Volume 652 Week 6 - Tuesday 10 March 2009 
Volume 652 Week 6 - Tuesday 10 March 2009 
[Volume:652;Page:1745] 
Tuesday 10 March 2009 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Questions to Ministers 
Accident Compensation Corporation—Performance 
1. CRAIG FOSS (National—Tukituki) 
 to the  
Minister for ACC 
: What reports has he received on the performance of ACC? 
Hon Dr NICK SMITH (Minister for ACC) 
: 
 I received the Department of Labour’s quarterly report on the Accident Compensation Corporation (ACC) last month. It is a quite critical report and notes that ACC is failing to meet six out of the seven key performance indicators that cover financial management that were set down by the previous Minister. Key performance indicators in which ACC is failing are rehabilitation costs per treatment costs per entitlement claim the return to work rate the long-term claims pool and the solvency ratio. By anyone’s measure that is not good and that is why the Government is making changes. 
Craig Foss 
: What reports has the Minister received on the long-term rehabilitation trends at ACC? 
Hon Dr NICK SMITH 
: ACC’s 3-month rehabilitation rate consistently improved from 1995 until 2001 but it has been declining since 2003. The latest rehabilitation data at December 2008 was the lowest since records became available. The 6-month and 12-month rates show a similar trend. This trend of workers being out of work for longer is bad for the individuals and increases costs for the accident compensation scheme. It is one of the areas where the new Government wants to see an improvement in ACC’s performance. 
Sue Bradford 
: What does the Government mean when for example John Key says that accident compensation will not be privatised but that private companies may have the opportunity to get involved? What is the difference? 
Hon Dr NICK SMITH 
: I am surprised that every time we raise issues about performances there is this old tired line and the sort of slogan of privatisation. I make plain to that member and members opposite that this Government is totally committed to a 24/7 State insurance model for accident compensation. 
Craig Foss 
: What reports has the Minister received on ACC’s long-term weekly compensation pool? 
Hon Dr NICK SMITH 
: I have received reports that show a consistent decline in the number of people on weekly compensation from 1995 until 2005 and a consistent and significant increase since that time. Long-term weekly compensation is a major expense for ACC and this upward trend in numbers is a factor in the latest reports which show a blowout in ACC’s liabilities. 
Sue Bradford 
: Will the Minister ensure that there is genuine worker representation on the reconstituted ACC board at the end of the month? 
Hon Dr NICK SMITH 
: I am working with the new chair Mr John Judge to ensure that we have a very well balanced and highly skilled board. This will ensure that ACC is able to deliver for all New Zealanders on a scheme that will ensure that when they have accidents they are properly covered but it will also ensure that accident compensation levies are affordable. 
Craig Foss 
: What has been the performance of ACC’s investment portfolio and how has this influenced the Minister’s decisions on changes to ACC? 
Hon Dr NICK SMITH 
: ACC’s investments have been adversely affected as have all investment funds since 2006. I note in the department’s report that this is one area of ACC’s performance that has been adequate and comparable to that of the other fund managers and I share that view. The only criticism I have of the board is that expensive extensions of the accident compensation scheme continued to be made in 2008 well after investment returns had plummeted. The board should have bluntly warned the Government of the risks of extending the scheme when income was going through the floor. 
Hon David Parker 
: Can the Minister confirm that at 1.49 this afternoon 11 minutes before question time he announced a $32-per-year increase in the motor vehicle levy as from 1 July 2009 and how does he explain that $32-per-year increase when last week he was scaring New Zealanders with threats of motor vehicle levy increases of some $500 per annum within a year or two? 
Hon Dr NICK SMITH 
: Mr Speaker—[ 
Interruption 
] 
Mr SPEAKER 
: The Hon Dr Nick Smith has the floor. 
Hon Dr NICK SMITH 
: The member exaggerates. The figure that the member mentions as being “in a year or two” for anybody who would read my press release was the projected figure by ACC in 5 years’ time. I am advised by the Department of Labour that the amount I would require to increase the motor vehicle levy to fully fund the scheme under current policy and legislation would be $121 this year. The Government said that that was unacceptable; that is why we have gone for the smaller amount of $32 which is significantly less than the $50 increase that Labour imposed last year. The reason we need to make changes to ACC is that I do not want to see those ongoing increases. 
Craig Foss 
: Is the Minister aware of any areas of ACC policy where the board has accepted that it made mistakes? 
Hon Dr NICK SMITH 
: Yes the board has advised me that its decision in 2004 in respect of physiotherapist funding was a mistake and it has described the policy that has seen costs blow out from $58 million a year to an expected $225 million per year as “untenable”. These policy changes were driven by the previous Government not by the board but the board must take some responsibility for the very poor projections of how much that policy change would cost. 
Hon David Parker 
: Can the Minister explain why he told Mr Ross Wilson and other board members in December 2008 not to speak out about ACC’s performance and why did he not allow the board to explain its understanding of ACC’s performance? 
Hon Dr NICK SMITH 
: It is the longstanding practice that boards do not speak publicly. It was the policy during the entire time of the 9 years of the previous Government. It is my view that nothing is to be achieved for the public and for ACC to have contradictory statements or other controversy between the chief executive the Minister and the board. It is my view that strengthening of the board is necessary particularly in respect of financial management skills. That is why I have appointed John Judge as the new chair. 
Hon David Parker 
: Can the Minister confirm that National has instituted a policy of gagging public servants and board appointees as it tried with Barry Matthews and now the ACC board when their views differ from the story the National Ministers want the public to believe? 
Hon Dr NICK SMITH 
: I find that question from a Labour member absolutely extraordinary in the sense that it has a record over the last 9 years of not just public servants but the private public—through the Electoral Finance Act—being unable to express their view. I am surprised that Mr Parker has had a sudden change of heart. 
Hon David Parker 
: I seek leave to table a letter that says that it is of concern to the board that at the Minister’s request it has been unable to respond to any public commentary on its performance. 
Mr SPEAKER 
: Leave is sought to table that letter. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Hon Dr NICK SMITH 
: I seek leave of the House to table the most recent report from the Department of Labour on ACC’s performance showing that it had not met six of the seven key performance indicators in the area of financial management set by the previous Government. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is none. 
Document by leave laid on the Table of the House. 
Corrections Minister—Relationship with Chief Executive 
2.  
Hon PHIL GOFF (Leader of the Opposition) 
 to the  
Prime Minister 
: Does he have confidence in his Minister of Corrections’ handling of her relationship with her chief executive; if so why? 
Hon JOHN KEY (Prime Minister) 
: 
 Yes; because she is working closely with her chief executive to restore public confidence in the Department of Corrections. 
Hon Phil Goff 
: How can the Prime Minister possibly have confidence in the Minister of Corrections’ management of that relationship—and its sustainability—when she has irretrievably damaged it by repeatedly refusing to express confidence in her chief executive having first prejudged his performance and then having been proven quite wrong by the State Services Commission report? 
Hon JOHN KEY 
: Firstly the Minister has made it quite clear that she has the confidence that she can work with the chief executive. Secondly the Minister has quite correctly identified that the important issue here is one of public safety. I would note that ever since the findings of the Auditor-General’s report were seen the Leader of the Opposition has had nothing to say about public safety. 
Hon Phil Goff 
: Was it Mr Matthews’ head that the Prime Minister expected to roll when he personally backed Ms Collins’ call for that to happen; if so how does his own credibility stand in light of the State Services Commission report that Mr Matthews’ sacking would not be justified? 
Hon JOHN KEY 
: At no time did either the Minister or I ask for heads to roll. We correctly asked the State Services Commissioner to look into the Auditor-General’s report to find out where accountability lay and to ensure that performance would be improved in the Department of Corrections. New Zealanders rely very heavily on the fact that the Department of Corrections needs to carry out its functions with a high level of public safety. This Government is focused on it because the previous Government was not. 
Hon Phil Goff 
: In light of the Prime Minister’s answer I seek leave of the House to table a document that says: “The Prime Minister … is backing Judith Collins’ efforts to remove its chief executive Barry Matthews.” That statement is in the  
New Zealand Herald 
 of 19 February 2009. 
Mr SPEAKER 
: Can I clarify whether that is a press statement? 
Hon Phil Goff 
: It is a press statement Mr Speaker. 
Mr SPEAKER 
: Leave is sought to table a press statement. Is there any— 
Hon JOHN KEY 
: I raise a point of order Mr Speaker. This is the second time in 2 weeks that the Leader of the Opposition has attempted to use editorial comment as a quote. It is not a quote. I am not responsible for the subeditors at the  
New Zealand Herald 
; I wish I was. 
Mr SPEAKER 
: I will not hear further on this because that is not a point of order. Leave is sought to table a press statement. Is there any objection to the press statement’s being tabled? There is. 
Hon Phil Goff 
: Does the Prime Minister agree with the comments of Paul Kuchenbecker that Ms Collins is “all bark and no bite“ and with the view of Colin Espiner and the media that National has handled this issue in a shambolic way; if not why not? 
Hon JOHN KEY 
: No. Actually I agree with the State Services Commissioner who stated yesterday: “The Minister has said she will be setting high standards of Mr Matthews and expecting him to perform in the coming months and working with him on that.” I think that that is exactly the right message. 
Hon Phil Goff 
: Does the Prime Minister then accept Mr Rennie’s report that Mr Matthews’ “… dismissal would not be a fair or a proportionate response”; and does he therefore accept there is now an untenable relationship between Ms Collins and Mr Matthews that can only be resolved either by buying— 
Mr SPEAKER 
: The member will resume his seat. The last part of that question was totally out of order with regard to supplementary questions. 
Hon Members 
: Why? 
Mr SPEAKER 
: The member had already asked the primary part of that supplementary question then a follow-up bit and he then sought to put into the question material totally superfluous to the asking of the question. I am afraid that I am not prepared to accept argument over the matter because that is the fact. If the Prime Minister heard the question then he may answer it. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I will not argue with the substance of that ruling but with the process that you used. It is usual for a Speaker when he or she wishes to interrupt a member asking a question to get to his or her feet. You did not do that. 
Hon Gerry Brownlee 
: That is a dreadful attack on you as the Chair of this House and I think that most members would expect that member to be dealt with summarily. It is quite appropriate for the Speaker to engage with members at any time. The respect shown to the Chair is shown one member to another and Mr Mallard completely denies that convention in this House. I do not think that we can tolerate a lot more of Mr Mallard’s challenging of the Chair. 
Hon Dr Michael Cullen 
: Coming from that member that comment seems a little off given that on television on Sunday night he was heard to be interjecting— 
Mr SPEAKER 
: The member knows that that comment is not contributing to the point of order. I appreciate the honourable member’s point but as Speaker I would like to think I am big enough to take that kind of point of order from the Hon Trevor Mallard when he is clearly concerned. My problem was—for the benefit of the Leader of the Opposition—that supplementary questions have to be supplementary questions. The member asked the first part to that supplementary question followed it up with a second part—which was OK—but then proceeded to inject his opinion into it further to that. That is absolutely out of order for supplementary questions. [ 
Interruption 
] Order! I am on my feet. 
Hon Phil Goff 
: I’ve done nothing out of order Mr Speaker. 
Mr SPEAKER 
: The member has been in this House long enough to know how supplementary questions are to be constructed. It is not good enough to keep week after week trying to ask questions that do not comply with the Standing Orders. I have accepted the question; I invite the Prime Minister to— 
Hon Phil Goff 
: I raise a point of order Mr Speaker. There are two points to my point of order. First of all you looked at me and said “Order!” when I had done absolutely nothing so I seek an explanation of why I might have merited that. Secondly I ask you to think just for a moment of what my question was. My question was whether given the untenable relationship that exists the options are either to pay out Mr Matthews or to remove Ms Collins. That is a question; that is not a statement. 
Mr SPEAKER 
: The problem was that question was not exactly the question the member asked. If the member were to check  
Hansard 
 he would find that he asked a particular question he followed it with a question about whether the Prime Minister would take a certain action and he then sought to put an opinion into the question. It is at that point that I stopped the honourable member. This way of asking supplementary questions needs to stop. I apologise if I offended the member but it is very easy for him to ask questions that comply with the Standing Orders. I invite the Prime Minister to reply. 
Hon JOHN KEY 
: I do accept the findings of the report from the State Services Commissioner. I also accept the view that the Minister can have a good working relationship with Mr Matthews but that does not mean that Mr Matthews will not have to set very high standards. That is absolutely the right thing to do according to the State Services Commissioner. 
Prisons—Private Management 
3.  
TE URUROA FLAVELL (Maori Party—Waiariki) 
 to the  
Minister of Corrections 
: Does she agree with the reported comment from Te Warena Taua who chaired a group representing six iwi in a formal relationship with Australasian Correctional Management that under a “contract with a private provider we have seen more progress and innovation in a prison than we have seen in decades from the public prison service”; and what factors can she suggest have led to this? 
Hon JUDITH COLLINS (Minister of Corrections) 
: 
 Yes. Under the contract the private provider was required to establish a relationship with iwi whanui which is the representative group that has been referred to. The private management of prisons does lead to innovation in management. This is a good example of where innovation has occurred. Since then the department has established similar relationships with other kaitiaki groups in the four new facilities commissioned since the Auckland Central Remand Prison. 
Te Ururoa Flavell 
: Has she seen the legal opinion from Jack Hodder of Chapman Tripp that handing an exclusive monopoly to the Public Prisons Service to manage all prisons: “will leave only a peripheral role for Maori service providers in relation to prison management and operations“; and how will the private management of prisons improve opportunities for Maori to participate in the management of prisons? 
Hon JUDITH COLLINS 
: No. However I am informed by the department that the opinion was provided by the iwi to the select committee that considered the previous Government‘s legislation abolishing privately run prisons. The contract management of prisons will seek providers who are efficient effective and innovative. The contractual process will provide ample opportunity for potential contractors including Maori providers to demonstrate these qualities. The department will be considering the inclusion of effectiveness measures to ensure improved outcomes for Maori offenders in any proposed contracts with successful tenderers. 
Simon Bridges 
: Has she seen any other reports on the private management of prisons? 
Hon JUDITH COLLINS 
: Yes. I have seen a report in which the Leader of the Opposition the Hon Phil Goff appears to endorse the private management of prisons. He said: “The point I am making is that it does not matter a damn whether one has private or public prisons in that sense. What really matters is the way in which those prisons are operated.” 
Hon Dr Michael Cullen 
: Has the Minister seen a report in  
The Economist 
 of 28 February where in Florida two judges have been charged with accepting kickbacks from a private correctional facility firm in order to sentence juvenile offenders to prison on extremely minor offences; if so what action will she be taking to make sure that no such misuse can occur in New Zealand? 
Hon JUDITH COLLINS 
: Yes and Florida is a long way away from here. 
Te Ururoa Flavell 
: Does she agree with Iwi Whanui o Tamaki-makau-rau that the previous Government’s failure to renew the Auckland Central Remand Prison contract and prohibiting any further contracts like it put ideology ahead of the best interests of inmates and Maori and how does she believe the ideology of private management can support Maori aspirations? 
Hon JUDITH COLLINS 
: Yes. Private prison management provides an opportunity for innovation in service delivery which will support better outcomes for Maori and the public. Provisions will also be able to be included in contracts for each prison to respond to unique needs or concerns of iwi in an area. 
Honours System—Reinstatement of Titular Honours 
4.  
Hon JIM ANDERTON (Leader—Progressive) 
 to the  
Prime Minister 
: How many jobs will be created for unemployed New Zealanders as a result of the reinstatement of the titles of Knight and Dame Grand Companion in the New Zealand honours system? 
Hon JOHN KEY (Prime Minister) 
: 
 None will be created and none will be lost. The member misunderstands the purpose of reinstating the titles. 
Hon Jim Anderton 
: When the Prime Minister promised to make jobs his most important priority when in Government which of the only other Commonwealth countries to offer knighthoods does he think New Zealand should emulate: Antigua and Barbuda the Bahamas the Leeward Islands Grenada Papua New Guinea St Vincent and the Grenadines the Solomon Islands or Tuvalu? 
Hon JOHN KEY 
: This Government is focused on growing the economy on growing jobs and on lifting New Zealand up to the top half of the OECD; a Government he was in managed to do quite the opposite. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. There was a very direct question which asked which of particular countries— 
Mr SPEAKER 
: The member will resume his seat. The Prime Minister answered the question in a manner appropriate to the question. 
Hon Jim Anderton 
: What items on the list of things the Government has made its higher priorities in Government will do the most to reduce the impact of global recession: bringing back knighthoods a national cycleway or privatising prisons? 
Hon JOHN KEY 
: All three can play a part in helping our economy to grow. I am surprised I have to say that Mr Anderton has come down to the House today with this primary question. Funnily enough I took a moment out of my busy schedule to have a look through the archives and I noticed that in 1997 the Hon Jim Anderton introduced the Exceptional Service Honour (Posthumous Recognition) Bill. He sought to have that bill passed and lo and behold the bill—which he waxed lyrical about but I will not bore members with it—would have conferred an honour with the status of a knighthood. That was what the bill was trying to do. Jim Anderton not only tried to create his own new honour with the status of a knighthood in 1997; he actually had tried it once before in 1991. 
Mr SPEAKER 
: The Hon Jim Anderton. 
Hon Jim Anderton 
: Mr Speaker— 
Mr SPEAKER 
: The Hon Jim Anderton has the floor. I cannot hear him. 
Hon Jim Anderton 
: As the bill— 
Mr SPEAKER 
: I take it that this is a point of order. 
Hon Jim Anderton 
: No it is a supplementary question. 
Mr SPEAKER 
: You have used all your allocation of supplementary questions I am afraid. 
Hon Jim Anderton 
: I raise a point of order Mr Speaker. As the bill that the Prime Minister referred to was a bill to honour posthumously Colonel William Malone and as most New Zealanders would wish that he be remembered well which of the knights who have been— 
Mr SPEAKER 
: The member will resume his seat. I allowed the member to raise a point of order that clearly was not a point of order because the Prime Minister did go on for too long in answering the previous question. That is why I allowed the honourable member to make a point of order that was not one. But he has made his point now and he cannot abuse the process any further. He has used his allocation of supplementary questions. 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. To assist the House Labour is happy to make a supplementary question available to the Hon Jim Anderton so that he can expand on this very important point. 
Mr SPEAKER 
: The Hon Jim Anderton. [ 
Interruption 
] The member needs to be heard when asking his supplementary question. 
Hon Jim Anderton 
: Which knight has been a great example of the economic success that New Zealand needs more of: Sir Michael Fay Sir Allen Stanford Sir Bob Jones or Sir Roger Douglas? 
Hon JOHN KEY 
: Firstly let me say that he is quite right in relation to the bill he tried to have passed which would have conferred a knighthood on Colonel Malone. I happen to join with him in wanting to celebrate Colonel Malone; that is the purpose of knighthoods—to celebrate success. In relation to the four gentlemen whose names the member raised I think all of them have made a contribution to New Zealand. 
David Garrett 
: Has the Prime Minister received any indication of which prominent Labour supporters who were in favour of abolishing knighthoods have now indicated that they might like to accept one and who is the current front runner among those hypocrites? 
H V Ross Robertson 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: I think I can anticipate what issue the honourable member will raise. To use the word “hypocrites” is out of order in this House. I ask David Garrett to stand withdraw and apologise for his use of that word. 
Hon Rodney Hide 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: I have just ruled on a point of order I say to the honourable Minister. I ask David Garrett to stand withdraw and apologise. 
David Garrett 
: I withdraw and apologise. May I ask the question in a different way? 
Mr SPEAKER 
: I would be perfectly happy for the question to be phrased differently. 
David Garrett 
: Has the Prime Minister received any indication of which Labour supporters who were in favour of abolishing knighthoods have now indicated that they might like to accept one and who is the current front runner on the list presently circulating around Parliament? 
Hon JOHN KEY 
: I have not received a list but I am hopeful that many people who are eligible to become knights or dames will take up that opportunity so that all 4.2 million New Zealanders can celebrate their success. 
Hon Rodney Hide 
: I raise a point of order Mr Speaker. I want just to make a point. It is quite right that members cannot call across the House that another member is a hypocrite but in this House we are quite entitled to reach outside Parliament and to suggest that an organisation is hypocritical or indeed that a citizen is hypocritical. It might not be the wisest thing to do but there is nothing in the Standing Orders or the Speakers’ rulings 
that rules against it. 
Mr SPEAKER 
: I appreciate the point raised by the honourable member. If I was too hasty in making that ruling I will seek further advice. I recognise that when the Speaker rules on something like that it can create a precedent. If I have been too hasty in making that ruling I will advise members because I do not want to restrict freedom of speech—if that was the case. 
Hon Jim Anderton 
: I seek leave to table a copy of the A R D Fairburn poem “On the Awarding of Knighthoods” to be sung to the tune of “Waltzing Matilda”. 
Mr SPEAKER 
: Leave is sought to table a poem to be sung to the tune of “Waltzing Matilda”. [ 
Interruption 
] I accept that members might find it amusing but it is a point of order and therefore it should be heard in silence. Is there any objection to that poem being tabled? There is. 
Hon Gerry Brownlee 
: I raise a point of order Mr Speaker. I want to indicate that the Government would have no objection to the member who was seeking leave performing the poem for the House. 
Hon Jim Anderton 
: I am happy to oblige Mr Speaker if the member wants. I must say that the poem has nine verses. 
Mr SPEAKER 
: I think the House has more important business to do and should be spared that course of action. 
Community Probation and Psychological Services—Public Confidence 
5.  
SANDRA GOUDIE (National—Coromandel) 
 to the  
Minister of Corrections 
: What steps are being taken to build public confidence in Community Probation and Psychological Services? 
Hon JUDITH COLLINS (Minister of Corrections) 
: 
 I am working closely with the chief executive to ensure that public confidence in that department is restored and the chief executive has committed to rebuilding my confidence and the public’s confidence in the department and in him. 
Sandra Goudie 
: What is the department doing to address the findings of the Auditor-General’s report? 
Hon JUDITH COLLINS 
: The State Services Commissioner found that although the department had a plan in place a plan is not enough in itself. Successful and rapid implementation of the plan is required. I have the assurance of the chief executive that this work will be completed as quickly as possible and both I and the State Services Commissioner will hold the chief executive to account for the effective implementation of the plan. 
Sandra Goudie 
: What other steps are being taken? 
Hon JUDITH COLLINS 
: An independent person will be appointed to chair an expert panel to review the procedures and performance measures of Community Probation and Psychological Services. The independent person and the chief executive will regularly report progress to the public and to me. I believe that an expert panel with a mix of internal and external participants with expertise in change management will assist Mr Matthews to lift performance at the department. 
Accident Compensation—Solvency 
6.  
Hon DAVID PARKER (Labour) 
 to the  
Minister for ACC 
: Has either the board of the Accident Compensation Corporation or the Department of Labour advised him that ACC is currently insolvent; if not why did he say it was? 
Hon Dr NICK SMITH (Minister for ACC) 
: 
 The member’s question is incorrect as it is based on a half-quote. I said: “If ACC was an insurance company it would be insolvent. It has assets of $10 billion and liabilities of $21 billion.” I would be more than happy to table the transcript. The advice I have received from the department and the Accident Compensation Corporation (ACC) is that the accident compensation scheme’s solvency has declined over the past 3 years and that its financial position is unsustainable without large levy increases or significant cost reductions. 
Hon David Parker 
: Why when the Minister pretended last week that accident compensation was fundamentally broken did he not acknowledge that according to the PricewaterhouseCoopers report released in April last year in New Zealand it cost 78c per $100 of workers’ wages to fund current workplace accidents whereas in Australia it cost an average of $2 in every $100 of wages? 
Hon Dr NICK SMITH 
: Members opposite make a huge amount of that PricewaterhouseCoopers report. I note that it is based on 2005 data and much has changed in accident compensation over the last 3 years. In fact if members opposite had got hold of the changes in accident compensation a lot earlier we would not be in the pickle we are now in. 
Michael Woodhouse 
: What reports has the Minister received on the appointment of John Judge as the new ACC board chair? 
Hon Dr NICK SMITH 
: I have received very positive statements that he is the right person to lead ACC at this time. His statements on Radio New Zealand National this morning that he is firmly committed to the founding Woodhouse principles of accident compensation and that he is committed to managing costs and his dismissals of the incorrect assertions about competition and privatisation I think give New Zealanders the confidence that this Government is fully committed to a 24/7 no-fault State insurance model but one that is affordable for ordinary New Zealanders. 
Hon David Parker 
: Why when the Minister pretended last week that accident compensation was fundamentally broken did he not acknowledge that in New Zealand 88 percent of people are rehabilitated and return to work within 6 months of being injured compared with the Australian average of 85 percent? 
Hon Rodney Hide 
: I raise a point of order Mr Speaker. I do not think it is acceptable to put the sort of innuendo into a question in the House that the member did in asking the question. It is supposed to be factual and to suggest that someone is pretending is a debatable point I am sure at best. 
Mr SPEAKER 
: I thank the honourable member for his point but we cannot enforce every element of the Standing Orders. I accept the point he makes that questions are not meant to contain innuendo and that kind of thing or outrageous assertions but I think the Minister is capable of handling the question. In order for question time to flow I think the question should be allowed. I invite the honourable Minister to reply. 
Hon Dr NICK SMITH 
: I would be happy to table a graph in the House of rehabilitation rates in accident compensation. It shows that in the 3-month 6-month and 12-month rehabilitation rates accident compensation’s performance has declined over the last 5 years. The new Government does not believe that is acceptable. Getting people back to work as early as possible should be one of the fundamental goals of accident compensation. 
Michael Woodhouse 
: What are the details of the changes the Minister announced today in respect of accident compensation levies to fund the increased liabilities of the corporation? 
Hon Dr NICK SMITH 
: I am not pleased that I have had to increase the motor vehicle levies today by a further $32 per vehicle. That is on top of the $50 that was imposed by the previous Minister on 1 July last year. I am advised that very significant further increases will be required if we do not make changes to accident compensation which is why this new Government is determined to better manage costs. 
Hon David Parker 
: Why when the Minister purports to justify fundamental changes to the scope of cover did he not acknowledge that according to PricewaterhouseCoopers’ report last April the cost in New Zealand of managing claims for accident compensation is 8 percent of the scheme’s total expenditure whereas in Australia with private schemes the cost ranges up to 32 percent? 
Hon Dr NICK SMITH 
: I say again to the member that this Government I and the new chair of ACC are totally committed to the Woodhouse report and its view that we do not want the “sue” culture that goes with regimes like Australia’s. But if we are to secure the future of accident compensation we do need to get costs under control and the $4 billion liability blowout that has occurred over the last year is unacceptable. 
Michael Woodhouse 
: What advice has the Minister received on changes to the board of ACC? 
Hon Dr NICK SMITH 
: I was surprised to hear this morning on the radio Mr Goff say: “It’s quite inappropriate to sack people because you don’t like their party politics.” I totally agree with his statement but I note that Mr John Slater a former ACC board member was asked to resign by Mr Goff’s Government and the reason given was his involvement in the National Party. 
Conservation Minister—Crown Ownership of Public Foreshore and Seabed 
7.  
METIRIA TUREI (Green) 
 to the  
Minister of Conservation 
: Does he agree with his department that he is “the Minister who represents the Crown as owner of public foreshore and seabed.”? 
Hon CHRISTOPHER FINLAYSON (Attorney-General) 
 on behalf of the  
Minister of Conservation 
: In general terms yes. The Foreshore and Seabed Act 2004 vests ownership of the public foreshore and seabed in the Crown. Section 28 empowers the Minister of Conservation to exercise certain “functions duties and powers of the Crown as owner of the public foreshore and seabed.” In relation to the management and regulation of foreshore and seabed activities under the Resource Management Act those responsibilities will include for example approving national coastal policy statements. There are others as well. 
Metiria Turei 
: Does the Minister agree with his department that Crown ownership of the foreshore and seabed is the primary reason for his Resource Management Act decision-making role over the coastal marine area? 
Hon CHRISTOPHER FINLAYSON 
: The issues involving the ability of the Crown to regulate the foreshore and seabed will be the subject of the review of the Foreshore and Seabed Act. The Minister is confident that at the conclusion of the review there will be adequate mechanisms in place to ensure that the foreshore and seabed is protected—for example under the Resource Management Act. 
Catherine Delahunty 
: Does the Minister think it is acceptable that he should have no decision-making authority in applications for councils’ sewage discharges in fragile marine ecosystems for sand mining in Maui’s dolphin habitat or for a private marina in a native forested estuary with endangered skinks—indeed no power to prevent ad hoc privatisation of our foreshore seabed and coastal areas? 
