Cullen Michael: Appropriation (Parliamentary Expenditure Validation) Bill — First Reading 
Cullen Michael: Appropriation (Parliamentary Expenditure Validation) Bill — First Reading 
[Volume:634;Page:5768] 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I move  
That the Appropriation (Parliamentary Expenditure Validation) Bill be now read a first time. 
Dr Richard Worth 
: I raise a point of order Madam Speaker. Would it not be appropriate for us to see this bill? 
Madam SPEAKER 
: That is not a point of order. [ 
Interruption 
] The bill is on the Table. 
Hon Dr MICHAEL CULLEN 
: Speaking to the point of order I say that a copy of this bill was made available to National Party members this morning before their caucus. 
Gerry Brownlee 
: The bill was delivered to us halfway through our caucus this morning. One copy was given to me and another copy was given to Dr Brash. There are only two copies on this side of the Table and they were brought into the House just as Dr Cullen was about to speak. This debate should not progress until there are sufficient copies on the Table for every member to have an opportunity to read it. 
Madam SPEAKER 
: I understand that copies of the bill are available for members on the Table. 
Gerry Brownlee 
: I seek leave for the House to adjourn for 20 minutes while the bill is distributed. 
Madam SPEAKER 
: Leave is sought. Is there any objection? Yes there is. [ 
Interruption 
] Members please we will preserve a little bit of respect and decorum. 
Hon Dr MICHAEL CULLEN 
: Of course when bills are moved for introduction and passing under urgency they are tabled subsequent to the motion being approved. 
This bill does two things. Firstly it validates expenditure from 1989 to the present day and secondly it provides interim funding definitions to enable the Parliamentary Service to function until the end of 2007 when clause 7 of this bill lapses. The first part of the bill the validation is unspecific— 
Hon Brian Donnelly 
: I raise a point of order Madam Speaker. Given that some sensitivity has been expressed by National Party members about being able to see the bill some of us in this part of the House would like to actually hear what Dr Cullen has to say. It has become quite clear that the official Opposition is not going to allow that opportunity at all. I ask that you ensure we do not have a continuation of the barracking that has just started. [ 
Interruption 
] 
The ASSISTANT SPEAKER (Ann Hartley) 
: I am ruling on the point of order Dr Smith. About five members on the National Party side of the House spoke during the member’s point of order. This is a final warning to those members. Mr Donnelly makes a perfectly valid point. We cannot hear. It is very hard for the parties on the cross benches to hear. I ask the member to show all members some respect. 
Hon Dr MICHAEL CULLEN 
: Madam Speaker—[ 
Interruption 
] I raise a point of order Madam Speaker. I have never done this in my career before but I have the right: I ask to be heard in silence. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member has asked to be heard in silence and he will be heard in silence. I warn members that the member will be heard in silence. Members have had their warning. 
Hon Dr MICHAEL CULLEN 
: The validation is for expenditure under Vote Parliamentary Service that may have been outside the scope or purpose of an appropriation or other enactment. It is framed as generally and vaguely as that because the import of the Solicitor-General’s opinion followed by that of the Auditor-General and the Auditor-General’s subsequent report is that it is impossible to tell what may or may not have been outside the scope of Parliamentary Service expenditure up until the present day. It certainly casts a pall upon a whole range of expenditure around travel and other matters that may have been outside the scope. The Auditor-General did not look at those; he looked only at a 3-month period and only at the communications vote. Therefore of course there is nothing in his report that assists us in terms of determining what else may have been outside the scope including communications expenditure before 1 June 2005—expenditure that is exactly the same as expenditure that he has ruled unlawful in the period under review. 
Secondly the bill provides an interim funding definition because that uncertainty continues to the present day and into the future. It is not clear what the Parliamentary Service can spend money on at the present time. Were for example Dr Brash again to seek to travel to another place in the country to sign up a second National Party member for the year that would probably be outside the scope of the parliamentary appropriation according to the rulings of the Auditor-General. We should not forget that the Auditor-General did not look at the issue of travel funding. 
This issue began it would now appear with the Auditor-General’s 2005 report. That report was primarily about ministerial budgets—more precisely about Government publicity campaigns such as that surrounding the Working for Families package. The report incidentally made some observations and comments around Parliamentary Service funding but in no part did the Auditor-General state in any shape or form that the then currently understood interpretations of what was legitimate were in fact outside the bounds of what he considered to be legitimate. So no clear warning was given at that point. 
