened—that the Government is not worried about them but that the 2500 employees who work for them will be paid. On top of that if there is a redundancy agreement this bill states the employees are to receive redundancy payments. And then they can go down to Work and Income New Zealand and get a benefit. We say that is wrong. 
If we look at the downstream effect of that we see it will not only be on the growers—the farmers and the other producers. We may ask about the effect on the processors and transport operators. And what about the flow-on effect on a business that may well move into liquidation? We have not yet seen the worst of what will happen in those communities. We have seen the visible effects as we do when we have earthquakes and disasters like that—in this case floods—but we have not seen the downstream effects on the business people in those small communities. If they go bung—if they have to close the doors—and there is a redundancy agreement the employee does not miss out. The employee will get paid. The Inland Revenue Department will get its cop because that is the first charge that has to be paid. After that of course there is any redundancy agreement. 
On page 2 of the commentary on the bill the committee stated: “We consider the cap should be raised to $15000. We recognise that the removal of the cap may detrimentally affect other creditors”. That is exactly what will happen to the small operators. The 297000 small businesses out there will be carrying the can for a Government that does not appreciate or understand what makes this community work. We have all the compliance costs that Roger Sowry talked about and now we have this sort of legislation that states that the workers will benefit from or get something out of an insolvency while the creditors and the owners of the business carry the can. 
In earlier days I was involved with a mortgage discounting scheme. Members may remember it. Businesses got into deep trouble. I was in the Rural Bank in those days and we were giving farmers $40000 to walk off their farms and buy a house in town because their liabilities were greater than their assets. They had negative equity. Now what happened to the staff—to the people who had worked on those properties? Although they did not get anything at least they had a home to live in. But the farmer who had owned that land had put the investment in and had raised the money through a trading bank—or in this case through the Rural Bank which is why I was involved—lost everything. 
PAUL ADAMS (United Future) 
: 
 I must confess I was disappointed with Peter Brown and also Rick Barker on their definition of a worker in this nation. The whole thing seems to focus back that one is only a worker in this nation if one is on somebody’s payroll. Let me assure members that there are many workers in this nation who are not on payrolls who take the risks who go out and work for themselves. What I dislike about this entire legislation is that yes there are agreements for redundancy and all those things but it is basically paying somebody for work that is not done before it is paying somebody for work that is done. Mr Peck should not shake his head because that is quite correct about what is happening. 
The self-employed small-business people in this country face many challenges even with Accident Compensation Corporation benefits. Perhaps they have had a tough year. They are just establishing a small business yet if they are tired and injure themselves what is their income from that point based on? It is based on what they have earned in the previous year. If they have not earned anything as such in the previous year they are really starving. So they have many things. 
I do not want to get into a discussion on whether a person on a wage is better off than a self-employed person because it is not an issue about that. I employ staff I appreciate staff and they are the backbone of any company. They are the ones who make or break the business. So I am not getting into a debate about which is better and which is not. But let me give an illustration that may show members how the thinking changes. There is not a right or wrong on this but let us take a seed. Let us take a pine seed. A worker may see it just as a seed so he will eat it because he will see it as food. Yet the entrepreneurs in this country will see that same pine seed and they will decide not to eat it but to plant it because they see within the seed a pine tree—that can produce a pine forest that can produce a timber company that can employ people. So it goes on. This is where we need both types of people. 
We heard Mark Peck mention that the Credit Contracts Act was enacted to cover payments for these small workers. That was great but this bill now takes away all that advantage. For those workers who have come to the last part of their contract—let us go to the end so the member is happy and agrees with me—maybe on this invoice they have most of their materials which is what would happen with a lot of tradespeople and the firm goes turkey up. Right. So they have done the work and they have bought the materials. They have invested their money but this legislation is telling them they cannot get their money for what they have done unless redundancy has been paid out to workers who have already been paid for all the work they have done. This is to tide them over for a period unless they get work. As has very rightly been pointed out tonight the moment those workers are made redundant they are able to go down and register for the unemployment benefit. Therefore from that day on they get income coming into their families. 
What happens to the small contractor who also has a family and children to support? What happens to him? Firstly he is devastated emotionally because he is now in a situation where he is likely to face bankruptcy through absolutely no fault of his own through circumstances and situations that he had absolutely nothing to do with. We talk about agreements. We talk about a redundancy agreement that is an agreement between a worker and an employee for that which they expect in the future. 
If we are going to have that sort of agreement I ask Mr Peck about the agreement where a contractor quotes for a job puts in the tender has to be competitive and is fighting against many others. What about that agreement where the contractor is saying he will do the work and the client is to pay for it? There is no rationale in the argument that one agreement may stand because someone is on a payroll but that another agreement does not matter because the person is not on a payroll has taken a risk mortgaged the house and has taken on workers. 
BRIAN CONNELL (National—Rakaia) 
: 
 I note that the Act is to come into force 60 days after the date on which it receives the royal assent. I say to the Committee that business people in this country will think that that day is too soon. In fact I think they will agree that any day will be too soon. I want members of the Committee to be absolutely clear about this: this is a union-driven initiative and Mark Peck is just the errand boy. 
Mark Peck 
: I raise a point of order Madam Chairperson. The member knows it is totally out of order to suggest that any member is doing anything other than representing his or her own views in this Chamber and to suggest that anybody else is carrying the candle for any other organisation in this place is out of order. 
Hon Richard Prebble 
: It is incorrect to suggest that a member is being directed by outside people. But in respect of the idea that he is carrying a message I have seen people elected to this place saying they are coming here to deliver a message. That is not out of order and I am surprised the member is not willing to be put up as a supporter of the trade union movement. I did not object when Mr Barker claimed that the ACT party was representing bankers. It did not seem to me to be likely and I am not aware of that connection. If Mr Peck’s comment is out of order then I wonder why Mr Barker was not pulled up for his. 
Hon Rick Barker 
: Mr Prebble tries to cunningly confuse the issue. He talks about Mr Peck carrying a message. That was not the accusation made; the accusation referred to the term “errand boy”. That implies a contract of service a master-servant relationship—the person is carrying an errand on behalf of someone and is being directed by him or her. Therefore it is not about carrying a message; it is about acting under instructions. I have to say to you Madam Chair that an allegation of being under instructions and under the control and direction of someone in a master-servant relationship is totally out of order. 
Lindsay Tisch 
: Point of order— 
The CHAIRPERSON (Ann Hartley) 
: No I am going to rule on this— 
Lindsay Tisch 
: Point of order— 
Jill Pettis 
: It won’t be anything new. 
Lindsay Tisch 
: I am on my feet— 
The CHAIRPERSON (Ann Hartley) 
: No the member is not supposed to be on his feet. I have stood up and said I will rule on this. There will be silence while I am ruling. Mr Prebble is quite correct. The insinuation was not that the member was “under the direction” of someone or that he was being “directed” by someone. 
Lindsay Tisch 
: I raise a point of order Madam Chairperson. 
The CHAIRPERSON (Ann Hartley) 
: Is it a new point of order? I have ruled. 
Lindsay Tisch 
: It is a new point of order. I am not going to revisit what you have said. When I was standing—and I did seek a point of order before you stood up—Labour’s senior whip told me to sit down. I was asking for a point of order and she interjected. Points of order are to be taken in silence but the senior Government whip yelled out while I was standing and before you stood. I ask for your guidance and ruling on this matter. 
The CHAIRPERSON (Ann Hartley) 
: I take the point of order. I was on my feet so I had asked the member to sit down too. 
Hon Taito Phillip Field 
: I raise a point of order Madam Chairperson. As a member of this Committee I take offence at another member being referred to in a derogatory way as being an errand boy. 
The CHAIRPERSON (Ann Hartley) 
: 
I have ruled on this. I refer members to the rulings on page 47 of  
Speakers’ Rulings 
. I have ruled on the matter. 
BRIAN CONNELL 
: We have established that Mr Peck is an errand boy and when he took a call he dispelled any view at all that he knew something about business. He tried to defend the indefensible. He stood up and tried to say that workers were the only people in this country who were entitled to be secured creditors. The fantasy that Mr Brown tried to perpetrate in this Chamber was almost unbelievable. The theory that employers do not have to have a redundancy agreement is one thing but if they tried to run a business in this country without offering their workers such an agreement then all Mr Peck’s union buddies would come down on them like a tonne of bricks threatening to put them out of business. That is an absolute fantasy I say to Mr Brown and he should hang his head. That just does not hang together at all. 