Hon CHRISTOPHER FINLAYSON 
: The Minister believes that it is important to look at the suite of powers that he is currently able to exercise as Minister of Conservation. Even if the reforms to the Resource Management Act are carried through the Minister will still have certain powers in relation to for example appointing a person to the hearing committee to consider restricted coastal area applications approval of coastal plans and so on. So there will be adequate powers in existence. 
Metiria Turei 
: Does the Minister agree with the Environmental Defence Society that his Government’s decision to remove his decision-making authority from the Resource Management Act “will give Regional Councils the ability to permanently alienate” coastal areas; and did he discuss this implication with the Maori Party before it agreed to support the Resource Management (Simplifying and Streamlining) Amendment Bill? 
Hon CHRISTOPHER FINLAYSON 
: No the Minister does not agree with the Environmental Defence Society. He believes that adequate precautions will be in place to ensure that the mischief the member complains of will not be a problem. 
Metiria Turei 
: Does the Minister agree that any changes that even further reduce the power of the Minister of Conservation to protect endangered species fragile habitats and wild places are a sad step backwards that undermines our guardianship role for future generations and also the multibillion-dollar “clean green” New Zealand image? 
Hon CHRISTOPHER FINLAYSON 
: No. 
Hon Dr Michael Cullen 
: Does the Minister find it ironic that the question line being now pursued is in support of the “public foreshore and seabed”—a term introduced and defined by the Foreshore and Seabed Act—when the principal questioner does not agree that there is such a thing as the public foreshore and seabed because the foreshore and seabed are owned by Maori? 
Hon CHRISTOPHER FINLAYSON 
: Yes one does see the irony. 
Metiria Turei 
: I seek leave to table a number of documents. 
Mr SPEAKER 
: Leave is sought to table a number of documents—[ 
Interruption 
] 
Metiria Turei 
: This is a point of order; I would expect silence during the point of order. 
Mr SPEAKER 
: I can hear the member clearly. If she proceeds by describing each document we will seek leave to table each one. 
Metiria Turei 
: I seek leave to table a report of the Ministry for the Environment that shows that a threat to a degraded marine environment is a major threat to our billion-dollar export industry. 
Mr SPEAKER 
: Is there any objection to that report being tabled? There is none. 
Document by leave laid on the Table of the House. 
Metiria Turei 
: I seek leave to table a departmental submission from the Department of Conservation dated 16 February 2009 which advises the Minister to recommend against the amendment with his annotation that discussion amongst Ministers went in a different direction from what the department had advised. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is none. 
Document by leave laid on the Table of the House. 
Metiria Turei 
: I seek leave to table the 2008 briefing to the incoming Minister which states that the Minister represents the Crown as the owner of the public foreshore and seabed in his role in Resource Management Act decision-making. 
Mr SPEAKER 
: Can I just check whether this briefing document has been released publicly. 
Metiria Turei 
: Yes it has. 
Mr SPEAKER 
: It has been released publicly so leave is being sought to table a document that was recently released publicly. Is there any objection to that? Yes there is objection to that. 
Catherine Delahunty 
: I seek leave to table a National Institute of Water and Atmospheric Research newsletter from April 2007 stating that New Zealand’s coastline is increasingly affected by run-off sewage disposal coastal subdivision and other contaminants. 
Mr SPEAKER 
: Leave is sought to table that National Institute of Water and Atmospheric Research newsletter. Is there any objection to that? There is objection to that. 
Rail—Purchase of Locomotives 
8.  
Hon TREVOR MALLARD (Labour—Hutt South) 
 to the  
Minister of Finance 
: Is he satisfied that all necessary due diligence was undertaken before the Government approved the purchase of locomotives from China? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Yes. I am advised by the board that it did take all necessary due diligence. 
Hon Trevor Mallard 
: Was he briefed on the fact that only five of the 20 locomotives supplied by the same Chinese company to Malaysia have lasted more than 3 years before he approved the package including those locomotives? 
Hon BILL ENGLISH 
: We relied on a board appointed by that member’s Government just a few months ago to make the decisions about the investment and yes I have been briefed on those matters. 
Hon Steven Joyce 
: How does the level of due diligence conducted on this particular investment compare with the level of due diligence the previous Government did on the whole KiwiRail investment? 
Hon BILL ENGLISH 
: I am hoping that the due diligence done on this project is markedly better than that done by the previous Government on the whole of KiwiRail where it spent something like $1 billion purchasing a business that has negligible commercial value now. 
Hon Trevor Mallard 
: Can the Minister of Finance tell us how it was consistent with the outcomes of the Job Summit to purchase these locomotives from a failing Chinese company rather than build them in the Hutt workshops in New Zealand given that the engines all come from Germany anyway? 
Hon Gerry Brownlee 
: Go talk to your cronies on the board! 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I think you made a ruling earlier as to descriptions of people outside the House. Describing the Rt Hon Jim Bolger as a crony is not something that is appropriate and that is what the Leader of the House just did. 
Mr SPEAKER 
: The member will resume his seat. I do not think that helps the good order of the House or the progress of question time. 
Hon Trevor Mallard 
: I raise a point or order Mr Speaker. I know you said it is not helpful but are you now ruling that it is acceptable for the Leader of the House to describe the former Prime Minister as a crony when earlier you said that people involved with the Labour Party are not allowed to be called hypocrites? 
Hon Gerry Brownlee 
: I am sure it will help if I withdraw and apologise. I make the point that any comment I might have made about some of Mr Mallard’s friends pales in significance in relation to what Mr Mallard has said in this House about the Rt Hon Jim Bolger a man I greatly respect. 
Mr SPEAKER 
: I think members will accept that we have had tit for tat here. Let us now hear the reply of the Hon Bill English. 
Hon BILL ENGLISH 
: At the Job Summit I spoke to one of Mr Mallard’s cronies Rail and Maritime Transport Union general secretary Wayne Butson and he said following last week’s announcement that the funding of new locomotives and passenger carriages was “a major boost for the rail system” and that the new locomotives would “lift the productivity of freight services.” I agree with Mr Butson. 
John Boscawen 
: What has been the return on the Government’s $1 billion purchase and rising of KiwiRail? 
Hon BILL ENGLISH 
: I do not imagine that the return on that investment will be significant but I hope that the investment in these locomotives will help KiwiRail to lift the productivity of its freight services. I am advised that the same Chinese manufacturer delivered 20 locomotives in Malaysia. At the request of Malaysia the locomotives were fitted with a different and outdated braking system which has been the cause of the problems with those locomotives. 
Jeanette Fitzsimons 
: I seek leave to table a document that facilitates the outsourcing of New Zealand jobs to China. It is called the free-trade agreement and one of the authors was the previous Government. 
Mr SPEAKER 
: Leave is sought to table the China - New Zealand free-trade agreement. Is there any objection to that public document being tabled? There appears to be no objection. 
Document by leave laid on the Table of the House. 
Schools—Recruitment of Teachers 
9.  
COLIN KING (National—Kaikoura) 
 to the  
Minister of Education 
: What steps has the Government taken to help schools recruit teachers in hard-to-staff locations and subjects? 
Hon ANNE TOLLEY (Minister of Education) 
: 
 The Government has delivered on its 100-day promise to introduce the voluntary bonding scheme for teachers in hard-to-staff locations and subjects. This means that new teachers will be eligible for a student loan write-off or extra cash payment for 5 years if they work in hard-to-staff areas such as decile 1 or severely isolated schools or if they work in hard-to-staff subjects such as chemistry home economics mathematics and statistics physics technology or te reo Maori. 
Colin King 
: What incentives has the Government put in place to retain these teachers? 
Hon ANNE TOLLEY 
: New teachers will be eligible for a before-tax payment of $3500 per year for 5 years with the first payment occurring at the end of the third year. This means that teachers who have the average-sized student loan for a teaching graduate will be able to pay off their loans in full within 5 years through their voluntary bonding payments and their compulsory repayments. All teachers who have graduated since 2005 are eligible this year and the Ministry of Education estimates that close to 1800 teachers will be eligible this year. 
Hon Chris Carter 
: Did the Minister involve the education sector in the development of the bonding scheme or did she just inform the sector what the Government wanted and then proceed with it? 
Hon ANNE TOLLEY 
: This was a campaign promise. Could one say that that involved the education sector? Yes because I went up and down the country promoting this as a policy. 
Hon Chris Carter 
: Has the Minister secured funding for this initiative or is it just another National pledge to be funded by cuts to existing educational programmes? 
Hon ANNE TOLLEY 
: The answer is yes. This will form part of the Budget bid earmarked for 2009. 
Biofuels—Exemption from Excise and Road-user Charges 
10.  
CHARLES CHAUVEL (Labour) 
 to the  
Minister of Energy and Resources 
: Will he exempt biofuels from excise and road-user charges in proportion to the blend and only on sustainably produced biofuels? 
Hon GERRY BROWNLEE (Minister of Energy and Resources) 
: 
 The Government is currently considering the options for giving effect to our policy of providing consistent tax incentives for sustainably produced biofuels. 
Charles Chauvel 
: Are the Minister and his colleagues serious about reducing the country’s overall carbon emissions; if so why would they consider bringing forward the building of the Rodney power station at a cost of over half a billion dollars when Genesis Energy told the Electricity Commission on 4 December last year that the plant had no resource consents no gas pipeline capacity and no access to a sufficient secure forward quantity of gas? 
Hon GERRY BROWNLEE 
: Yes; and I do not know. 
Charles Chauvel 
: Do the Minister’s answers not confirm the observation in yesterday’s  
New Zealand Herald  
editorial that he “showed little interest in the economics of electricity investment and seemed hell-bent on bulldozing any obstacle to the maximum security of supply.”? 
Hon GERRY BROWNLEE 
: The Government is committed to having a regime that provides a consistent tax incentive for biofuels in New Zealand. 
Charles Chauvel 
: I seek leave to table a letter from Genesis Energy to the Electricity Commission dated 4 December 2008 which notes that the proposed Rodney power station has no resource consents and no forward gas supply. 
Mr SPEAKER 
: Leave is sought to table that letter. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Veterinarians—Voluntary Bonding Scheme 
11.  
SHANE ARDERN (National—Taranaki - King Country) 
 to the  
Minister of Agriculture 
: Why has the Government recently introduced a voluntary bonding scheme for vets? 
Hon DAVID CARTER (Minister of Agriculture) 
: 
 The National-led Government is committed to building and supporting strong rural communities. New Zealand has a severe shortage of rural veterinarians. This Government will not accept this shortage and the risk it poses to our vital pastoral industries. By incentivising vet graduates to stay in hard-to-staff rural areas for up to 5 years we are confident that the critical shortage of vets in these remote areas can be largely alleviated. 
Shane Ardern 
: What reports has the Minister seen on vet bonding schemes? 
Hon DAVID CARTER 
: Only good ones. The New Zealand Veterinary Association welcomed the scheme and praised the Government for addressing the issue. The head of veterinary science at Massey University described the scheme as “well-thought out“ and a great start. Finally Federated Farmers said it was “very positive“ and noted: “Thank goodness we have a Government that recognises the importance of the agricultural industry in this country and is doing something positive to help promote it”. 
Pay Equity—Investigations 
12.  
SUE MORONEY (Labour) 
 to the  
Minister of Women’s Affairs 
: Was she consulted over the Government’s decision to “discontinue” pay equity investigations for social workers and school support staff? 
Hon PANSY WONG (Minister of Women’s Affairs) 
: 
 As I advised the member in my answer of 3 March to her written question no. 
Sue Moroney 
: Does the Minister recall why a previous National Government got rid of pay equity legislation as soon as it took power in 1990? Was that also because of an economic downturn or was there a different excuse then although with exactly the same outcome? 
Hon PANSY WONG 
: I am proud to tell the member that it was a National Government that in 1972 introduced the Equal Pay Act. 
Sue Moroney 
: I raise a point of order Mr Speaker. The Minister failed to address the question that I had asked her which was about legislation that National got rid of in 1990. Sunday was International Working Women’s Day and I believe that New Zealand women deserve— 
Mr SPEAKER 
: Points of order cannot be used to put information before the House as the member has just done. 
Sue Moroney 
: Why did the Minister ignore a protest on this issue by school support workers in Hamilton on Friday and then just minutes later tell the Hamilton International Women’s Day Symposium that the gender pay gap was too large in New Zealand and she wanted to do more when her Government is actually guilty of doing less? 
Hon PANSY WONG 
: I hardly ignored the handful of protesters in Hamilton. I actually told them to please take care and not get too wet. 
Amy Adams 
: What is the Minister doing to address the gender pay gap in New Zealand? 
Hon PANSY WONG 
: A National Government passed the Equal Pay Act in 1972. It made it illegal to pay a woman less than a man for the same work. After 30 years there remains a gender pay gap in New Zealand. The causes of it are complex. The Ministry of Women’s Affairs and I are looking at and addressing the various issues contributing to it which include occupational segregation educational qualifications time out of the workforce to undertake caring responsibilities and employment practices. 
Hon Ruth Dyson 
: Can the Minister explain the difference between pay equality and pay equity; if so could she give the House the benefit of this wisdom that she has very recently acquired? 
Hon PANSY WONG 
: I believe that I addressed that in my last answer if that member had cared to listen carefully. If one adds up all the men and women on either side one finds that the pay gap is largely to do with occupational segregation qualifications etc. But I just want to add that if the previous Labour Government believed that pay equity was such a serious issue why did it take it 7 years to start two pay equity investigations? 
Hon Ruth Dyson 
: I raise a point of order Mr Speaker. My point of order is no doubt obvious to you and the rest of the House. My question was very simple. I asked what the difference is between equality and equity and if the Minister understood the difference to share that wisdom with the House. The Minister failed to address the question. 
Mr SPEAKER 
: Can I just check with the honourable member whether she in fact asked that question or whether she asked the Minister to explain the difference. If my memory serves me correctly the member asked the Minister to explain the difference and the Minister gave her explanation. 
Hon Ruth Dyson 
: I asked whether the Minister understood the difference and if she did could she explain it. Neither point was addressed by the Minister. 
Mr SPEAKER 
: As the member knows where there are two parts to a question and one part seeks an explanation I think that the explanation that a Minister gives may not be in the member’s view a very good explanation but it is still an explanation. That is the dilemma with that kind of supplementary question. 
Sue Moroney 
: Which of the following quotes does the Minister believe most closely resembles the aspirations of New Zealand women: that of the Hon Tony Ryall who in scrapping the pay equity investigations said they “generate an additional form of remuneration pressure that is unaffordable in the current economic and fiscal environment.”; her own quote when she said: “it is inevitable that New Zealand women will be hugely affected by the recession.”; or that of President Barack Obama when he said: “Making”—[ 
Interruption 
] I raise a point of order Mr Speaker. 
Mr SPEAKER 
: I think it is clear what the honourable member’s point of order is going to be. It was not possible to hear the last part of the question. Although I accept that it was a longish question we have had some longish answers today. It was a single question; the member was asking the Minister which of several things was correct. But we do not want the list to go on for too long. If the member could repeat the third— 
Sue Moroney 
: Can I start from the top Mr Speaker? 
Mr SPEAKER 
: No; from the third “or” please. 
Sue Moroney 
: OK. Or that of President Barack Obama when he said: “Making our economy work means making sure it works for everybody that there are no second-class citizens in our workplaces.”? He said that when he was— 
Hon PANSY WONG 
: I am sure that the only woman the member quoted said more than that it was “inevitable”. My aspiration is that women exercise choice in their lives. I back women all the time so I am backing the woman who was quoted. 
Sue Moroney 
: I seek leave to table a document that I am disappointed to see has not made it on to the Department of Labour website yet because it is a good piece of work. It is the  
Report on the Pay Investigation for Special Education Support Workers 
 which has not been published on the websites of any of the Government departments that produced it. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Urgent Debates 
Accident Compensation Corporation—Removal of Chair of Board 
Mr SPEAKER 
: I have received a letter from the Leader of the Opposition seeking to debate under Standing Order 380 the decision made by the Minister for ACC to remove the chair of the board of the Accident Compensation Commission and appoint a new chair. This is a particular case of recent occurrence and it involves ministerial responsibility. Important aspects of governance are raised and future new developments of public interest are foreshadowed. Given the significance of the decision I consider that it requires the immediate attention of the House. I call on the Leader of the Opposition to move that the House take note of an matter of urgent public importance. 
Hon PHIL GOFF (Leader of the Opposition) 
: 
 I move  
That the House take note of a matter of urgent public importance 
. The Minister for ACC moved yesterday to sack the chair of the board of the Accident Compensation Corporation (ACC) Mr Ross Wilson. No good reason was given for that dismissal. Mr Ross Wilson is well regarded across the industry. He is regarded as competent he is regarded as efficient he has more experience arguably than anyone else in New Zealand working in accident compensation and the credits given to him by people including the Association of Salaried Medical Specialists indicate that there was huge confidence in the job he was doing. 
This dismissal mirrors a pattern of dismissal that is appearing under this Government. There was the dismissal of the Chair of the Otago District Health Board Richard Thomson. Richard Thomson was the guy who caught the crooks. The crime had actually happened before he took over the chair. He was dismissed by Mr Ryall. Richard Thomson’s successor when asked whether he would do anything different from what Richard Thomson had done said: “Nothing at all.” That is an exact parallel. Of course there was also the blunder of the Minister of Corrections in trying to sack the Chief Executive of the Department of Corrections in order to put the blame on somebody else where there was no evidence for it and no support. Mr Wilson’s dismissal is part of a trend of an arrogant Government that wants to remove anybody who might have a different view a different outlook or a different perception from that of the Government. 
What was the dismissal of Ross Wilson really about? If it was not about his competence if it was not about his efficiency and if it was not about his skill and experience why was he dismissed? He was dismissed for two reasons. Firstly it was part of the National Government’s effort to remove any obstacle to cutting the benefits of accident compensation. It wants to cut the benefits of accident compensation because it wants to privatise ACC—to pass it over to the private sector as a profit-making organisation. That is on the record. Merrill Lynch—and I ask who worked for Merrill Lynch once upon a time—last year let the cat out of the bag that National would do just that long before there were any reports about any problems or deficits. It let the cat out of the bag saying here was a big opportunity for the Australian insurance companies. Yes it is a big opportunity for the Australian insurance companies because National’s goal is to let overseas insurance companies come into New Zealand and pick out the eyes of the profitable parts of accident compensation. The inevitable consequence of that will be a system that is weakened and that does not deliver to New Zealanders the benefits the entitlements and the coverage they need. 
We have seen a consistent attempt made by Nick Smith to undermine the credibility of accident compensation. First of all he said that the deficit in the non-earners account was because Labour Ministers had suppressed it. National members were so confident that they set up a ministerial inquiry. The problem with the ministerial inquiry was that it found no fault whatsoever with the actions of Labour Ministers. It stated that Treasury should have included the deficit in the Pre-election Economic and Fiscal Update. It made no findings whatsoever against Labour Ministers. So tactic No. 1 failed. Tactic No. 1 failed but tactic No. 2 was to try to frighten New Zealanders into accepting major cuts in accident compensation coverage. That was why Nick Smith went out and talked about the motor vehicle account requiring an increase in vehicle registration fees of $500. He talked about a figure of $500. Then today he said that it would be over 5 years. What was the increase? It was $31. Again the tactic is exposed for exactly what it is—an effort to frighten New Zealanders into accepting cuts to the basic entitlements that are needed for us to have a fair and just system of accident compensation. 
It is quite clear that we have the best system of accident compensation anywhere in the world. A 477-page report from PricewaterhouseCoopers said just that. It made the point that accident compensation is serving the public better than any comparable scheme in the world. But still National wants to gut the basic entitlement to a fair system of accident compensation. I would direct the Minister—if he is interested but he will not be—to read an article written by the Rt Hon Edward Thomas a former Court of Appeal judge who gave this summary about what PricewaterhouseCoopers found. He stated that the survey “establishes that ACC leads in having higher coverage a greater range of benefits higher benefit levels lower administration costs lower premium levels a lower rate of claims disputes less delays in claim resolution better return to work outcomes and significantly superior long-term rehabilitation services.” What is it about that that Nick Smith does not understand? This system is a world-class system serving New Zealand well and giving extensive coverage at a lower cost than any other country in the world does. 
We have only to look across the Tasman to see what is happening there. Employer levies are 250 percent higher per wages earned than those in New Zealand. Let us have a look at what PricewaterhouseCoopers—[ 
Interruption 
] The Minister disputes this. Let us have a look at what the 2008 report found. In New Zealand it costs 78c per $100 of workers’ wages to fund workplace accident compensation—78c per $100. In Australia it costs $2 per $100 of workers’ wages. Does the Minister accept that? He has to; it is a fact. In New Zealand 88 percent of people return to work within 6 months of being injured. In Australia the figure is lower—85 percent. In New Zealand the cost of managing accident compensation claims is 8 percent of total expenditure. In Australia the cost of managing claims ranges from 9 percent to a whopping 32 percent. In New Zealand ACC disputes 0.2 percent of workplace injury claims. In Australia on average 9 percent of workplace injury claims are disputed by accident compensation providers. 
Most people think that if a system is working we should not tamper with it. The reason that the National Government wants to tamper with this system is to cut the benefits that are available to ordinary working New Zealanders who rely on this system to the extent of making 1.7 million claims a year. These people are ordinary New Zealanders who deserve a fair go. Dr Smith is telling us that he is going to push back the entitlements that the Labour Government legislated for. 
Hon Dr Nick Smith 
: But never funded—but never paid for them. 
Hon PHIL GOFF 
: That is nonsense. The Law Society said that what Labour had effectively done was to remove the anomalies in the system—to remove the unfairness and to give people access to just outcomes. I will give Dr Smith an example of one person who suffered under the old system—which was the reason we changed it—in terms of mental trauma. His name is Terry Bristowe. He is a former engine driver. He is a 62-year-old grandfather. He was unfortunately involved in two fatal accidents when he was driving his locomotive. Two pedestrians walked across the line in front of the train. One was a 19-year-old and one was in his mid-twenties. After the first accident he suffered 3 months of trauma during which time he stayed at home but he decided to return to work. The second accident happened in December 2002 when he hit a man on the Woburn line and killed him. After the second accident he could not return to work. 
Is Dr Smith telling the House that Mr Bristowe is one of the people who will no longer be entitled to the full range of benefits under accident compensation? Is he telling the woman who was set alight as a result of medical misadventure when she was undergoing a Caesarean—the anaesthetic caught fire—that she will not automatically be covered under accident compensation? Is he telling victims of rape that they will not be entitled to counselling for mental trauma—one of the changes that Labour introduced? Is Dr Smith telling the people of New Zealand that they will no longer get lump-sum payments for accidents that they have suffered? Lump-sum payments go back to the original Woodhouse commission scheme. They were part of the contract but they were ripped out of it by an earlier National Government. Tories never change their spots. They are at it again. Labour brought back lump-sum payments. I want Dr Smith to rise to his feet and say why justice should not be delivered to the decent ordinary hard-working New Zealanders who have those particular entitlements. 
Dr Smith would like to say that the increase in liabilities is because of inaction or inappropriate action by the ACC board. Dr Smith knows that is not true. Dr Smith knows that the major factor is that interest rates have fallen and the return on investments has gone down. That has affected not only accident compensation; actually the superannuation fund has been more affected by it. Is the Minister going to dismiss the board of the superannuation fund now? Is he going to suggest that the management of every New Zealand insurance company that is losing money because of the lower return on investments ought to be dismissed? Of course he is not saying that because he is not giving an honest answer about why the board chair has been dismissed. He knows also that some of the increases in liabilities are about changes to the financial reporting system. Those changes do not influence the bottom line at all; they just say that things that were always there but were not added in before have to be added in. There is nothing that this Minister can pin on the chair of the ACC board that in any way suggests inappropriate incompetent or inefficient handling. 
What Dr Smith wants to do along with the rest of the National Government is carve back the benefits that New Zealanders enjoy because they need them as a matter of social justice. Is Dr Smith telling the 400000 seasonal workers that they will have to go back to a system where their compensation is calculated in a way that disadvantages them in terms of the income support they receive? Is that what Dr Smith is telling the country? He needs to be upfront. When Dr Smith gets to his feet he needs to tell us the country why he wants to hive off aspects of accident compensation to the private sector to enable it to make profits at the expense of the system. 
The last time that happened the Department of Labour produced a report on it—the Blue Lotus report. That report demonstrated quite clearly that a greater amount of money was being spent on administration that more payments were being wasted and were not going to the victims of accidents that insurance companies were late in making payments and that the system was not working as well as the system that it had replaced. It was a clear report. It demonstrated that privatisation did not work for the taxpayer and did not work for the consumer. It worked for the private companies; they made money out of it. But where was that money coming from? It was coming from the benefits the entitlements and the coverage that New Zealanders who are injured at work would otherwise have got and it was coming at the expense of the employers. Even the employers know that if they lose the accident compensation system as it was set up then they will be worse off. The levies on employers will be higher the costs to workers will be higher and the costs to motor vehicle owners will be higher. 
If it works do not fix it. Our accident compensation system is fundamentally sound and the ACC board has been appropriate in its actions and its governance of the scheme and the claims that Nick Smith makes about that are quite incorrect. This is not a system that is failing to deliver to people. Dr Smith is promising New Zealanders lower entitlements at greater cost. That argument cannot be sustained. 
Hon Dr NICK SMITH (Minister for ACC) 
: 
 This issue is all about performance and securing for New Zealanders an accident compensation insurance scheme that is effective efficient and affordable. My decision yesterday to have Mr John Judge replace Mr Ross Wilson was made because Mr Judge has the right skills for what is required by the Accident Compensation Corporation (ACC) and to secure its future which was put at risk by the reckless actions of the previous Government. 
Let me recite for the record exactly what occurred for me as the new Minister after receiving the phone call from the Prime Minister saying I was to be the Minister for ACC. Before I even received my warrant I received a call from the Department of Labour to say that unless it got an extra $300 million for the non-earners account the scheme would be unable to provide the basic accident compensation coverage for non-working New Zealanders. I asked the officials: “Hang on. How long has the previous Government known about that $300 million blowout?” They told me it had been known about for over a year. So when I see crocodile tears coming from members opposite about the integrity of our accident compensation scheme I ask where they were for the 12 months when they knew this scheme was in trouble and they did nothing. 
Then we go on. I have received three independent reports that bring up major questions in terms of the finances of the ACC. There is the MartinJenkins report. I invite members to read the fact that the previous Government broke the Public Finance Act—it broke the Public Finance Act; that is the first time since 1989 that that Act has been breached. Furthermore that report said the underlying problem of huge cost increases at the ACC went back many many years to the misadministration by that Government. 
Then we come to the report I received this year in February by PricewaterhouseCoopers. Let me remind members opposite of what it says because they would pretend all is well within ACC. Let me recite the first thing that the report says. It says that ACC’s finances had deteriorated by $3.9 billion in 1 year. The report identifies that during Labour’s tenure ACC’s liabilities increased from $6.1 billion to $22 billion. That is a deterioration of $16 billion. The report further said that over the last 6 months the situation had deteriorated by $2.6 billion. That was the second report. 
The third report I received was from the Department of Labour which I tabled in the House today. It said that of the seven financial reporting indicators or key performance indicators set by the previous Government six of them are not being achieved and will not be achieved this year—six out of seven. Let me go through what they are. In respect of rehabilitation rates ACC is not meeting the targets that the previous Government set; in respect of the return to work rates ACC is failing; and in respect of the costs per claim it is not performing as per the criteria set down by the previous Government. Mr Goff has made much of the investment returns. The interesting thing is that of the seven financial key performance indicators the one that ACC was meeting was on the rate of investment returns. I have never justified making the changes to the board on the basis of performance in that area because it is true that whichever investment funds one looks at whether it is the superannuation fund private funds or others there have been major holes. 
I have had three substantive reports that show ACC was underperforming. And what would members opposite have me do? 
Hon Members 
: Nothing! 
Hon Dr NICK SMITH 
: I say to this House that a responsible Minister would respond to those reports in such a way as to secure the future of ACC and that is just what I am doing. 
 Let me outline the advice I have received about what would happen if I was to do nothing. I am advised that if I do nothing motor vehicle levies would need to increase by 129 percent. 
Nathan Guy 
: What? 
