Volume 615 Week 48 - Tuesday 17 February 2004 
Volume 615 Week 48 - Tuesday 17 February 2004 
[Volume:615;Page:10997] 
Tuesday 17 February 2004 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Motions 
Civil Emergency—Lower North Island 
SIMON POWER (National—Rangitikei) 
: 
 I move  
That this House notes the severe flooding and damage to houses bridges power and water supply and telecommunications that have hit the Rangitikei Horowhenua and the lower North Island and expresses its sympathy to those who have been affected; and further that this House commends the emergency services and hundreds of volunteers who have worked during this disaster in many cases with little sleep since Sunday 
. 
Motion agreed to. 
Amended answers to Oral Questions 
Question No. 7 to Minister 11 February 
Hon STEVE MAHAREY (Minister of Broadcasting) 
: 
 Last Wednesday in response to a question from the Rt Hon Winston Peters I said that for the financial year ended 30 June 2003 Television New Zealand employees had made 28 trips to international conventions and trade fairs at a cost of $380000. Now that TVNZ has had time to carefully analyse all the figures for the year I can advise that the correct figures are 38 trips at the lower cost of $340347. I take this opportunity the first opportunity I am able to present to the House the information that corrects TVNZ’s information to me. 
Points of Order 
Rodney Hide—Alleged Comment 
RODNEY HIDE (ACT) 
: 
 I raise a point of order Mr Speaker. First I must check whether you have received a breach of privilege complaint against me from the Government whip Mr David Benson-Pope. 
Mr SPEAKER 
: If I had received it you would have received it immediately. 
RODNEY HIDE 
: Thank you. Last week I was accused in this House of making an appalling racial epithet. As you recall Mr Speaker you were in the House and I denied using any unparliamentary language. You accepted my word and we proceeded on. I was not aware of what I had been accused of saying until I was rung by a journalist who said that Mr David Benson-Pope had made the claim in the House. I of course vigorously denied that I had made any such remark. I was then rung by the Christchurch  
Press 
 on Friday and told that a complaint of breach of privilege was being taken against me by Mr Benson-Pope who had said that he was very determined and that nothing would stop him from taking a complaint of breach of privilege. 
There has been only one MP who has ever used that racial epithet in this House and it is the chief Government whip. I have this morning had the benefit of listening to the Radio New Zealand digital tape of the interjection. What I said was “Don’t be negative.” That is what I called out. I have to say to you Mr Speaker that the Government whip is guilty of a very serious series of offences. The first one is that he has brought this Parliament into disrepute by suggesting that MPs would use such a racial slur in Parliament. That is bringing the House into disrepute and could be reported around the world. The second thing is that it is an outrage to repeat the allegation outside this House after the speaker’s word has been accepted and to try to get some media coverage out of it as a political stunt by suggesting that there is a breach of privilege at stake. I was rung—you know the convention Mr Speaker—[ 
Interruption 
] I have not finished. 
Mr SPEAKER 
: I want the member to come very quickly to the point. 
RODNEY HIDE 
: I am coming to the point. The convention when one makes a complaint of breach of privilege is to write to the Speaker as soon as possible. I knew nothing of that complaint until I heard about it through the media. I now know that David Benson-Pope not only was not telling the truth in his statement about my racial epithet he was also not telling the truth when he said he would lay a complaint of breach of privilege. I do not have any confidence in the Government whip he clearly does not have confidence in you Mr Speaker and I suggest to you that the Government whip be asked to apologise not to me but to this House and to you for suggesting that a New Zealand MP would stoop to making such a vile allegation. It was a false allegation it was a lie and it was repeated outside the House. 
Mr SPEAKER 
: That last sentence in which the member said that another member had told a lie will be withdrawn and apologised for. 
RODNEY HIDE 
: I withdraw and apologise and I look forward to the Government whip doing the same. 
Mr SPEAKER 
: The member should just withdraw and apologise. If members say outside the House that they intend to raise a matter of privilege that is up to them—I cannot stop them. In fact provided that the breach of privilege complaint is lodged before the next sitting of Parliament it is in order. The comments the member is referring to were made by a member outside the House. It is between the two members concerned as to how they deal with those matters. Last week’s point of order has gone because of course I asked the member a question and he gave me an answer. 