The Auditor-General’s report last week and the previous Solicitor-General’s legal opinion took that matter somewhat further. As for the Auditor-General’s 2005 report as I said the content was limited in some respects; the non-content in our view remains very significant. The Solicitor-General’s opinion in April this year took a very narrow view of what was in in terms of parliamentary purposes and I think it is worth reminding ourselves of the Jack Hodder opinion which states: “A fundamental feature of the context is that the potential scope of the work of the House of Representatives relating to legislation on public expenditure and of the parties represented in the House is almost unlimited. However that scope is the field of contestable policy proposals and decisions and of legitimate political dialogue between MPs and the electorate. The competition between parliamentary parties includes a continual contest for future electoral support.” I can only say “Hear hear!” to that; that is what we call democracy. But taking a narrow view of what is in as the Solicitor-General and the Auditor-General did then having a brightline test leaves a huge amount of uncertainty about what is in fact legitimate. That was comprehensively challenged as I said in the Hodder opinion and in the Speaker’s report to the House. 
Furthermore the Auditor-General’s report last week provides no clear guidance at all to the House as to what in the current parliamentary appropriations is legitimate spending. Wittingly or unwittingly the report ended up being partial in that respect both because it covers only a very limited time period from 1 June 2005 to the election and because it covers only certain appropriations—that is communications expenditure. 
It is clear that legislation is the only way to remedy the issue of unlawfulness and that is unaffected by the refunding of money. The passage of this bill does not at this point change at all whether a party should or should not refund money to the Parliamentary Service. The refunding of the money does not affect in any way the unlawfulness of the original expenditure. The National Party argument seems to be that it prefers to remain with its expenditure being unlawful. Indeed it is in the peculiar position of arguing—it is the only party in the House arguing this—that it knew that the rules had changed but it broke them nevertheless and has now chosen to refund the money. And Katherine Rich seems to be the sort of fall person in that respect. 
The real problem is that nothing is solved in terms of the current conundrum by the Auditor-General’s position. There is no clear guidance in the report as I have said and the bill therefore provides a narrow definition of what is out and a brightline test from there. What is out in terms of communications is seeking support for the election of a particular person or persons seeking support for a party vote for particular parties encouraging any person to become a member of a particular party or parties and soliciting subscriptions or other forms of financial support. That probably reflects a pretty fair summary of where the vast majority of parliamentarians believed the rules were up until the Auditor-General’s report. It is a narrow definition and then there is a brightline test; what is beyond that is therefore legitimate expenditure. Therefore Dr Brash will not have to refund the expenses of his travel to Nelson to sign up Ian Ewen-Street as a member of the National Party. 
Gerry Brownlee 
: I raise a point of order Madam Speaker. Those references that Dr Cullen is wishing to pepper his speech with are in fact of themselves out of order. Dr Cullen has asked that the House give him the respect of being heard in silence. You have said that that is his right. We are not able actually to find anywhere in Speakers’ rulings or the Standing Orders that that is something speakers can ask for; nonetheless we respect his desire to get his message across. But we are not prepared to sit here and hear him make personal reflections on members on this side of the House without your intervention—without your calling him to account. There have been three occasions now. I am loath to take a point of order during the Minister’s speech—it is the opening speech on a bill—but Madam Assistant Speaker you do have a duty if you are preserving Dr Cullen’s right to be heard to ensure that our right not to be impugned in any way is also treated with some respect from the Chair. 
Hon Dr MICHAEL CULLEN 
: Speaking to the point of order I was not impugning Dr Brash at all. The point I was making was that in my view what Dr Brash did was a perfectly legitimate action. But that legitimate action is cast into doubt by the Auditor-General’s ruling. What this bill does is make clear that what Dr Brash did was legitimate. So if the member thinks there was a personal reflection I am happy to withdraw and apologise for that. But let me assure him that there was no personal reflection in that comment. 
The ASSISTANT SPEAKER (Ann Hartley) 
: Perhaps from the point of view of clarifying the issue if the member would like to withdraw and apologise. 
Hon Dr MICHAEL CULLEN 
: I withdraw and apologise to the extent that it appeared to be a personal reflection. 
The ASSISTANT SPEAKER (Ann Hartley) 
: Yes. 
Hon Trevor Mallard 
: Point of order— 
The ASSISTANT SPEAKER (Ann Hartley) 
: No please I want to make two points. First of all to the member—[ 
Interruption 
] 
The ASSISTANT SPEAKER (Ann Hartley) 
: That member will leave the Chamber now. I was in the middle of giving a ruling. That was extremely bad manners. 