Hon Dr NICK SMITH 
: By 129 percent. If I do nothing—and I know this will be a concern for the member for Otaki—the motor vehicle levy would need to be increased to $585 per motor vehicle. I think that is unaffordable. The report says I would need to increase the accident compensation levy on businesses by 71 percent. I ask how many people in this House believe that with the economy in its current shape it would be responsible to increase accident compensation levies on businesses by 71 percent. If we wanted to kill jobs that would be the surest way to do it. [ 
Interruption 
] I say to the previous Minister for ACC Maryan Street who is squawking that she should take some responsibility for the mess she left ACC in. The worst increase in levies would be for ordinary families and workers. ACC advises me that if I do nothing the levy for ACC would increase from $1.40 to $4 which is an increase of 185 percent on earners. Members on this side of the House say that is unaffordable and we need to make changes. 
Let me note some of the other areas. Again I challenge members opposite who came out and promised New Zealanders that they would make physiotherapy free. They advised that it would cost $9 million. How much did it cost? Well to date it has cost nine times that figure. In fact I am advised that the policy of providing free physiotherapy has expanded the cost of accident compensation from $58 million to $225 million per year. Who would say that we can go on? Even the current board of ACC has advised me that that is untenable that a mistake was made and that that is one of the things we will have to address. 
I take the area of medical misadventure which the previous Government changed to a more generous treatment regime. The previous Government said it would cost $9 million per year. I am advised that it is costing $40 million a year. Mr Goff and members opposite believe that we can have all those increased entitlements without anybody having to pay. Who believes that nonsense? That is why this Government has embarked upon a sensible programme of change. 
What are those changes? The first thing I have said is that I believe ACC needs to have a stronger level of financial governance skills. I say that John Judge who has been the chief executive of Ernst and Young and whom the previous Government appointed to Te Papa is a proper person to provide ACC with the governance skills that are required. I would note the editorial published in the  
Dominion Post 
 at the time Mr Ross Wilson was appointed. Let me tell members what the  
Dominion Post 
 said: “Labour is pushing the boundaries beyond what is acceptable in looking after its friends.” Is that what the editorials are saying about my appointment of John Judge? No that is what the editorials said about the appointment of Mr Ross Wilson. It is my intention to boost the skills of the ACC board so that New Zealanders can have confidence that it is running an efficient and effective 24/7 insurance scheme. 
Hon Steve Chadwick 
: To cut services. Give us the real agenda. 
Hon Dr NICK SMITH 
: The second change that I have flagged I say for the benefit of the previous member for Rotorua is that in my view we do need to make legislative changes. It is my view that the full-funding date of 2014 will put too much pressure on levies. That is why I said last week that this Government will introduce a bill to push that full-funding date out and provide some space for levy payers. I have also said we need to review a number of items of funding that are out of control. I have specifically noted physiotherapy. 
We need to have an honest debate not a debate where we say ACC can do everything but the levies will not go up. We need to have an honest debate where we say to New Zealanders: “Here are the entitlements; here are the costs. How can we do this in an effective way?” At heart here is a debate around how to make ACC secure for the future. Let me make it absolutely plain to members of this House and to New Zealanders that this Government is committed to the underlying Woodhouse principles of accident compensation. This Government is committed to a 24/7 State insurance scheme that can be secure for New Zealanders. But I also say I will not have this organisation go down the financial gurgler and put vulnerable New Zealanders at risk. That is why this Government will make responsible changes. 
It is our view that the previous Government converted accident compensation into some sort of social welfare scheme without knowing who would pay the bill. We will be financially responsible and we will secure a future for accident compensation because it matters. I challenge the next speaker from the Opposition to apologise to New Zealanders because the previous Government through its reckless approach put the scheme at risk. This Government will secure a future for accident compensation. It is my view that John Judge has the right set of skills to enable ACC to move forward to enable it to move out of the hole that the previous Government created and to enable us to provide New Zealanders with the all-important security of knowing that if they have an accident the accident compensation system will be there for them. That is the commitment that I give to New Zealanders. 
Hon DAVID PARKER (Labour) 
: 
 It is interesting to reflect on why the Government is already on the defensive on this issue. Why are we having an urgent debate today about its handling of the issue? The underlying reason is that Dr Smith and his colleagues tried to spin it. They tried to spin it and they have been caught out. They tried to present a picture to New Zealand that was inaccurate. That picture was that the accident compensation system was fundamentally flawed and in a parlous financial position. That picture was presented to justify the Government’s ambition to cut dramatically the scope of the scheme and reduce New Zealanders’ entitlements the entitlements they need when they have an accident and are injured or when they suffer some injury in hospital. 
Let us look at how the Government was caught out. Nick Smith said to this House and following his discussions with the  
National Business Review 
 he was reported as saying the Accident Compensation Corporation (ACC) was “technically insolvent”. Those were the words he used: “technically insolvent”. [ 
Interruption 
] Sir Roger Douglas says “Of course it is.” The definition of solvency is the ability to pay one’s debts as they fall due I say to Sir Roger Douglas. Nick Smith ought to know that and Sir Roger ought to know that. That is the traditional definition of solvency. It is absolutely clear that ACC has grown more solvent year by year not less. 
Sandra Goudie 
: What would that member know when he ran it into the ground? 
Hon DAVID PARKER 
: What would I know? In 1999 64 percent of ACC’s liabilities were unfunded. It had $2.5 billion worth of assets. Where are we today? Today after ACC has booked significant decreases in its asset values as a consequence of decreases in investment prices around the world even now it has more than $12 billion worth of assets looking at the latest figures from December 2008. There is over $12 billion worth of assets compared with $2.5 billion in 1999. 
Hon Dr Nick Smith 
: Get the latest info. You’re out of date. 
Hon DAVID PARKER 
: Those figures are as at 31 December 2008. Admittedly it will have gone down a little bit since then because of the financial crisis but that was after already booking a decrease in value of investments of $700 million from June to December. As a percentage of the total liability what was unfunded? We know as I have said that it was unfunded by 64 percent back in 1999. That figure is now down to 45 percent. It is now 55 percent funded. 
What other exaggerations did we have? We debunked the idea that ACC is technically insolvent. If we look just at current year performance we see that it took in $4 billion worth of income and spent $3 billion. ACC went forward by a billion dollars this year so it certainly is not insolvent on this year’s measure of performance. 
Other exaggerations we had from Nick Smith were that he said that unless there were significant changes to the scope of the scheme—that is his code throughout: “significant changes”—we will have households paying $2400 per annum extra by 2013-14. That is per family per household per year. That is what he said. He pretends that was an outcome that was going to happen. It was never going to happen. We saw it today in respect of the announcements about the registration fee levies. He was pretending they were going to go up by hundreds of dollars; they went up by $31. We already know that the substantial part of this problem can be cured by pushing out the date for full funding from 2014 to 2019. We already know that the substantial part of the problem for ACC currently is the decrease in the value of its investments not the underlying change to the scope of the scheme. 
We had Dr Nick Smith saying on  
Checkpoint 
 last week that the first thing is that the investment losses are only a very small part of ACC’s difficulties. I will repeat that. I am quoting it word for word from  
Checkpoint 
: “Well the first thing is the investment losses are only a very small part of ACC’s difficulties.” That is rubbish. Let us look at the PricewaterhouseCoopers report. It refers to the $2.58 billion decrease in ACC’s financial position in the period as at June 2009. About that change in position of $2.6 billion Dr Smith says that “the first thing is that the investment losses are only a very small part of ACC’s difficulties”. What does the report state? It states that $1.8 billion of that $2.6 billion is due to changes in economic assumptions. I will read out what PricewaterhouseCoopers said: “The liability … has increased by $1.830 billion due to the impact of revised economic assumptions most notably revised discount rate assumptions. The global financial crisis has seen a large fall in forecast yields across most economies with New Zealand having experienced an average 1.3% drop in yields over the 6 months to 31 December 2008. Due to the long term nature of ACC’s liabilities even a small reduction in yields leads to a large increase in the liability.” 
The very report that Dr Smith was relying upon was spun by him mercilessly to state that the major part of the problem related to some generosity of the scheme when in actual fact the big problem has been the decrease in investment returns on ACC’s ledger compounded by the fact that under current legislation the scheme has to be fully funded by 2014. This means that effectively the bucket of money we need to pay future claims has to be bigger because investment rates of return have dropped. We have only until 2014 to do it under the current legislation. Therefore it would see a big lift in levies if we did not change that date. But we have always known that we can largely fix that problem by changing the full funding date to 2019. It should have been done by Christmas and employer levies would be lower now than Dr Smith has already put them up to. I sought leave to table a member’s bill that would have very simply given that effect but Dr Smith and National members declined that leave. He now says he will do something. 
Hon Dr Nick Smith 
: You had 9 years mate. 
Hon DAVID PARKER 
: Dr Smith says we had 9 years. The latest bit of jargon we heard was that the National Government was going to increase motor vehicle levies to $585 by 2013-14. He was saying that by 2009-10 they should be going up to $376. He knew even when he said that last week that that was not the case. How do I know that? Because today less than 1 week later he did not put up the levies for motor vehicles by $120; he put them up by $32. He was spinning it and trying to scare people into thinking that the problems at ACC are fundamental. 
If we look at the changes the National Government proposes we see that the ones that people should be most scared of are changes to the scope of the scheme. Dr Smith—again I am quoting him—has promised “significant changes”. He means the word significant. We know that the last time the National Government was in power it left the accident compensation scheme so miserable and with so many injustices that the very basis of the social contract of giving up the right to sue in order for fair compensation to be given was put at risk. Since then the Labour Government has reinstituted various things that had been cut by the former National Government. 
What did we do? One of the gross injustices was that if someone was a seasonal worker and had an out-of-season accident—let us say he or she was hit by a drunken driver through no fault of his or her own—under the rules the former National Government left that person would receive earnings-related compensation based on his or her earnings for a short period prior to his or her being hit by the drunken driver which could exclude his or her seasonal earnings. That person might be unable to work but have no earnings-related compensation to reflect his or her seasonal earnings. 
What other examples were there? They are legion. The criteria necessary to prove medical misadventure were so narrow that some of those people who suffered injury in hospital when very sadly they suffered burn injuries when antiseptics caught fire did not get compensation. All of these things are at risk from National which wants to cut the scheme despite it already being far cheaper for employers than the Australian schemes. 
SUE BRADFORD (Green) 
: 
 The Green Party joins other colleagues here in the House today to express our extreme concern at the direction in which the Government is taking accident compensation and to question whether this is the beginning of National’s blitzkrieg on much that we hold dear in this country. 
National is using the tactics of shock and awe to try to soften up people for a major undermining of our accident compensation system. Whether National goes in the direction of privatisation which it continues to deny or whether it is undermining a whole lot of areas that accident compensation currently covers and is turning back the clock on them—whichever way National is going or even if it is going in both directions—we do not want it. The accident compensation system has been in place for many years. It is underpinned by the Woodhouse principles which I would hope National still subscribed to of community responsibility comprehensive entitlement real compensation and administrative efficiency. We do not want to see any of those go. We understand that there are concerns about aspects of the scheme’s performance but we do not need the kind of undermining of the scheme that is happening at the moment. 
First of all in relation to funding the Government has rapidly created a so-called financial crisis out of the issue that all claims are supposed to be fully funded by 2014. I understand that the Minister for ACC has accepted what the Opposition has put up and what the Accident Compensation Corporation (ACC) board has recommended which is that the 2014 deadline for full funding should be moved out to 2019. I understand that Dr Smith is in agreement with that that he thinks it is viable and should be done. That is good; that is great. So why are we rushing into this now? Why do we have to suddenly start looking at cutting back people’s entitlements? Why do we have to look at taking accident compensation out to private companies? I believe that all of this is scaremongering done by the Minister and the Government. None of it is necessary. 
In terms of the losses on international markets that is not happening for— 
Hon Dr Nick Smith 
: Does the member believe the $22 billion from PricewaterhouseCoopers? 
SUE BRADFORD 
: I have no idea but I believe that it is scaremongering in terms of how it is paid. The PricewaterhouseCoopers report actually stated a whole lot of positive things about what accident compensation is doing. It stated that compared with other workers compensation schemes our accident compensation scheme performs well in terms of people returning to work. Eighty-eight percent of New Zealand workers return to work within 6 months compared with an average of 85 percent in Australia. 
 That is not a sign of a scheme that is failing. The PricewaterhouseCoopers’ report states that the accident compensation employer contribution rate as a proportion of wages is substantially lower than in comparable Australian workers compensation schemes—78c for every $100 in New Zealand compared with an Australian average of $2 for every $100. Our motor vehicle contribution rates are significantly lower than rates in Australian states—although there has just been an announcement that our rates are going up today. The PricewaterhouseCoopers report also states that we have lower claims management expenses than all Australian schemes and lower administration costs. This report is the very one the Minister is talking about. 
Hon Dr Nick Smith 
: No it’s not. 
SUE BRADFORD 
: Yes it is. The report’s writers conclude— 
Hon Dr Nick Smith 
: That’s from 2005. It’s 3 years old. 
SUE BRADFORD 
: The Government has gone on this week to sack the chairman of the ACC board Ross Wilson and we are concerned about what may happen to the rest of the board. We are not sure what is happening to the rest of it but we are very concerned that Mr Wilson’s union colleague Wayne Butson may be removed. We question whether the Government will have any worker or union representative on the board once it is reconstituted after the 1 month deadline that the Minister has given. Given that this scheme is a workers compensation scheme it would be a total shocker if the board were to have no worker or union representation at all. I certainly hope the Minister will look at appropriate candidates for the board. Unions and workers absolutely must have representation on the board. One of the major parts of society affected by accident compensation cannot be suddenly left with no representation at all. Mr Wilson has been replaced by the previous head of Ernst and Young John Judge—about whom I must admit I know nothing and for all I know he will be a fantastic chair. He needs beside him at least one board member—if not more—who understands the real needs and the real situation of the workers of this country who are affected by accidents unfortunately every day around this country. 
The third area we are very concerned about is the threat by the Government to cut actual entitlements and services provided through accident compensation. Again this is very unclear. We can only go on what little the Government has said and what has been in the media over the last few days but it is clear there is a threat to physiotherapy. We had finally reached a point where physiotherapy had become accessible to all injured workers and others. Rehabilitation rates are going up. What we see now is a threat to that area—after we had finally got some decent changes. Will the Government be making cuts in the area of medical misadventure where unfortunately there have been a large number of accidents? Will it cut accident compensation for seasonal workers? Why should they miss out? Seasonal workers are workers too and deserve cover just as much as anyone else does. What other cuts will the Government make? What rehabilitation do people not deserve whether they are in work or non-earners? All injured people whoever they are deserve the best that this country can give them on a no-fault basis. Worst of all of course would be to restore—and some people are calling for it—the right to sue and to get rid of that no-fault basis. I certainly hope Dr Smith will not take us in that direction. I see him shaking his head. Thank goodness! 
ACC must be maintained as a publicly owned company. The Woodhouse principles must be maintained. Accident compensation must not be put out for privatisation. I am very concerned about the comments Mr Key made the other day—and I asked about them in question time today—regarding taking the accident compensation scheme out to private companies. I fail absolutely to understand the difference between taking the accident compensation scheme out to private companies and privatisation. Is it partial privatisation that the Government is talking about? Where do these private companies come in? 
I sat with the Minister on the special committee on accident compensation back in 2000 and we heard what a failure the first attempt at partial privatisation of accident compensation had been. I hope that some of the members who were on that select committee and are sitting on the Government benches now will remember the submissions we heard back then about the inequities and iniquities of that system as it was actually applied to workers in some workplaces. Workers were told they had to go through what was basically a company doctor scheme. Everything possible was done to avoid those people getting compensation. Income-related compensation and rehabilitation options were limited. We saw the beginning of a move towards the American system which has manifestly failed people in that country. 
The Green Party will continue to work with colleagues—where we can—across the House and with trade unions community organisations physiotherapists and everyone else we can work with out there in the community to resist what the Government is trying to do to accident compensation and to try to retain the good system that we have to the maximum extent possible. 
Hon Sir ROGER DOUGLAS (ACT) 
: 
 The fact is that the accident compensation scheme is a total failure. It is a walking disaster. Over the last 9 years the Labour Government expanded the coverage of accident compensation far beyond what was originally intended and at the same time told us that it would not cost more. It was absolutely wrong. The employers’ account will need to increase by around 55 to 60 percent over the coming years to make up for the shortfalls projected unless strong action is taken. 
The failure of accident compensation has not happened by chance. Accident compensation is failing basically because the concept is intellectually bankrupt. The idea that one can provide cheap insurance through monopoly provision is a myth. We know this to be true. Monopolies fail to meet consumer demand because consumers have no choice at all. Monopolies fail to reduce costs because they have no competition to drive out the high-cost structures. Every State monopoly costs too much. Every State monopoly—whether it is accident compensation or otherwise—costs too much and fails to meet consumer demands. 
I ask members to consider the problems with the accident compensation scheme. The Accident Compensation Corporation (ACC) is bankrupt. Any private insurance company that had such a large unfunded liability would be out of business. The only thing that keeps ACC in business the only thing that keeps ACC from receivership is that it is compulsory—that is it has a claim on the income of each and every New Zealander. In other words it is a tax by another name. Accident compensation shields the negligent. Employers with safe workplaces subsidise those with unsafe ones. What incentive is there under an accident compensation system to make workplaces safer unless one pays for a lack of safety? That is why in the year after the introduction of accident compensation workplace accidents increased by 400 percent. I repeat: 400 percent. 
The third point I make is that the accident compensation scheme has surging costs. Schemes that have open-ended liability and no way to guarantee that revenue matches costs are unsustainable. In 2008 the number of claims increased by four and a half times the population growth. This suggests that the taxpayer is being defrauded. In the 3 years to 2008 the cost of the scheme’s medical treatment increased by 55 percent at a time when inflation would not have increased by even 10 percent. The accident compensation scheme has a poor record of getting people back to work. For example half as many New Zealanders receive an action plan for how to return to work as do Australians living in Tasmania who have private insurance. Many people say that private provision would increase costs because there would be a profit motive but it is the profit motive that ensures that private businesses do not become excessively bureaucratic and bloated. Competition would allow consumers to purchase a much wider range of insurance products. Competition would decrease premiums overall and especially the premiums for safe workplaces while increasing them for unsafe workplaces thus providing an incentive for greater safety. That is how the system would work. Competition would stop bureaucratic expansion and help end insurance fraud. 
Once again the real story here is that State monopolies are destined to fail. But if we look at ACC we see that the real problem is that it has a cost-plus culture. Under a Labour Government we had unrealistic cover extensions loss of provider management the removal of co-payments for services increasing claim escalations and service utilisations limited case management and limited employer involvement. It is no wonder that it is a mess and no wonder that it is basically bankrupt. 
I have sat here and listened to members go on about the PricewaterhouseCoopers report. The fact is that the Labour Government depended on erroneous international comparisons to counter the clear performance deterioration of ACC. That report cost $1.3 million but it did not undertake a meaningful analysis of ACC’s emerging and comparative performance. No adjustment was made for demonstrable differences between our accident compensation scheme and the Australian scheme. Let me quote two lower-income replacement rates: 100 percent in Australia and 80 percent here. We have significantly lower lump-sum common law payments with payments of 30 percent in Australia compared with 1 percent here. 
If those two factors are taken into account it would mean 40 percent extra costs in Australia over and above those in New Zealand. The previous Government has not mentioned that because it does not want the facts; it wants to pretend. But at the end of the day pretence gets us nowhere and it is no wonder that we in this country are finding that our productivity and our standard of living have declined. There are no performance incentives to positively influence behaviour and utilisation. There is no risk rating and very limited excesses or service co-payments which are so necessary in order to keep a cap on expenditure. ACC as I understand it is actively preparing for competition while not actively addressing the substantive deterioration in its core statutory businesses. 
What the Labour Government did over the last 3 or 4 years is a disgrace—an absolute disgrace. ACC used phoney estimates to give the appearance that it was solvent. For example it overstated the discount rate which put a gloss on the figures of $5 billion or $6 billion. ACC’s optimistically projected reductions in expenditure trends were reduced—for example the rehabilitation liability came down from 10 percent to 1 percent in 4 years. What the Labour Government did over the last 4 or 5 years with the accident compensation scheme is nothing short of disgraceful—absolutely and utterly disgraceful. The fact is that the scheme during that period was a total failure and it is now a walking disaster; members opposite should be ashamed of themselves. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 I am somewhat bemused at the reaction to the announcement from the Minister that the Accident Compensation Corporation (ACC) needed a fresh start in order to face up to its funding issues. What is wrong with a fresh start? In all other spheres of the world it seems that the deteriorating economic forecast is dominating our thinking. We are calling for results-based accountability funding for outcomes efficiency of services and better targeted support. 
Let us not forget that we are talking about an agency in which a shortfall of $1.5 billion is supposedly of such little interest to its management that it was deemed unnecessary to disclose the amount in the statutory Pre-election Economic and Fiscal Update. For 3 whole months before the 2008 election the ACC board had recommended that more funding would be required specifically $1.559 billion—gasp—over the next 5 years including $307 million in the current year. Despite the requirements around limited powers that every good public servant knows about officials in ACC and Treasury had not deemed it necessary to pass that information on. On top of the Pre-election Economic and Fiscal Update we then received the latest 6-monthly PricewaterhouseCoopers valuation of ACC’s liabilities. In this report it was revealed that ACC’s liabilities have increased to $21.875 billion with dramatic increases needed in the earners levy and the vehicle levy. 
Today New Zealanders have had to accept the shock announcement that the motor vehicle levy will be increasing by $32 from 1 July 2009. The motor vehicle licence fee for a petrol car will increase from $136.44 to $168.46 and on top of that the ACC petrol levy will rise from 9.34 cents per litre to 9.90 cents per litre. To many in this House those numbers may just seem like dollars and cents and hardly the stuff to get concerned about but for my constituents the constituents of Te Tai Tonga those dollars and cents come at a time when they can least afford it. The families in my electorate are on a median income of $54500 for an entire household. That is a whole $5000 less than the median family income for New Zealand as a whole and for many of the people in this establishment it is an income level that might be regarded as being too low for even an individual let alone a family. 
But that is not all we need to think about when we think about ACC—bad enough though it is. I want to drill down further into the experiences of our constituents with ACC and specifically the experiences of Maori. All the research tells us that comparisons of need with actual care consistently show us that across the health sector Maori have greater need but less access to treatment. We have seen that for heart disease for respiratory health for cancer for strokes and the list goes on. But the data that is particular to ACC reveals that Maori are not receiving the entitlements they should receive in the areas of care rehabilitation and compensation. They are not receiving their entitlements at a level comparable to the proportion of Maori in the population and so we have to ask why. 
I ask again whether the case of appointing a new chair for ACC justifies the use of the urgent debate formula. The situation that should really warrant urgent consideration is the situation outlined by Dr Peter Jansen of Mauri Ora Associates. His research paper  
Maori consumer use and experience of health and disability and ACC 
 is fascinating reading for all of us because it reveals in some depth that the reasons for the large health disparity include barriers to access barriers to treatment provider behaviours cultural competence institutional racism differences in utilisation lack of knowledge by Maori patients and Maori preferences for care. I know that that is not news to anyone in this House but it should be. What could explain why so little has been done to address that situation? 
 We know that Maori are dissatisfied with the care they receive and with the barriers to care. Now is the time to do something about it. In our world view we have a saying: ruia taitea kia tu ko taikaka anake—strip away the sap wood gather only the heart wood. It literally means to clear away the rubble in order for us to get to the heart of the matter—the ultimate outcomes in terms of health and care. 
We are not about to say that an individual—Ross Wilson or John Judge—is capable or incapable of earning the trust of the public. It is not our place to do that and it is certainly not appropriate to target or finger-point individuals but we do believe it is useful to look afresh at accident compensation. The ministerial inquiry the funding shortfall and the continuing saga of ballooning accident compensation entitlements and levies signalled this week are all vital areas of examination in their own right. But when we overlay the situation for Maori on top of that context it most certainly appears to us that nothing could be wrong with taking a fresh approach and a good look at a system that is clearly experiencing some problems. In the interests of our constituents of Maori of taxpayers and of everyday New Zealanders we say let us be brave enough to withstand the challenge of change and let us look anew at the accident compensation scheme. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: I call Grant Robertson. I remind the member that this is a 5-minute slot and I will give you a bell at 4 minutes. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 Thank you Mr Speaker. What we have seen from the National Party with the sacking of Ross Wilson is simply stage one of its plan for accident compensation. It is a plan to move to privatisation to reduce coverage and to increase the role of private insurance providers—largely Australian private insurance providers. It is a message of “cut and sell” and it is petty politics to sack Ross Wilson from the role of chair of the Accident Compensation Corporation (ACC) board. Ross Wilson is a person with years of experience in ACC. He is somebody who has been there and done that at the worker level and at the board level of ACC and sacking him is simply a matter of petty politics from Nick Smith. 
National’s agenda for accident compensation began before the election. Merrill Lynch gave it away to us. It told us that the work account was going to be opened up to private insurance. We have heard a lot today about the principles of the accident compensation scheme the principles that Owen Woodhouse put forward. One of the things Owen Woodhouse said was that involving private insurance providers in the scheme would fundamentally undermine it because their motive of profit fundamentally goes against a 24-hour no-fault scheme. As Owen Woodhouse said the compensation regime before we brought in universal coverage was a lottery and that is what National wants to return us to: a lottery where New Zealanders are exposed to litigation. 
We have given away the right to sue. New Zealanders should be and are proud of the accident compensation scheme because it is our scheme. It is Kiwis looking after Kiwis. It is our collective response to injury to accidents and to rehabilitation. It prevents New Zealanders from being exposed to an American-style insurance scheme and that is the scheme that the National Government is taking us back towards. 
Hon Dr Nick Smith 
: Rubbish! 
GRANT ROBERTSON 
: I ask Dr Smith whether he said to the Australians that this scheme was going to be opened up for private insurance because if he did then he is fundamentally undermining the scheme that Owen Woodhouse put forward. Owen Woodhouse said that this was our collective response to injury and accidents and it would be undermined by the role of the private sector. 
We need to be clear today that Nick Smith has put up a straw man to show that New Zealanders cannot afford the accident compensation scheme. We are saying to him that that straw man is based on a loss of investment income on interest rates going up and on some accounting changes. Yes there have been some costs but fundamentally the accident compensation scheme is affordable with the coverage we have now. The agenda here is to reduce coverage. National needs to come clean on its agenda for accident compensation because it is not acceptable here in this House that the principles that Owen Woodhouse put forward are somehow being upheld by a National Government that wants to bring in private insurers. Private insurers are driven by a profit motive. This is a scheme Kiwis can and should be proud of because it is a universal no-fault scheme that looks after New Zealanders throughout their lives. It is a scheme that Labour in Government has tried to uphold. 
National has never liked the scheme and in the 1990s it brought in private insurance to undermine the scheme. We know that private insurers in this scheme will cherry-pick to ensure that they pick off those cases that can be easily dealt with. That will leave the Government provider ACC as the default provider and the last-resort provider putting further pressure on the corporation. It is an unacceptable approach and it is the approach that the National Party is taking today. 
New Zealanders should be proud of the accident compensation scheme because the PricewaterhouseCoopers report has shown that it is working best in the world for accident compensation schemes. It is supported by a range of people across the board and it is supported because the costs have been very internationally comparative. In New Zealand it costs 78c per $100 of worker wages to fund workplace accident compensation. In Australia it is an average of $2 in every $100 of wages. In New Zealand 88 percent of people return to work within 6 months of being injured compared with the Australian average of 85 percent. In New Zealand the cost of managing claims for accident compensation is 8 percent of ACC’s total expenditure and in Australia it is up to 32 percent. 
That is because we are not focused on management costs. Private insurers are focused on management costs as that is where they make their money. In New Zealand we have a scheme that is focused on rehabilitating people and on people getting back into work. That is the kind of scheme New Zealanders should be proud of. That is the kind of scheme that Ross Wilson spent 25 years working on and ensuring that it works well. 
Hon Dr NICK SMITH (Minister for ACC) 
: 
 I raise a point of order Mr Speaker. The previous speaker made a claim that it was Labour that brought in the accident compensation scheme. I seek leave— 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: If the member wants to seek leave he seeks leave but with a long introduction like that he is entering into debate. A point of order is not about debate. 
Hon Dr NICK SMITH 
: I seek leave to table the original Woodhouse report and the legislation passed by Prime Minister Holyoake. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: Leave is sought for that purpose. Is there any objection? There is no objection. 