RODNEY HIDE (ACT) 
: 
 I raise a point of order Mr Speaker. That is not my point I am afraid. In the newspaper the chief Government whip questioned your authority. That is what he was doing. He said that the Speaker was wrong to accept an MP’s word. That is openly defying you and openly defying this Parliament and I suggest that David Benson-Pope be asked to withdraw and apologise. 
Mr SPEAKER 
: If the member wants to write to me about the matter he is entitled to do so and he can. But as far as I am concerned the point of order went last week when I ruled that I accepted the member’s word. 
Hon ROGER SOWRY (National) 
: 
 I raise a point of order Mr Speaker. I think it is an interesting issue and I hope the member does write to you about it. The chief Government whip Mr Benson-Pope is required by the Standing Orders to accept Mr Hide’s word in this House but he clearly did not. He clearly went out of the House and anyone who read either the  
Dominion Post  
or the  
New Zealand Herald— 
not just the Christchurch  
Press— 
saw Mr Benson-Pope adamantly claiming that offensive language had been used by Mr Hide. That now appears to have been nothing more than a political stunt but it does bring Parliament into disrepute particularly I have to say when someone—who as a whip is the Prime Minister’s right-hand man—is prepared to use Parliament in that way. 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 There was no point of order in the original point of order in any case so this certainly is now becoming slightly farcical. The Standing Orders require us to accept the word of a member inside this Chamber. There are a number of words we are not allowed to use inside this Chamber that are used by the entire population outside this Chamber—indeed frequently of all of us collectively not just individually as politicians. The fact that a certain comment was made inside the Chamber denying that a certain thing was said does not mean to say that a member does not have the right to go and check whether in fact it might have been said. Of course if the member has reason to believe that it was said then that is precisely a case for a breach of privilege. Those tapes have been listened to. I think it is useful that Mr Hide has clarified what was said because I think he himself will admit that the words are somewhat indistinct on the tape. Indeed it is perfectly possible that somebody did hear what they think they heard in terms of the words they thought that member said. That is where the matter now must rest. 
Hon RICHARD PREBBLE (Leader—ACT) 
: 
 I do not believe that the matter should rest there because there is an honourable course of action. Mr Speaker you may not be able to order it but the House knows that. What the chief Government whip should now do is not send in a breach of privilege but rise this time give a genuine apology and say that he does accept that a racial slur was not made across this House. One of the reasons he should do it is that allowing it to stand gives the public the impression that we in this House have no standards. The racial slur did not happen I think Mr Benson-Pope now knows that it did not happen and the honourable thing for him to do is to get up and acknowledge that. Then perhaps we can proceed to the business in a more civilised way. 
Mr SPEAKER 
: Well that is up to Mr Benson-Pope. As the member rightly points out it is not up to me to insist on that happening. 
Rt Hon HELEN CLARK (Prime Minister) 
: 
 I raise a point of order Mr Speaker. If I can speak to the point of order raised by Mr Prebble— 
Mr SPEAKER 
: No this has to be a new point of order. 
Rt Hon HELEN CLARK 
: I will raise a new point of order. I accept unreservedly the explanation of Mr Hide and apologise for any hurt he has felt he suffered as a result. 
Hon RICHARD PREBBLE (Leader—ACT) 
: 
 I raise a point of order Mr Speaker. I raise it on behalf of Mr Hide. I think the Prime Minister has done the right thing but it would be quite a good thing if Mr Benson-Pope were to rise and say that. We are now in the absurd situation that the whole House knows that the remark was not said but the one person who has gone around the country telling the media that that is how we in the New Zealand Parliament behave is not prepared to get up be a man and say: “I accept he did not say it and I apologise.” 
DAVID BENSON-POPE (Labour—Dunedin South) 
: 
 I am prepared to accept Mr Hide’s assurance as to the comment he made and I apologise unreservedly for any offence he may have taken. 
Questions to Ministers 
Civil Defence—Emergencies 
1. DARREN HUGHES (Labour—Otaki) 
 to the  
Minister of Civil Defence 
: How has civil defence reacted in the current emergencies? 
Hon GEORGE HAWKINS (Minister of Civil Defence) 
: 
 Coordination of response has been very good. Emergency services including civil defence staff police firefighters ambulance and volunteers have worked well together with good support from other agencies particularly defence. The impacts of the event have been felt over a wide area the areas most affected being the Manawatu and Rangitikei districts. Wanganui is currently assessing whether to declare a state of civil emergency and is concerned about the hinterlands; but other areas including the Hutt Valley have also been impacted. People have come together from far and wide to help their neighbours and people they have not met before. Professionals and volunteers have worked extremely well together. 