In my opinion the Government has absolutely no right to get involved or to come between employer and employee negotiations or agreements. This legislation is the worst type of nanny State mentality I have encountered since I have been in Parliament. It demonstrates that this Government has a clear anti-business bias and has a view that employers and businesses have deep pockets they can continually trawl through for easy money and cheap votes regardless of whether they think it is right or wrong. 
The assumption is that all business is big business and has the capacity to pay regardless of its financial position. That is not the reality—[ 
Interruption 
] If that member would shut up for a moment she would also learn that that is not the reality. The reality is that businesses employing 10 employees or fewer make up 92.5 percent of all businesses in this country and those employing five employees or fewer make up 86 percent. To put it another way those businesses are not the large meatworks that are meant to be the inspiration for this type of nonsense. In reality those businesses are the small businesses the mums and dads—I say to Mr Brown—who have mortgaged their homes. They are the very people whom his party purports to stand up for and who have mortgaged their homes to take a risk to get into business. 
What will this Government do to them now? When things go bad what will it do to them? It will clobber them. That is going to win a lot of votes! Will those businesses be able to pay? Of course they will not. Mr Peck should think it through. There will be neither enough cash nor enough assets because they are small businesses. 
Let us use an example. A couple mortgage their house and raise $70000—and if I cannot get through this in the time I have left I will take another call and continue. They start in business and things go OK for a while. They employ five people. Suddenly things go awry. Their biggest customer who owes them a hundred grand does not pay and suddenly the squeeze goes on. To cut this sad story short they end up going belly up. It is a low-cost business and they have very few assets. The receivers move in and they find there is $35000 in the bank but this is owed to creditors—that is suppliers who are the very people Mr Sowry mentioned. They are the electricians and the plumbers who have done the work and are expecting payment unlike the employees who have not yet done the work. Let us think about what the definition of redundancy is. It is for loss of earnings; it is not for money that one has already earned. 
Hon Rick Barker 
: Rubbish! 
BRIAN CONNELL 
: That is what one gets paid for I say to Mr Barker. One goes to work and gets a fair day’s pay for a fair day’s work. 
DIANNE YATES (Labour—Hamilton East) 
: 
 I move  
That the question be now put 
. 
Hon RICHARD PREBBLE (Leader—ACT) 
: 
 I rise to make one further point in respect of the bill—a point that Mr Peck has not addressed. When one looks at the bill one discovers that the only employees who are excluded are those who are directors. So in many large companies—the freezing works are the examples that have been given—there would be senior managers who would be entitled to redundancy. I ask the Committee where the fairness is in that. I go even further than that— 
Mark Peck 
: What was the point? I missed the point. 
Hon RICHARD PREBBLE 
: The point is this: the only employees who are excluded are those who are directors or relatives of a director. So the management of a company can get redundancy. I say this to Mr Peck: yes there are examples where companies go broke when it is no one’s fault; there has been a change of economic circumstance. It might even be the example just given by Mr Connell where a major creditor fails to pay but I also have to say to him that in my experience of insolvency frequently it is the result of mismanagement—of managers making bad decisions. I say to Mr Brown from New Zealand First that I know about the case which he told us about of the stevedoring company. Yes what it did to them was wrong but I also know that the employees in that case actually did have an opportunity to renegotiate and they turned it down. 
What about the creditor? The creditor does not have such an opportunity. The creditor is told a company is a good company and has no way of knowing that it is actually going broke. The management may know it is going broke but the creditor does not and the creditor loses. I ask where the morality is in this. The very people responsible for the insolvency who may have been totally irresponsible are now going to get $15000 guaranteed to them and it will be money that is actually taken from small business. 
The only people excluded are directors. Well they are frequently nowhere to be seen. That is a piece of nonsense and when people get up and say: “The hard-working worker did a fair day’s work and worked hard. Why should he not be paid?” I say that sure there are many such people but there are also just as many cases where the management by their actions put the company under and nowthis Parliament is saying that those people should be rewarded. Where is the justice in that? I ask Mr Peck where the morality is in it. Where is the business sense in it? It is clearly wrong and the small business that supplied the goods and services was honest. It supplied the goods and services and it had no chance. But the management that put the company broke under this bill is going to be rewarded. Surely the House can see that that is just wrong. 
Hon RICK BARKER (Associate Minister for Social Development and Employment) 
: 
 This has been a very interesting debate. Firstly let me respond to one of the points made by Brian Connell. I have to say that I found his presentation very disappointing. To claim that people who are owed wages and owed holiday pay have not earned it is just ridiculous. 
Brian Connell 
: I raise a point of order Madam Chairperson. I never said that people who were owed wages or holiday pay were not entitled to that. That is misleading the Committee. 
The CHAIRPERSON (Ann Hartley) 
: That is not a point of order. It is a debatable point. 
Hon RICK BARKER 
: I want to repeat the point. I listened to what Mr Connell said and I am happy to get the  
Hansard 
 out. I want to make it clear that he made it very clear to this House that people who were owed money and would benefit from this bill had not earned it. That is what he was implying and I say to Brian Connell that that is simply not correct. These people have earned it. It is money that they are owed wages they have not been paid and holiday pay they have not been paid. They have earned it and if Brian Connell wants to stand in this Chamber and say that people who have unpaid wages and outstanding holiday pay have not earned it well I am happy to argue with him at any place about that. 
As to the point that was made by United Future as to why other people should not be paid and why these people the workers should get some money—which ties in really I guess with the point that Richard Prebble is making—the fact of the matter is that when a business goes bust it is unusual for it to have sufficient money to pay everybody. That is why we have a problem; not everybody can be paid. Richard Prebble’s argument is that the line for people who are owed wages and holiday pay should be moved back as far as it can contracted as far as it can so it leaves more money for other people. 
He makes a case for the small-business person who is a small contractor but I make the point to Richard Prebble that the vast majority of money that is taken out of those situations of redundancy is to the banks. I am not particularly down on banks but I want to give him just two examples. The first one I have spoken about is Tomoana Freezing Works. The banks got every cent they were due. I have got 2000 people in my constituency who are owed money. 
Mark Peck 
: Thirty-five million. 
Hon RICK BARKER 
: They are owed $35 million. That is what was owed to the people of Hastings in the area of my electorate and the banks nearly all overseas-owned got the lot. Richard Prebble says that is a bad thing. It is bad luck for the people of Hastings good luck for the banks and he supports that. He does not want to see any redress. Well I say to Richard Prebble that I am on the side of my constituents. I want my constituents in any future redundancy to get their money. 
Hon Richard Prebble 
: What did the banks do wrong? 
Hon RICK BARKER 
: The banks knew exactly what was going on in the case of Weddel Tomoana. They had a person in that head office every day. They knew all its accounts. They could have put that company under any time they wished and they did not. They decided they could not. Instead of putting any company down which they could have—AFFCO or otherwise—they in fact decided to down Weddel and my constituents lost $35 million. 
So what we are deciding here is where the balance lies. ACT wants to cut the workers back more and more. The National Party wants to cut the workers back more and more. That is their traditional ground—beating up on unions and beating up on working people. They realise; they think there are no votes for them in this but they do not care. All they are interested in is big business. They see that if the line has shifted from $6000 to $15000 in the small pool of money that is outstanding then the workers are going to get some more and some of the banks are going to get less. 
Well I have to say to them that is just tough. We are entitled to draw the line and the proposal to this House is to make it $15000 rather than $6000. As for what Paul Adams is saying about the other small-business people well there is a difference here Paul. These people have a contract. The contract says that in the event that they are laid off— 
Brian Connell 
: I raise a point of order Madam Chairperson. I understand that it is a convention in this Chamber that members are referred to by their correct names. 
The CHAIRPERSON (Ann Hartley) 
: That is quite correct. The member will refer to members by their correct names. 
Hon RICK BARKER 
: Yes; I am sorry. The member did not take offence but I accept the chastising from the Chair. The point I want to make is that there is a contract here. The contract says—and I give the member the example—that the workers at Tomoana Freezing Works went without a wage increase in return for redundancy agreement. 
What that member is effectively saying is that there should be no sanctity of the contract. There is a contractual agreement. Other people who enter into business arrangements with them might have a different contract of agreement. They might be unsecured. 