Documents by leave laid on the Table of the House. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 I raise a point of order Mr Speaker. At the beginning of Dr Smith’s point of order he claimed that I had said that Labour had introduced the accident compensation scheme. I did no such thing. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: The member has just transgressed against what I said before and told the Hon Dr Nick Smith not to do which was to use a point of order as a debating mechanism. Points of order are about order and structure. 
Hon MARYAN STREET (Labour) 
: 
 This Government is trying to perpetuate a number of myths around accident compensation and they need to be busted. 
Hon Dr Nick Smith 
: Just apologise. 
Hon MARYAN STREET 
: The extravagant language of the Minister for ACC tempts me into using unparliamentary language but I will resist that. 
The solvency myth is the first myth that needs to be busted. The $22 billion in liabilities may well be the case. I do not doubt that but the $22 billion over time is what matters. The Accident Compensation Corporation (ACC) is in a long-term game and that is why the investment portfolio has taken a hit in recent months. When I was the Minister there was a little over $12 billion in assets and I understand from the current Minister that it has gone down to a little over $10 billion. It is taking the same kind of bath that all investment portfolios around the world are taking. 
Hon Dr Nick Smith 
: Why did you hide the $300 million? 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I think you have heard the barrage from the member opposite to the member who is speaking but when he brings you into the debate as he did then that is inappropriate. I ask you to ask him to cease and desist from doing that. 
The ASSISTANT SPEAKER (Hon Rick Barker) 
: The member is correct; the Speaker should not be brought into the debate. I invite the member to continue her speech. 
Hon MARYAN STREET 
: The whole point is that the liability of ACC is spread across the lifetime of the injuries. 
 So the $22 billion is not liable and that is why some of the backbenchers in the National Government ought to ask their Minister for a few correct facts not just the spin he wishes to put on things. It is about the liability that is payable over the lifetime of the injury. 
I will go on to the question of the principles of the Woodhouse report because the Minister has said even as recently as today that the Government intends to uphold the principles of that report. There are five principles: community responsibility comprehensive entitlement real compensation administrative efficiency and complete rehabilitation. It is patently obvious that the direction this National Government is taking in respect of accident compensation will infringe at least three if not all five of those principles. 
In the first instance introducing competition is about introducing private insurers into the scheme which cuts absolutely across the principle of community responsibility. 
Hon Dr Nick Smith 
: The member breached the Public Finance Act and should apologise. 
Hon MARYAN STREET 
: That Minister is the only National member to be returned to this House with a reduced majority. When the tide was coming in for the National Party the tide was going out for that member. I am sorry that it hurts him so much but it is true. Dr Nick Smith was the only one of his caucus to have a minus figure beside his results at the latest election. The point is— 
Hon Dr Nick Smith 
: Why did the member breach the Public Finance Act? 
Hon MARYAN STREET 
: This member did not breach the Act and Dr Nick Smith’s own ministerial inquiry found that to be the case. 
Hon Dr Nick Smith 
: No it didn’t. 
Hon MARYAN STREET 
: It absolutely did. The fact that the Minister keeps repeating it does not make it true. 
I will talk about the other principles underpinning the Woodhouse report that would be breached by this Government were it to proceed with its intentions. The first is the introduction of private insurance companies. Because that Minister does not understand the fundamentals of accident compensation he does not recognise the extent to which private insurers would jeopardise the principle of community responsibility. He does not understand that principle. This is not an ordinary insurance scheme; this is a social contract. I say to Sir Roger that this is not an ordinary private insurance scheme; this is a social contract. 
The citizens of New Zealand have given up the right to sue in order to get one of the Woodhouse principles which is comprehensive entitlement. That means that New Zealanders get comprehensive entitlement—full cover for an injury—in exchange for giving up the right to sue and that principle is in jeopardy. 
I will go further and look at some of the specifics that the Minister has been parading recently in more or less inflammatory language depending on how the editorials run the next day. Another one of the Woodhouse principles is administrative efficiency. Let us go back to the 1990s when the National Government put a cap on the number of physio visits one could have under accident compensation. It limited the number of visits to five after which there were huge hurdles to overcome in order to get another treatment. The risk of sending incompletely rehabilitated workers back into the workplace is very high with such a limit so that would also infringe the complete rehabilitation principle. This Government is looking to limit the extent of the treatment that could be given to people who are injured and to send them back on to the shop floor inadequately rehabilitated which would only rack up costs against the health system later on as their injuries revisit them. 
I will go into some more specifics to do with the levies. If one looks at the question and answer section of the Minister’s own media release which was publicly released the other day one finds that he said in respect of the residual claims account that if one were to push out the residual claims date to 2019 it could bring down the expected levy rate per $100 of liable earnings from 68c to 36c. Let me just make that plain: this Minister could have had he been on top of his game—which he is not—reduced these levies. 
Hon Dr Nick Smith 
: You had 9 years! 
Hon MARYAN STREET 
: I say to Dr Smith that that does not wash because the residual levy— 
Hon Dr Nick Smith 
: Why didn’t the member do it? 
Hon MARYAN STREET 
: I had announced that change. It was not required before that point. 
The point is that this Minister could have reduced the levy to employers and reduced the levies on motor vehicles. Instead of putting them up by $32 today according to his own paper he could have reduced them by $100. He could have reduced by $100 the motor vehicle levy according to his own paper for every family with a car. Why did he not do that? Why did he not take down the employer levy? I will tell members why. It is because he wanted an articulate and vociferous lobby group such as the employers to be grumbling about high levies. Why did he not take down the car levy? Because he wanted every family in the country to say that accident compensation is unaffordable. That is why he did not take it down. That is why he did not drop the levies when it was in his power to do so. 
It was in the Minister’s power to drop those levies at the end of last year and he should have done it then. If he had done so there would have been no need to raise motor vehicle levies now. 
Hon Dr Nick Smith 
: Wrong! 
Hon MARYAN STREET 
: Absolutely. He could have lowered by $100 the car registration levy. He did not do that because what National is looking for is constant noise about accident compensation against which it can say that the system is failing and that it needs to cut it down and take away people’s entitlements. 
MICHAEL WOODHOUSE (National) 
: 
 I find it very interesting that in a snap debate called by the Labour Opposition on the merits of the Minister for ACC’s decision to remove and replace the chair of the Accident Compensation Corporation (ACC) not a single member of the Labour Opposition has questioned the competence of the new chair. Not a single reference has been made to that in the debate. This debate is about the merits of the Minister’s decision. Instead the Leader of the Opposition introduced this debate by saying: “No good reason was given for that dismissal.” Well frankly I can think of over 10 billion good reasons and none of them are funded. 
We have had a total smokescreen over this scheme that has deflected attention from the abysmal performance of the previous Government over the last 4 years. Last week we had David Parker standing up here and saying in question time that the measurement of the unfunded liability was completely irrelevant. He said that as a percentage of the total liability the unfunded liability had gone down from 65 percent to 45 percent. Well frankly that is a nonsense for two reasons. The levy payers do not pay in percentages; they pay in dollars. Sixty-five percent of a mouse is a hell of a lot smaller than 45 percent of an elephant which is what this issue is about. 
This situation is the financial elephant that had been in the room of the previous Labour Government for several years. The Labour Government knew about it and in the face of diminishing returns and increasing costs it continued to load cost after cost on to the scheme. 
I can tell members that this National Government is very firmly cognisant and supportive of the Woodhouse principles—I know what they are; I have lived by them as a member of staff at ACC and I continue to do so—which are 24-hour no-fault cover that has community responsibility comprehensive entitlements complete rehabilitation real compensation and administrative efficiency. I ask those members on the other side of the House to tell me how it is responsible behaviour that a previous Minister who knew on 1 July last year that there was a $300 million blowout in the non-earners account did not disclose it which is in breach of the Public Finance Act. The fact is that either she knew and did not disclose it or she did not know and should have known. Either way it is a problem. Members can choose their poison. 
I will go back to another comment by the Leader of the Opposition in relation to comparisons made with similar schemes in Australia trumpeting the fact that the scheme here costs 78c per $100 against $2 per $100 in Australian schemes. The fact is he is not comparing like with like. He well knows that motor vehicle accidents that occur in the workplace setting are covered by the Australian scheme and over here they are not. Frankly the very obvious case is that this 78c in the $100 is not currently managing to cope with the costs of the scheme. 
The Leader of the Opposition said we have the best scheme in the world; it works it is cost competitive it has great rehab and it has great claims rates. Well my question is if it is so great if it is the envy of the Western world then why is nobody copying it? 
I will take back members to a time when the scheme was cost competitive when there was great rehab and early exits. I will tell members who was in charge of the corporation at that time. The person in charge of the corporation at that time—and he was appointed by a National Government—was a former Labour Minister of Finance. So I think members on the other side of the House should reflect on whether some political interference is at work here. 
At that time during the introduction of the residual claims fund the idea was to reduce the residual claims to zero by 2014 and to fully fund the other parts of the scheme. At that time over 26000 claims were still on ACC’s books and the number steadily reduced from 1998 to 2005—from 26000 to 15500 to 12500 and so on down to 4000. The fact is the number has not moved that much more which is probably to be expected because those are the tougher claims the longer claims that will have higher rehabilitation costs and higher scheme costs. 
The fact of the matter is that the majority of the unfunded liability is not in the residual claims account; it is in the “others” accounts which was never intended. So why is that? In the face of 9 years when we have had a huge investment in health and safety in injury prevention initiatives in workplace promotion in advertising and with safer cars and safer roads why do we continue to have claims rates increasing by 4 and 5 percent year on year since 2004? 
We had investment performance during that period that exceeded the market average sometimes up to 12 and 13 percent. Yes since 2008 there has been a downturn in the average claims rate but I note that in the Department of Labour’s recent report on ACC’s performance of the seven key performance indicators the department considered most important to the corporation’s financial state the only one that was met was investment returns which were continuing to exceed the market. What were not being met were key liability drivers the cost per treatment claim the cost per entitlement claim 3-month rehabilitation rates long-term claims pools and return-to-work rates—all missed. So why is that? 
It is very clear that claims numbers are increasing in the face of all that investment in injury prevention. Claims duration—the most material influencing factor on the costs of claims and total scheme costs—is going up. Three-month exit rates are down by 5 percent. Six-month exit rates are down. Twelve-month exit rates are down. Treatment costs are significantly up. We have already talked about physiotherapy costs but it is interesting that the highest intervention rate by physiotherapists in the Western world occurs in this jurisdiction. We have the highest number of physiotherapists as a percentage of the population anywhere in the world. 
Surgery costs are up. Ambulance costs are up. Vocational rehabilitation is up. Social rehabilitation is up. The fact is this scheme has been softened away from entitlements into benefits. The Leader of the Opposition in his opening debate used the term “benefit” four times. The scheme is an entitlement-based scheme which is focused on 24-hour no-fault cover and a relentless drive to a fast and lasting return to work and independence. Instead it has become a soft and socialised scheme. We need to have a discussion debate and dialogue with the public of this country about what kind of scheme they want. The fact is— 
Darien Fenton 
: Competition. 
MICHAEL WOODHOUSE 
: This has nothing to do with that. The fact is this issue is about what kind of scheme we want—a scheme that sets out very clearly what people can expect and what levies people can pay—and sets to work within that. 
I do not blame the very hard-working staff of ACC many of whom are known to me and who do a very good job in the circumstances but the fact is that expectations that have been put on them have changed from those that existed a few years ago and they should be turned round. A fast and lasting return to work and independence has to be the goal. 
Instead we have a corporation that has had expectations set for it that are outside of the parameters of the legislation. I am advised by staff who work at ACC that they have been encouraged not to follow the legislation but to adopt different policies for the acceptance of claims and the payment of weekly compensation which are outside the legislative framework and have caused no end of trouble when cases like that go to review because the reviewer has the legislative framework only to consider. 
We have to have that discussion about whether we want a social contract or a real contract with real levies and real entitlements. It is a scheme that is designed to cover people who have injuries and no more. The drift from the health sector to the non-earners account is consistent marked and increasing and boundaries have to be put on the scheme. The fact is that with any scheme that has entitlements that some people will qualify for and some will not there will be people who miss out. So let us have an intelligent discussion about that and say where those boundaries should be and what the costs of that scheme should be. 
The debate having concluded the motion lapsed. 
Reserves and Other Lands Disposal Bill 
First Reading 
Debate resumed from 5 March. 
A party vote was called for on the question  
That the Reserves and Other Lands Disposal Bill be now read a first time. 
Ayes 113 
New Zealand National 58; New Zealand Labour 43; ACT New Zealand 5; Maori Party 5; Progressive 1; United Future 1. 
Noes 9 
Green Party 9. 
Bill read a first time. 
Bill referred to the Primary Production Committee. 
Building Amendment Bill (No 2) 
First Reading 
Hon MAURICE WILLIAMSON (Minister for Building and Construction) 
: 
 I move  
That the Building Amendment Bill (No 2) be now read a first time. 
 At the appropriate time I intend to move that the Building Amendment Bill (No 2) be considered by the Local Government and Environment Committee and that the committee report finally to the House on or before 11 May 2009. I will also be moving that the committee has the authority to meet at any time while the House is sitting except during oral questions during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House and to meet outside the Wellington region during a sitting of the House despite Standing Orders 187 189 and 190(1)(b) and (c). The current economic downturn is having a big impact on the building sector. Therefore it is important that the bill moves quickly through the select committee process so that the sector can benefit from the proposed changes sooner rather than later. 
The purpose of this bill is to reduce compliance costs and to improve the efficiency of the building design and consenting process. The bill was introduced just before the end of the previous parliamentary term following consultation with the industry and with local government. It takes some useful steps to cut red tape and to improve consistency in decision making around the building consent processes. Although the bill includes some useful initiatives it is only a start and does not go far enough in addressing the compliance issues that face homeowners developers and builders. There is way more to be done. The Government will be reviewing the Building Act and looking to make further amendments to cut red tape in order to drive down costs without of course compromising building quality. It is quite possible that Supplementary Order Papers may even be introduced and sent to the select committee to consider along with the bill. 
The reviews that the Government is involved in include looking at what needs to be consented based on better differentiation between levels of risk; providing better information and education on the building code and on how to meet performance standards without regulating everything that moves; removing unnecessary building control regulation and putting a greater focus on information and education so that people can make informed choices rather than having them made for them; simplifying building licensing rules and providing recognition for trade qualifications making it easier to get licensed but not dumbing down the system; supporting councils to work smarter through the use of technology shared services and online systems; helping consumers to make better informed decisions about building their homes and choosing products that best suit their needs; and finally focusing on how to get developers and builders to stand behind their work and to put things right when that is needed. Along with that the Government will also be looking at how liability and risk around building is distributed between the parties and at how those factors might be better managed. That will include of course looking at some form of home warranty insurance. 
Moving to the key measures in this bill first of all I say it introduces a pre-approval scheme which is a national multiple-use approvals process to streamline the building consent process for house designs that are to be replicated on a substantial scale. That will reduce the time and cost associated with the approval of designs particularly for volume builders. Once a national multiple-use approval has been issued a building consent will still be required in the district where the home is to be located. However decision making by the relevant building consent authority will be limited to site-specific matters only: things like foundations and connections to utility services. The bill provides that the time frame for processing building consents for pre-approved designs will be reduced to 10 working days. That compares with 20 working days for the standard building consent process. 
Secondly the bill enables regulations to be made that define minor variations that can made to building plans without having to go through a full building consent amendment process. That will clarify and simplify the process for making variations to building consents and will reduce the time and cost involved. I think that this is a sensible approach. It recognises that the building process is a dynamic one and that things can and do change on the way through the process that are not of any such great significance that that they need to go back through a full consent. In many cases I have had builders say they just wanted to move a handbasin within a bathroom design or change where the toilet and the shower were juxtaposed and doing that meant going back for a complete and utter go through the process. If a variation is defined as a minor adjustment—as we would define it in those cases—then a consent would not be required. 
Thirdly the bill will also make it optional for a consent applicant to obtain a project information memorandum reducing the time and cost associated with obtaining building approval. 
This bill takes some steps towards reducing red tape and streamlining the decision making associated with the building consent process. However more needs to be done and there is much more to come and I signal that right now. I invite members of Parliament and the public to watch this space as we work through some of the issues that I have canvassed earlier in my speech. 
SU’A WILLIAM SIO (Labour—Mangere) 
: 
 Kia ora and talofa lava Mr Assistant Speaker. Malo lava le soifua maua malo le lagi e mama i lau afioga ma sui mamalu o le Maota Fono. That is my way of acknowledging you Mr Assistant Speaker and the members of this House. I also want to recognise the members of the public who are listening in and watching the proceedings of this House especially those who are listening in from my electorate of Mangere. It is as we call it the gateway to New Zealand where Aotearoa touches the rest of the world. I acknowledge Minister Maurice Williamson for bringing back this Building Amendment Bill (No 2) into the House. Labour introduced this bill while in Government to help reduce unnecessary delays in the building consent process which causes frustration among many of our builders throughout this nation. The bill rightly—as the Minister has outlined—will reduce both the direct and indirect costs to owners and developers associated with the construction process while ensuring that good-quality homes and houses are constructed. The bill is part of a coordinated approach taken to assist in increasing the supply of good-quality affordable homes but I suspect that many of the public who are listening in to this debate will be wondering what is going on with this Government. 
You see it is a shame that the National Government does not share the same commitment to having good-quality housing. Why else would it axe the $1 billion household insulation fund that would have improved the energy efficiency of Kiwi homes? Ordinary New Zealanders will also be looking at each other in puzzlement and asking what is going on here and they will be making some important judgments about the National Government. I say this because when the public got over their initial shock last year after the election and when they woke up and saw that National was in Government being the fair-minded Kiwis they are most people said: “OK we made a mistake. But let us see what National has got. Let us see what this Government is made up of.” Then the National spin doctors got working and created an image that the Prime Minister and his Cabinet were the action team. I would say that those who are drinking Tui at my local pub in Mangere Bridge will all be shouting out: “Yeah right!”. 
Then the spin doctors got working and came up with the new Cabinet of Ministers and after peppering that Cabinet with some new faces amongst the old faces they announced that here was their new National front bench. What was the response of the Tui drinkers out in the public? It was: “Yeah right!”. What we saw was a National Cabinet that promoted the Prime Minister’s close friends and demoted some hard-working senior long-serving National MPs. Some of the members of the National Cabinet were young some were not so young; some of them had good hair styles and some of them were without any hair. The public got to see that some of them were good-looking and that there were others to whom the old expression would apply: “They have the looks that only a mother could love.” 
The point I am making as to why I think the public listening to this debate would be perplexed by what this Government is doing is that at a time when the world is swirling in economic turmoil there is a strong call from our communities for this Government to act quickly and do something substantial in support of low-income families. Although this bill is necessary the impact of the global economic recession does raise the question of how many jobs this bill will save. Why is National prioritising this bill when the House should be using its valuable time considering measures necessary to help low-income earners who are struggling to make ends meet? 
I conducted a meeting last week with some providers in our community—including the Monte Cecilia Housing Trust Housing New Zealand Corporation and a few others—just to try to get a handle on the impact of the recession on housing needs in Manukau. The key issues that emerged were overcrowding which is getting worse; the re-emergence of infectious diseases; the cost quality and security of tenure of some private rental stock; issues around boarding houses; the need to support the community housing sector; and the increase in poverty. 
In my electorate we had a series of redundancies during the Christmas period. Sadly nobody kicked up a fuss about that because we had a bit of money. Most people spent that money supporting their families during some happy times in the Christmas period. That is all gone. The Work and Income New Zealand office told me that when people come in looking for jobs there are no jobs for them. It is very difficult for them to direct people who have been working in labour-intensive roles to other new roles. 
That is the question that will probably be causing quite a bit conflict. Yes this bill is necessary but in a time when there is so much uncertainty and there is the growing worry about making ends meet and about job security income protection and being able to afford the basics and when this Government ought to be coming up with something substantial the public will be saying that this is just not enough and that this is not what they were looking for. 
Earlier today there was a debate about how this Government has sacked Ross Wilson the chair of the Accident Compensation Corporation (ACC). 
Hon Parekura Horomia 
: Shame! 
SU’A WILLIAM SIO 
: Shame on them! I absolutely agree with my friend. This is the example of the 90-day bill the fire-at-will bill. Ross Wilson chair of ACC is the first casualty 
Nicky Wagner 
: Have you read that bill? You need more than 90 days. 
SU’A WILLIAM SIO 
: It was not more than 90 days. The National Government sacked Mr Ross Wilson without any reason. It sacked a man who has the integrity to continue in the role and who has the skills and the intelligence. The Government is determined to wreck ACC and it does not want to have anybody chairing it who might be able to right the wrong it intends to do. 
Labour supports the bill but in terms of the timing and the concern we have for communities we feel that this is not the answer that the communities need to help with their housing difficulties. I think the Minister can do more by considering supporting the needs of those in our communities—as I have outlined earlier in the meeting that I conducted—in terms of overcrowding the increase in poverty and supporting a community housing sector. Although we are supporting this bill through the process it is our feeling and certainly my feeling that National should be concerned about giving to the public the measures necessary to help low-income earners who are struggling at this particular time. With those words I say that Labour supports the first reading of the Building Amendment Bill (No 2). 
CHRIS AUCHINVOLE (National—West Coast - Tasman) 
: 
 I am pleased to stand and support the Building Amendment Bill (No 2) which was introduced to the House by the Hon Maurice Williamson. It was wonderful to hear such a robust analysis by my learned colleague. This bill will make the necessary amendments to the Building Act 2004 for achieving the purpose of increasing the flexibility and efficiency of the building consent process. 
Hon Maryan Street 
: This isn’t a school play Mr Auchinvole. 
CHRIS AUCHINVOLE 
: It will facilitate an increased supply of affordable homes—something the member Maryan Street talked a lot about but did not actually produce. It will seriously ensure that homes and buildings that are built are of good quality which is a most important caveat. 
We went into the last election with a clear manifesto that the new Government would place a high priority on reducing red tape would increase efficiency and would reduce costs and that is what we are about. 
Hon Maurice Williamson 
: Red anything actually. 
CHRIS AUCHINVOLE 
: Red anything yes. That is why we are pushing through with the Resource Management (Simplifying and Streamlining) Amendment Bill in order to reduce unnecessary delays and costs and to give consent applications a smoother passage without compromising our environmental obligations. That is why we have given priority to the Unit Titles Bill—which I spoke on last week—in order to streamline development processes and provide flexibility for those who are building big developments. That is exactly why I am in favour of speaking in support of the Building Amendment Bill (No 2) being passed into law. It is part of this Government’s ongoing commitment to cutting and reducing red tape and it will reduce both direct and indirect costs to property owners and developers. 
Let us look into this a little bit closer. The big problem with the status quo is that building consent applications are assessed on a case by case basis by councils even where the proposed building work is to be replicated within the same subdivision. Developers are required to wait for each building consent to be processed before work can proceed. Labour would think that is good orderly stuff. It seems a considerably cumbersome process and one that can be streamlined to produce much greater efficiency by having a system of national multiple-use consenting for buildings that are to be replicated several times on a nationwide basis. 
Under this legislation the building design would be approved on a national level and building consents issued at the local level with reference to the individual situation of each building such as ground conditions foundations connections to water and other utility services. In other words decision making by the local building consent authority where the building is to be located would therefore be restricted to site-specific matters and any customisation or variation of a multiple-use consent. 
Common sense would suggest that such an approach will reduce delays in workloads for processing building consents result in quicker approvals overall and give builders a greater degree of certainty. In the current Building Act one cannot distinguish between minor and major amendments to building consents. Variations to consented building work following the granting of a building consent are common. Some of these may be major and likely to affect compliance with the building code. It is perfectly acceptable that those variations to the original proposals are put through the formal amendment process. However concern has been expressed by many in the industry that because all amendments are currently considered in the same way and because many minor variations to building work—and I think we heard some examples from the previous speaker—have been put through the same rigorous formal process unnecessary costs and delays are being added to the building process. 
What the Building Amendment Bill (No 2) will allow however is the ability to define a variation as a major or a minor variation and to act accordingly. Hence major variations will still go through the formal process but minor variations defined in relation to a national multiple-use approval as a minor modification or additional variation to the plans will instead undergo a far less formal process. Naturally this will result in improved efficiency reduce compliance costs cut through the red tape that minor variations are currently blighted by and result in greater streamlining and simplification—all with no discernible negative consequences. Now that is what I call good National policy. 
The Building Act 2004 Part 2 section 15(1)(c) provides “that a project information memorandum must be obtained before a building consent is issued:”. A project information memorandum is not a consent nor does it require the applicants to do anything. One of the main purposes of this requirement in the previous legislation was to save owners or developers time and money by providing an advance warning of issues that needed to be taken into account when developing plans for building work. However anecdotal evidence suggests that only in a minority of cases are project information memoranda applied for prior to a building consent application being made. Therefore the benefit of the advance warning is not realised in most cases. Instead this requirement has become just another example of extra costs being imposed on the owner or the developer. I will give two examples of such costs: first the professional fees to the adviser who applies or considers the content of the project information memorandum; and second territorial authority fees for issuing the project information memorandum. 
Different councils charge different fees for project information memoranda but to provide one specific quote the Auckland City Council charges $241 for a stand-alone project information memorandum. The Building Amendment Bill (No 2) will instead make it voluntary to obtain a project information memorandum from a building consent authority that is a territorial authority. This will lower the burden of costs. We in the National-led Government are in the business of reducing costs—indeed of eliminating unnecessary costs rather than imposing them. 
As we speak of costs other aspects of the Building Amendment Bill (No 2) will continue this Government’s determined and motivated efforts to reduce delays and costs in general particularly in the issuing of consents for various matters. Let me take a moment to dwell on the importance of the situation. The global recession is hurting our building industry and costing Kiwis their jobs. One of the most disturbing aspects is the effect on the younger builders—the apprentices coming through. We do not want to lose those future builders. The global recession is having that effect. These changes to cut red tape will make it easier for people to do business. There will be a boost for the building industry at a time when companies are struggling and builders are looking for work. Builders have complained of waiting up to a fortnight at a time to get onsite building inspections done—a fortnight at a time—adding to the cost that has been crippling for builders and frustrating for homeowners. This should not happen. 
We are making changes to tackle problems like that. Actions that we are taking include reducing the statutory time frame for processing a building consent application from 20 working days to 10 working days where the application includes a national multiple-use approval. Indeed we are halving the statutory time so that we can significantly reduce delays. Last year we also pointed out that the Building Act is estimated to have loaded up to $20000 on to the cost of building a new home making housing affordability very difficult for many many New Zealanders. The Building Amendment Bill (No 2) will ensure that home affordability becomes more of a reality for ordinary Kiwis. 
This Building Amendment Bill (No 2) is high-quality legislation that keeps up our proud work on reducing time delays and costs and on streamlining and simplifying processes that have become unnecessarily long and costly. Under this National-led Government we are embarking on a process of improved efficiency rather than continuing under a culture of needless prevarication and expense. Multiple-use consenting will help drive improvements in housing costs and affordability through removing barriers to achieving potential economies of scale distinguishing between major and minor variations to allow building consent authorities to focus on what is really important and making project information memoranda voluntary as they are of little benefit. This will drive down unseemly costs. 
In conclusion I am very happy to stand and support the Hon Maurice Williamson on this legislation as it is time we recognised the problems inherent in the Building Act 2004. National is doing something about them. Thank you Mr Deputy Speaker. 
Hon GEORGE HAWKINS (Labour—Manurewa) 
: 
 The last speaker—the National member for West Coast - Tasman Chris Auchinvole—was very interesting. He tried to grab acclaim for the Building Amendment Bill (No 2) which the Hon Shane Jones actually did all the work for as he also did last week with the Unit Titles Bill. 
This Government is in a situation that is a wee bit like the hare and the tortoise. For the first 100 days the hares on the Government side of the House ran flat stick. They went everywhere day and night running flat stick and then they went to sleep. They ran out of work so they picked up Labour bills to bring into the House. Maurice Williamson a person whom I have quite a bit of time for—[ 
Interruption 
]—no I do not have any for Phil Heatley—got up to say that they were going to carry on this pretence a bit further. The Local Government and Environment Committee will sit day and night and then he will do some work himself. Well not really—his officials will do some work. They will get a couple of Supplementary Order Papers into the bill as well. 