Darren Hughes 
: What financial assistance can the Government make available to these regions under stress? 
Hon GEORGE HAWKINS 
: The Government provides support in a number of areas. The cost of food water and shelter for evacuees is fully recoverable by local authorities from the Government. Through Transfund New Zealand the Government will make available to local authorities resources for bridge and road repairs at 100 percent for State highways and up to 85 percent for local networks. The Government will provide financial assistance to councils to repair damage to essential service infrastructure. The Defence Force has contributed personnel equipment and other resources and the Government has contributed $20000 to each of the Manawatu and Rangitikei district councils’ mayoral relief funds. Other agencies also help. 
Simon Power 
: How can the Government expect the people of Rangitikei and Manawatu to take seriously an offer of $20000 to each council as an emergency fund when the Government gave $5.8 million to Niue for reconstruction after its natural disaster? 
Hon GEORGE HAWKINS 
: I think the member does not understand what I said in the answer to the last question. If he had listened he would know that we are making funds available to repair infrastructure and to help with evacuees across a number of agencies—the Earthquake Commission Work and Income and Housing New Zealand Corporation. We are helping in as many ways as possible but at the moment people are still trying to get people into safe conditions and will make sure that those matters are looked at very closely. 
Larry Baldock 
: Were civil defence efforts hampered by the poor quality of roads in the Wellington region; and would the apparent vulnerability of these roads have civil defence implications in the event of an even more serious emergency such as a major earthquake along the Wellington fault line? 
Hon GEORGE HAWKINS 
: Those questions really relate to a scene where a civil emergency was not declared. There was not a need to declare it and of course those are questions that have answers that can be looked into in the future. But at the moment we are dealing with two district councils that have declared and possibly a third one that will declare. 
Jill Pettis 
: Can the Minister please further advise the House what will happen for those families who have lost their homes their businesses and their livestock? 
Hon GEORGE HAWKINS 
: Civil defence’s main aim is to preserve life. So far there has been no loss of life in the areas where civil defence emergencies have been declared. Once the initial danger has passed then local authorities and others will work together to resolve the situation they find themselves in. The other agencies of Government will play their part in the recovery. 
Simon Power 
: What discussions has the Minister had with the Minister of Agriculture over support that may be offered from that particular avenue given reports of whole dairy herds being swept to sea hay sheds being destroyed and hundreds of sheep being swept out to sea? 
Hon GEORGE HAWKINS 
: I have spoken to a number of colleagues. This is a whole-of-Government response and I am sure that the Ministry of Agriculture and Forestry will do its part to make sure that the damage is minimised as far as the farmers are concerned. We are concerned about the farmers; we are concerned about the livestock and the crops. 
Reducing Inequalities Policies—Maori 
2.  
Dr DON BRASH (Leader of the Opposition) 
 to the  
Prime Minister 
: Can she confirm that media reports on the weekend asserting that the Government would not be changing its policies in relation to Maori accurately represent her position; if so why did she reportedly announce yesterday that the Government is evaluating the “reducing inequalities” policies to ensure that those policies are “thoroughly based on need”? 
Rt Hon HELEN CLARK (Prime Minister) 
: 
 What I said yesterday is that we can have a look through our policies and assure ourselves that what we are doing is based on need. The Government will continue to target need not privilege like the tax cuts for the rich that the member advocated in Rotorua yesterday. 
Dr Don Brash 
: Why has she now called for the review of such programmes when just last week she said that the policies National has been advocating—including a return to funding based on need rather than race—would put race relations in New Zealand back years and were divisive? [ 
Interruption 
] 
Mr SPEAKER 
: I am sorry. The Prime Minister has not said a word and I do not need any interjections until she is really into the answer. 
Rt Hon HELEN CLARK 
: This Government will continue to target need not privilege. That member’s policy yesterday would give him an extra $168 a week in a tax cut. I say low and modest income families need it more. 
Rt Hon Winston Peters 
: Having regard to Mr Brash’s statement that kohanga reo kura kaupapa and Maori health providers will remain because somehow they represent choice in her reading of reports on the “one nation” policy of Dr Brash has she anywhere seen— 
Mr SPEAKER 
: There is no need to have those two particular words to render the sense of the question. Could the member please restate the question? 