Paul Adams 
: What about the creditor’s contract? 
Hon RICK BARKER 
:Well if that is what they have done their business on—being unsecured—that is the way they have conducted the business. But in terms of the workers they have decided to negotiate an agreement that has a redundancy clause and I would have thought that United Future would argue in favour of the sanctity of the contract and said that where a contract exists it should be honoured. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I want to take up a few of the points raised by various members. First of all I would like to correct any impression I gave to Paul Adams that only employees are working people. I accept the point he made. I know that self-employed people are working people and that they work very hard and I hope the member takes my correction. 
I would like to talk about the people affected by the flood which was an issue that Lindsay Tisch raised. If I heard him correctly he is saying that employees of a small business in one of the flood-stricken towns will have lower priority than a contractor who lives miles away and is not affected by the flood. The flood victim is going to lose his or her job yet Mr Tisch says that any payments made should go to the contractor who might live in safe surroundings quite some miles away. I find that to be an unusual argument to say the least. 
Mr Connell raised the point that all employers are subjected to heavy-handed tactics by union officials. He seemed to imply that. I think that from memory only about 20 percent or thereabouts of working people in this country are in a union. The vast majority of people who work for small businesses are not unionised and in all probability they do not have a redundancy clause in their employment agreements. So I do not know how he comes to the conclusion that small businesses will be highly saddled with union officials coming in and demanding this and demanding that when in fact no such clause will exist in most of the agreements. Nobody will come in after the event and say that the business should have had this and because it should have had it it has to have it and has to pay out accordingly. I find the argument a little bit unusual to say the least. 
In terms of the larger employers who do have a unionised workforce to suggest that the employers are weak-kneed or they cannot look after their own interests is rather insulting. I can only tell Mr Connell that if they are that bad I had better get in amongst them because there is still some steel in my spine. I had better get back there pretty damn fast because if employers cannot front up— 
John Key 
: Intimidated! 
PETER BROWN 
: Intimidated? I can recall employers who were so tough that they would make the lot of us here look like a bunch of juveniles. Do not go away with the impression that employers in this country are easy meat for anybody! They are hard-working but they are also hard-nosed. So members should not think that union officials walk into the room and these guys fall over and say: “What do you want? Where do we sign?”. It is a long way from that I can assure members. As I say for many years I was an employer in the association of waterfront employers and we had some right stoushes I can tell members. I do not think the unions got terribly much that they did not have to work damn hard for. Equally we employers achieved some quite workable agreements as a result of those stoushes. It is two-way traffic and a two-way dialogue. It is very demanding at the time but at the end of the day virtually all agreements are like that; there might be a bit of rough and tumble in getting there but they are agreements. I have yet to meet an employer who has had a gun put to his or her head literally or had his or her arm squeezed up his or her back or anything like that and signed an agreement. 
Hon Richard Prebble 
: I have. 
PETER BROWN 
: Oh the member has? 
Hon Richard Prebble 
: Most certainly and on the waterfront too. 
PETER BROWN 
: Well I tell that member that the waterfront unionists used various tactics but I have never seen them go to the extent of the physical action of putting people’s arms up their back or whatever. I tell Mr Prebble that some of the employers in the days that he is talking about were what I call phoney employers. They did not actually employ the labour; they represented the shipowner who put the ship through the port and they bowed to pressure that they should not have bowed to. But since port reform where I had a positive role things have changed quite dramatically. 
Hon Richard Prebble 
: I had a minor one. 
PETER BROWN 
: Mr Prebble did have a minor one. In fact I remember advising people on what they should say to him when he was the Minister. I was quite pleasantly surprised when they came back with the right answers. 
Hon TAITO PHILLIP FIELD (Minister of State) 
: 
 I am going to make a contribution because I have been listening to this debate and from the sound of in particular contributions made by Mr Sowry and a few others one would think that this bill is in relation to something that has not been agreed to in negotiations between employers and their workers. What we are talking about here is a situation where a redundancy package has been properly negotiated to be part of the terms of employment of workers. 
I want to take up first of all the implication made by Mr Sowry that redundancy payments would send a business belly up. Well that is just not right. What we are talking about here is in fact a business that has already gone belly up and is facing closure with the workers losing their jobs and with the employer looking at honouring what has already been negotiated and agreed to in terms of a redundancy package. 
I want to make another point in relation to some of the comments that have been made about workers having immediate access to welfare payments after a closure. In my experience that is certainly not the case. There is a stand-down period where holiday pay has to be taken into account and other moneys that have been paid out to workers have to be taken into account. In some cases there is quite a lengthy stand-down period for those workers before they get payment of a benefit or anything else. 
I can appreciate the arguments that have been put forward by some members in relation to the plight of small business. Sometimes those hard-working people have taken a risk in terms of investment. I take on board the points that have been made by Paul Adams. There are a lot of hard-working New Zealanders who make a commitment and a sacrifice in starting a business and that needs to be acknowledged. Nobody on this side denies that. 
What we are talking about is the situation that prompted this bill. It has been aptly described by my colleague Rick Barker and in the speeches made by my colleague Mark Peck and I want to congratulate him on sponsoring the bill. It is a situation of closure where a significant workforce is made redundant and where small communities in rural areas are affected. We have had some colleagues on the National side talk about farmers and their situation. Often these huge redundancies have affected rural towns and farmers. Some of those farmers who have been made redundant have been reliant on working in the meat industry during the killing season to supplement their earnings. 
I agree with the points made by Rick Barker in relation to the Tomoana Freezing Works closure but I also want to identify with the Patea Freezing Works closure because that was a classic example of a whole community that was affected by redundancy. Those workers losing their livelihoods turned that town into a ghost town. The loss of jobs and loss of income affected their children and families and also affected the whole community of Patea. Other small businesses in Patea were detrimentally affected as a result of that closure. When we talk about employers under this bill having to give workers priority where a redundancy provision has already been agreed to we are taking about the survival of small communities. A lot of small businesses in a small rural town like Patea are very much dependent on the income of workers. That is an aspect that members also have to take into account. It is not a simple question of our just viewing this matter from a small-business point of view or from a business point of view; it is also a question of how it affects other New Zealanders—ordinary working New Zealanders. Closure not only has an effect on families and children; it has a downstream effect on communities and on other small businesses in those small towns. 
That is where I think the issue of fairness has to come in. We cannot be one-eyed because nobody is not going to suffer as a result of a closure of a business. I think all people in small businesses—management as well as staff—suffer as a result of that situation and I think it is very very important to have a balanced approach to consider what is fair and what priority should be given to workers and to consider the downstream effect that I have been talking about. I think this bill has a balanced approach and a fair approach to the issue of redundancy. 
A party vote was called for on the question  
That Part 1 be agreed to. 
Ayes 75 
New Zealand Labour 52; New Zealand First 13; Green Party 8; Progressive 2. 
Noes 42 
New Zealand National 25; ACT New Zealand 8; United Future 8; Independent: Awatere Huata. 
Part 1 agreed to. 
Part 2 Amendments to Insolvency Act 1967 
MARK PECK (Labour—Invercargill) 
: 
 Part 2 amends the Insolvency Act in a number of ways. Essentially it deals with issues in the Insolvency Act providing for no lien over a bankrupt’s books. It deals with priorities and makes some consequential appeals as a result of the amendments that are made as well. The importance of this is to establish redundancy as part of the priority for employee entitlements. Prior to that employee entitlements were basically wages holiday pay and other incidentals that might have been accrued during the time of employment. But as has been discussed in the currency of this debate many employees in the process of negotiating their redundancy deals trade away things to obtain that little bit of security at the time that a company might be going through hard times and subsequently folding up. 
Rick Barker talked a lot about Tomoana Freezing Works and I have talked about Ocean Beach freezing works. There are a myriad of freezing works in this country that have been affected. I thank Phillip Field for raising the issue of Patea. Having come from Taranaki myself I know that the Patea community was absolutely rent asunder when that particular freezing works closed. Nobody wishes that on anybody or on any community and nobody wishes redundancy on anybody either. Nobody wants to see a firm fail and go under but that is the cut-throat nature of business and as I mentioned earlier in a contribution in my electorate there is talk about building another freezing works. I have to say that that concerns the Alliance freezing company quite seriously. It has been through major reorganisation and having had to cut chains to close Ocean Beach Freezing Works and to bring in double shifts to be able to process the stock now faces the establishment of new chains. I do not know—other speakers might want to elaborate—when a new chain has been built in New Zealand in the freezing industry for quite some period of time. These are the pressures that go on businesses as they face their normal business. So including the redundancy settlement as part of the employee priorities simply means that that part of the wage and salary package is protected to a maximum of $15000. 