This is typical of a Government that has run out of puff. A couple of weeks ago the Government had its big Job Summit. Just a few hundred yards down the road was the Manukau City Council. What are the council officers doing? They are suggesting that building consent and resource consent fees should be increased by 20 percent. They are doing that at the same time as the Government is bringing this bill to the House. You see Manukau is doing something quite unusual. It is keeping on those officers even though it does not have the work for them. 
Chris Auchinvole 
: Pardon? 
Hon GEORGE HAWKINS 
: The council does not have the work but it is keeping the officers there in case there is a turn-up of work in the building sector. 
This bill of Shane Jones’ is I think quite useful but it is not as urgent as it was because the number of buildings starting has reduced. Everyone knows it has reduced— 
Colin King 
: Preparing for the country to grow again. 
Hon GEORGE HAWKINS 
: Oh there is a man who wants the country to grow again! He had better change party if he wants that to happen because it will not happen under National. I ask members to look back. Things were rosy last year; what are they like now? We know who to blame; we know it is those members over there. 
This bill has some very good purpose. However the urgency that was there is not there any more. 
I can remember when I was Mayor of Papakura that building inspectors used to have red pens and they would delight in finding fault. They would find only one fault on a plan put a big cross by it and give it back. If somebody fixed up that fault and brought the plan back the inspectors would find another one. Things have changed and it is really important that councils themselves make the biggest changes. This legislation will make it easier for them. 
The key thing is that the bill is part of a coordinated approach to provide more affordable homes. We can hear Mr Heatley laughing in the background. Of course he is trying to sell off State houses in the wealthy areas and make the old people living in them shift out. We know that. He can keep on laughing as much as he likes but this bill will be available to people to speed up the process. What I am saying is that councils like Manukau City Council which is putting up its rates by a disgraceful 3.9 percent will have staff twiddling their thumbs. The Building Amendment Bill (No 2) will not speed up the process initially; it will in the future because things will change. 
I do not think it is all doom and gloom. This bill comes at a time when the global recession is really just starting to get under way. Time will tell how many buildings will be started this year. I suggest that it will not be anywhere near as many as were started in recent years. When Shane Jones did the work on this bill the economy of the world was much healthier. I have to thank Shane Jones because without him the National Government would not have much on the Order Paper to deal with. I think the National Government should go and shake Shane Jones’ hand and say that this is good. 
Hon Maurice Williamson 
: This is a leadership bid. 
Hon GEORGE HAWKINS 
: Maurice Williamson has made his way up to the middle benches; I used to like it more when he was on the front bench. He deserves to be on the front bench but I think John Key listened to Bill English too much dumped Maurice Williamson out of the Cabinet line-up and made him a Minister outside Cabinet. 
I do not want to hold up this bill because the Minister of Building and Construction has made out how urgent it is and how the select committee will be sitting at all sorts of times day and night to get this bill through. But I say that the urgency is not really there any more. These bills are a part of the National Government’s bluster. It is trying to con the public that the Government is doing something and that everything is urgent. Well the people are not that silly and they will realise what the Government is doing. I think that in time people will see through the very thin veneer of the National Government. 
NICKY WAGNER (National) 
: 
 I rise to support the Building Amendment Bill (No 2) because it amends the principal Act the Building Act 2004 which was introduced by the Labour Government at that time. It is disappointing that we have to review the Act so soon. Considering the amount of time and work that goes into writing a bill it would be expected that an Act might last a little bit longer. We would expect it to have a bit more longevity. Often we are amending Acts that have stood the test of time over maybe 20 30 or even 40 years but not this one. This Act has been on the books only for a little over 4 years but already it needs to be addressed. 
The need to review the principal Act is not surprising to National members. We predicted it when the Act was first passed in 2004. It was David Carter who said: “This bill will impose huge costs and huge complexity on the construction industry … I tell the Government that … this legislation will be one of the first pieces of legislation that is back before a National Government—because it will be a National Government that will tidy up this mess.” It is all very well for George Hawkins to talk about Shane Jones and all the hard work he has done but it takes a National Government to bring the legislation to the House and to tidy up the mess. That is why we are here today. Back in 2004 Lindsay Tisch also warned the Labour Government. He said the bill “… introduces a very prescriptive regulatory regime. It is overkill and an overburdening of the industry with bureaucracy and administration … This legislation will add significant costs to all construction work and compliance costs for residential buildings will increase the most.” How prophetic was that? He stated: “It will potentially affect economic growth due to the significant increase in building compliance costs for both applicants and territorial local authorities …”. That has proved to be so true. 
One of the most valuable Kiwi traditions is that of homeownership but the Building Act has added so much additional cost that many New Zealanders are finding that homeownership is out of their reach. Many critics have talked about that increase in costs and they estimate that it could be up to $20000 per house. The National Government wants to make homeownership more affordable and this bill is a step in the right direction. Why is the National Government so supportive of homeownership? It is because homeownership is good for individuals families and communities. On an individual basis there is a real thrill a real sense of achievement when someone buys his or her own home. However humble it is or however much DIY opportunity that building has and however much it is a first step everyone gets a kick out of earning his or her first home. Suddenly weekends are focused on the house the garden or the neighbourhood. 
Homeownership is good for families and communities. Neighbourhoods are more settled house-proud and community-minded. Local kids get to grow up together to go to school together and to put their roots down in their neighbourhoods. Those neighbourhoods provide familiarity and security to young people. People say that it takes a village to bring up a child and many members will remember what it was like as a kid growing up in a suburb full of young families in their first homes. That community of young families gave us and our young mates the caring and support of a village. 
The amendments in this bill are designed to cut the costs of constructing houses and buildings without compromising the quality of those buildings. All amendments follow extensive consultation with the industry and with local government. Both the industry and local government are very keen to cut the costs time and energy that go into the consenting process. These amendments are part of the National Government’s ongoing commitment to cut red tape and speed up processes to stimulate the economy. It was interesting to hear George Hawkins talk about the fact that this bill does not need to be passed now. At what other time in our recent history has there been a time when we should stimulate the economy? At what other time has it been so important? Similarly the National Government’s resource management reforms were aimed at simplifying cutting costs and stimulating the economy. The international recession is affecting our building industry. Consent applications are down and builders and contractors are concerned about the lack of forward work that is coming on stream. The changes that we propose in this bill will cut the costs and time of the consenting process and stimulate the industry at a time when workers really need to keep their jobs. 
There are three major amendments. The first is the introduction of a system of national multi-use consents. The idea behind that is that designers and builders can get some sort of economy of scale for similar buildings which can be consented together. Under the scheme the building design can be approved at a national level although each site will need to be consented locally to allow for individual variations. But to speed up that local process the statutory time frame for processing a consent application that includes a national multi-use consent will be reduced from 20 to 10 days. This will increase the efficiency of the process and improve productivity. 
The second major amendment is a differentiation between major and minor variations to a consented building plan. Most buildings require some minor variations to their plans and this amendment will allow those changes to go through without having to go through the complete consenting process. Again it will reduce costs save time and increase productivity. 
Finally this bill also makes obtaining a project information memorandum voluntary. The reason a project information memorandum was first introduced was to provide advanced warning of issues when developing a building project. But as it has turned out the majority of project information memoranda are not applied for until after the consent process has been completed. Making the project information memorandum voluntary will reduce unnecessary costs to owners and developers—and they are big costs. There are costs for professional fees territorial authority fees and delays in starting the building. 
National supports this Building Amendment Bill (No 2) because it is time to streamline and simplify the Building Act 2004. Although the Act is only 4 years old National has always considered it to be very prescriptive and overburdened with bureaucracy. These amendments will cut through that bureaucracy. In the face of a worldwide recession we urgently need to cut the costs involved and the length of time required to consent building work for two reasons: so we can keep our building industry working and so we can make housing more affordable for Kiwi families. Thank you. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 Less than a month ago I stood up during question time and asked the Minister of Housing what steps he would be taking to address the reported decline of homeownership rates amongst Maori. The context for my question was the staggering fact that the proportion of Maori who own their home has fallen from 61.4 percent in 1991 to 45.2 percent in 2006. Putting it another way the proportion of Maori now relying on rental tenure has increased from 38.6 percent to 54.8 percent. Here we are before a month has gone with a solution of sorts. The  
Maori Housing Trends 2008 
 report told us that although the hike in property prices and rents has impacted negatively on Maori as it has on other New Zealanders the impact has been exacerbated for Maori particularly because they often need larger houses which are more costly to rent. So any initiative to help first home buyers is an initiative we look at with particular interest in terms of how well it will assist Maori into homes. 
The Building Amendment Bill (No 2) is a fast-track approach which we in the Maori Party hope will be an avenue to providing starter homes to first home buyers at a quicker and more affordable rate. That would be good news for Maori and good news for Aotearoa. Maori homeownership is of particular concern to me as the member for Te Tai Tonga with the Canterbury region having the lowest ratio of Maori homeownership in New Zealand. This bill amends the Building Act to reduce compliance requirements and costs to developers and homeowners in order to improve the efficiency of the building consents process. According to the Registered Master Builders Federation approximately 40 percent of all new homes in New Zealand are built by volume builders. 
A key initiative introduced in this bill is that of national multiple-use approval. Multiple-use approvals will streamline the consent process for building work that uses the same design and that will be replicated nationwide. There will be a Lockwood in every street—Lockwood Homes that is. Having multiple-use approvals in place will mean that developers and project managers can devote more time to the building itself. All of the time devoted to the paperwork can be compressed into one focused approach. A new pre-approval system will fast track the building consent process but councils will still need to assess site-specific matters. 
Another initiative introduced in the bill is the voluntary project information memorandum (PIM) proposal. PIMs—not the liquor—are currently required before any building projects can begin. In the usual order of things project information memoranda are applied for at about the same time as a building consent is issued. Yet when we looked into that we found that on the basis of evidence less than 5 percent of project information memoranda are actually applied for in practice before the building consent application is made so the point of the whole process is lost. What started off as a good idea—that the project information memoranda would be a one-stop shop boutique hosting all information related to building consent—failed in reality because only a few project information memoranda were actually applied for prior to building consent application being made. This bill will make it optional for a building consent applicant to obtain a project information memorandum from a territorial authority. These measures are honourable in the intent to dramatically increase the supply of good-quality affordable homes. The thinking is that the bill will help to reduce unnecessary delays in the building consent process in order to streamline the process. 
The whole point of the legislation is to increase flexibility and efficiency in the building consent process. The amendments include the reduction in the statutory time frame for processing a building consent application from 20 working days to 10 working days when the application includes a national multiple-use approval. The hope is that owners and developers will benefit from reduced costs associated with the construction process while at the same time ensuring that quality homes and buildings are constructed. This is where the key concern rests for the Maori Party. Although we can fully appreciate that the potential economies of scale are able to be achieved through volume we must not see any compromise in quality or building compliance. This is where we are pleased that the capacity to record the process is still formalised through the functions and powers of the Department of Building and Housing. There are still some specific requirements to meet the technical application as set out in clause 30B of the bill. In short this is that the application will be in writing and contain prescribed information with the required plans and specifications necessary. The last thing we ever want to see replicated is leaky building syndrome. 
Although this bill speeds up the process removes unnecessary compliance requirements and will achieve economies of scale we must be mindful that in the haste to speed up things we do not dilute quality. We will be looking to the select committee process to ensure that there is due support for best-practice models to be expressed in managing amendments to building consents. Although we are sure that every party in this House will gladly support any proposals that reduce and remove unnecessary costs and delays to the building process we must be careful that in streamlining the process we do not end up creating a rod for our backs. This is where I return to the questions I asked of the Minister not too long ago. In his response about how to improve the levels of Maori homeownership the Minister said he would be speaking to a number of iwi and hapu groups and to the Maori Party. He also suggested that he would be seeking specific feedback from these groups about how the Housing Innovation Fund can help and how papakainga housing can be advanced. 
These were welcome signals from a Minister who is expressing a commitment to increase the availability of affordable social housing. We want that commitment to come alongside the goal to resource iwi and Maori organisations themselves to develop sustainable housing initiatives. We will therefore support this bill at its first reading to facilitate housing opportunities that we hope will reap benefits for Maori alongside other New Zealanders. But we will be watching particularly for submitters to bring to the select committee their assurance that the quality of building construction will not be compromised by the amendments. We want to see too that the reduced construction costs for developers will actually translate to reduced housing costs for buyers and renters and that the downstream costs will contribute to improved housing affordability. And we want to be absolutely convinced that the monetary savings are actually substantial enough to affect housing affordability.  
Having all of these factors in mind we will support the bill today in the hope for a better tomorrow for so many of our whanau who have not yet enjoyed the opportunity to buy their own homes. Kia ora Mr Deputy Speaker. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 Speaking as a person who has built three of his own homes I am pretty glad I built them prior to 2004 by the sounds of things. I did not really build them; I was the project manager. I did build one wall which had to be rebuilt so perhaps my skills are in project management rather than with a hammer and nail. 
The building industry is a very important part of the New Zealand economy. Housing is a basic necessity and a human right and affordable housing has become an increasing concern for all New Zealanders and members on both sides of the House. In March 2008 the then Prime Minister’s office released a report into house prices. It claimed that in real terms house prices had increased by 80 percent since 2002. That is more than the increase in the 40-year period between 1962 and 2002. The cost of land has also doubled since 2001. We identified tremendous concern in our country particularly for young people trying to get into their first home. The Building Amendment Bill (No 2) is very advantageous to the hope that we will see the price of housing come down with measures taken to reduce compliance costs and regulation costs but without reducing the quality of the homes that builders in New Zealand construct. 
House prices have fallen since those statistics were produced but the historical house price to household income ratio of close to three and a half times annual earnings has changed considerably. Affordability requires household disposable income to increase by 80 percent or house prices to fall by over 40 percent. This bill will begin to address that alarming increase we have seen. 
Although there are a number of drivers to this increase in unaffordability one notable driver is the increase in regulation costs and compliance costs. Last year National members pointed out—and some members have stated so here this afternoon—that the Building Act was estimated to have loaded up to $20000 on to the cost of building a new home. When we came to building our first home if another $20000 had been added we would not have had a home. Not only would we not have had a home but I am sure that the builder and subcontractors—plumbers and electricians—would have been without the benefit of that employment. 
So we see as we begin to address some of these costs that not only are we making the issue of housing affordability important so that it is within the grasp of young people and families in particular but also there is the opportunity for more work to flow to subcontractors. At a time such as this when we are facing a global recession that is affecting the construction industry in particular there are people out there in our communities right now who are perhaps on their last job or wondering whether in a week’s time they will find more work. We will not get this bill through in time for that to be resolved but it will address that issue and housing affordability and increase work opportunities in time to come. 
Not only does this increased cost act as a huge roadblock to people but removing it will make it far easier for people who are in the subcontracting industry to find work. The National-led Government sees streamlining as important because it will free up our economy and promote growth particularly at this point in time. As part of our first 100 days in Government we introduced a bill to streamline and simplify the Resource Management Act to improve the processing of resource consents and cut compliance costs. The reform of the Building Act has the same intention as our work on the Resource Management Act. It is part of this Government’s ongoing commitment to cut red tape. 
One instrument with which to streamline the building industry is to employ multiple-use consenting which we have heard about this afternoon. It will help drive improvements in housing costs and affordability by removing barriers to achieving potential economies of scale. Another change this bill seeks to bring about is reducing the statutory time frame for processing a building consent application from 20 working days to 10 working days where the application includes a national multiple-use approval. That makes great sense and enables expeditious timing to take place in building projects. 
These proposals follow consultation with the industry and local government. As a member of the Local Government and Environment Committee I look forward to working in that group to progress the bill to the next stage. 
The bill introduces another two changes. The first is to differentiate between major and minor variations to consented building work. Let me tell members as someone who has designed houses and built them that plenty of variations come along. Halfway through the project one sees a cost saving or halfway through the project one thinks of a better idea. Kiwis have ingenuity and want to make things better if they can without having to load up extra costs for a good idea or to save in the overall expense or put a better design element somewhere in the house. That is a good move and will offer the flexibility that people involved in construction and building enjoy. It will allow for creativity and changes to come without making it overtly or unnecessarily expensive. 
The second change involves project information memoranda which we have heard about. They include great information for somebody who wants to go forward in a project but many builders and developers know everything they need to know about a particular property. A project information memorandum is a compulsory requirement in the consenting process but as we have heard only 5 percent of people seek that memorandum before the consent process takes place. Obviously they get the memorandum at the same time as the building consent in order to comply but the other 95 percent of people find it unnecessary. It adds cost. There is a range of fees all the way up to $1189 for particular projects. It just adds cost that many people feel is unnecessary. It also adds time. 
The project information memorandum is still available and it is a very interesting and perhaps positive report for people to seek if they are not sure. But many people are sure and we feel that in making them voluntary rather than compulsory it will be very good in keeping down compliance costs. It is a great service that councils can offer. For example a project information memorandum will show whether there could potentially be erosion on the property falling debris subsidence or slippage or silt build-up because the land is susceptible to flooding or in fact whether flooding could happen on the property. All that information is very useful and councils feel that giving this information is pre-warning people so that later on they are able to proceed with full knowledge. 
Hon Maurice Williamson 
: It would have been good if that had been around in Noah’s time. 
JONATHAN YOUNG 
: That is right. However a project information memorandum adds expenses—professional fees to advisers territorial authority fees and the cost of delays in starting the building. All of those can cost money. Even though there is a fee regime from a territorial authority there can be very high expenses in terms of professional fees to support that project information memorandum. This bill does not do away with that cost but makes it voluntary whether someone seeks a memorandum. 
This bill will streamline many aspects of the building industry and in that regard I believe that it is very well supported in the House. It is part of National’s commitment to reducing red tape in order to get this country growing again. I thoroughly support this bill. Thank you Mr Speaker. 
KELVIN DAVIS (Labour) 
: 
 I rise to support the Building Amendment Bill (No 2). Quite simply the bill is about improving the efficiency and effectiveness of the building consent process therefore ensuring that quality homes and buildings are constructed quickly and at less cost. I am in favour of any legislation that makes it easier for whanau to get into new homes. 
I come from an area in the Bay of Islands where not too many kilometres from the townhouses and condominiums on the Paihia waterfront if one were to take the time to travel some of the gravel roads into the heart of Ngati Hine and Ngapuhi one would see whanau living in conditions that many would describe as Third World. It is not too uncommon to see homes that are little more than corrugated iron huts which one would expect to see overseas and not here in Aotearoa. Those homes are usually unlined leaking cold and damp dwellings. 
I think of my home valley of Karetu just below our urupa of Puketohunoa where there is a structure we call “the barn”. Not surprisingly it has been used as a barn at times but in-between being used as a barn it is used by cousins and family who come home to the valley and need somewhere to live while their homes are being built. So any legislation that shortens the length of time my whanau have to stay in the barn and in similar dwellings I am in support of. 
Legislation such as this that extends the Department of Building and Housing’s functions and powers to allow it to issue multiple-use approvals for dwellings and buildings and therefore to speed up and lower the costs of building homes gets my support. Given that 40 percent of all new homes in New Zealand are built by volume builders it makes sense that some efficiencies can be achieved by a streamlined approval process under the Building Act for buildings that are replicated on a nationwide basis. 
There is as a number of members have alluded to in the course of the debate the need for individual buildings to have consent sought at a local level because each site has unique characteristics such as ground conditions slope foundations connections to water and other utility services. So it makes sense that these are inspected and OK’d by the local authority. In fact one of the conditions in my home town of Kawakawa that needs to be looked at is the fact that there is subsidence due to historical coalmining in the town so that needs to be inspected at a local level. 
This bill—which Labour introduced while in Government—is designed to help reduce unnecessary delays in the building consent process which aside from causing frustration amongst builders also causes frustration for those whanau wishing to get into their new homes as quickly and as cheaply as possible. As well as cutting bureaucratic red tape around the issuing of approvals for dwellings this bill also seeks to reduce the statutory time frame for processing a building consent application from 20 working days to 10 working days—again as a number of members have alluded to. This is especially so when the application includes multiple-use approval. 
Again I say that I support any legislation that helps my whanau hapu and iwi members to move out of their small cold and dingy homes into larger new warm insulated homes. A point I failed to make earlier when describing the homes and living conditions of many of my whanau hapu and iwi up north is that those dwellings are without any doubt in my mind part of the reason many Maori suffer from poor health. I doubt that anyone in this House would be brave enough to say that living in cold damp cramped unheated and uninsulated homes would not put the health of the occupants at risk thus leaving them susceptible to flu colds pneumonia chickenpox measles and other diseases of poverty. If for no other reason the lives of families is reason enough to support this legislation. 
This legislation also differentiates between major and minor variations to consented building work. In other words the homeowners who want to make minor non-structural changes to their homes do not actually have to jump through major hoops in delays and costs in order to make simple alterations. This bill will also reduce for owners and developers both the direct and indirect costs associated with the construction process while ensuring that quality houses are constructed. This bill is part of a coordinated approach to assisting in increasing the supply of good-quality affordable homes. 
Late last year I attended a housing hui in Kaikohe a town not known for its glitzy homes and extravagant lifestyles. A local businessman there had a plan to build a housing estate for the elderly in three stages. Stage one consisted of 30 or so identical homes and if that stage was successful then stage two and stage three would be built with 30 more homes respectively for each stage. I applaud the attempts of this businessman in his desire to care for the elderly but if his plan is to be successfully embraced by the community I would like to think that those of us sitting here could make it as simple as possible for the plan to be achieved as we know that the elderly are some of our most vulnerable citizens. The intentions of this bill would help our kaumatua and kuia both Maori and non-Maori to have access to warm comfortable and in that case may I say modest dwellings close to whanau friends and community facilities. 
There are a lot of more important things we could be talking about such as developing work and jobs for New Zealanders so although not wanting to diminish what I have just been saying I will conclude. Basically multiple-use consents that reduce the statutory time frame for processing building consents from 20 to 10 days and the ability to make minor variations will help not only those elderly members of the Tai Tokerau community but also every other whanau up there living in their shanties—as well as the wider New Zealand population—to more easily afford warm comfortable and healthy dwellings. Therefore I support this bill. 
LOUISE UPSTON (National—Taupo) 
: 
 I rise to speak in support of the Building Amendment Bill (No 2) put forward by the Minister for Building and Construction Maurice Williamson. For many hard-working New Zealanders 9 years of a Labour Government has meant that the dream of owning their own home has slipped further from their grasp. I am thrilled that this bill means that housing affordability will get a little bit closer for those who have that dream. 
The issue at the moment is that to construct a house is very time consuming and very costly and the layers of bureaucracy are incredibly difficult to navigate to wade through. There is such an amount of unnecessary paperwork steps and hoops to get through in this process so I am really pleased that this bill will fix a number of problems. Firstly there is the issue raised in terms of issuing multiple-use approvals for dwellings and buildings. For those organisations or businesses that want to construct multiple dwellings it will mean a much simpler process and therefore it will mean that the costs will be significantly fewer. There will also be less time involved in getting a project to completion. 
Another component of the bill is the reduction of the statutory time frame whereby the time for processing a building consent application will be reduced from 20 days to 10 days. This is significant if we look at the amount of time involved with these projects. Another key purpose is to differentiate between the major and minor variations to consented building work. That will mean that minor pieces of work do not have to go through this huge drawn-out process. It will reduce time and it will reduce money. Another thing that this bill will achieve is that it will be voluntary for an owner to obtain a project information memorandum—a PIM—from a building consent authority that is a territorial authority. 
I thought it would be quite useful to look at a couple of case studies in relation to the proposed legislation. The first issue is around compliance costs. Any time compliance costs are added on to a business they flow through on to the end-user and the end-user in this instance is the person who wants to get into a house. I firmly believe that it is an important part of the New Zealand way of life that we each and every one of us are able to aspire to homeownership. Some of us have big hurdles to overcome but if we can do anything to make that goal more achievable by reducing compliance costs and by reducing the time and energy involved with the building process—without sacrificing quality I might add—then it will be a great thing for average hard-working Kiwis who want to get into a home of their own. 
The other thing that is particularly important at the moment given the recession we are currently in is the impact that those sorts of extra costs and delays are having on those organisations or companies that are in the building trade. I met with the representative of one of those organisations in my own electorate on Friday. This is a local business that has been around for 10 years. It was recently employing 10 staff but is now down to four. The business has an apprentice but the owner is not sure whether he can hang on to his apprentice. The lag time between an owner deciding to push the go button and build and all of the time involved before the business can actually start construction is a delay that I hope will not put that business into the ground. Every time a building firm goes under in this recession it also takes the guy who builds the cabinets the person who sews the drapes the carpet layers and the people who put the glass in. You name it there is a whole industry of people who go down every time one of our building companies fails. Anything we can do as a Government to reduce unnecessary compliance reduce the time and reduce the costs has to be a good thing. 
I want to see that these local businesses are able to survive and weather the storm of the recession and that they come out on the other side so we can build more houses and so hard-working New Zealanders can achieve their dreams of getting into a home. I agree with Kelvin Davis; I think it is disgraceful that we have large numbers of New Zealanders living in substandard housing. If we can trim $20000 off the price of a house then we can get more people into houses that are worthy of them and not tolerate the sub-standard conditions that too many of our New Zealanders are putting up with. 
That is the first case study I wanted to look at. The second is around simplifying and streamlining. I know that changes were made to the Building Act in 2004 but I have to say to Labour members: “Sorry guys you did not do a good enough job so we’re going to have to do some tidying up.” I worked in local government at the time that this Act came in and I can tell members that the layers and layers of bureaucracy and additional work that got wrapped around the building process were absolutely outrageous. Possibly a small amount was necessary but the reality is that there was extra paperwork and extra work built in for no sound reason. We are getting in there cutting the red tape getting it back to basics and making sure that the process is as simple as it can be. The bill is getting rid of some of the things in the building and consenting process that are completely unnecessary. 
It was really interesting to watch the implementation of the Building Act and it will be interesting to watch from a different perspective now as a member of the Local Government and Environment Committee. I want to see that local government is efficient and productive just as there should be a level of productivity in other parts of the public sector. It is really important that we get on and focus on the actual job. For me the priority is getting people into housing at a price that they can afford. In terms of housing affordability some would say that we are in good times at the moment. We should be seizing the opportunity and making the most that we can of the economic conditions in terms of affordability. 
The third area I want to look at is the affordability side. Most days when I drive from Putaruru to my home I drive past a Habitat for Humanity home. This is a project where people are getting into housing that they potentially would not be able to get into otherwise. It is about making sure that social housing and community groups are assisting people to get into their own homes through innovative programmes. I personally want to see obstacles like red tape reduced for those sorts of organisations. If people want to build multiple dwellings then it should be much easier to do so. This legislation that I am standing in support of today will enable that. That is why I am really proud to support this legislation. 
Another thing that is important in this legislation concerns waiting times. I want to emphasise the lag time for business people. From the time a person wants to start his or her project there are time delays in terms of actually picking up the hammer and putting the first nail in a piece of wood. It is just a waste of time for any builder or the builder’s team to be sitting around and waiting for someone else to do the paperwork and it does nothing for us in terms of productivity. I really believe that this bill will take us quite a way forward in terms of improving productivity. The end goal in respect of that productivity is that more people will be in homes that they can afford and that provide a good standard of accommodation. 
Before I conclude I make the point that yes we are talking about driving down costs cutting through red tape and reducing the costs involved. But we are not talking about compromising quality. It is really important that the houses built in New Zealand are of the standard we expect and that we are able to move people out of sub-standard housing. The measures we are talking about in this bill do not compromise the quality of the housing we are talking about. I am very thrilled to stand in support of this bill which will ensure that home affordability and good-quality housing become an end goal for more of our hard-working ordinary New Zealanders. 
Hon MARYAN STREET (Labour) 
: 
 I rise to take a brief call on the Building Amendment Bill (No 2). The origins of this bill do not lie in the recession. Although the provisions of the bill may have some positive impact on the recessionary experience that our construction industry is undergoing at the moment that was not the origin of the bill. Its origin came out of the previous Government’s intention commitment and earnest desire to provide affordable housing in New Zealand. In order to get to a situation of affordable housing in New Zealand a number of blocks and barriers needed to be taken down. Shane Jones brought this bill forward as a way of dealing with some of the frustrating and difficult regulations and red tape that compounded the process of arriving at building consents. 
The bit that is particularly important in this legislation is that around national multiple-use approvals. The building industry was perfectly willing and able to recognise standard templates for building designs and to approve them according to the highest building standards but the point was to enable developers to say they would like in the course of building their hundred-house development to build 20 C1s 10 B2s and five A3s or whatever the name of the housing design was. The purpose of getting multiple-use approvals was that people could get standardised designs—they could be labelled anything at all; I have just used As Bs and Cs—that could be replicated everywhere without having to go through the process of approval. 