Rt Hon Winston Peters 
: Yes. Right. Having regard— 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. Are we to take it that the National Party now takes objection to the term “one nation” for New Zealand? 
Mr SPEAKER 
: No but the Prime Minister is not responsible for National Party policy. We will now have the question heard in silence. 
Rt Hon Winston Peters 
: Having regard to Dr Brash’s statement that kura kaupapa Maori kohanga reo and Maori health providers will remain because somehow they represent choice and having regard to the reports of Dr Brash’s views has she anywhere seen the suggestion that next year’s Lions and New Zealand Maori game must be cancelled because one of the teams is selected on race not on need? 
Mr SPEAKER 
: There is no responsibility for the Prime Minister yet to select rugby teams. 
Hon Richard Prebble 
: Could the Prime Minister clarify the position: is it that there has been no change in Government policy; if so how is it that a policy that was a flagship policy for the Government called “closing the gaps” has had its name changed to “reducing inequalities” that the committee has had its terms of reference changed and that we now read in the media that Government policy is to be based on need? What is it: is it still closing the gaps or has the Government gone into reverse? 
Rt Hon HELEN CLARK 
: The member is a little out of date. The programme has been referred to as “reducing inequalities” since the end of the year 2000. 
Hon Richard Prebble 
: I raise a point of order Mr Speaker. I actually acknowledged in the question that she changed the name of the policy. I did not ask her when that was done. I asked which one of her two statements is correct: is the Government not changing its policies or has it gone into a complete reverse? 
Rt Hon HELEN CLARK 
: The policy was always based on need is based on need and I am more than happy to keep looking to ensure it is based on need. My challenge to the Leader of the Opposition is to be specific. As the leader of New Zealand First has pointed out every time the issue is specific he says: “Oh no not that one!”. 
Hon Metiria Turei 
: Can the Prime Minister confirm that the one-size-fits-all rhetoric is a ridiculously simplistic approach which itself perpetuates inequality and that culturally appropriate programmes such as Pacific Island language nests kura and the other education and health programmes are essential to targeting on the basis of need? 
Rt Hon HELEN CLARK 
: Yes I do agree with that statement. Of course because of ideology Dr Brash has described them as acceptable on the basis of choice. 
Dr Don Brash 
: Given that the Prime Minister last week labelled my advocacy of policies based on need not race as racially divisive but is now asserting that she will “vigorously address” policies to ensure that they are “thoroughly based on need” can we now conclude that the Prime Minister is having second thoughts about her position of last week; if so why? 
Rt Hon HELEN CLARK 
: I have no second thoughts about a policy approach designed to pit white against brown and rich against poor in New Zealand. I will fight that to my last breath. 
Rt Hon Winston Peters 
: Has the Prime Minister received any reports as to the likely effect on our democratic framework if after the abolition of the Maori seats as proposed by some parties of this country the political parties then have no representation from the Maori people; and what sort of democracy will that become? 
Rt Hon HELEN CLARK 
: It would indeed be a concern if Maori were not represented in this House across the political system. Of course the list system makes it possible for that to happen and to some degree it has. But my concern would be given that the law passed back in 1993 gave Maori a choice as to which roll they enrolled on for that choice—that right—to be taken away from them by a Parliament in which they were a distinct minority. I think that would cause gross disharmony in our country. 
Hon Ken Shirley 
: Will she be re-evaluating her Government’s policy of race-based electoral rolls for local bodies and race-based representation around the council tables and can she tell us how that is not divisive for this country? 
Rt Hon HELEN CLARK 
: I understand that the member has shifted to the Bay of Plenty and it was from the Bay of Plenty Regional Council that that first came up. My understanding is that local bodies themselves have the ability to decide those matters. 
Dr Don Brash 
: What has happened in the less than 2 weeks since the Minister for Social Development and Employment released the“reducing inequalities” monitoring reports without any mention of such an evaluation that would compel the Prime Minister to announce that she is going to “vigorously address” the Government’s programmes to ensure that what it is trying to achieve is based on need not on race? 
Rt Hon HELEN CLARK 
: The Government has been asserting for years that the policies are based on need not on privilege of the kind that the Leader of the Opposition stands for when he advocates a tax cut for himself of $168 a week. 