Let us go back to the situation at Tomoana Freezing Works. We are talking about $35 million across 2000 workers. That is a heck of a lot more than $15000. That is a dead loss to those employees. Those particular workers were totally unable to do anything about looking after their mortgages and their families. I am sure Rick Barker can tell the Committee some of the stories. Workers are very reluctant to come forward to tell us the difficulties that they face when they are trying to look after their families on no income. It is highly personal and highly embarrassing to them and a little bit of decency about protecting those particular matters is important. 
The other thing that this particular part of the bill does is ensure that there are periodic adjustments and it provides the mechanism for the periodic adjustment to occur. That will mean that the House will not have to revisit this matter again once this particular legislation has been passed. It will mean as a result of cost-of-living increases that in time these amounts will be reviewed against that and increased by Order in Council. That will mean that this will not diminish over time and will not devalue as a result of inflation. Those workers who subsequently find themselves in a position later on in their working lives to lose income are able to pick up their redundancy payments at a rate more appropriate than perhaps the $15000 rate. Again I thank the select committee for the work it did and I thank the submissioners who submitted on this part of the bill. I say to the Committee that this legislation is moving this part of our industrial law into the 21st century. 
JOHN KEY (National—Helensville) 
: 
 Most members of this Committee can understand why Mr Peck has such an interest in redundancy and even have some sympathy. Members may wonder what Mr Peck has done to deserve Trevor Mallard and his Sonny Bolstad impressions down in Invercargill. 
I want to pick up on just two points before I move into what I think is the main issue here. The first is the comment that Mr Barker made that somehow the ACT party’s position was driven off the bankers supporting the ACT party. It may come as quite a shock to Mr Barker who may not know who funds the Labour Party but if he looks at financial contributions from financial institutions he will see quite clearly that the largest benefactors were the Labour Party and the National Party—not the ACT party. He might want to check that out. [ 
Interruption 
] It is a matter of public record and if the Minister does not understand that then he should have a look at it. 
The second point I want to make concerns the issue that Mr Tisch raised regarding growers and how their losses will be suffered and I think it is testimony to how the Labour Government sees self-employed people. The growers in the Manawatu Rangitikei and the Horowhenua who are losing their entire livelihoods and will not be protected by some sort of union-driven status of redundancy bill are being offered three-quarters of the unemployment benefit by this Government. They are not even good enough to get the unemployment rate—they are being offered three-quarters. That is what the Labour Government thinks of self-employed people—when they are really down as a result of the flood they get three-quarters of the unemployment rate. It is a disgrace. 
I want to pick up on a point made by Mr Prebble in his speech in relation to the fairness of these redundancies and the fairness of this legislation. The logic behind this bill is so silly that one would imagine that nobody has taken a reasonable time to look at it. I want to make this first—the first and most obvious point. There is nothing stopping any employee in New Zealand from having this treatment currently. Employees can negotiate the position. They are absolutely free to negotiate this position with employers today—and they do not do it. Why do they not do it? They do not do it because firstly they do not see the value in it doing it and secondly employers understand what the impact will be on the banks’ capital structures. The second point I want to make in relation to fairness is that if anybody can see that a redundancy is likely to happen if anybody can see that a collapse is likely to happen it is the people inside the company. It is not people outside the company. We have all had experiences of going round to large employers in New Zealand and we can recognise when the writing is on the wall. So if people need protection then it is small businesses that operate with those and customers. 
I make one final point. We have heard quite a lot of debate about the issue related to small businesses but no mention has been made of customers who pre-pay for activities with a company that goes broke. There is a large group of New Zealanders who will be adversely affected. However I want to speak tonight mainly about what this bill will do to the capital structure of investing in New Zealand and in companies. One of the great tragedies of this bill relates to whether New Zealand is committed to getting back into the top half of the OECD—and we know that the Government does not like to talk about that. We know the Government has abandoned that proposition. Treasury tells us day after day as it tells the Government that the Government’s policies are anti-growth and that they will not deliver higher living standards for New Zealand any time before the 21st century—unless with the good grace of the people of New Zealand we can put a National-ACT Government in power which I have no doubt will occur very soon. Very importantly we need entrepreneurial activities and we need banks to want to invest in small businesses. The first thing this bill does is make small companies that interact with large companies more vulnerable. That is exactly what this bill does. It makes them more vulnerable and less likely to get a payout than anybody else. Banks will automatically adjust their risk profile if this legislation goes through. 
Peter Brown 
: Rubbish! 
JOHN KEY 
: The member says “Rubbish” but he has not actually spoken to the banks about it. 
Hon RICHARD PREBBLE (Leader—ACT) 
: 
 Part 2 sets out a new order of payment. I have a question for Mr Peck if he is able to answer it. It would appear from my reading of clause 8 that one could actually sign a redundancy agreement the day before a company goes insolvent and as a result of that the employee would immediately get a credit. Is that correct? If so then we are enabling people to “defeat the creditors” and that is regarded as very naughty. In fact a person can go to jail for that. It appears to me that if the manager of a company realises that the firm is going broke then provided that person is not a director he or she ought to negotiate a redundancy agreement with himself or herself. He or she probably can being the manager. 
Nothing I have seen in the bill stops a manager of a company provided he or she is not a director from negotiating with himself or herself signing an immediate redundancy which would be for only $15000 then going to the liquidator and putting the company into liquidation. Is that correct or have I misread it? It may be on reading section 104(1)(d)(iv) in clause 8(1) that it has to be 4 months before a company is put into liquidation. However I would like an answer to that question. Members have been telling us how carefully they have studied it so Mr Brown could tell me. 
Are we really allowing the manager of a company to do this—a manager who may have made the company insolvent through his own misdeeds? Perhaps the manager gambles and drinks and is told by his accountant that he has to put the company into liquidation. The manager may say: “Nick I’ve just got to do one thing first. I need to negotiate myself a $15000 redundancy. Just wait a second while I sign the agreement then I’ll put the company into liquidation.” Are we seriously doing that? If we are I assure the Committee that what I am describing will not be a joke; it will happen. Of course it will happen. Human beings are not perfect but they are very ingenious. If the incentive is for a manager to write himself or herself a $15000 redundancy agreement because he or she will get priority over everyone else—and he or she will get paid—then that is exactly what will happen. 
Where is the commercial logic in that? Where is the morality of it? What is the point of us having an Insolvency Act that states it is a criminal offence for a person to defeat the creditors when we then put up a measure that enables people who put a company into liquidation to give themselves $15000 redundancy? I would like that simple question answered. Am I reading it correctly? If I am not what is the situation? It would appear to me that a redundancy deal signed the day before a company is put into liquidation would get priority. If that is so then there is nothing to stop a manager if he or she has the proper authority from signing himself or herself a $15000 redundancy deal. How can we possibly think that is fair law? 
BRIAN CONNELL (National—Rakaia) 
: 
 Normally I start my speech in these debates by saying that I am pleased to take a call but I am not. I feel compelled to take a call because I think that this legislation is some of the worst that has been perpetrated in this House. 
In my last call I was speaking about insolvency and working through an example that I did not conclude so I will take the opportunity to do that now. Members will remember that I was saying that the receivers had moved in and that there was $35000 in the bank that was owed to creditors. Under this legislation the employees are owed $75000 not to mention their superannuation holidays and wages owing—and I would have made that point more carefully had Mr Barker allowed me to. Thirty-five thousand dollars does not cover the redundancy liability so mum dad and the kids have their house sold from underneath them. It is worth $150000. The employees who did none of the risk taking will divide up the spoils. They will get their wages holiday pay etc. and now they will get $15000 to boot. Wages holiday pay and redundancy sees them get $17000 each and on a rough calculation a grand total of $85000. There is a shortfall of $50000 owed to the employees so they will be working to sell up mum and dad as well. It will pit Kiwi against Kiwi and mum and dad against mum and dad. The bank takes the balance to cover the loan of $70000 and that is fair and reasonable because it is protecting shareholders’ funds—the same people the mums and dads who make deposits. Seventy thousand dollars plus $50000 for the quicker people in the House is $120000 a positive balance of $30000 with regard to the value of the house. Moneys owed to other creditors amount to $35000; therefore mum and dad are now left penniless if not bankrupt and the employees have the option of either going on to the dole or working elsewhere. That sounds really fair does it not? It sounds very fair indeed. Well I do not think it does. 