When in Opposition the National Party thought that this meant the Labour Government was intent on building the same houses everywhere. That was absolutely not the case and in fact I have not heard one of the Government members mention that objection in the course of this debate. Clearly those members have now cottoned on to the fact that it does not mean that; what it means is that there are standard designs that can be approved nationally—across the country—and then be picked up by a developer and all that the local body has to do is to ensure that that particular design is appropriate for the particular site. That eliminates the red tape and fast tracks the development for the developer. That is to everybody’s benefit. 
The rationale behind this bill was the terrible situation that we found ourselves in by the end of 2007: recognising that the cost of houses had gone up by some 80 percent over the previous 5 years. That situation could not be allowed to continue without some remedial action being taken. This bill was a small step but a tiny part of the jigsaw that needed to be put together along with other Government initiatives—whether they be shared equity or using State-owned land for developmental and residential housing purposes—that could be brought together as a complete package to address the housing affordability problem. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
Bill read a first time. 
Hon SIMON POWER (Minister of Justice) 
on behalf of the  
Minister for Building and Construction 
: I move  
That the Building Amendment Bill (No 2) be considered by the Local Government and Environment Committee 
 that the committee report finally to the House on or before 11 May 2009 and that the committee have the authority to meet at any time while the House is sitting except during oral questions during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House and to meet outside the Wellington region during a sitting of the House despite Standing Orders 187 189 and 190 (1)(b) and (c). 
Motion agreed to. 
Sale and Supply of Liquor and Liquor Enforcement Bill 
First Reading 
Hon SIMON POWER (Minister of Justice) 
: 
 I move  
That the Sale and Supply of Liquor and Liquor Enforcement Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be referred to the Justice and Electoral Committee for consideration. 
Firstly I wish to acknowledge the previous Associate Minister of Justice the Hon Lianne Dalziel for the work she did for the last Government in preparing this legislation. It is now timely to advance it. 
Alcohol is a challenging issue for any Government because any attempt to ameliorate the negative impact of alcohol abuse must be balanced against the freedom of the majority of the adult population to drink responsibly. Those who cast their minds back to the so-called sherry tax of 2003 will recognise that liquor reforms must be targeted and relevant if they are to help fix the problem without punishing the innocent. 
However the problems caused by excessive drinking are undeniable. In the area of criminal justice alone it is estimated that approximately 60 percent of offenders were under the influence of alcohol at the time they committed their crimes. Police estimate that 50 to 70 percent of their work is associated with alcohol including disorder assault criminal damage family violence drink-driving taking drunk people home or detaining them for detoxification. This bill attempts to address the problems associated with the availability of alcohol youth binge drinking and alcohol advertising through amendments to the Sale of Liquor Act 1989 the Summary Offences Act 1981 and the Land Transport Act 1998. 
A key provision of this legislation relates to the availability of alcohol in our communities. The number and range of outlets selling alcohol is much larger than what was envisaged by Parliament when it passed the Sale of Liquor Act 1989. Since 1990 the number of on-licences has more than tripled and the number of off-licences has similarly tripled. In response to public drunkenness and alcohol-related offending communities from Mount Roskill to Riccarton are protesting against the marked increase in liquor outlets in recent years. In this regard I wish to acknowledge the work of the Hon George Hawkins in bringing to the House a local bill that would enable his constituents in Manurewa to object to any application for a liquor licence on the basis that if granted it would have an adverse social impact. 
The Government’s bill addresses all communities’ demands for more say in local liquor licensing decisions. At present there is nothing to stop a local council from creating an alcohol management plan but that plan will not have a formal status in liquor licensing decisions. This bill will enable local councils to create local alcohol plans that must be given effect to in liquor licensing decisions. Local alcohol plans will be able to set restrictions on the number of outlets in an area on the proximity of outlets to other community buildings like schools and on hours of operation. In short local alcohol plans will give communities greater control over where and when alcohol is sold. 
This bill will also clarify Parliament’s original intentions for the types of premises that are eligible for an off-licence and the alcoholic beverages they can sell. In 1999 Parliament voted against allowing dairies to sell wine and beer which may come as a surprise to those who have seen a number of shops that would normally be regarded as dairies selling alcohol. This bill will commence the argument to ensure that except in very limited circumstances grocery-selling stores will not be able to obtain a liquor licence unless they have a floor area of at least 150 square metres. Whether 150 square metres is the best benchmark will no doubt be the subject of careful scrutiny at the select committee and I encourage full and open debate on that issue. 
The bill will also ensure that grocery stores and supermarkets continue to be restricted to selling beer wine cider and mead. This is designed to avoid situations where spirits are sold by setting up a store within a store or an immediately adjacent liquor store that sells a full range of alcohol. Again I expect that the select committee will pay close attention to what constitutes an immediately adjacent store for the purposes of this restriction and I welcome submissions and debate on this point. 
I cannot overstate the importance of the second set of provisions in the bill—the provisions that address the harm arising from youth drinking. A recent study from Christchurch found that children as young as 4 were trying alcohol and that the onset of drinking rises very steeply from the age of 12. Harm to minors is most significant when alcohol consumption is unsupervised and most consumption is. The bill changes the current approach to the social supply of alcohol to minors by making it an offence for adults to supply liquor to minors without the consent of their parent or guardian. A small but significant number of liquor outlets continue to sell alcohol to minors so the bill will increase the penalty for managers who do that. The bill will also restrict the legal defences available to a person who sells liquor to a minor by repealing the defence that a seller had a reasonable belief that the minor was aged 18 or older. This means that the only available defence will be that the seller viewed appropriate identification. 
I have already mentioned the impact that alcohol use can have on offending but obviously it can have a broader social cost. Inexperienced drivers are particularly at risk of alcohol related-crashes so the bill amends the Land Transport Act 1998 to reduce to zero the allowable blood-alcohol content for drivers under 20 who do not have a full licence. In recognition of the need to address problem drinking as early as possible the bill will also allow police to refer a minor to an alcohol intervention programme as an alternative to paying an infringement fee for certain offences under the Sale of Liquor Act. 
Finally the bill incorporates recommendations arising from the review of regulation of alcohol advertising. That review found a small but significant association between the level of exposure to alcohol advertising and alcohol consumption. The bill proposes to insert a new part into the Sale of Liquor Act that provides for a system of enforced self-regulation by setting out the principles of the proposed system the roles of the body responsible for administering the self-regulatory system and the new offence. These provisions require very close scrutiny by the select committee. 
 This bill tackles what can be done immediately to help limit the harm caused by alcohol. My intention is that it will be complemented by the Law Commission’s first-principles review of the entire regulatory framework for the sale and supply of liquor. I have asked the commission to speed up that work so it is now planning to produce a discussion paper by the end of July with a final report due by the end of June 2010. Of course both that review and this bill deal only with the laws that govern the sale and supply of liquor. There are quite rightly limited laws in other areas. That is a product of our culture the way we drink and it will change only gradually over time. But that does not mean we should not try. I commend this bill to the House. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 I rise very much in support of the Sale and Supply of Liquor and Liquor Enforcement Bill. This is another bill that I get to speak on that was originally introduced by the previous Labour Government. A lot of hard work was done then by Lianne Dalziel as was acknowledged by the Minister of Justice Simon Power. 
The bill amends the Sale of Liquor Act 1989 the Summary Offences Act 1981 and the Land Transport Act 1998 to implement recommendations arising from the recent reviews of the sale and supply of liquor to minors the sale of liquor and liquor enforcement issues. It also introduces a new system of enforced self-regulation of alcohol advertising. 
The objectives of the bill are to support a more moderate drinking environment and culture to reduce the normalisation of youth drinking to enhance the responsibility of friends and adults who supply alcohol to minors to increase youth responsibility and accountability to improve compliance and responsibility of the industry to increase community input into licensing decisions and to clarify the types of premises that may hold off-licences. 
The health impacts of the misuse and abuse of alcohol are wide ranging and deeply felt by our community. They range from injury to cancers to heart disease and several other health impacts. The costs in dollar terms are quite immense where they can actually be measured. In New Zealand we estimate that the alcohol harm costs somewhere between $1 billion and $4 billion a year. It costs the public health sector something like $655 million. In crime and related costs it costs $240 million. In social welfare it costs $200 million and in other Government spending it costs $330 million. In lost productivity it costs about $1.17 billion. Those numbers are enormous and drive the need to address the drinking culture in this country. It is something that we have talked about a lot but finding some form of legislation to deal with it has been difficult. This is a good first port of call. 
Labour introduced this bill whilst in Government because we take the issue of alcohol-related harm very seriously. Labour of course also initiated the Law Commission review of New Zealand’s liquor laws and I look forward to the results of that review. As the Minister pointed out it is timely that we take a look at our liquor laws because it has been an extraordinarily long time since the last comprehensive review back in the mid-1980s. 
One of the things that I think is most important about this bill is the opportunity it gives to communities to take ownership of the alcohol issue within their own community. The ability for local authorities to provide an alcohol plan and for that plan to have some meaning is a substantial part of this bill. 
It is worth noting the support that this bill has received from within the health industry. Recently the Canterbury medical officer of health Dr Alistair Humphrey said: “Our pubs and clubs by and large are responsible hosts just as the specialised bottle shops are responsible retailers. That so many of the central city outlets sell to children who are so young demonstrates how difficult it is for these businesses to stay within the law. A move towards restricting off-licences in the central city will protect our children protect our city communities and indeed protect the convenience store businesses themselves from the further prosecutions they will undoubtedly face.” 
Alcohol is very much a public health issue. Certainly the Minister has covered the justice side of the issues but it is very important that we pay attention to the public health issues and the harm that the misuse of alcohol does to our communities. It is for that reason that the Labour Party is supporting this bill being referred to the select committee and we look forward to the submissions that the select committee receives. 
We need to think about what this bill is not going to do. It is not some sort of witch-hunt for people who drink responsibly nor is it a witch-hunt for retailers who have a responsible attitude towards the sale of liquor. It is about clarifying the rules it is about communities taking ownership and it is about reducing the harm related to alcohol. It is not about cracking down on the sensible responsible use of alcohol by the majority of New Zealanders. It is about the responsibility of families and the responsibilities that parents have in taking care of their children and the young people whom they are responsible for and building a responsible drinking environment and culture within their families and within their communities. 
I look forward to the progress of this bill. I look forward to the work that will be done at the select committee. We take note of the Minister highlighting the areas he would like the select committee to look at— 
Hon Darren Hughes 
: Very subtly! 
IAIN LEES-GALLOWAY 
:—ha ha—particularly closely and I look forward to speaking again on this bill when it returns to the House. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I am delighted to follow my most excellent colleague the Hon Simon Power who has done a magnificent job in this regard. It is interesting to note that this year actually marks the 10th anniversary of the lowering of the drinking age to 18 and the 20th anniversary of the Sale of Liquor Act which made it easier for dairies and superettes to sell alcohol so— 
Hon Lianne Dalziel 
: There is no drinking age. There never has been. 
SANDRA GOUDIE 
: Well the lowering of the drinking age to 18? 
Hon Lianne Dalziel 
: No there is no such thing as a drinking age. 
Hon Member 
: Purchase age. 
SANDRA GOUDIE 
: Oh purchase age. OK righty-o! Oh semantics! So in 2009 it is timely for New Zealanders to re-examine their tolerance or lack of tolerance of heavy drinking. It is also interesting to note that researchers are actually finding linkages between alcohol and some cancers as well as a raft of other health problems such as cirrhosis of the liver—well that is pretty well known—anxiety and psychological issues. 
The social costs are much harder to quantify but can be pretty substantial. The fatal and non-fatal road accidents that occur because someone is drunk behind the wheel are devastating for families. One constituent recently wrote to me expressing a huge amount of concern in that regard. He had lost his wife of 33 years and his children had lost their mother as a result of a drunk driver. It was quite a tragic situation. It would be tragic for anyone in that circumstance. 
The domestic violence the absenteeism the poor productivity and the decision to buy alcohol rather than groceries—these social costs are almost too huge to take into account. But it is good to note that some communities are already taking steps to help reduce the toll that alcohol is taking on their residents. In Clendon South Auckland a community support group organised a protest against a local superette applying for a liquor licence and that in turn led to some superette owners withdrawing their liquor licence applications. I think that is a worthy step in the right direction. 
Liquor bans that councils have adopted have been hugely successful throughout the country in many many communities. Families feel much safer being back in areas where they might not normally have congregated because of the amount of drinking and inebriation in the streets. I have to say that a place like the Coromandel is inundated with people during the summer period. The population increases to about 150000 throughout the district. The liquor bans have been very very successful in making members of the community feel that they are safe at that time of year when people are celebrating. 
So it is wonderful to be supporting the Sale and Supply of Liquor and Liquor Enforcement Bill which amends the Sale of Liquor Act 1989 the Summary Offences Act 1981 and the Land Transport Act 1998 to implement recommendations arising from recent reviews of the sale and supply of liquor to minors and the sale of liquor and liquor enforcement issues. It also introduces a new system of enforced self-regulation of alcohol advertising. 
When I was looking at the bill and listening to my colleague speaking earlier I saw that new section 84A “Territorial authorities may adopt local alcohol plans” is to be inserted in the Sale of Liquor Act by clause 37. This section has been mentioned by other speakers in the House. I am delighted to see that it states “may”. There is always a cost to local authorities when they enter into any of these sorts of processes so if we have the word “may” it means that they may or they may not do that. 
But if they decide to do that they may be able to recoup their costs through the liquor licensing process because there is a charge for that process. As members will be aware if a council is to adopt any sort of plan it has to go through a consultative process which is hugely costly. Councils have to weigh up whether the benefit of having the plan is worth the cost or whether they should just introduce some of those conditions at the time of issuing a licence. I am not clear on that point but I understood that when local authorities issue licences they specify some conditions around them. 
In seeking to address the drinking behaviour of minors an integrated approach is necessary. Solutions rely on changing the behaviour of individuals and communities and this involves a supportive regulatory environment public awareness and ownership of issues and an understanding of rights and responsibilities. There certainly is not enough of that in this country where individuals should better understand their responsibilities if they expect to have some rights. Consistent and effective enforcement is also important. Improving the compliance of the liquor industry will also make a contribution and the proposals in the bill are intended to contribute to this change. 
Research indicates that parents are the main suppliers of alcohol to minors. Sixty percent of minors identify their parents as the primary source of supply. That is of huge concern. Around 30 percent of the alcohol supplied is supplied by friends and 10 to 15 percent is purchased from licensed premises by minors themselves. That is 10 to 15 percent. In the context of these findings a large majority of parents—92 percent—agree that the primary responsibility for helping teenagers to learn how to handle alcohol responsibly belongs to parents and so it should. Again it is that word “responsibility”. Parents need to take some responsibility and to step up to the plate and that is what it is all about. 
Common locations where minors consume alcohol are their own home someone else’s home and public places. Well liquor bans can deal with the public places so parents and other people need to take responsibility when alcohol consumption is occurring in their home or in somebody else’s home. 
There is also increasing concern regarding the extent of alcohol-related harm and communities are frustrated by their inability to manage that harm. There is a need to improve local control over where to whom when and how alcohol can be sold in communities to ensure that social impact is taken into account in licensing conditions. In this context the policy objectives of the bill are to improve the compliance and responsibility of industry to increase community input into licensing decisions and to support a more moderate drinking environment and culture and to reduce the normalisation of youth drinking. As anybody knows a young person of 18 years of age is still not physiologically developed enough to really handle alcohol effectively. The bill is also designed to enhance the responsibility of friends and adults who supply alcohol to minors to increase youth responsibility and accountability and to clarify the types of premises that may hold off-licences. In addition this legislation introduces new offences for adults supplying liquor to minors without consent and it increases penalties and limits the defences available to those selling. 
There are amendments to the Land Transport Act 1998 as I mentioned earlier that inexperienced drivers are particularly at risk of alcohol-related crashes. These proposals aim to make it clear to young inexperienced drivers that alcohol and driving do not mix. So there can be no doubt that drivers aged under 20 years who do not have a full licence will have an alcohol limit of zero. I will just repeat that: if people are aged under 20 years and do not have a full licence they will have an alcohol limit of zero. People cannot have even one glass of beer if they are 20 or younger and driving. I think that is an appropriate condition in order to ensure that we reduce the level of incidence of young people who have been drinking and are behind the wheel and I know that this will be welcomed by many. However some young people say that often it is the older folk who are inclined to be drunk behind the wheel. 
There are other points to note. This legislation is a priority area for this Government which is looking at a variety of alcohol-related issues. We hope to pass this bill through its first reading to enable select committee hearings on it to commence in the not too distant future. 
In addition as members heard earlier from the Minister of Justice he has asked the Law Commission to speed up its in-depth review of the law concerning the sale and supply of liquor in New Zealand. The final report after feedback has been received is due by the end of June 2010 and depending on the outcome another bill could be introduced by the end of 2010. 
We are delighted to be supporting the passage of this legislation through the House and we know that the wider community of New Zealand is delighted about the content of this bill and will be looking forward to constraints being exercised around the sale and supply of liquor. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 As I was the Minister who introduced the Sale and Supply of Liquor and Liquor Enforcement Bill I welcome the opportunity to participate in the debate on its first reading. 
The main features of this bill put the power of controlling the availability of liquor where it belongs—in the hands of local communities and in the hands of parents. The bill allows liquor licensing bodies to take social impact into account when making licensing decisions. It gives local communities standing to object to the granting of licences. Currently they have to show a greater interest than the public generally. The bill gives real teeth to local alcohol plans by requiring the licensing bodies not merely to take them into account but rather to give effect to those local alcohol plans. It comes the closest this country has ever been to having a drinking-age provision by making it an offence to supply liquor to a minor without parental consent. There are provisions that deal with a misunderstanding that the licensing bodies had over Parliament’s intention in respect of the exception that allows supermarkets and grocery stores to sell liquor and for that liquor to be limited solely to wine beer mead and cider. 
I proposed to Cabinet that we seek to address this issue by putting in place a size threshold to reinforce the decision of Parliament in 1999 that dairies would not be allowed to sell liquor. It has been very disappointing to see licences granted to premises that Parliament never intended to be allowed to sell liquor. It is equally pleasing though now to see that the Liquor Licensing Authority has itself drawn the line in the sand where Parliament intended it to be drawn diminishing as it does the need to use size as a proxy for this definition. I never regarded that definition as being particularly satisfactory. Size is an unfortunate proxy to be used in this context and I am sure that as a result of the Liquor Licensing Authority decisions in future there will not be the granting of licences to dairies in this country. The Justice and Electoral Committee should consider this matter very very carefully when considering the content of the bill and hopefully in its report back it will have some sensible comment to make on that matter. 
I will comment on another trend in liquor licensing decisions because it will impact on how this bill is considered. I have been following the Liquor Licensing Authority’s decisions recently. This is largely as a result of some work that I did with a community group involved in opposing an application for an off-licence in Halswell in Christchurch. I know that other communities have started to take a real stand by putting in combined opposition to liquor licensing applications and having that stand recorded in a very public way. The objection in this case though stemmed from the fact that the owner of the licence was also the owner of the supermarket. The supermarket was essentially next door to the proposed premises for the bottle store which was a matter of metres from the hotel bottle store which faced into exactly the same car-park. The members of the community said enough was enough. They counted the number of licences that had been issued in Halswell and they felt that a bottle store that actually faced on to the same car-park as the hotel bottle store was a ridiculous proposition to put to their community. It was not needed. Unfortunately because of the limited scope of the criteria listed in the legislation the Liquor Licensing Authority really had no option but to approve the licence. However the Liquor Licensing Authority did reduce the hours that the applicant had applied for. The applicant had originally applied for 11 a.m. until 11 p.m. and that was knocked back to an 8 p.m. closing. I thought it was very good that the Liquor Licensing Authority took that position and it has adopted that position consistently for first-time licences since it has reconsidered its approach in these matters. 
The other thing that happened as a result of the community taking up this issue was an approach that has now been put in writing in respect of the impact of loss leading. I will read directly from the decision itself: “We believe that the retail initiative known as loss leading—that is advertising and selling goods at less than cost in order not only to attract customers to the store but in the process sell more products—needs to be looked at more seriously by licensees. If a licensee uses liquor to loss lead then he or she is stimulating and not meeting demand. Where liquor is involved it is not good enough for a licensee to say as they do”—and as they did in this case I might add because I sat and listened to the hearing—”that they have to continue with this business practice because of competition. Most licensees understand that they are dealing with a drug and that they have a duty under the Act to help promote the reduction of liquor abuse. In our experience loss leading helps to promote the abuse of liquor and future examples of loss leading by an off-licensee will be treated as an indication of lack of suitability”. I hope that the supermarkets in this country sit up and take notice of that warning from the Liquor Licensing Authority. 
I am disappointed that the decision has not received as much media attention as I thought it deserved. It is a major statement of a new position and it is one that is welcomed by those of us who believe that the worst decision made by this Parliament was the decision in 1999 to allow beer to be sold in supermarkets. This exposed liquor to the norms of the retail industry which treats liquor like all the other items on its shelves. That is why members of the hospitality industry—quite a different industry and one more akin to the sale of liquor—tell me that they can buy beer more cheaply from their local supermarket than they can from their wholesale distributor. The vote for beer to be sold in supermarkets in 1999 was carried by 58 votes to 53 votes. It is appalling that such a major decision which has had a huge impact on the accessibility of alcohol in this country was passed by such a narrow and ill-informed vote. There were people on both sides of this House who voted for that resolution. I certainly did not. 
 My reaction to what happened on that vote has been to criticise the conscience vote but the bottom line is that only a few MPs get to sit on a select committee and hear the evidence. That is why these sorts of matters should be subject to the kind of analysis that the Law Commission will be undertaking. I know that people think that yes it is fine that the Minister has asked the Law Commission to speed up the report back. But I do not want the speeding up of the report back to be at the expense of quality research and analysis because that is what this Parliament needs in order to exercise what continues to be a conscience vote. 
I hope that members of the House do not see this bill as an opportunity to move ad hoc amendments. The legislation has suffered for long enough from that approach. My message is to deal with the issues that have been raised in this bill then await the Law Commission report to allow sound judgment to be applied to the next substantive proposals to provide a legal framework that contributes to the reduction of liquor abuse. 
I want to end by talking about the purchase age. I am sick of the media referring to there being a drinking age. This country has never ever had a drinking age in our laws; we have a purchase age. There is nothing in the law at the moment that stops anyone from supplying liquor to an under-18-year-old as long as the liquor was not bought with that intention in mind. This bill fixes that issue by requiring parental consent. But the real question is whether we should have a debate about the purchase age. I think that we should but given the very many exceptions that used to exist to allow on-licences to sell to 18-year-olds we should perhaps also debate the difference between on-licence sales and off-licence sales; between supervised drinking where the alcohol is drunk on the premises and licensees face consequences for breaches of their obligations versus unsupervised drinking where the licensee faces no consequences for what happens when the liquor leaves the premises. I personally think that would be a very worthwhile debate which is why in my view the Law Commission review of the legislation is so important. I believe that it would be a huge mistake to invite submissions on matters not contained in the bill because MPs and submitters alike may be trapped into thinking there are simplistic responses to these issues. There are not. 
KEITH LOCKE (Green) 
: 
 The Green Party is supporting the Sale and Supply of Liquor and Liquor Enforcement Bill. From the time when alcohol was first introduced by the settlers many decades ago our country has had a drinking problem. That drinking problem led to the establishment of very big organisations such as the New Zealand Women’s Christian Temperance Union which was a motivating factor in women being given the right to vote in 1893 to try to control the drinking problem the level of alcoholism and the binge drinking. I think binge drinking was reinforced by the 6 o’clock closing time that we had for many years. People drank huge amounts up until the in effect 6.15 p.m. closing time. It is good that this bill will make some progress in controlling binge drinking particularly amongst young people. 
I will comment on a couple of provisions such as the local alcohol plans. I was struck by the need for such plans a year or so ago when I went to my local barbershop—hairdresser—about 30 metres off Karangahape Road in Auckland which is a retail area. I went there at about half-past 10 on a Saturday morning and about 10 metres away from the barbershop and other retail premises there was a liquor outlet—a bar—going full bore. Apparently the way things went in that K Road area the bar only really got going at about 3 a.m. and it was licensed to go through until midday. So people like myself who were arriving at the hairdressers could not hear ourselves. Basically the neighbouring retail premises to this liquor outlet lost all their business on a Saturday morning because of the drunkenness around them—people being sick on the pavement and the like. 
 The suggestion in the legislation once it is implemented of local alcohol plans to be adopted relating to the sale or consumption of alcohol within a local district particularly with the consultative way in which this plan is to be formulated will mean the end of situations that I have described which are totally out of sync with community interests. There is no way that that bar should have been open at those hours right in the middle of a shopping community on a Saturday morning. 
The other point I will address is the question of advertising and promotions. The Green Party is not in favour of alcohol advertising. We have campaigned against it in relation to advertising in the media and elsewhere. This bill here goes a step towards the Green goal but not far enough because there is a little bit of a contradiction in some of its principles. The bill states: “liquor advertising and liquor promotion should not hold strong appeal to children or young people.” Well anyone who looks at liquor advertising will know that it is directed primarily at young people; it is not directed at people who are 40 or 50 years old who are set in their drinking ways in one way or another. Advertising tries to increase consumption of a particular product among young people. Members could look at any advert on a billboard on television or whatever and see that that is the reality. If this legislation can restrict that then good on it but it will be a bit difficult. 
The bill states: “liquor advertising and liquor promotion should not be inconsistent with the promotion of responsibility and moderation in the consumption of alcohol;”. Again I think the whole point of advertising is to get people to drink more than they otherwise would. It would be good if adverts stated “Don’t drink more than one glass.” or whatever but I have not seen them and I think that even under this bill I am probably unlikely to see them. 
Restricting advertising is very important for the health of people and particularly for our young people. When we have alcohol companies promoting a sport—and Lion Red is used a lot at sports events—there is a contradiction there. We have a big debate in relation to the New Zealand Rugby League which the Warriors are part of. The league is arguing about whether it should ban its players from using alcohol at all. It has said it would be a bit difficult to do that but the very fact that it is having that debate at the same time as we are having teams being sponsored and promoted by alcohol companies is a little bit contradictory. It is a step forward in the advertising area to go beyond our previous voluntary self-regulation to what is called enforced self-regulation. 
It is good that under the advertising provision proposed in new section 136B in relation to the recognition of the liquor advertising advisory body it states: “when reviewing its codes devising appropriate ways of engaging with the community to elicit a range of views on them;”. I think that is critical and Lianne Dalziel also recognised that if the community becomes aware of this new law and its powers together with the local bodies then we will see big change in terms of the way in which New Zealand liquor advertising is conducted—and hopefully in the extent of that advertising. Thank you. 
DAVID GARRETT (ACT) 
: 
 I rise on behalf of the ACT Party to support the Sale and Supply of Liquor and Liquor Enforcement Bill. I intend to take only a very short call in line with my own personal view that if one has not got something worthwhile to say then one should not say anything at all. 
Hon Darren Hughes 
: That’ll change! 
DAVID GARRETT 
: I try to resist the temptation to become like Mr Hughes but in the meantime I will say that I noticed when looking through the bill—which I obviously was not familiar with because it was introduced last term—that two things in particular stuck out. The first thing was the provision for local alcohol plans. I note that a territorial authority may adopt an alcohol plan relating to a number of matters that are listed in proposed section 84B. That seems to me to be an eminently sensible way to proceed. 
I have the pleasure these days of living out in the country north of Auckland in an area that I commonly refer to others with great approval as “old New Zealand”. One does not have a lot of the problems out there that one has elsewhere. But I used to live in the North Shore of Auckland and again that is very different from other parts of the city. I must admit to having been a bit doubtful about claims that liquor is available at “every dairy down the street” but just the other day I had reason to be down in South Auckland and sure enough in premises that were the local dairy there was liquor on sale and one would not need to go very far to find another one. 
I can very readily see that the intent of laws in the past has been abused and it seems to me that these local alcohol plans in which such factors may be taken into account as to where the outlet may be located the maximum density for outlets—which harks back to the speech by the Hon Lianne Dalziel—and the minimum distance from other outlets etc. are eminently sensible. Who could disagree with them? 