Dr Muriel Newman 
: In light of the Prime Minister’s announcement that assistance should be based on need not race can she confirm that her Government has given millions of dollars of taxpayers’ money in non-repayable grants of up to $50000 to repair private houses that have been allowed to run down; if so is she saying that it is just coincidence that in 2002 100 percent of those grants were given to Maori households? 
Rt Hon HELEN CLARK 
: My understanding is that those grants are not targeted on race; they are targeted on need. A lot of grants have also gone to businesses very few of which have been Maori ones. 
Dr Muriel Newman 
: In light of the Prime Minister’s answer I would like to table a parliamentary question that shows that 100 percent of the grants were based on race. 
Document by leave laid on the Table of the House. 
Heather Roy 
: Given the Prime Minister’s statement that her Government’s policies are to be “thoroughly based on need” will she remove the weightings that apply to ethnicity from the access and interim formulae her Government is using to determine funding for primary health organisations—or is her claim just spin without substance? 
Rt Hon HELEN CLARK 
: Any assessment of need would show that a people that is disproportionately unhealthy and enjoys a low life expectancy is in greater need than anybody else. That is why it is a needs-based formula. 
Hon Richard Prebble 
: When Dr Brash gives a speech in Orewa and calls for Government policies to be based on need not race how can the Prime Minister describe that as playing the race card when she can now get up in the House and say that her Government’s policies are thoroughly based on need—or is she thoroughly playing the race card? Can she please clarify that? 
Rt Hon HELEN CLARK 
: Quite simply because Dr Brash’s message was trying to say that they were race-based policies. They are needs-based policies not based on the privilege he stands for. 
Question No. 3 to Minister 
GERRY BROWNLEE (Deputy Leader—National) 
: 
 I raise a point of order Mr Speaker. I want you to consider a suggestion from us that this question is quite out of order. If you look at all the other questions on the sheet—and I will focus particularly on questions Nos 2 4 7 and 9—you will see that each of them was accepted by the Clerk’s Office because we took down to that office substantial verification and justification for the question being asked. I ask you to rule on this because we are going into new territory if we in the Opposition will be able to go to the Clerk’s Office and have questions lodged on the basis of a suggestion. How do you verify a suggestion and if in fact the suggestion is made how do you link that to any ministerial responsibility whatsoever? I think it is clear enough where the question is trying to go to. But it is fair to say that the question in the circumstances relating to the way in which it has been worded clearly sits outside the Standing Orders and we suspect that some of what we have known to be going on around the question process is at play in this situation. This question should be ruled out of order and forfeited by the Government. 
Mr SPEAKER 
: I will have a look at that issue. We will leave this question for now and come back to it later. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 I raise a point of order Mr Speaker. It is not so much whether there is any verification for the suggestion; it is the inference that somehow tax cuts are paid for. That I would have thought would rule it out in the first place. 
Mr SPEAKER 
: That is why I will have a look at it and I will come back to it. 
Foreshore and Seabed—Customary Rights 
4.  
Dr WAYNE MAPP (National—North Shore) 
 to the  
Attorney-General 
: How does she distinguish between Maori customary title and Maori customary rights in the Government’s foreshore and seabed proposals given that last week she told the House that “a customary right is a property right”? 
Hon MARGARET WILSON (Attorney-General) 
: 
 A Maori customary title recognises the mana whenua—that is the ancestral connection between a specific iwi hapu or whanau and the coastline. No property right attaches to it. A customary right relates to the customary use. That is a property right. 
Dr Wayne Mapp 
: Does the Government’s proposal therefore mean that Maori customary title is likely to be granted over virtually the entire coastline provided iwi hapu or whanau can prove mana and ancestral connection to the foreshore and seabed adjacent to their ancestral lands? 
Hon MARGARET WILSON 
: Yes the mana whenua status will certainly be acknowledged through the title which as I said is not a property right. 
Tim Barnett 
: Could the Minister please clarify whether a customary right will be able to be sold? 
Hon MARGARET WILSON 
: While in general property rights can be sold in the case of a customary right by its very nature it cannot be sold. 
Rt Hon Winston Peters 
: Why has the Minister not taken any action in respect of the port authority’s appeal to the Privy Council and in particular with regard to Justice Hingston’s view—supported I might add by the New Zealand Court of Appeal—that somehow land and sea are the same thing so that we now have the seabed being regarded as land? 