I shall now respond to the comments made by Mr Field. I thought that his contribution was very level headed and I commend him for it. I tell Mr Field that the workers and the mums and dads who run a business are equal. Why should we cherry pick? Why should some be more equal than others? Because mum and dad form a business or incorporate they are just workers who are deriving their income in a slightly different way. This legislation will not encourage people to take risks. Essentially we will end up getting a very risk-averse culture where it is just not seen as being worthwhile to put up one’s house as a stake in order to raise money to get into business. 
Mr Key raised the issue of the cost of capital. I ask Mr Peck: what will this do to the cost of capital? I would like him to take a call to answer that question. I do not think he really knows the answer so it is probably unfair to ask him. However I will give him the answer. This bill will increase the cost of capital because banks will not have the same level of security—and banks price for risk. The other thing the bill will do is remove capital out of the marketplace. Banks will simply say: “The deal is going to be shorter so we’ll call up money sooner or we’re just not prepared to risk at all.” 
This legislation will do immense harm and for the life of me I cannot understand why Mr Peck and his Government colleagues cannot heed these warnings. They are not coming just from me. The Status of Redundancy Payments Bill was opposed—and Mr Peck says by just a few—by Business New Zealand the Financial Services Federation the New Zealand Business Roundtable the Joint Insolvency Committee of the New Zealand Law Society and the Institute of Chartered Accountants of New Zealand Federated Farmers and I shall stop there. Does anyone in the Chamber actually support this legislation other than unionists? Interestingly enough the Council of Trade Unions submission was one of six in favour of the bill. Others expressing similar sentiments came from the Rail and Maritime Transport Union from the New Zealand Nurses Organisation— 
PAUL ADAMS (United Future) 
: 
 The point I would like to pick up on—and I agree that the Hon Taito Phillip Field did make some very good and sensible points in his speech—is that when a large business fails in a small community it can also bring devastating results. I agree with that. 
From United Future’s perspective—and we are a true centrist party so we do try to see both sides of the spectrum and try to come with a common-sense middle ground—what we need to understand is that big business is great. We would agree with that and we would support it. But a big business does not just arrive all of a sudden except in some cases when it comes in as an overseas entity. 
 But take for example Stephen Tindall and The Warehouse. That business started in a building that we once shared. He started with only one or two employees and the business gradually grew. Any sporting club that fails to cultivate the youth and stays only with older people eventually dies. 
In this country we need to see the importance of small business. I take the Hon Richard Prebble’s point that over one-third of our population earns their money from outputs now. That will only increase. Much as the Government says that we are the least regulated it is the type of regulations that we are talking about here that is putting the brakes on small business. It is making people less likely to want to employ staff. They would rather employ contractors because they do not want to deal with all these issues. I think that as MPs we have a responsibility to make a fairer level playing field that will not only support people who want to be wage earners but equally will support people who are prepared to take a risk put their house on the line and give it a go. Because if we fail to support those people we will not have the Stephen Tindalls in this nation: the people who are prepared to put everything on the line to serve the population of New Zealand. A business is only there to serve its customers and it rises and falls on its merits and ability to serve its customers well. 
We create difficulties when we continue to bring in legislation that will affect those entrepreneurs who want to go out and work under contract. We say to them that we will give support to the contracts that wage earners have but the contracts that contractors may have with a business in order to get paid will be put aside. Contractors will wait in line after the Inland Revenue Department after the banks and after the redundancy payments. As we have heard a few times we are not talking about workers’ wages or holiday pay—nobody would want to restrict those payments. But redundancy clauses can be put into many packages and whichever way it is viewed it is payment for work that has not been done whereas possibly one-third of the workforce are on an outputs-based income. 
United Future cannot in any way see the fairness or merit in paying people for work that has not been done ahead of paying people for work that has been done. Any leader who does not base his or her efforts on truth compassion and mercy really is in trouble. I seriously ask Mr Peck and those who are supporting this bill to ask themselves whether they are showing compassion and mercy to the entrepreneurs of this country who lay everything on the line to help other people get work. All they are asking for is fair pay for themselves. 
Hon ROGER SOWRY (National) 
: 
 It is good to follow the United Future party. I note the member said it is the true centrist party and it is—it controls half a percent either side of the centre and long may it continue to do that. 
This bill is a terrible bill. We are debating Part 2 and all of it is new. The entire part was introduced at the select committee. It did not form part of the original bill. Mr Peck said that people did not come along to the select committee and argue and make submissions so on that basis we should put the bill through. I say to Mr Peck that the public and business sector at large did not believe that the Government would pass this bill. They did not think it would be as stupid as that. I challenge the Government to send this bill back to the select committee adopt it as a Government bill and tell the people out there who will be really hurt by this bill that the Government is prepared to listen to them. 
But the Government will not do that even though it knows that lots of small-business people stand to lose the shirts off their backs. That is the reality of this bill. Any small business that has paid out for goods or services and provided them to a large company that then becomes insolvent will go to the wall whilst the workers get their redundancy. That tells us what Labour’s priorities are. Its priorities are not about creating wealth. Labour does not give a fig for small businesses out there that are providing services to larger businesses. This bill offers them no protection—none at all. 
Hon Rick Barker 
: It’s not— 
Hon ROGER SOWRY 
: Rick Barker says that it is not designed to. That is fine. So small businesses will go to the wall? 
Now I come to New Zealand First. I cannot understand why that party is supporting this bill. It does not fit at all with the leader of New Zealand First who has championed small business during his time in Parliament. How does New Zealand First argue that this bill is good for a small business that is providing goods and services to a large business when it places it at risk? I cannot see how New Zealand First which normally claims a lot more common sense on these issues can support a bill that puts lots of small businesses at risk. 
Hon Rick Barker 
: Rubbish! 
Hon ROGER SOWRY 
: That is an intelligent interjection from the member. Let us consider a rest home that goes into receivership. It happens. 
Hon Rick Barker 
: A who? 
Hon ROGER SOWRY 
: A rest home. Is the member aware of rest homes? The staff component is about 40 percent of the wage bill. The rest home has a redundancy agreement so that all the staff—all the nurse aides—walk away with a couple of thousand dollars redundancy. Who misses out? The suppliers do. The people who are owed money for supplying food security services checking alarm systems and all those personal services miss out—lots of tiny companies and small businesses. No Labour members have got to their feet to say they think that workers deserve more than small businesses. Why does Mr Barker think that all the little businesses that were providing services— 
PETER BROWN (Deputy Leader—NZ First) 
:  
I will try to answer some of the questions that have been raised in this portion of the debate. Firstly the Hon Richard Prebble gave the scenario of a manager who knowing the company is about to go belly up the next day signs up his own redundancy agreement which is capped. This bill includes holiday pay wages and redundancy. The $15000 cap does not relate just to redundancy; it relates to everything. If a manager is as desperate as that—and I do not know a manager who would be inclined to do that but I accept that the honourable member might know of somebody—then I am prepared as we are in the Committee stage to support an amendment to this bill that will address that concern and exclude directors and company managers who are likely to do such a thing. I am certain someone could work out a little bit of wording and New Zealand First will support a clause preventing a manager from ripping off the system. 
In terms of the point raised by the Hon Roger Sowry I say to that member that we are talking in the main about employees of large companies. Not many small businesses employ unionised workforces that have redundancy agreements but there are— 
Hon Roger Sowry 
: We’ll wait for the next bill. 
PETER BROWN 
: We will wait for the next bill but we are talking about this bill at this point in time and the member should not get confused. 
Lindsay Tisch 
: Look ahead. 
PETER BROWN 
: The member has to be kidding. Does he think ahead? That is why Don Brash this morning or this afternoon was in Katikati. He blocked off the road and the car-parks for a paltry little crowd. Is that thinking ahead? 
Dr Wayne Mapp 
: There were 600 people. 
PETER BROWN 
: I would not bet on that. [ 
Interruption 
] I do not mind those guys chipping in but it is a little bit disconcerting when they are seated behind me. Never mind they want to have something to say. 