The other provision that I noted with great approval was the concept of “three strikes and you’re out” which seems to have been introduced by the previous Labour Government. Proposed sections 135A and 135C provide for the mandatory cancellation of managers’ certificates after three incidents relating to minors within 2 years. As the House knows I am backing the “three strikes and you’re out” laws for more serious violent crimes and it is very heartening to see that the previous Labour Government recognised that the idea of having two chances but then being struck out as it were on the third is sound reasoning and a sound way to proceed. The ACT Party will be supporting this bill. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Assistant Speaker. Kia ora tatou i tenei po. Members might not know that I do not drink too much these days but I find myself thinking that I may be a bit of a hypocrite talking about this sort of bill and about the rights and wrongs of drinking or purchasing liquor. I have to admit that once upon a time I did venture into a pub—before I was supposed to— 
Hon John Carter 
: By mistake. 
TE URUROA FLAVELL 
: I purchased alcohol by mistake ahead of the right age and yes I got led astray by some of my friends by mistake and lost my mana. 
Hon Member 
: That must have been Te Arawa. 
TE URUROA FLAVELL 
: By mistake it was. In those days drinking seemed to be all about fun; that was the focus. But in reflecting on this bill it seems to me that times have changed a little bit. I say that because last August as most of the members of the House will know in the southern regions down in the Te Tai Tonga area in Dunedin riot police had to come out to battle with crowds of drunk university students as they threw bottles and burnt couches in what is generally known as the Undie 500. We understand that 30 people were arrested for disorderly behaviour obstruction and breaching the liquor ban in the annual riot that is all too often dismissed as some would say student pranks. Somewhere along the line the alcohol-fuelled trip organised by the students union blurred the distinction between off-campus fun and behaviour of a criminal nature. This seems to be the case more often than not these days. 
 As I stated last week in a debate on a similar bill—and despite my feeling a bit of a hypocrite—the Maori Party is greatly concerned about alcohol and drugs and the part they play in youth crisis situations. It did not seem to be like that in my time. During the debate last week I spoke of the fact that alcohol-related harm is a major contributor to preventable health and social costs on young people. I also spoke of the reality that young people are more than twice as likely to suffer from alcohol-related harm as those in other age groups. As parents grandparents and in some cases great-grandparents we hear stories about the drinking behaviour of our rangatahi. As a caucus we of the Maori Party are determined that we have to do something about it. 
We know that overall a lower proportion of rangatahi Maori drink alcohol compared with non-Maori. That is pretty great from our perspective in the sense that most of the statistics around our people are not all that crash hot. Unfortunately compared with all non-Maori and with people aged over 30 years those young Maori people who drink alcohol appear to be disproportionately engaged in heavier and riskier drinking. 
Young people themselves report that alcohol is usually supplied by parents in about 60 percent of cases and by friends aged over 18 years in 30 percent of cases. The Sale and Supply of Liquor and Liquor Enforcement Bill is intended to improve industry compliance and responsibility in order to put the focus fairly and squarely at the feet of the alcohol barons and the alcohol industry. 
As other speakers have said this bill seeks to regulate where to whom when and how alcohol can be sold in communities. Importantly this bill will implement the recommendations arising from the review of the sale and supply of liquor to under-18-year-olds in New Zealand. Well we say that is all good but of course it misses the point. It is not the fact that we are buying booze that is the problem; it is the fact that we are drinking. 
Nothing in this bill specifically focuses on those whom the young people identified as handing over the alcohol to them namely their parents and friends. The bill targets the industry local authorities on-licences and off-licences—in fact everyone except the person holding the wallet which is our concern. That is not to say it is not important to have the wider community take responsibility for this problem but more to suggest that we must target our efforts on those who are within the immediate orbit of the young people who are the focus of this bill. 
The Maori Party has always said there should be a variety of strategies both legislative and non-legislative to reduce the overall supply of alcohol to young people in order to limit their drinking and its associated harms. We know as other speakers have said this evening that to stem the tide of this desperate problem of binge drinking by young people we cannot put up ad hoc proposals in isolation from the overall drinking culture of the nation. This bill is a step in the right direction in terms of putting in place different approaches to addressing the responsibility of those supplying alcohol to our young people from a commercial premises. 
The bill attempts to address drinking behaviour by improving industry compliance and responsibility to regulate where to whom when and how alcohol can be sold in communities and to ensure that social impact is taken into consideration in licensing conditions. That is all good and we support any moves to bring responsibility to the front of the korero. We understand that that responsibility is specified in the bill in a number of ways and other speakers have mentioned them. Firstly the bill introduces local alcohol plans to be adopted using consultative procedures provided for in the Local Government Act thus increasing community input into licensing decisions. Secondly any application for an on-licence an off-licence or a club has to be consistent with the local alcohol plan. Local authorities need to notify the authority to state that they support the granting of the licence. Thirdly the types of premises that may hold liquor licences are defined. Off-licences cannot be granted in small premises and are restricted to selling wine and beer. Finally—and importantly—those supplying alcohol will be subject to more stringent rules around their own performance in the industry. 
A lot of these changes are to do with self-regulation and self-control. In 2000 at Manu Ariki near Taumarunui the first Maori alcohol and drug summit took place. Two of the key recommendations from the summit were one a need for leadership to advise and guide kai mahi—workers in the drug and alcohol area—and two a need for cultural competencies to standardise drug and alcohol services. Leadership may be about having Maori staff and Maori counsellors who have knowledge of tikanga and kuia and kaumatua as mentors explaining and promoting the programme to whanau so they understand what is involved. 
Turning to the cultural competencies it is all about developing a whole-of-whanau approach especially if there are drug and alcohol issues at home. Since that first summit Maori alcohol and drug service providers have been meeting regularly I am told to ensure that Maori retain mastery over our own solutions to address alcohol-related harm. Their commitment is that Maori are able to honour and respect themselves others and their places of belonging. To do that Maori need to be free of the behaviours that threaten our way of being. 
When we look through the Sale and Supply of Liquor and Liquor Enforcement Bill we can say that although we are pleased to see the greater clarity around the roles of managers of off-licence premises and of licensing authorities we know it is but a partial solution. Real solutions are likely to be most effective when coordinated at multiple levels in society. Real solutions involve stakeholders at all levels and we believe our families and whanau. Real solutions engage our whanau and are directly run with those who are at the centre of this bill: our rangatahi. 
We will support this bill at its first reading because we want to encourage a debate that is as wide as possible on an issue of such critical and fundamental importance to our nation. Our policy as the Maori Party has been to support whanau-focused alcohol and drug addiction recovery and restoration services. We are particularly concerned for the futures of our young people. More than 53 percent of the entire Maori population is under 25 years of age so we have plenty at stake here. 
We cannot turn a blind eye and ignore the profile of young people who drink in Aotearoa New Zealand. We know that the consumption of large quantities of alcohol in one sitting seems to be an accepted norm these days and if there is one thing we would most like to see this bill achieve it would be to change the attitudes that lead to the behaviours of binge drinking and getting wasted which we all condemn. We will support this bill and we look forward to more changes to come to ensure a huge and meaningful reduction in drinking-related harm for our young people. Kia ora tatou. 
SHANE ARDERN (National—Taranaki - King Country) 
: 
 I could not agree more with my colleague who has just resumed his seat Te Ururoa Flavell. Much of what he had to say was absolutely right. I also say that it would be hypocritical of me to take a pious view of the consumption of alcohol now at age 49 or to while thinking back to when I was in my 20s take some sort of position that would be inconsistent with my own lifestyle. 
As the father of two young adult boys I am fully aware of the impact that alcohol can and does have on a lot of families. I also say that I believe that this generation of young New Zealanders is actually far better than we were. On the whole they are much more responsible and much less likely to get involved in alcohol-related activity shenanigans legal disobedience or other such activities than was our own generation notwithstanding some of the television footage we see of students in Dunedin and other places—and that is certainly at the top of the news at the moment. I firmly believe that percentage-wise they are not as bad as some would have us believe. That said we do see a large number of young people—and I mean very young people—overindulging in alcohol. Whom do we blame for that? Whom should we ask why that is so? 
I congratulate the former Labour Minister Lianne Dalziel who recently took a call and put forward some of the research that had gone into the Sale and Supply of Liquor and Liquor Enforcement Bill. The bill states that something like 60 percent of the minors surveyed identified their parents as being the suppliers of alcohol. Their parents of course are people of our generation so we need to look no further than the type of culture that has developed in our time rather than in the time of the children who are now offenders. 
 The bill itself as other speakers have said covers a number of issues around the advertising activities of licence distributors and other such things. But according to the research done for the bill only 10 to 15 percent of those who are involved in under-age drinking actually purchase the alcohol themselves. There is already a fairly powerful law around the purchasing of alcohol by minors which is that one must present either a driver’s licence with a photograph on it a passport or a special identification card before the licensed premises can serve alcohol. If the licensed premises do not obey that law then some fairly hefty penalties apply. So clearly the argument in that regard is about enforcement rather than about a change of law. 
We must come back then to the basic principles. Some speakers have talked about advertising. My 23-year-old son arrived home from Victoria University wearing a T-shirt that stated “Tuiversity”. I asked him what “Tuiversity” meant and whether he knew how big the cheques were that I was writing out so that he could enjoy this so-called higher level of learning in Wellington. We never had to have T-shirts with “Tuiversity” on them to learn the values of the consumption of that fine product from Mangatainoka. I asked him what he was doing wearing these T-shirts. He said to me that I needed to get with it and that if he wore the “Tuiversity” T-shirt to the Speight’s Ale House often enough they would give him a Speight’s T-shirt so that he would be kept in clothing throughout his university studies without it being a burden on his parents. I do not know how much one has to invest in the Tui product to be eligible for these shirts but certainly he collected a fair volume of them. 
I will also share with the House a small anecdote. On the weekend a number of colleagues and myself went to the Hurricanes match in New Plymouth and watched the Hurricanes thrash the Australians again. At that great occasion I ran into the father of a close friend of my son who was also a Victoria University graduate. He said to me that at his son’s wedding the “teenagers” as we call them—but they are not actually teenagers; they are young adults now—were very very responsible. There was no drunkenness or stupidity. In fact they behaved at a very high standard. He was surprised; I do not know why that is but he was. I suggested to him that I had experienced that situation a number of times in that I had been nervous about one or two things that were likely to take place at our place and then I had been pleasantly surprised not to have had my apprehensions borne out. I suspect that a minority of children consume alcohol—that is children from the age of 14 to the legal age of being able to purchase alcohol as the Minister rightly said— 
Hon Paula Bennett 
: Former Minister. 
SHANE ARDERN 
: —as the previous Minister said. Of course that is right. The law has never ever prescribed a drinking age; it has prescribed a purchasing age. There is a lot of debate around at the moment about whether that issue should be revisited. I suggest that it should be properly enforced. That would be a better approach. 
An expert multidisciplinary steering group reviewed the self-regulatory system for alcohol advertising. It considered a broad range of evidence and concluded that alcohol advertising plays a role in shaping the culture of drinking and that it reflects and amplifies drinking practices in the context of a country’s social economic and cultural history. I suspect that that is absolutely right. Hopefully this bill once it becomes law will go some way—at least we hope it will—to addressing the culture that has developed in society around the problem drinking that we see so often now in television bulletins particularly around universities and the behaviour that is taking place as a result of that drinking as well as some of the crime statistics that we see from time to time. 
The review also found that there were a number of gaps. The gaps are that industry is largely accountable for the system with limited opportunity for influence by the Government. In other words there is a self-governing regime as far as advertising is concerned. This bill goes some way to giving both local and central government the opportunity to say: “Well look we have given you guys a go. You haven’t played ball in terms of what society expects from you in general so you either do that or we will bring in some law regulation local body law or other such thing that will make you do so.” The report identified that there was no real legislative framework to do that so this bill brings that in. 
The system is not underpinned by clear policy goals. In other words in one area one thing applies; in another area another thing applies so therefore there is confusion and uncertainty around what is expected of various providers. We have heard tonight in this debate a lot of anecdotal evidence at least of various suppliers running loss-leader wars on alcohol. The previous Minister said that in her view it was a great pity that we allowed beer to be sold in supermarkets. Well as someone who goes into the supermarket on the way home occasionally and picks up a few dozen for friends who are coming round to watch the rugby match or whatever I actually find it very convenient to buy beer from supermarkets. Why would she penalise 90 percent of society for those who would offend given as has been stated many times that it is the parents themselves who need to be accountable for teaching young people or showing responsibility in respect of the use of alcohol? I am not sure I agree with the previous Minister on that point but some clear guidelines around advertising and how supermarkets and other outlets should run loss-leaders and other such things in the promotion of alcohol may need to be looked at. 
There are no infringement powers in cases of persistent and serious non-compliance so clearly this bill does something in regard to giving local authorities in particular—but not just local authorities—an opportunity to do something about that. 
This bill is a small step to overcoming what has become a growing problem in our country but I think it is a problem that is more cultural and more parent-driven and will be resolved within the community as opposed to being resolved by legislation. But the legislation will give more powers to those who wish to do something. Thank you. 
Hon JIM ANDERTON (Leader—Progressive) 
: 
 I support the Sale and Supply of Liquor and Liquor Enforcement Bill but I am under no illusions that it needs to go much further than it does if we are seriously to reduce the harm caused by alcohol. Alcohol causes between $1.5 and $2.5 billion worth of economic and social harm each year in New Zealand. It is by far the most damaging drug in this country. It is the most damaging drug not because it is intrinsically the most dangerous drug—far from it. It is the most damaging drug because it is the most available drug. In recent years when alcohol was made much more available predictably the harm caused by alcohol has also risen. In recent years we have lowered the drinking age and more young people are being harmed much more often. We have allowed more widespread alcohol advertising. We have allowed the sale of liquor in more places and for longer hours. The resulting harm is there to be seen by anyone who cares to look: in the carnage on the streets and in alcohol-fuelled crime waves. 
Nothing makes it more obvious that the Government has its priorities wrong than the casual attitude towards alcohol that we just heard from the previous speaker. If the Government truly wanted to reduce crime it would make alcohol less available. If the Government truly wanted to reduce the health bill and make New Zealand more productive it would reduce the availability of alcohol. It is cynical if people come in here to Parliament and pronounce grimly about the toll that alcohol causes yet they do not take effective action against it. Some of the Government members were the first to sneer about a nanny State when someone tried to fix problems such as this. They claim to be anti-crime but they also sneer and call anyone who tries to reduce crime the “fun police”. 
Let us look at what they mean by “fun”. In 1999 500 people were killed on our roads. By 2007 total road deaths had declined to 410—a reduction of 90. But the number of road deaths among 15 to 29-year-old New Zealanders did not fall anywhere near as much as that. Last year if the toll among 15 to 29-year-olds had fallen by the same amount as the rate fell for the general population there would have been 20 fewer deaths of young New Zealanders. In the context of 410 deaths 20 fewer does not sound much but the Transport Agency values the life of anyone killed on the road at about $2.5 million. If we multiply that by 20 we are up to $50 million and that is only the direct economic cost. The social and human cost is much greater. So why would the toll not fall among young people in the way it fell among the rest of the population? There is only one reason: the drinking age was lowered. 
In the years prior to 1999 when the drinking age was lowered the number of dead drivers who had an alcohol level above the legal limit was tracking down. Since 1999 when the purchase age was lowered the number of dead drivers in that category has stopped tracking down. Because we reduced the age more young people are being killed and injured. Those are the brutal facts. In 2000 there were 4079 15 to 29-year-old car and van drivers involved in injury crashes. In 2007 7 years after the lowering of the drinking age there were 6538 injury crashes involving 15 to 29-year-olds which is an increase of 60 percent. Is that just an accident of history or is there a causal relationship between lowering the drinking age and that figure? I leave members to draw the obvious conclusion. The number of injury crashes among young people is far greater than the number among the general population. The research in New Zealand and around the world is clear: there is a direct link between the availability of alcohol and the level of harm caused by it. 
Alcohol is also an enormous factor in crime. Between half and three-quarters of all police work is associated in some way with alcohol abuse. If we talk to police on the front line we will hear many of them say that over 90 percent of the criminal activity they deal with is caused through alcohol abuse. That is what they are dealing with. Between half and three-quarters of all police work is associated with that problem. Two out of three people whom the police deal with as offenders have been using alcohol prior to the offence being committed. Is that some kind of accident or is there a causal factor there? 
So I support the measure in the bill to reduce access to alcohol and I have no truck with people who call it “nanny State” or who call anyone who is voting for this bill the “fun police”. This issue is not funny. I condemn anyone who says that a vote for mild restrictions on this dangerous drug is a vote for prohibition. Sensible control of alcohol is not prohibition and pretending they are the same is both irresponsible and distorted. Restricting the availability of alcohol will make a huge difference. 
About 5 or 6 years ago some members who are now in the Government bitterly attacked me when by accident I was acting for the then Minister of Customs the Hon Rick Barker who was in the Chair just a little while ago. I copped all the flak for what actually happened but I took steps on that night to increase the excise rate charged on alcoholic drinks in the range of 14 to 23 percent alcohol by volume. Those drinks were euphemistically described as light spirits but they were 23 percent proof alcohol by volume. They were being sold cheaply and were being advertised in the school holidays so the kids could buy bottles of gin vodka brandy and whisky for around $8. The increase in the excise duty on those light spirits stopped almost at once those spirits being sold and the binge drinking that had taken place as a result of drinking them. The reduction in alcoholic drinks released for sale as a result of that excise duty increase was 80 percent. So 80 percent of the light spirits—23 percent proof alcohol—were stopped by an increase in excise duty. That shows how sensitive alcohol is to price in terms of young people. The decline in the quantity of so-called light spirits drunk by young people was half a million litres. 
I was criticised for not making any difference. I think half a million litres of high-level alcoholic spirits not being drunk is a pretty good result. I must say that some parliamentary colleagues on the other side of the House were abusing me for being the “fun police” or the “nanny State” saying none of it would work and all the rest of it. Well it actually did. One of the principal manufacturers immediately reduced the alcohol content of the product from 23 percent to 13.9 percent because that complied with the new law but eventually the company went out of the business because the increased cost was effective in terms of restricting use. That shows that we can make a difference. To anyone who asks what we can do I say it was done. That measure meant half a million fewer litres of high-level alcohol were drunk sales were 80 percent lower and eventually the product was driven off the market. 
I support the objectives of this bill. I support reducing the availability of alcohol particularly for young people. I support more restrictions being put on alcohol advertising and availability in the community. I must admit it is a constant irritant to me to see major sporting events celebrating the use and abuse of alcohol. After every game people are going out to “have a few quiet ones” and we see the result of that in the newspapers usually on a Monday morning. So if the Government wants to keep the wild promises it has made to seriously reduce crime in New Zealand it had better come back to this House very soon with some more significant issues on alcohol abuse. I am not at all confident that it will because the issue is not very popular. I know that but it happens to be right. I support the start that is being made here but I hope it is not the end of what we need to do in this matter. 
MELISSA LEE (National) 
: 
 I rise to support the Sale and Supply of Liquor and Liquor Enforcement Bill which amends three Acts relating to liquor including the 20-year-old Sale of Liquor Act 1989. The attempt to reduce the opportunity for society and individuals to be harmed by the misuse or excessive consumption of alcohol is obviously supported by the whole House and many statistics have been given by previous speakers more senior than me. It is lovely to see for the first time since I have been in the House that everybody agrees or seems to agree. 
New Zealand has a permissive drinking environment. We have quite a relaxed attitude towards having a few after work at social gatherings and at the dinner table. Like my colleague I too will not try to be pious about my drinking. I enjoy a glass of wine; about this time of the night I like a glass of wine but I did not partake tonight. Yet with our relaxed attitude to alcohol consumption there is a concern around the social supply of liquor to minors. At one time or another we have all witnessed unsupervised drinking in large quantities by minors and some of us have participated in it—several decades ago. 
To address the drinking behaviour of minors we need to change the behaviour of individuals and communities. To make this happen we need a supportive regulatory environment and a public that is aware and owns up to the challenges we face with this issue. We need consistent and effective enforcement. Having been the holder of a liquor licence I know how important it is for licensed premises to be responsible hosts. Compliance by industry will also help to address drinking behaviour. 
I learnt how to drink from my parents. I was allowed to drink the froth off my parents’ beer when they were having one; I was allowed to acquire the taste for wine and spirits with little sips; and I was eventually allowed a full glass of wine when I became legal age. Many responsible parents do this. In fact 92 percent of parents agree that the primary responsibility for helping teenagers learn how to handle alcohol responsibly belongs to parents. However there is growing concern regarding the extent of alcohol-related harm and I know that many communities are frustrated by their inability to manage that harm. There is a need for us to improve local control over where to whom when and how alcohol can be sold in communities to ensure that the social impact is taken into account in licensing conditions. 
 Something I really like about this bill is the introduction of new offences for adults supplying liquor to minors without the consent of a parent or guardian—that has to be good. The bill increases penalties and limits the defence for those selling alcohol to minors. For me the best part is that inexperienced drivers aged under 20 who do not have their full licence will have to have a blood-alcohol level of zero. I know that that will not be popular with some young people but most of New Zealand will applaud it. 
This legislation is part of a priority area for this Government—looking at a variety of alcohol-related issues—so I support this bill and hope it passes through its first reading to enable select committee hearings to commence in the not too distant future. I commend this bill to the House. 
JACINDA ARDERN (Labour) 
: 
 I am proud after many sitting weeks in this House to finally be discussing a bill that goes some way to addressing some of the social harms and social issues that contribute to crime. We in this House all know that crime has been a major topic of discussion and debate and I am pleased that we have moved on to alcohol as part of that wider discussion. 
The Minister the Hon Simon Power at some point I believe pointed out that between 80 percent and 89 percent of serious crime has some association with alcohol. There is an intrinsic link which means that this bill is particularly timely. There are of course other links with health and well-being which have been drawn out by previous speakers but I want to dwell on those with particular reference to young people. 
The Youth 2007 survey which I do not think has been raised in this House to date was recently released. It is one of the largest surveys conducted in New Zealand covering over 9000 young people who are currently attending high school. It is the most comprehensive youth health and well-being survey that we have. What did the most recent survey tell us? It told us what many have already asserted in this House—that 72 percent of students have tried alcohol. 
There is a difference though between those who have tried alcohol and those who consider themselves drinkers. Of those surveyed 61 percent currently consume alcohol and of those who drink a third do so weekly or more often. But that does not strictly bring them within the definition of binge drinking. Of those who do consume alcohol one-third has five or more drinks within a 4-hour period and for young people in New Zealand that is the definition of binge drinking. 
Obviously those results have consequences. We have already talked about the impact on crime but there are further consequences that we intuitively know. Young people are more likely to indulge in risky behaviour when they are under the influence of alcohol and the Youth 2007 survey told us that of current drinkers 14 percent have partaken in unsafe sex 7 percent have partaken in unwanted sex and 22 percent have suffered injuries whilst under the influence of alcohol. 
I think it is important that we put all of this into context. Not all young people are prolific drinkers. It is really important that we underline that fact in this House—not all young people are binge-drinkers. In fact the Youth 2007 survey showed us that in comparison with the Youth 2001 survey there has been a decrease in the number of young people who could be defined as binge-drinkers. But that does not mean that we do not still have an issue to deal with—we do and all of us in the House acknowledge that. 
I highlight again though that it is not a new issue and some members have highlighted that fact from their own personal experiences. Where we perhaps differ in some parts of this House is on how we address the problem. One thing I have heard many members acknowledge is that we have a cultural issue to address. Drinking is an issue of culture in New Zealand and 14 percent of young people drink to get drunk. Let us compare that with the adult figure of 9 percent. Some might perceive that there is a much bigger divide between the behaviour of our young people and the behaviour of adults—there is not; it is 14 percent versus 9 percent. 
This fact has been recognised by a number of our more eminent members of the sector. In fact the chief executive of the Alcohol Advisory Council (ALAC) Gerard Vaughan is quoted as saying that young people’s drinking has to be seen in the wider context of the adult drinking culture in New Zealand. He has said that young people learn their drinking behaviours from those around them and that until we change the adult drinking culture we will not change the behaviour of young people. 
This is the collective responsibility of community leaders recognised role models the youth sector and us. But what can we as legislators do in addition? Obviously we have an additional role beyond just being role models and exemplars. Availability is one of the issues that has been talked about already and that is addressed in this bill. Dr Sue Bagshaw from the 198 Youth Health Centre in Christchurch someone I have been lucky to meet with briefly has already identified the fact that nothing will change unless there is some restriction around the marketing of alcohol and alcopops in particular—alcopops being cheaper and more sugary versions of spirits which some young people consume. So I think that a wider debate is needed on that. 
The chief executive of ALAC also recognises the contribution of alcohol availability to our levels of consumption and this bill goes some way to addressing that. But the issues of availability and responsibility are also intrinsically linked. Some members will recall that when the issue of the purchasing age was debated the common perception was that if we lowered the age to 18 the supply age would drop by virtue of younger adults supplying their peers and those even younger still. I think that that was a bit of a distraction in that debate. 
If we look again at the Youth 2007 survey we see that 53 percent of young people claimed to be supplied with alcohol by friends. We do not know whether they were within the legal age. The bill looks at parental consent—and rightly so. Those young people will be drawn into the legislation as they will be required to have the consent of a parent before supplying a peer. But as already has been acknowledged parents are in fact the biggest suppliers. That is highlighted by the Youth 2007 survey which states that 54 percent of young people are supplied with alcohol by their parents. 
We cannot assume that parents always act responsibly when they supply their children with alcohol. To say they do I think is a fallacy. In fact Deb Fraser the manager of Dunedin’s Mirror Counselling Service has stated: “Parents will sometimes provide their children with a 1 litre bottle of vodka and not actually follow up where their child is going. At times it is challenging to educate those parents because they drink and smoke in the same way as their kids. It is not about not supplying alcohol at all but doing it in a responsible way and leading by example.” Again that has been highlighted in the House and it is something I wanted to reiterate. 
The final source of supply is someone else buying alcohol on a young person’s behalf and the bill addresses that issue also by tightening up and clarifying I would say the requirements around a retailer checking ID. A defendant will now have to prove that what seemed to be evidence of age was produced and that that defendant could believe on reasonable grounds that the evidence was in fact legitimate. 
There are two major points I want to conclude on. A journal article recently—in fact last year—on social science and medicine found that marketing and pro-alcohol advertising in social features created an environment where drinking to a state of intoxication was naturalised and it concluded that action was needed to regulate exposure. That is another area that the bill addresses through self-enforced regulation. 
The point I want to finish on and to underline the House comes off the back of some evaluation work that has recently gone on around youth access to alcohol projects that have been undertaken in 30 communities. Early evaluation from those programmes has again demonstrated that parents continue to be our major challenge in this area and I would also assume based on my experience of growing up in a provincial and rural area that off-licence consumption is also one of our bigger challenges. That evaluation work also found that involving young people is integral to the success of the programmes. 
 We cannot vilify young people in this debate. If we vilify young people it will impact upon our success and act as a distraction from the real issues. Instead young people must be involved in this debate. They must be a part of finding the solutions. I challenge the Minister to ensure that that is exactly what happens in the continuing development and work around this bill. We will find solutions that minimise the harm caused by alcohol only if we continue to go beyond the first steps of this bill. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 Tonight we are discussing very important legislation that has come before this House. We are looking at the balance between liberty and responsibility but we are also looking at it within the framework of families with parental concern for their children. One of the things we understand especially through the growing teenage years is that alcohol seems to be a rite of passage that many young people seek. It seems to be one of the things that they consider marks their growing up and becoming more mature whereas in fact we see the misuse of alcohol as a sign of immaturity. Liberty without responsibility inevitably leads to a long list of ills whereby someone pays and pays tragically. This legislation will bring in measures that will protect our young people oft-times from themselves but also from adults who are less responsible than they are and protect them and our communities from the harm that the abuse of alcohol can bring. 
There is never an age where excessive drinking that leads to abusive behaviour is acceptable but it is exceedingly unacceptable when it is a minor who is affected by excessive alcohol. When we see the abuse the pain and the destruction that happens to adults and to families because of alcohol abuse it grieves us to think that such a path can be taken at an early age by those so young amongst us. It is unacceptable because they are forming values and behaviour patterns that often govern the entirety of their adult lives. A pattern of alcohol abuse can become ingrained in them. In our society there are many what I would call eases of attitude towards things that we would normally consider to be elements that we want our young people to move away from. We find ourselves today facing these situations with this legislation being presented to the House and I think it is very good legislation. 