Hon MARGARET WILSON 
: My understanding is that the appeal is still waiting to be heard in the Privy Council so it would be inappropriate for us to interfere although I understand we will be observing what is happening with that appeal. I am not sure whether that completely answers the member’s question but that was the bit I understood from it. 
Metiria Turei 
: Is not the issue getting lost in a debate between Pakeha about what their terms mean when in fact the real need is for a proper negotiation between the Crown and Maori as to how to resolve the foreshore and seabed issue whilst upholding the treaty? 
Hon MARGARET WILSON 
: There has been considerable debate and discussion between the Crown and Maori on this issue and I am sure it will continue through the select committee process. 
Dr Wayne Mapp 
: Given that the Government has now acknowledged that virtually the entire coastline will be subject to a Maori customary title does the Minister not agree that those customary title holders will have enhanced participation rights over the management of the foreshore and seabed that no other New Zealander will have? 
Hon MARGARET WILSON 
: The mana whenua title is just a formalisation of what is already apparent. There is no particular property right significance in that. In terms of the ability of Maori to be able to participate in decisions that affect them the new Local Government Act of course does require extended consultation and we are hoping the proposals will assist local government and local Maori to effect decisions that they both agree with. 
National Drug Policy—Announcements 
5.  
JILL PETTIS (Labour—Whanganui) 
 to the  
Associate Minister of Health 
: What recent announcements has he made to advance the Coalition Government’s National Drug Policy? 
Hon JIM ANDERTON (Associate Minister of Health) 
:  
Today I have announced the locations of the 15 community action programmes for which I secured funding in last year’s Budget. These programmes are aimed at reducing the demand for drugs. The sites are Whangarei west Auckland Waitakere City Clendon Manurewa central Auckland Otahuhu Otara Papatoetoe Huntly Morrinsville Tauranga Western Bay of Plenty Whakatane Tai Rawhiti Horowhenua Wanganui Dunedin and a regional service that is based in Hastings and runs from Tai Rawhiti across to Whanganui and down to Wellington. 
Jill Pettis 
: Can the Minister please advise the House further on how today’s announcement fits in with the Government’s overall strategy on drugs? 
Hon JIM ANDERTON 
: The coalition Government’s war against drugs is multifaceted. At one level we are aiming to reduce supply by toughening up the penalties on the peddlers of dangerous drugs and their precursors. At another level we are increasing treatment services to reduce the harm drugs cause. The third level is the demand-reduction policy programme which is what these community action programmes are aimed at achieving. 
Nandor Tanczos 
: Can the Minister confirm that the programmes he mentions are a very good example of the value of targeted funding to provide culturally and socially appropriate services driven by the needs of the communities in which they operate and as a result they are rare in the field of drug education in that they are demonstrably effective? 
Hon JIM ANDERTON 
: The needs of particular communities have been carefully assessed by a research-based organisation attached to the Massey University campus in Auckland called Shore. Associated with that research unit is a Maori research unit and an evaluation unit that have both targeted these 15 communities on a range of criteria. The initial five programmes which were started in 1997 by the former National Government were equally targeted. Had they been evaluated as successful they would have been followed up by these programmes. I suggest to the House that they are proving effective they are needs-based and they include both Maori and Pakeha who are affected by drug and alcohol abuse. 
Ron Mark 
: Is he concerned about the comments made by people in the Drug Policy and Education Council who have stated that his “smug” position over the Government’s drug policy is unwarranted and that the policy has acted to increase the availability of methamphetamine to the extent that schoolchildren are reportedly using it and if so will he ensure the passage of new asset-seizure laws to aid the police in bringing suppliers and manufacturers to justice; if not why not? 
Hon JIM ANDERTON 
: No one who is cognisant of the harm that drugs and alcohol abuse cause in our community—in particular to our young people—has any reason for smugness and certainly I do not count myself in those ranks. As I have said this issue is multifaceted and complex but some people want to dine out on making sensationalist statements or making a crisis situation out of what is a worldwide problem that all Governments dealing with it find difficult to handle. I think the agencies that are close to this Government on these matters know full well that we are more proactive and are doing more in this area than any previous Government has ever attempted. 
Judy Turner 
: Will measurement and evaluation of these national drug policy initiatives include an accurate mechanism to measure drug use in the centres funded or are evaluations purely around networking and capacity building? 