Phil Heatley withdrew from the Chamber. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The point I was making to Mr Brownlee was that under Speaker’s ruling 57/2 any member is entitled to be heard without interruption. 
Hon Trevor Mallard 
: I raise a point of order Madam Speaker. I think it is important. A member—I am sorry I do not know the member’s name but the one next to Mr Bennett—called out twice during Dr Cullen’s speaking to the point of order. I think she should be disciplined because you did say that people were on a final warning. 
The ASSISTANT SPEAKER (Ann Hartley) 
: I ask the member whether she called out. 
Paula Bennett 
: I am sorry Madam Assistant Speaker but I am desperately trying to find in the Standing Orders—that is what I was actually doing; I have not been calling out. 
The ASSISTANT SPEAKER (Ann Hartley) 
: Please be seated. I ask the member to stand and just answer my question: did the member call out during that point of order? 
Paula Bennett 
: I am sorry Madam Assistant Speaker. I am not trying to be smart; I am just trying to work out which point of— 
The ASSISTANT SPEAKER (Ann Hartley) 
: Did the member call out during—[ 
Interruption 
]—just a minute; just answer the question. We have been hearing points of order and they will be heard in silence. Did the member call out during the point of order? 
Paula Bennett 
: Yes. Yes. I am not sure to be honest with you. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member will leave the Chamber. [ 
Interruption 
] Just wait please. I will wait until the member leaves the Chamber. 
Paula Bennett withdrew from the Chamber. 
Gerry Brownlee 
: I raise a point of order Madam Speaker. None of the Speakers’ rulings or the Standing Orders work if members of Parliament are not prepared to respect them. The Chair has no authority other than the authority that comes from the respect members of Parliament are prepared to give the Chair. You have taken a pre-emptive strike—and I use those words very deliberately—on our side of the House this afternoon when two members were provoked quite unreasonably by the very member who stood up to complain about them just a few minutes ago and who is well known for his loud and smart mouth in this House. 
Madam Assistant Speaker I want to explain to you that the decorum in the House from this point is extremely tenuous. We are not prepared to be treated in a manner that is any different from the Government. Our observation at the moment is that that is exactly what has just happened in the last couple of minutes particularly in respect of the last incident where one of the loudest people through points of order—during my own point of order for example—was the very person who appealed to you and whose appeal you accepted by throwing one of our members out of the House. That is not a good way to progress. 
I want to point out to you also Madam Assistant Speaker that when you call on Speaker’s ruling 57/2—which states: “Strictly speaking a member is entitled to be heard without interruption but with the tacit consent of the House the rule has been relaxed in favour of members asking reasonable questions.”—you should remember that we are part of the House; it does not belong exclusively to the Government. Anybody who is witnessing the sort of legislation we are getting pushed through today who has witnessed the activities of the last couple of days and who is witnessing the very partial position taken by Parliamentary Service could well believe that the Government thinks that this is just some sort of a rubber-stamping exercise for dictatorial powers. But it is not and it is your job Madam Assistant Speaker to ensure it is not seen to be that. We expect fair treatment and we expect you now to turn to Mr Mallard and deal with him as you have two of our members. 
Hon Dr MICHAEL CULLEN 
: I just want to draw it to your attention that Dr Nick Smith has yet to leave the Chamber having been ordered to do so— 
The ASSISTANT SPEAKER (Ann Hartley) 
: No it was not him; it was another member. 
Hon Dr MICHAEL CULLEN 
: Was he not ordered to go? 
The ASSISTANT SPEAKER (Ann Hartley) 
: No. 
Hon Dr MICHAEL CULLEN 
: In that case—and I think he thought he was ordered to for a moment—I make a point about being heard in silence. I know that that is done relatively rarely recently. In fact it is a very longstanding principle of this House that members have the right to ask that and it applies to any member of the House. If Dr Brash in responding wishes to be heard in silence then he also can make that request. 
The ASSISTANT SPEAKER (Ann Hartley) 
: Thank you— 
Gerry Brownlee 
: It’s not the issue. 
The ASSISTANT SPEAKER (Ann Hartley) 
: It is the issue Mr Brownlee and it is what I ruled on. I also tell the member that a warning was given. Several interruptions occurred prior to Ms Bennett’s interruption. There was not an interruption from the Hon Trevor Mallard. He was entitled to raise the point of order he raised. I ask Dr Michael Cullen to continue. 
Hon Dr MICHAEL CULLEN 
: Can I make the point— 
Hon Murray McCully 
: I raise a point of order Madam Speaker. 