We know that with many redundancy agreements signed up in this country the working people the employees have made some sacrifice to get a redundancy agreement. In essence it is like an insurance policy. We know that over the years things have gone wrong in many industries. I asked the library to research where there have been major redundancies. The library gave a summation of such a size it is hard to collate including the meat industry sharemarket industry clothing industry car industry airline industry and shipping industry as well as stevedoring. 
If the National Party wants to dismiss that information so frivolously and as Mr Connell earlier suggested that this bill was opposed by a number of submitters then I ask those members why they did not oppose it at the Commerce Committee. I ask National Party members why they signed up to this clause in the commentary on the bill: “We recommend that redundancy entitlements be included within the employee priority.” In other words the total contract is treated as one. “We consider that such entitlements form part of a contractually negotiated package for employees which may have included trade-offs in relation to wages or salary.” That is what National Party members signed up to at the select committee. 
Hon Richard Prebble 
: Were they actually there? 
PETER BROWN 
: That is a good question. But the document tells me there were two National representatives on the select committee: the Hon Maurice Williamson— 
Hon Richard Prebble 
: Maurice Williamson would not have been there. 
PETER BROWN 
: —he might not have been there; the member thinks not—and their current deputy leader Gerry Brownlee. He might have had other things on his mind. [ 
Interruption 
] Well if that is supposedly the Government-in-waiting God help this country. If that is what those members do with one little bill like this—sign up to it not know what they are doing and not turn up at the select committee—then God help this country if they ever come to the forefront of it. If that is true that is a disgrace. 
This bill puts working people’s contracts to the fore and that is a fair way of handling things in the view of New Zealand First. We support this bill and will be pleased to see it go through the House in short order. 
Hon RICK BARKER (Associate Minister for Social Development and Employment) 
: 
 Peter Brown had some very good advice for the National Party and the people it claims to represent. It is very simple: “If you don’t like it or agree with it don’t sign up for it.” It is as simple as that—even Richard Prebble would agree with it. But if they sign up for it and agree with it then they should be bound by it. 
There was a very interesting presentation given recently by Mr Roger Sowry. I note Mr Sowry is the previous chair of the Commerce Committee. This bill has come back from that committee but do I see any dissenting report on it from Mr Roger Sowry? 
Hon Roger Sowry 
: I raise a point of order Mr Chairperson. It is true I am now the previous deputy chair of the Commerce Committee and I want to thank Labour members for voting for me for that role. But in fact I was not on the committee at all when the bill was before it. I wish I had been because National would have opposed it. 
Hon RICK BARKER 
: Point of order— 
The CHAIRPERSON (Hon Clem Simich) 
: No that is not a point of order and we will not get into a debate on it. 
Hon RICK BARKER 
: I should be protected from spurious points of order and that is a debatable point. 
Anyway I want to make the other point. The deputy chair of the Commerce Committee was Gerry Brownlee that outspoken bombastic deputy leader of the National Party. He speaks out volubly on Maori affairs. He does not know anything about that area but that does not stop him from speaking out on it. But when it comes to this very key heartfelt issue for the National Party what do members see from that party? Silence. I cannot find a dissenting opinion at all. 
That does not surprise me because I listened to one of the presentations by Roger Sowry before and he talked about the Lakeview Farm Fresh meat-processing plant being in Dannevirke. Well I have news for Mr Sowry; it is in the Otaki electorate. No wonder he was not elected but defeated time after time. He does not know where these places are. Has Mr Sowry ever visited the electorate or does he just put his name on the ballot paper? 
Hon Member 
: He’s passed through it. 
Hon RICK BARKER 
: I am reliably told that he has passed through it three times while going to Auckland. He might have stopped for a cup of tea at Levin. Anyway I say to Mr Sowry that Lakeview Farm Fresh is at Lake Horowhenua in the Otaki electorate; it is not in Dannevirke at all. How does that give credibility to Mr Sowry’s opinion? 
But he asks a fair question: “What about small business?”. Well what about small business? I say to members that this is not about being anti - small business pro-this or anti-that. What this is all about is that a long time ago for the amount of money guaranteed for wages and holiday pay which is owed—which Brian Connell said was not worked for and not earned but I will put that aside for the moment—the bar was set much higher. It was the Tory party that cut the level back. The Tory party did that—but it is nothing unusual. The Tory party cut penalty rates for workers did it not? It had gone around before the election and said there would be no cuts to penalty rates. 
The CHAIRPERSON (Hon Clem Simich) 
: I tell the member he has had more than half of his time and it would be nice if he would come to Part 2 of the bill. 
Hon Roger Sowry 
: I raise a point of order Mr Chairperson. Given that your predecessor has on many occasions ruled that parties have to be called by their correct names I would appreciate your upholding the same ruling in this Committee. The name is the National Party and we are proud of that. The Tory party is in another part of the world but unfortunately the member does not seem to understand that. 
The CHAIRPERSON (Hon Clem Simich) 
: I thank the member for that. 
Hon RICK BARKER 
: Part 2 is very interesting because it talks about priorities and allocation. When we talk about priorities we can see what National Party priorities are about. Those members want to maintain the boundary so that when there is a diminished amount of money left over to pay out most of it to goes to business. They want most of it to go to banks. They do not care about the ordinary working people who have sweated and slaved over those jobs. 
When a business goes broke people not only lose their income; they lose their livelihood. Their life’s work could be put into those businesses. In the example of a rest home which Mr Sowry talked about a supplier like a butcher might turn up and put over a few shanks of meat but that butcher will be serving many other rest homes. But for people working in the rest homes their jobs are their full-time jobs and their only jobs and their livelihoods are at stake. 
We say the bar that was reduced by the previous National Government to a miserable $6000 should be increased to $15000. As Peter Brown put it very well: when someone has signed up for a redundancy agreement we believe in the sanctity of that contract—unlike United Future members who say that it does not matter what has been signed. We say we must honour the sanctity of the contract; if the employer has agreed to it and signed up to it the deal should stick. 
We are very happy to say that working people should have redundancy payments holiday pay and annual leave protected to a maximum of $15000. That is what the bill is about and we are very happy with that. If the National Party wants to take more off workers we are not surprised because when it comes to the matter of 4 weeks’ annual leave what have those members said? They will abolish it. We have said 4 weeks’ annual leave but the Tories want to cut it to 3 weeks’ annual leave. 
MARK PECK (Labour—Invercargill) 
: 
 There was one serious matter raised during the debate that I felt should— 
Hon Rick Barker 
: I thought I raised at least three. 
MARK PECK 
: I really appreciated the member’s contribution to the debate but the Hon Richard Prebble raised a serious matter concerning a redundancy agreement being negotiated just prior to bankruptcy or litigation. I am advised by the officials that the law is not clear but it is unlikely that the payment could be challenged by the liquidator or official assignee on the basis that it was giving an unfair advantage to the employee because the employer would not be a creditor at the time the contract was negotiated. 
However I draw members’ attention to clause 5(7) which deals with the definition of who is an employee and who is not. It is quite clear that in any such circumstances the employee must be a genuine employee hired by an employer “to do any work for hire or reward under a contract of service”. So in the situation of it being alleged that a form of insider trading could have been entered into—to assist employees and disadvantage other creditors—the question would have to be asked why a company would want to do that particularly in the light of it not having had a redundancy agreement in the past. Most particularly it would be unable to assist anybody who had any interest in the ongoing nature of the business especially shareholders family members directors or the like. 
A party vote was called for on the question  
That Part 2 be agreed to. 
Ayes 75 
New Zealand Labour 52; New Zealand First 13; Green Party 8; Progressive 2. 
Noes 42 
New Zealand National 25; ACT New Zealand 8; United Future 8; Independent: Awatere Huata. 
Part 2 agreed to. 
Clauses 1 and 2 
MARK PECK (Labour—Invercargill) 
: 
 Under the new Standing Orders this part of the debate is a little different. Essentially in dealing with clauses 1 and 2 we can assume that the matters around the title and the commencement date have been traversed in the course of the debate so it is an opportunity to sum up the debate and the issues. 
Lindsay Tisch 
: No! 
MARK PECK 
: Yes indeed it is. I suggest that the member reads his Standing Orders report. He will find that that is exactly what this part of the debate is about. 