Hon JIM ANDERTON 
: Researchers have used a wide range of indicators to identify these communities. Drug use is one of them and there are many others. The evaluation is done at a professional and qualified research level. All these programmes have been carefully evaluated and that evaluation is going into the knowledge that this community is building up about its own problems so that this country can have a New Zealand - based approach to solutions to New Zealand problems. 
Immigration—Costs to Taxpayers 
6.  
Rt Hon WINSTON PETERS (Leader—NZ First) 
 to the  
Minister of Immigration 
: Can she explain her Associate Minister of Immigration’s comments on the  
Holmes 
 show last Wednesday night “with over 3000 cases each year … I will treat these ones very fairly as well” and at what cost are these cases to the taxpayer? 
Hon LIANNE DALZIEL (Minister of Immigration) 
: 
 Since September 2002 I have delegated my discretionary decision-making powers on individual cases to the Associate Minister who receives many requests to reconsider all nature of decisions made by the New Zealand Immigration Service. The only cost that would arise from a decision of the Associate Minister to intervene would be if the individual was already in New Zealand and became eligible to access services that he or she would not otherwise be eligible for. This would occur in very few cases. 
Rt Hon Winston Peters 
: What is her department’s criteria for allowing those who come here originally on visitor work student or limited purpose visas to eventually be given residency after applying on shore and will the same criteria apply to those revealed by Nelson’s planned “sanctuary day” for illegal immigrants to come forward and the three car loads found by routine traffic stops over 2 days in the Western Bay of Plenty last week? 
Hon LIANNE DALZIEL 
: As the member is well aware the rules of the Immigration Act require that a person is on a valid permit when he or she makes an application for another permit. If a person is not on a valid permit then under section 35A he or she can be put on a temporary permit in order to lodge an application for a permit. That is the purpose of the “sanctuary day”. 
Rt Hon Winston Peters 
: Given the Minister’s answer on 2 May 2003 is she saying in relation to the 8359 onshore applications made as at 30 April 2003 that those people will be allowed to stay provided that they are married working have no criminal convictions and are fitting well into the community as one would assume from Immigration Service media adviser Brett Solvander’s comments; if that is the case is it little wonder that New Zealand’s immigration laws are a joke overseas and that anyone wanting to come here illegally knows how to wangle the system? 
Hon LIANNE DALZIEL 
: The rules enable people to transfer from one form of permit to another so that somebody who comes here as a visitor as a student or as a temporary worker is able to lodge an application for residence. The residence application will be determined according to normal policy. I do make the point that this was the case when that member was the Deputy Prime Minister. 
Employment Relations Law Reform Bill—Collective Contracts 
7.  
Hon ROGER SOWRY (National) 
 to the  
Minister of Labour 
: Will an employer’s genuine preference to employ their employees on individual contracts be considered a genuine reason not to enter a collective contract under the Employment Relations Law Reform Bill;if not why not? 
Hon MARGARET WILSON (Minister of Labour) 
: 
 The answer depends on whether the employees also agree to enter an individual agreement. If they do then there is a genuine reason not to enter a collective agreement. If they do not agree to enter an individual agreement but want a collective agreement then the employer needs to justify why these employees should not be able to negotiate a collective agreement. 
Hon Roger Sowry 
: In a situation in which only a low proportion of an employer’s employees have joined the union which has initiated bargaining will the employer have a genuine reason not to enter into a collective agreement; if not why not? 
Hon MARGARET WILSON 
: They may well depending on the circumstances of the case. 
Hon Mark Gosche 
: Can the Minister give examples of a genuine reason? 
Hon MARGARET WILSON 
: While it is for the authority or the court to determine what is a genuine reason in the particular circumstances the intention behind the provision is to ensure that reasons are given and that the employees’ request is not rejected out of hand without any reasons. 
Peter Brown 
: Will a group of non-union employees who have a genuine preference for a collective agreement be allowed to have a collective agreement or will they simply be told to go away and join a union; if so what justification is there for that? 
Hon MARGARET WILSON 
: If employees genuinely want a collective agreement they can have one. The current legislation states that they form a union to be able to get the collective agreement. 
Paul Adams 
: In light of the fact that the Employment Relations Law Reform Bill imposes a $10000 fine on employers who do not have a genuine reason not to settle a collective agreement combined with the provisions in the bill that allow for a bargaining bonus for those negotiating a collective agreement does the Minister agree that either way this bill will cost business; if not why not? 