The ASSISTANT SPEAKER (Ann Hartley) 
: I just warn the member that I have dealt with the point of order to date so I presume he is raising a new point of order. 
Hon Murray McCully 
: I am Madam Assistant Speaker. I heard you direct the Minister of Finance to withdraw and apologise after offence was taken on this side. That should have taken place without any qualification. Dr Cullen sought to make that withdrawal and apology with qualification. I now ask that you require him to withdraw and apologise in the terms required by the Standing Orders. 
The ASSISTANT SPEAKER (Ann Hartley) 
: He did withdraw and apologise the second time without any qualification. He did that the second time. 
Hon Dr Nick Smith 
: I raise a point of order Madam Speaker. Are we to take from your ruling in respect of the request by the Minister of Finance for silence on this very contentious bill that any interjection will result in a member being ejected from the House? The reason that that is important is that Dr Cullen has repeatedly claimed that the Leader of the Opposition Dr Brash specially travelled to Nelson to— 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member will be seated. I have dealt with that point of order. The member has withdrawn and apologised for that. The point of order has been dealt with. 
Hon Maurice Williamson 
: I raise a point of order Madam Speaker. 
The ASSISTANT SPEAKER (Ann Hartley) 
: I presume it is a new point of order. 
Hon Maurice Williamson 
: It is a very new one as of this minute. I have been in this Parliament a long time and one of the traditions I have been very keen to follow and observe is that whenever Speakers were making a ruling or discussing a point of order they would always be on their feet. In fact it was important that any member of this House had to resume his or her seat whilst the Speaker did that. I want to make a plea on behalf of my colleague Phil Heatley because Madam Assistant Speaker you did not rise to your feet on a number of occasions. Rather you sat while you made a ruling. I did not realise you were even involved in making a ruling when I looked up. On a couple of occasions since then you have stood up to so do but you were not on your feet when you were dealing with Phil Heatley’s interjection. 
Going back a number of Speakers I see Sir Robin Gray here in the House. He will know that he used to get to his feet all the time and deal to people like me when we were being badly behaved. I suggest on behalf of Phil Heatley that because the sign was not there that you at least allow him to come back into the House and make sure that he then behaves himself according to the principle that when you are on your feet we remain silent. 
The ASSISTANT SPEAKER (Ann Hartley) 
: I take the member’s point and also note that although Speakers often stand when they are giving a ruling they often remain seated too. I also make the point on the ruling I gave in respect of Mr Heatley. I had very clearly said I will address the ruling. 
Hon Dr MICHAEL CULLEN 
: I make the point now more theoretically and assisted by the intervention from Dr Smith. Let us suppose a member of Parliament travels somewhere and has a range of business at that place. Amongst that business he or she may sign up a member for his or her political party. The import of the Auditor-General’s opinion and the brightline test that is imposed there is that the entire expenditure is out of being legal. [ 
Interruption 
] I am afraid that that is not rubbish. The member should read the Solicitor-General’s opinion again. Mr McCully is nodding his head. He actually agrees with me. He understands the point being made. 
The Solicitor-General’s opinion quite clearly is that if something is outside then that renders the entire vote activity—the expenditure that that involves—outside the appropriation. The member really has to read those reports very carefully because if he does not he will not understand how important it is to actually carry forward the second part of this bill which is to clarify the current spending rules. And might I say to the House that the Government if it were self-interested would not bother to do that part because half the Government is covered by Vote Ministerial Services in that respect not Vote Parliamentary Service and that would give us an undue weighting and advantage in that respect. 
However in carrying forward that interpretation—in setting out that narrow interpretation—there is a sunset clause: it will expire at the end of next year. That is done because we have to respond to the need for a broader review of the rules. Another independent report is being done by John Goulter and Adrienne von Tunzlemann which may have implications for the structure of Parliamentary Service votes. There are issues that will almost certainly lead us into the legislation around the Parliamentary Service in terms of the apparent responsibility of the Speaker for expenditure incurred by a political party with which the Speaker is not in the least connected. I think that in itself places the Speaker in an impossible position. 
This House and the parties in this House must move on from these issues to actually address those issues over the coming few months so they can be clarified before we enter upon another election cycle in 2008. That is why the sunset clause is both long enough to enable the review to be done but short enough to make it clear that it does not go into the 2008 election year. 
This is not a difficult bill; it is a bill that requires some degree of detailed application in order for it to be understood clearly and to make sure that people understand the actual surrounding issues. I am sure that most of the debate will have absolutely nothing to do with the actual contents of the bill but then that is not unusual unfortunately for debates in this House these days.