This bill seeks to address the drinking behaviour of minors but it also seeks to address the behaviour of adults who enable minors to have access to alcohol. It brings a legislative framework that makes alcohol abuse amongst minors difficult. There is a change in attitude in New Zealand at the moment around alcohol issues that has been spearheaded by individuals and communities. They are demanding a say in liquor licensing decisions. Our nation has developed a drinking culture that feeds into crime violence family breakdowns and injury in all sorts of different ways. We as a nation need to focus on and address this drinking culture and this legislation goes a long way towards doing that. The harm that results from our drinking culture is very high compared with a few years ago when people did not accept that we had a binge drinking culture in this country. We have a drinking culture that oft-times seeks to alleviate the pain anger and frustration that adults carry but amongst young people we have a drinking culture that seeks to lift a person up to be idolised by his or her peers. 
Peer pressure is very strong especially amongst teenagers. Last weekend I had a conversation about peer pressure with some 13-year-olds. Peer pressure is something that tends to make our young people and even adults do things that would not normally be acceptable or are unsafe or unwise. Our greatest concern regarding alcohol and young people is the injury that occurs especially with the use of motor vehicles. It is very good to see that this legislation provides for a zero tolerance regarding alcohol consumption for people under 20 who do not have a full licence. 
There is also increasing concern about the extent of alcohol-related harm. Communities are frustrated by their inability to manage that harm. There is a need to improve local control over where to whom when and how alcohol can be sold in communities to ensure that social impact is taken into account in the licensing conditions. In this context the policy objectives of the bill are to improve the compliance and responsibility of industry to increase community input into licensing decisions and to support a more moderate and responsible drinking environment and culture to address the normalisation of youth drinking. We want to see the responsibility that friends and adults have towards each other improved and enhanced. They are the ones through whom young people in particular can have access to alcohol. We want to see an increase in youth responsibility and accountability and clarification of the types of premises that may hold off-licences. 
Accountability is a word that this Government has used on a number of occasions. Accountability basically says that there are areas in our communities and society that need redress and we want people to be thinking about them and acting in responsible ways. In addition this legislation introduces new offences for adults supplying liquor to minors without consent and it increases penalties and the limitations of defence for sellers of liquor. It is very important that these aspects are brought to the select committee to be discussed and are then brought back to the House. 
Solutions rely on changing the behaviour of individuals and communities. The answer is not and never has been just legislation. There has to be an intent a decision and a commitment within a community that we want to have safer communities and healthy environments for our young people to grow up in. I would much prefer that parents teach responsibility to their sons or daughters rather than their learning to drink somewhere else away from the jurisdiction of their home. I believe that parents have a part to play in this whole process. Legislation must gird the efforts of parents and communities to train their children to become people who have a responsibility for the freedoms that our democracy affords them. Where there is an absence of legislation there is a great lag in support for parents and communities. 
The addressing of these problems involves having a supportive regulatory environment and we must also have public awareness through informed community groups and discussion forums in our communities talking about these problems—particularly in areas where our young people are involved such as sporting venues and clubs. There needs to be an ownership of the issues an understanding of the rights and responsibilities and consistent and effective enforcement. 
This bill introduces a number of new measures. It introduces a new system of enforced self-regulation of alcohol advertising. The present regime is voluntary self-regulation. I believe that enforced self-regulation hardens up an area that must be attended to. This legislation takes into consideration the frustration that communities have with the number of liquor outlets popping up. Communities in Mairangi Bay Oranga Mount Roskill South in Auckland and Cannons Creek in Porirua have all protested against proposed new liquor outlets. One hundred people were drawn to a protest march in Porirua on 8 December and there were almost 1000 signatures on a petition against the latest proposed liquor store in Roskill South which would be across the road from two schools and a kindergarten. There are some changes coming to this country changes that I believe are well due and I commend this bill to the House. 
Bill read a first time.  
Bill referred to the Justice and Electoral Committee. 
Alcohol Advisory Council Amendment Bill 
In Committee 
Part 1 agreed to.  
Part 2 Transitional provision 
STUART NASH (Labour) 
: 
 I stand in support of the Alcohol Advisory Council Amendment Bill. As I said when I spoke in favour of this bill during its second reading we should all be in favour of any legislation that promotes consistency across an industry or product especially when that consistency benefits an organisation with the public health mandate such as the one that the Alcohol Advisory Council (ALAC) has. Again I spoke at length on the council previously and my colleague Jacinda Ardern quoted its chief executive officer extensively in her recent speech in this Chamber. We should be even more in favour of the bill given that the proposed amendments will have minimal impact upon those who will pay this levy—that is the customers who purchase alcohol. Therefore industry consumers our communities and society benefit from this amendment bill. 
It is a technical amendment bill but that does not detract from its importance or its function. Basically as has already been alluded to this bill amends the Alcohol Advisory Council Act of 1976 by simplifying the current mechanisms for setting the Alcohol Advisory Council levy. It solves the problems that exist with the current levy-setting mechanisms by introducing an updated and simple calculation system that reflects the current alcohol market as well as future-proofs the levy against new types of alcoholic products. The amendment bill also provides for regulations to be made by Order in Council to fix the rate of levy payable. Of course the debate on this bill is not the occasion on which to debate the concern around alcohol-related harm but as with the last bill debated the Sale and Supply of Liquor and Liquor Enforcement Bill any legislation that helps our communities—in this case through the good work of ALAC—to be better served through education and enlightenment around the healthy and safe use of alcohol is a start. Our communities demand this and that is why the last Labour Government introduced this bill. 
I think we all agree that one of the positive aspects of this bill is that alcoholic beverages with a higher volume of alcohol will contribute a higher portion of the levy. This is salient in today’s environment where evidence shows that young drinkers are drinking the dreaded alcopops—in essence alcoholic fizzy drinks—and the role of ALAC has reached a new level of importance and relevance. The new system will not affect the total sum collected for the levy and the effect on prices for consumers through shifts in the levy payable between beverage types will not be significant—approximately 2c for a 750 ml bottle of spirits and a difference of less than 1c for a bottle of wine a six-pack of beer and a four-pack of ready-to-drink beverages. 
This bill has its genesis in the 2004 Ministry of Health review of the current levy-setting mechanisms of the Alcohol Advisory Council Act 1976 which found four major problems with the way in which ALAC’s levy was calculated and apportioned. The first problem was that it was outdated—the industry has changed considerably over the past 30-odd years. The second finding was that the spirits category required a calculation of proof litres; this concept is no longer in use. The third problem was that the current levy-setting mechanism was unnecessarily complex and the fourth was that section 27 of the Alcohol Advisory Council Act 1976 allowed the levy to be set by the Minister of Health by  
Gazette 
 notice; hence there was no process for Cabinet to be involved in the levy-setting process. This bill rectifies all those anomalies; therefore I support it wholeheartedly. Thank you. 
Dr PAUL HUTCHISON (National—Hunua) 
: 
 Unlike the previous bill the Sale and Supply of Liquor and Liquor Enforcement Bill the Alcohol Advisory Council Amendment Bill is not intended to contribute to reducing alcohol-related harm. Instead the bill aims to simplify the calculation of the levy that funds the Alcohol Advisory Council. I must say what a very important job the council does. It receives in levies about $12 million and that sum helps it to continue its work in research in dissemination of information in educational programmes and in innovative treatment programmes. But the whole point of this bill is that it is a technical bill that is designed to simplify the machinery of levy setting. 
It is interesting that the bill was brought in I believe in about November 2007. Here was a classic example of something that could have been simplified but the previous Labour Government had other things in mind—things like the Electoral Finance Act. Labour was not going to simplify the entangled mesh of bureaucracy it had made over the previous 9 years so it is a very positive thing that this new National Government has with alacrity brought this bill into the House and is passing it expeditiously. This bill is here to simplify and align the levies with the export duties that were out of line in the past. 
Part 1 is the major part of the bill. However I believe that by sleight of hand we are on to the transitional part. It is important to make it clear that this bill creates new definitions of wine because in the past those definitions were not flexible enough to encompass the various drinks that have come on to the market including ready-to-drink beverages the alcopops which change rapidly from moment to moment as the marketers think of a new product that they are able to sell. So it is important to put in a new definition and align that with a rate which is done so in the schedule of this bill in order to make a flexible regime in line with the excise duties. I note that the bill repeals the old definitions and brings in the new ones. The definition of “wine” substituted in clause (4)(a)(i) includes: “cider perry and mead; and (ii) fortified wines such as sherry port and fruit or vegetable-based liquors; but (b) does not include—(i) beer or spirits; or (ii) any liquor containing no more than 1.15% volume of alcohol.” 
 I note that the bill has a very clear mechanism for determining the amounts of levy of each class of liquor. It goes in five steps that are very very— 
Hon Tony Ryall 
: Sequential. 
Dr PAUL HUTCHISON 
: —sequential steps that are clearly delineated in an elegant but non-verbose manner which again is in line with the philosophy of the new Government to make sure— 
Paul Quinn 
: Sharp. 
Dr PAUL HUTCHISON 
: —that things are indeed sharp— 
Paul Quinn 
: To the point. 
Dr PAUL HUTCHISON 
: —to the point and relevant. The steps are described in proposed new section 26(2) of the Alcohol Advisory Council Act paragraphs (a) through to (e). The rate of the levy is fixed by Order in Council and that again is defined in the schedule and is quite clear. It goes from class A to class F and if indeed there is more than 1.15 percent but not more than 2.5 percent the rate is 1.5 percent but if it is more than 2.5 percent but not more than 6 percent it is variable; and so forth according to the schedule. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 I do not intend to take particularly long. As the previous speaker said the Alcohol Advisory Council Amendment Bill is very clear. It sets out its intentions very clearly and the amendments that have been made at the Health Committee are excellent; they clarify a couple of matters very well. 
It is only natural I suppose that speakers have drawn a comparison between the previous bill the Sale and Supply of Liquor and Liquor Enforcement Bill and this one. As we were debating the previous bill a number of statistics and points of view were quoted from the health industry and the justice sector and all of that information is brought together by the Alcohol Advisory Council (ALAC). I think that is one of the most important things about this organisation—it allows a reasoned evidence-based sensible debate around alcohol issues to take place. That is why it is fantastic that we can tidy up the funding mechanism. It is got out of the way it is nice and easy and ALAC can focus on the good work does in supporting the kinds of issues we have heard debated this evening. There is universal support for the bill although we heard a number of slightly different opinions all with some evidence to back them up. That is excellent to see. 
This is one of the benefits of treating alcohol in the way that we do. We regulate it. It is a legal substance but it is regulated. That allows us to include the ALAC levy within the taxation of alcohol. It provides for the funding of an organisation like ALAC so that we can look seriously at the issues and at the balance as the member opposite mentioned between liberty and responsibility. I just add my support to the bill and to its speedy progress. 
KELVIN DAVIS (Labour) 
: 
 I stand to support the Alcohol Advisory Council Amendment Bill. I too will not take too long over this. This bill is a technical amendment bill and it provides for a levy-setting regime that is fair up to date and simple to calculate. It replaces the current levy-setting mechanisms of the Alcohol Advisory Council Act 1976. That Act was reviewed by the Ministry of Health in 2004. It found that there were problems in the way the levies were calculated and apportioned. Clearly there was a need to move this levy system into the 21st century and effectively this bill does just that. 
The functions of the Alcohol Advisory Council as far as we are aware include research dissemination of information educational programmes and innovative treatment programmes. These functions are vital if we are to arrest the damage alcohol does within our society. However this bill does not address that damage unlike the previous bill that was debated—the Sale and Supply of Liquor and Liquor Enforcement Bill. As I mentioned this bill stems from a review carried out in 2004 by the Ministry of Health of the mechanisms used to set levies in the Alcohol Advisory Council Act 1976. The review found that the levy-setting mechanisms were outdated and that there were four problems in the way the levy was calculated and apportioned. 
Firstly in 1976 the classes of alcoholic beverages were limited. In fact there appeared to be only four classes of alcohol. From my perspective as a 9-year-old growing up in Northland in 1976 those four classes appeared to be Lion Red DB cask wine and top shelf. The point is that the range of alcohol available in the market has changed considerably since 1976 and the levy-setting provisions no longer reflect the diversity of alcohol available for purchase in New Zealand. I welcome the future-proofing of levies against the emergence of new types of beverages. The ready-to-drink products which contain about 5 percent of alcohol and taste little different from Thrifty or Raro were not available in 1976 so we can only imagine the jet-fuel mixes that will be released on to the market in the years to come. So I welcome this bill which streamlines the levy classification of emerging beverages. 
Secondly the spirits category requires the calculation of proof litres—something that no longer exist. It is therefore an anomaly that needs rectifying. Proof litres are no longer recorded by the New Zealand Customs Service which instead measures spirit volumes as litres of alcohol. 
Thirdly the current levy-setting mechanisms are unnecessarily complex especially when viewed alongside excise duties which are set on the basis of alcohol content. Alcohol importers and producers have noted that this procedure could do with simplification. There is no process for Cabinet to be involved in the levy-setting procedure and that is inconsistent with the more robust procedures for setting levies such as the problem-gambling levy. 
This bill corrects technical anomalies around the collection of levies and does not in fact increase by much the amount consumers pay for the various alcoholic products. It makes the new system fairer and ensures that a greater levy is paid for beverages containing more alcohol. Therefore I support this bill. 
Part 2 agreed to. 
Schedule 
The question was put that the amendment set out on Supplementary Order Paper 6 in the name of the Hon Tony Ryall to the schedule be agreed to. 
Amendment agreed to. 
Schedule as amended agreed to. 
Clause 1 
NICKY WAGNER (National) 
: 
 I rise to support the Alcohol Advisory Council Amendment Bill in the Committee stage. However the title “Alcohol Advisory Council Amendment Bill“ is a little misleading. The bill does not amend the Alcohol Advisory Council (ALAC). It is a technical amendment to the method of calculation of the levy that is applied to alcohol in New Zealand and that is used to support ALAC. This amendment updates simplifies and streamlines the levy calculation to make it easier and to make the process more transparent. 
The method of calculation takes the existing levy and aligns it with the separate excise and excise-equivalent duties that are also calculated on alcohol. This levy was first applied back in 1972 when the council was set up. The method of calculation was designed to reflect the drinking culture of the 1970s. Since then our drinking habits—where we drink what we drink and how we drink—have changed dramatically and probably not for the better. It is time to update the calculation. The new calculation is future-proofed in that it is flexible enough to adapt to future changes in drinking habits new products and new ways of consuming alcohol. 
The money from the levy is used positively by ALAC. When ALAC was set up it was designed to educate New Zealanders to use alcohol sensibly and to reduce alcohol-related harm. It does that in four different ways. It does it by commissioning research about alcohol—about how we are drinking and what we are drinking. It disseminates information. The ALAC website is a treasure trove of information about alcohol. It allows us to make good decisions about what we should be doing with alcohol in our society. It also develops education programmes which are delivered in schools in the community and also on television and through other media. 
The very hard-hitting ALAC message of how “It’s not the drinking. It’s how we’re drinking.” accompanies these ads. About 94 percent of all New Zealanders remember those ads. They are very powerful ads; in fact they are a little bit sickening. I do not know about other members but when I see them on television I tend to turn away. The one that is particularly disturbing is the story of a family barbecue with a young father playing with his son. At the beginning of the ad there is a lot of fun there is a lot of laughter and everybody is having a good time. But as the evening progresses and the father drinks more and more he becomes drunk. He then plays with his son there is a nasty accident and the thud of the child’s head hitting the furniture is absolutely shocking. 
We are shocked by those ads. They are very powerful. In fact ALAC has won an award for producing such well-remembered ads. I think that even if people occasionally complain and say that they are too realistic we need to face the fact that this sort of behaviour is going on night after night in our communities. The ads reflect what happens when dad is a drunk maybe mum is a drunk or maybe somebody in the extended family does not know how to manage alcohol. 
ALAC is doing very effective work in our community and this new bill will ensure that the levy that underpins its work is collected in the most cost-effective simple and efficient way. Therefore I support the bill. 
Clause 1 agreed to. 
Clause 2 agreed to.  
Clause 3 agreed to.  
Bill reported with amendment. 
Report adopted. 
Criminal Proceeds (Recovery) Bill 
In Committee 
Part 1 Preliminary provisions 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 As the previous Labour Government—in the form specifically of the then Minister the Hon Annette King—wrote the Criminal Proceeds (Recovery) Bill we will of course be supporting it. I do not think there is a lot of politics around this bill. It is based on the clear principle that crime must not pay. 
Part 1 looks at significant criminal activity and other terms around that. The major change proposed by this bill is that a criminal conviction will no longer be required for property representing the proceeds of crime or the value of unlawfully derived income to be confiscated. We support this measure; we know that crime in any form is nefarious. The Minister in the chair the Hon Simon Power has proposed a Supplementary Order Paper—which I know we will get to later—that provides some tidying-up and some technical amendments. I note that another Supplementary Order Paper Supplementary Order Paper 5 has been put forward by Mr Flavell. After some discussions with the Minister and others I think that Supplementary Order Paper 5 presents some difficulties and I believe that the Minister may want to provide some advice on this to the Committee. I am advised that he has taken a high degree of advice on this and as a learned lawyer himself he is well briefed. He may want to provide some clarification around that matter. 
Currently the Proceeds of Crime Act 1991 allows the Crown to confiscate the profit made from a crime after someone is convicted of that crime. The profits of the crime however can be spread among many people not all of whom are able to be convicted of the crime. Organised crime is an example of this as we know. The bill deals with this problem by providing the Crown with the power to confiscate profits and assets obtained through criminal activity on the civil standard of proof. The bill will also allow us to tackle gang leaders who do not—shall we say—get their own hands dirty. Many of them as we know do not wear patches. This bill addresses and provides a huge weapon in the fight against organised crime and gangs as opposed to—meaning no disrespect—the bill put forward by the Wanganui District Council and Mr Borrows the Wanganui District Council (Prohibition of Gang Insignia) Bill which addresses apparel rather than providing key tools to attack gangs and organised crime. Again I say that I mean no disrespect but I think that this bill is a substantive measure that will actually go quite a way towards addressing hitting head-on and dealing with gang leaders and organised crime. Some of the most insidious gangs and elements of organised crime in our community do not parade around on motorbikes and wear patches. In fact they loathe any sunlight being poured on them or having any profile. They deal in the shadows and cause devastation with their activities. 
We in the Labour Party believe that this bill provides an appropriate balance between targeting the proceeds of crime and protecting personal and property rights. As we know Australia Ireland and the UK have passed similar laws. I think that the Law and Order Committee has done a serious job on this bill. The report of the select committee has recommended a number of changes which we will address as we go through. The key recommendations are that the police should be the recovery body that the definition of owning “property“ should be extended to include those who might have an interest in it—hence dealing with many of the nefarious activities of organised crime—and that the definition of “instrument of crime” should be amended to include proceeds from the sale of property. There is also clarification of the circumstances in which property acquired can be restrained after a restraining order has been made. 
I think this is a good bill. As I have said it addresses very simply the notion that crime should not pay. There is a high degree of bipartisanship on this; we support the bill. I look forward to the Minister providing us—as I know he can as an expert in this area—with a very extensive extrapolation of the facts and the legal tenets behind the pitfalls or pluses we might find in Supplementary Order Paper 5. 
Hon SIMON POWER (Minister of Justice) 
: 
 It is always a good sign when the Hon Clayton Cosgrove and I agree on an issue. I am pleased that this first occasion has arisen after 9½ years. 
Clause 9 relates to one of the areas where the Law and Order Committee made a technical amendment. It was contentious for some submitters. The Legislation Advisory Committee and the Law Society held the position that the Criminal Proceeds (Recovery) Bill was essentially a penal statute and should therefore not apply retrospectively. The Law and Order Committee did not share this view. It considered that the rule against retrospectivity as provided for in the New Zealand Bill of Rights Act the Sentencing Act and the common law did not apply because civil forfeiture is not universally considered to be a penalty and does not increase penalties under New Zealand law. Also the Committee might be interested to know that the bill is not completely retrospective in its application. It is limited to criminal proceeds obtained up to 7 years previously. This period was chosen for consistency with tax law requirements as there is more likely to be a record of a person’s legitimate financial activities over this period. 
I turn to clause 5 and in particular to Supplementary Order Paper 5 which has been offered up by the Maori Party—by Te Ururoa Flavell. It excludes amongst other things Maori customary land and Maori freehold land from the definition of “property” in the bill. The National Government is not in a position to support this Supplementary Order Paper as I indicated to the member earlier. 
Officials advise me of a matter that may help to put to rest the Hon Clayton Cosgrove’s mind as well as the mind of the promoter of the Supplementary Order Paper. The residual rights of innocent parties who are caught up in the forfeiture regime continue to attach to the procedure. This means that if an innocent party who can show an interest in Maori customary land Maori freehold land or the other land indicated on the Supplementary Order Paper makes an application for that land to not be dealt with under the regime—in other words confiscated; well caught by the regime sold and then the proceeds are divided—the court has an option of hearing that application and retaining the land. But the party involved in making the application needs to bring a clean slate to the proceedings—in other words the party cannot be tainted by the criminal activity surrounding that application. As I understand it that is the position. 
 So although the member might have genuine concerns about the multiple-ownership structure of for example Maori customary land or indeed Maori freehold land to an extent—and I am not saying that it is as full as the member would like—there are options for application by parties who hold that status and are innocent in respect of the matter under consideration in the same way as would apply by the discretion of the court if a spouse of someone who was caught under this particular recovery regime was completely innocent or unaware of the criminal activity. Those applications and the capacity to make those applications are available to that party. 
As I understand it the legislation does not run with a “must” but with a “may”. In other words the court retains discretion in this area. But the legislation does mean that not all residual rights that would otherwise be held by an innocent party caught up in the application when that innocent party had no part in the criminal activity are completely lost. I hope that gives the member some assurances. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I had wanted to defer to the representative from the Maori Party in particular as he has a really important Supplementary Order Paper on the Table but obviously he is not going to take the call. It is a bit difficult to comment on that Supplementary Order Paper without having the benefit of his contribution to the debate which is why I was very keen for him to speak first but I may take an opportunity to speak again after he has. 
I am deeply concerned about the proposal in the Supplementary Order Paper to exclude Maori customary land and Maori freehold land land that has ceased to be Maori land and land acquired from Maori for public works etc. as listed in this proposed amendment. I am a little unclear from the Minister’s explanation as to whether he has received advice on whether this particular provision adds anything to the existing status of Maori land. Does it represent something that is required to be addressed in the legislation or can we leave it to the application of existing principles under current statute? I suspect it is the latter rather than the former and because this has been brought to the Committee by way of Supplementary Order Paper and we have not had a presentation from the person proposing it it makes it very difficult for us. My instinct would be to vote against the inclusion of Part 1 clause 5 definitions but not on the basis that in principle I object to what it is trying to achieve; I just believe that the current law already enables that to be the case. A very clear statement from the Minister—not just in the Committee stage but certainly in the third reading on the bill—would be very important to clarify that in order that there is a clear statement of record in terms of the Government position on the application of the existing law. 
There are important issues to have consideration of and I am very mindful of the fact. It may sound as though I am not speaking to the bill itself but that is because this amendment raises the issue of Te Ture Whenua Maori Act 1993 which was—of course—the Act that was under consideration in respect of what has become known as the foreshore and seabed issue. The reason I raise that is because the Te Ture Whenua Maori Act 1993 would never have been written the way it was written if in fact the  
In re the Ninety-Mile Beach 
 case had never been decided in the way it was decided; there was no way a National Government in 1993 would have passed legislation that would have allowed for parts of the foreshore and seabed to become classified as Maori land and able to have a registrable interest under the Te Ture Whenua Maori Act if it were not for the  
In re the Ninety-Mile Beach 
 decision that actually limited the application of that registration to land that was contiguous to land considered Maori land under that Act. 
I think it is an extremely important provision because most people do not understand the foreshore and seabed issue. All the court did was to overturn the  
In re the Ninety-Mile Beach  
case and that had a huge impact on legislation that had been passed in the belief that that law would stand. That is why it is really important that we have a very clear statement about what the legal rights and obligations are in respect of this issue and why it does not necessarily need to be dealt with in the context of this legislation. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Kia ora tatou Mr Deputy Speaker. For the benefit of Ms Lianne Dalziel I say that the example we used in respect of this particular issue in the second reading of the Criminal Proceeds (Recovery) Bill is about the land. I used the example of some of the constituents in my area although not a lot of them are involved in such a situation. For example we believe that a whanau could potentially lose its ancestral land as a result of another person growing cannabis on a farm without the whanau’s knowledge or even consent—hopefully it would not be the consent at issue but more the knowledge. 
In the sense that there have been some precedents in the past in respect of some laws that have unfortunately alienated Maori land I placed this issue fairly and squarely in front of the Minister Simon Power. His explanation was that there are some mechanisms. It is of real concern particularly in the case of multiple-owned land where the owners live throughout the country that people may not even know that this is going on. A family member or a trust member of some kind is caught up in some sort of wheeling and dealing and all of a sudden the court has determined that some proceeds come from criminal activity. Firstly the whanau members being innocent parties do not have any knowledge of the issue. Secondly they have to apply to the court to maintain that land under their ownership when they should quite rightly have the use and ownership of that land. That is of real concern. 
I join with Ms Dalziel in the sense of asking whether there is a possibility of Supplementary Order Paper 5 adding to and benefiting the bill in one form or another in those circumstances. There should not be any doubt in the minds of anyone in this Parliament that the Maori Party is determined to protect any issues around Maori land interests. If there is any move towards the further alienation of land by any means through the courts or unwittingly then I think we certainly want to deter any thoughts about that. I seek the Minister to take a call to consider this line. For it is very important. 
It is not that we do not have other concerns about the bill of course but this is the key one. It is just one example but nevertheless its ramifications are quite far-reaching particularly around issues of land. With that as a very brief explanation I ask the Minister to perhaps take some consideration of how the bill might be added to. Kia ora. 
SIMON BRIDGES (National—Tauranga) 
: 
 It is good to take a call at this stage of the progress of the Criminal Proceeds (Recovery) Bill and to speak on Part 1 and on the purposes of the bill. I agree with the Hon Clayton Cosgrove that really its purposes are summed up by the words “Crime does not pay and it should not pay.” I also agree with the member that gangs these days are no longer just the gangs that we see wearing patches or the gangs that we talked about when we debated the Wanganui District Council (Prohibition of Gang Insignia) Bill. They are often much more sophisticated than that and it is important that we have a strong response to those gangs as we do through this bill. 
Where I suppose I part company from the Hon Clayton Cosgrove is that although Labour has talked the talk on this issue it was sad to see that in 2005 and the years following it the previous Labour Government did not walk the walk. I note that at the election in 2005 the previous Government promised to pass into law a civil forfeiture regime to allow gangs to be stripped of the proceeds of crime. It did not do that; the bill languished on the Order Paper. Over Labour’s time in Government we had a situation where in fact although crime went up the proceeds of crime that were seized went down. Since 2002-03 the total value of proceeds that were seized was one-third of what it had been dropping from $3.6 million to $1 million and at the same time the average value of each seizure dropped from $183000 to approximately $24000. That was a shame indeed when anecdotally any police officer or prosecutor on the street could tell us that the amount of crime committed by gangs and in relation to P has gone up. So it is a shame that this bill has languished but it is here now. It is good to see that the Opposition is in support of the bill. 
I say to the Committee that the law on the proceeds of crime has been seen as a bit of a poor cousin in the criminal law arena. It should not have been; it is vitally important that we do more than send a message but actually make sure that crime does not pay. That is vital in the war on gangs and P. As I said at the first reading of this bill it is quite clear to me—and a case in Mount Maunganui in my home electorate made this clear when police swooped in over Christmas time and seized multimillion dollars worth of ingredients for the illicit manufacture of P—that the money that can be made in crime really does go not just into one or two million dollars but into tens of million dollars. As I said I agree with the Hon Clayton Cosgrove that as the criminals and the gangs have become more sophisticated then so must we. This bill here does that. It hurts the gangs to take their assets—not just to lock the gang members up but to make sure their Harley Davidsons their motorbikes and so on are taken. This bill goes towards that. 
What does this bill and Part 1 achieve? As the Hon Clayton Cosgrove said it repeals effectively parts of the confiscation regime we had previously whereby it was only when we had the owner convicted that we would see the proceeds of crime seized. 
Progress reported. 
Report adopted. 
The House adjourned at 9.56 p.m.