First of all I thank members for engaging in the debate. It has been quite robust and has raised some serious issues. Indeed Opposition issues in respect of the way business will be treated particularly small business are matters that this Government has been concerned with and has dealt with in other legislative ways—in particular in the Construction Contracts Act which deals with the issue of progressive payments for small contractors. 
The Joint Insolvency Committee is still doing quite a bit of work in insolvency law and I am sure that as that committee progresses its work further announcements will be made to the House—be they in the form of reports or legislation. Of course that is a matter totally outside the ambit of my remit tonight. 
The contents of this bill are encapsulated quite well in its title. It will raise the priority status of redundancy payments under insolvency legislation and within the terms of the Companies Act in order to ensure that where a company goes into bankruptcy its employees have the protection of $15000—being their wages holiday pay and any component of a negotiated redundancy agreement. 
I want to thank the New Zealand First members for raising two principles in the debate the first being that a company should not enter into a redundancy agreement unless it intends to honour it—and New Zealand First is prepared to support the bill on that basis. Secondly they raised the point of the rights of workers in an industry. They outlined a number of industries in which redundancy has become a feature simply by the nature of change in the way work is done or the incredibly competitive nature of those particular industries as they have tried to survive. 
During the debate there has also been discussion about it being a sad thing when companies close. We all know that. We know about the disruptive effect of closures not only on employees their families and their communities but also on the business community. Closures impact on business confidence and they are something that all of us hope will never occur. Unfortunately in the nature of business they do happen. 
I am pleased to say that the bill has been well debated in the Committee stage. I think it is right that the commencement clause clause 2 provides that there is a period of grace for employers to get their heads around the new legislation. By virtue of the fact that the bill comes into effect on the 60th day after it receives the royal assent it will allow employers and their advisers to do their homework so that they are able to implement it in the way intended. 
PANSY WONG (National) 
: 
 I find it quite interesting that although we are supposed to be debating the title and the commencement date Mr Mark Peck did not quite bring himself to talk about the title. I gather from his whole speech that he is exceptionally defensive and apologetic towards small business. So he should be because this bill once again demonstrates the problem of a Labour Government that does not act out of principle but tries to be all things to all people. In this legislation it tries to please employees of a business that goes bankrupt who have negotiated redundancy packages without thinking about what will happen to the employees of the creditors—the suppliers—of the business that do not get paid. When suppliers cannot get payments from businesses that are in trouble what happens to their employees? 
That further demonstrates what happens when a party like Labour is in Government. It continues not to think about principles but to act on vested interests—lobbied by the unions of one particular sector—and forgets about the employees of the suppliers that are creditors to those businesses in trouble. Who will protect them? I find it really difficult when a Labour Government introduces a bill that upsets very long-held principles and commercial practices without very good background and analysis. 
Some of my colleagues mentioned that it might be a reaction to the closure of freezing works. My we are reaching back into history! That is the problem of this Labour Government—it still operates in the 1950s and 1960s. It is still fighting the class war when right now it is the year 2004 and employers understand that their most important business assets are their people. 
The National Government’s Employment Contracts Act created a very flexible environment in which individuals could negotiate directly with their employers. Unfortunately once again we face a Labour Government that operates in the 1950s and is starting to sneakin amendments and changes to legislation that no longer reflect contemporary working conditions in New Zealand. 
 I want to briefly mention the title and make the point which National has been making for a long time that it should really reflect more closely the intention of the bill. To simply call it the “Status of Redundancy Payments Bill” does not tell a lot of people what the bill is all about. It seems to me that it is more appropriate to call it the “Changing Status of Redundancy Payments Bill” or the “Creating Further Redundancy Payments Bill”. 
When Mr Mark Peck mentioned the commencement date I wondered why the commencement clause refers to this magical figure of the 60th day. I am not too sure what is magical about the 60th day of this legislation being in force. Does it mean that it will take that amount of time to educate employers about what the Labour Government’s plan is and to inform business of these changes? Will Mr Mark Peck tell the public whether there will be a follow-up? Will there be an assessment of the consequences of this legislation? 
The Government says the bill will not change much so why is it wasting Parliament’s time changing a well-known commercial practice that has been in existence for quite a long while? The National Party will definitely vote against this legislation. It is not a party that believes in a U-turning leader. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 This bill is correctly named. I think that the title reflects what it is all about. The Status of Redundancy Payments Bill basically provides for employees who have signed a redundancy agreement with their employer to have a higher status in the pecking order if the firm wants to needs to or does go belly up. [ 
Interruption 
] I cannot see exactly what the member is doing. I wish he would stop echoing like a sparrow at the back. 
Over the years thousands of people have been made redundant in this country. I listed them before from press cuttings I got from the library. They are people from the meatworks the sharemarket the clothing industry the car industry the airline industry the stevedoring industry and the shipping industry. Thousands of people have been affected and without exception every one of them went home feeling quite distressed and in quite some anguish. 
In many cases when these firms have gone belly up contractors have lost some money and some as a result have gone into liquidation—but not always. In the main small businesses that service large businesses survive because they have their eggs in many baskets. When I was the manager of a stevedoring company from time to time I was offered the chance to tender for a stevedoring contract from an organisation that was perhaps a little suspect— 
Richard Worth 
: Dodgy. 
PETER BROWN 
:—or dodgy. I would put in a tender but then I would ask for a financial advance to lessen my risk. Nine times out of ten I would receive such. Occasionally a company would be reluctant to give me one. I then evaluated whether the risk was greater than I first thought and it was my choice whether I took the contract. 
Small-business people are not dumb. They know the wiles of the world and the way things operate. I hear National Party members in particular talk about employers as if they do not have a clue how to do anything. I wonder whether any National Party members have had any experience in real business operating at the coalface with people. 
Richard Worth 
: I have. 
PETER BROWN 
: A lawyer says that he has had experience in real business. It is encouraging to know that a lawyer has had hands-on experience in real business where he has been dealing with staff in sufficient numbers. 
Employed people are entitled to some protection. They go to work daily and rely heavily on the employer to do things correctly to look after them and to offer them some security of employment. This bill moves the redundancy payment one step further to give them that protection. Nobody wants companies to go bankrupt nobody wants to see liquidations nobody wants to see people made redundant and nobody wants to see contractors lose in these sorts of circumstances but when those events occur there needs to be a priority order. This bill changes the current priority order in a fair-minded manner. The cap is $15000 which embraces holiday pay wage entitlements and a redundancy payment. I think that is quite reasonable. I think it offers protection to working people who have signed a redundancy agreement—they get no redundancy if they do not have a signed agreement. There is no gun to an employer’s head to agree to a redundancy agreement. I think that this bill is appropriate and that the title is appropriate. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 75 
New Zealand Labour 52; New Zealand First 13; Green Party 8; Progressive 2. 
Noes 42 
New Zealand National 25; ACT New Zealand 8; United Future 8; Independent: Awatere Huata. 
Clause 1 agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 75 
New Zealand Labour 52; New Zealand First 13; Green Party 8; Progressive 2. 
Noes 42 
New Zealand National 25; ACT New Zealand 8; United Future 8; Independent: Awatere Huata. 
Clause 2 agreed to. 
MARK PECK (Labour—Invercargill) 
: 
 I move  
That the Committee divide the bill into the Companies Amendment Bill and the Insolvency Amendment Bill pursuant to Supplementary Order Paper 192. 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 75 
New Zealand Labour 52; New Zealand First 13; Green Party 8; Progressive 2. 
Noes 42 
New Zealand National 25; ACT New Zealand 8; United Future 8; Independent: Awatere Huata. 
Motion agreed to. 
The CHAIRPERSON (Hon Clem Simich) 
: Before I report the bill so divided I want to congratulate Mark Peck on taking a member’s bill through the Committee. 
Bill reported without amendment. 
Volunteers Employment Protection Amendment Bill 
Procedure 
LINDSAY TISCH (Junior Whip—National) 
: 
 I seek leave that all remaining stages be taken as one debate. 
Mr SPEAKER 
: The bill has to go into Committee because there are some amendments. I think the member will find it is OK. We will proceed accordingly. 
Second Reading 
Dr WAYNE MAPP (National—North Shore) 
: 
 I move  
That the Volunteers Employment Protection Amendment Bill be now read a second time 
. I would like to thank Mr Tisch for his assistance there because it is the desire I believe of every party in the House to have this bill passed into law as soon as possible. However I suspect that 20 minutes today will not be quite enough time. 
It is somewhat of a bittersweet moment because the bill has had an extraordinarily long gestation—unfortunately so long that it is no longer able to achieve its immediate objective of protecting the jobs of the hundreds of volunteers who served in East Timor. That was the actuating reason for the bill. It is worth noting that emergencies like that in East Timor occur only every few decades and the service people who are volunteers need the protection then. It is unfortunate perhaps that the bill was not passed within say a year of its introduction. That would have been acceptable and at least two final deployments to East Timor would then have benefited. 
It is after all worth recollecting the time line. The bill was introduced in September 2000 approximately a year after the first deployments. As it turned out there ended up being six deployments in total over 3 years. If the bill had been passed within say 1 year the final two deployments—or at least the final one—would have benefited from it. That would have been appreciated. Having said that I want to acknowledge the assistance of the Minister and Defence Force officials. I acknowledge the Minister’s office the Defence Force and in particular Brigadier Tim Brewer for the role they played in improving the bill. There is no doubt that the bill we are dealing with today is a superior bill to the one introduced nearly 4 years ago. 
Hon Ken Shirley 
: Four years? 
Dr WAYNE MAPP 
: Nearly 4 years ago. 
It is worth remembering that when we deploy servicemen in the circumstances of East Timor we ask a heavy commitment of all our service people be they regular forces or territorial forces. On every occasion that occurs there is a solemn debate in this House. That particular deployment had the support of every party. We need to recollect that we ask individual people to make major sacrifices for the common good and this bill acknowledges that as part of that the employers of those people should keep their jobs open for the period of the deployment. As was pointed out to the Foreign Affairs Defence and Trade Committee that of itself would then be asking something of particular employers that others were not bearing. 
I want to acknowledge some of the changes in the bill since it went through the select committee. The first change is that the drafting itself has been improved. More substantively there is now established a mechanism whereby employers will get some recompense for their particular commitment in holding the employment open for the service person. I think that is right and proper. The rest of the community has a shared commitment in that regard. The second point I want to note is the establishment of the Employers Support Council. That will be hugely important in building the acceptance and understanding of service and the value of it—not just to the individual service person not just to the community at large but actually to the employer. 
I want to acknowledge the person sitting beside me tonight Captain Richard Worth OBE a senior member of the Royal New Zealand Navy reservists. He himself would know the importance of the training that people receive in terms of self-confidence capability planning and so forth. I think that is acknowledged by a large number of people. As the number of reservists has gone down and as the number of employers who have had experience of military service has reduced that understanding frankly is less than it used to be. 
I note at this point that the territorial force of the Army is now down to 1800 and probably only 800 are efficient. When I was in the Territorial Force some years ago now the number was 7000 and large numbers of employers understood the value of it. The situation was different. The irony is that as the numbers of the Territorial Force reduced the requirement for their commitment increased. I hope this bill will play some part in turning that round. 
I give personal testament to all those service people who served our country in East Timor under considerable hardship and away from their families. They were serving this country and building peace for the people of East Timor—and in fact for ourselves not just East Timor; they were doing it for the region itself. It was an altruistic activity by New Zealand undertaken by particular individuals; but we in the region all benefit from that. 
Finally I am pleased we have got to this stage tonight. I appreciate that the bill will now be passed into law probably by 24 March but better late than never. I look forward to the Committee stage when the Supplementary Order Papers will be introduced and then to the third reading. 
Hon MARK BURTON (Minister of Defence) 
: 
 We do indeed have every reason to be immensely proud of all our service personnel for the work they are doing and for the reputation they continue to build for New Zealand and New Zealanders and—I agree with Dr Mapp—nowhere more so than in East Timor. It gives me pleasure to rise in support of the second reading of the bill. 
This Government has made it clear through its defence policy framework its defence statement and its long-term development plan and of course the major acquisitions announced as a result of those three documents that it is committed to a Defence Force that is equipped and supported to a standard that can match the high level of skill dedication and indeed courage constantly displayed by our personnel. 
The deployment of our Defence Force to East Timor drew into public focus the role of our personnel in a way that has not happened for many years. It also highlighted the important role played by the men and women in the territorial forces and reserve forces many of whom as Dr Mapp mentioned served in East Timor and indeed continue to serve in operations today. I will use the term “Territorial Force” but it does include volunteers and reservists from all three services. 
 In the past Territorial Force personnel were recruited and trained to give New Zealand the ability to expand its defence forces to meet a serious threat to national security. With increasing demands for peace support operations around the world and the need to use defence resources in the most efficient manner possible the Territorial Force must be able to contribute to the things the Army is most likely to do. Where extra personnel are needed as in East Timor the enhancement of New Zealand’s ability to utilise volunteers provides a cost-effective solution. 
As part of the Government’s initiative to enhance the pay and conditions of service for the armed forces there have been a number of improvements to conditions in the Territorial Force. For example its personnel are now paid the same as regular force personnel as indeed they should be. To ensure that the Territorial Force is able to contribute effectively to Defence Force deployments service in the Territorial Force needs to be more attractive to volunteers and their employers. I think all parties in this House agree about that. 
The Volunteers Employment Protection Act of 1973 was enacted at the same time that national service was abolished. It currently protects the civil employment of the volunteer members of all three services but only when they undergo their initial or annual training. It was extended under the Defence Act of 1990 to cover the deployment of the members of the Territorial Force and reserves when called up by proclamation for an actual or imminent emergency involving overseas deployment of our forces. It has not been systematically reviewed previously it is fair to say and frankly it is quite out of step with modern employment legislation. It does not cover members of the Territorial Force who serve overseas voluntarily and as Dr Mapp indicated it was the major deployment to East Timor just such a deployment that really drew this into sharp focus. 
This bill was initially a member’s bill sponsored by Dr Mapp in order to protect the employment of volunteers and to provide support for employers. As he said it was introduced in August 2000. It was then referred to the Foreign Affairs Defence and Trade Committee which heard public submissions to the effect that the bill needed to go further than its original scope. Substantial work was undertaken by committee members and myself working together and I also acknowledge Brigadier Brewer and a number of other members of the Defence Force who put in a substantial amount of work; their support was excellent. With the full agreement of the select committee and with leave of the House a Government Supplementary Order Paper has been introduced for consideration by the Committee of the whole House. 
The Supplementary Order Paper significantly expands the scope of the protection available to volunteers in the Territorial Force for all three services both when called up by proclamation for continuous service whether or not in New Zealand or overseas and when serving voluntarily for fixed periods when that service is declared to be in the national interest. 
It provides for a workable mechanism for volunteers in the Territorial Force to serve voluntarily for such fixed periods. As far as possible it aligns the procedures and practices for volunteers’ leave with those established under the Parental Leave and Employment Protection Act. It brings the Volunteers Employment Protection Act up to date with present employment law. It also empowers the Governor-General in Council to make regulations to compensate employers when their Territorial Force volunteer employees serve in a situation of national interest. It provides for the appointment of a Territorial Forces Employer Support Council to promote service in those forces and to advise the Minister of Defence on matters relating to those forces. 
The bill was reported back from the Foreign Affairs Defence and Trade Committee with the recommendation that it be passed with amendments and I am pleased tonight to stand to support the progress of the bill. 
Bill read a second time. 
In Committee 
Hon MARK BURTON (Minister of Defence) 
: 
 I seek leave for the Committee to take the provisions of this stage as a single debate. 
The CHAIRPERSON (Hon Clem Simich) 
: Leave has been sought for that course to be followed. Is there any objection? There appears to be none. It will be taken as a single debate. 
Clauses 1 and 1A Parts 1 and 2 and Schedules 1 to 4 
Hon MARK BURTON (Minister of Defence) 
: 
 I take the opportunity for a very short call to explain the additional Supplementary Order Paper and amendments in my name. The passing of the Holidays Act of 2003 which comes into effect on 1 April 2004 necessitates some minor amendments to this bill as reported back. The opportunity therefore is taken to correct a minor typographical error; divide the bill into two bills to amend the Volunteers Employment Protection Act and the Defence Act respectively; and provide that the bill will come into effect at the same time as the Holidays Act. There is a further amendment to clause 5 consequential to the renaming of the Higher Salaries Commission as the Remuneration Authority. 
Progress reported. 
The House adjourned at 9. 56 p.m.