Hon MARGARET WILSON 
: As I recall—and I am sorry but I cannot find the specific provisions—it is not merely saying there is no genuine reason. In fact there has to be a pattern of behaviour that over a long period of time sustains a refusal to be able to negotiate before the penalty would in fact be applied. 
Hon Roger Sowry 
: Does the Minister still stand by her statement that: “The Employment Relations Law Reform Bill is about freedom of choice.” in light of the bill’s clear prejudice against individual contracts; if so why? 
Hon MARGARET WILSON 
: Yes. The Government stands by the fact that it is promoting choice and the fact that 80 percent of employees choose individual agreements would indicate that was successful. 
Paul Adams 
: Does the Employment Relations Law Reform Bill have any regard for an employer’s genuine preferences if he or she is forced to hire the existing workforce when taking on a new business or contract? 
Hon MARGARET WILSON 
: In terms of the vulnerable workers the requirement is of course that arrangements be made for their continued employment in the new business. For other people in the workforce there is no obligation as such except to have a provision that there will be negotiation the outcome of which will be determined by the bargaining between the employer and the employee. 
Question No. 3 to Minister 
Mr SPEAKER 
: I now wish to return to question No. 3. Statements of facts and questions must be authenticated as per Standing Order 364(1)(a). Questions Nos 2 and 4 contained statements of fact that therefore had to be authenticated and they were. Question No. 3 puts a suggestion to the Minister and asks for a reaction. Provided the suggestion relates to a matter for which the Minister has responsibility—in this case tax cuts—there is nothing wrong with that. If the Minister has not received any such suggestions he can say so. With regard to the second part of the question about how any hypothetical tax cuts are to be paid for I think there could be a legitimate objection that it is put colloquially. In so far as there is an assumption that tax cuts must be paid for—whatever that means—there is an assumption of fact involved and I think that I should rule the second part of the question out of order. The first part of the question can be asked and will be asked now. 
GERRY BROWNLEE (Deputy Leader—National) 
: 
 I raise a point of order Mr Speaker. So that we are quite clear about the distinctions here are you saying that it would be appropriate now for us to go down to the Clerk’s Office with a question that asks for example the Minister of Defence whether he has seen or heard any suggestions that the Skyhawks are about to be sold to al-Qaeda and if so how they are to be paid for and that that would be a reasonable question? 
Mr SPEAKER 
: Not the second part but I cannot see what is wrong with the first part. The Minister can simply get up and say no or yes. 
GERRY BROWNLEE 
: So now we will be able to ask questions in the House on the basis of rumour. There is no need to be able to substantiate a question any longer if members use the English language to put it in such a way that they simply ask the Minister about something that may or may not be suggested. 
Mr SPEAKER 
: The House changed its own rules a few years ago to allow hypothetical questions. I have to adhere to the Standing Orders. The first part of the question can be asked and that is where it will end. 
Taxation—Tax Cuts 
3.  
CLAYTON COSGROVE (Labour—Waimakariri) 
 to the  
Minister of Finance 
: Has he received any suggestions regarding tax cuts? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I receive suggestions regarding tax cuts very frequently indeed from many different people usually of quite different types. The most recent of those was a suggestion yesterday to set the company rate at 30 percent and to lower both the 33 percent and 39 percent personal rates to 30 percent. That came from Dr Brash who said that it could be done because we ran a $6 billion surplus last year. 
Clayton Cosgrove 
: Is the $6 billion Budget surplus that was achieved last year available for spending? 
Hon Dr MICHAEL CULLEN 
: No. As with everybody else’s income last year I suspect we have spent it all in one form or another. The $1.2 billion cash surplus was used to retire debt. For the current year as a brief check of the December Economic and Fiscal Update would show Treasury is forecasting a cash deficit of $1.1 billion. Finally as the Leader of the Opposition ought to know any excessive fiscal stimulus will only lead to higher interest rates being imposed by the Reserve Bank and to more pressure on the dollar. 
John Key 
: Has the Minister noticed reports in the  
Australian Financial Review 
 of Thursday 12 February outlining that the Australian Labor Party leader Mark Latham is considering reducing the top personal tax rate in Australia from 47c to 35c in the dollar; if so what does he consider will be the economic impact on New Zealand when Australia has a lower top personal tax rate a lower company tax rate and a US free-trade arrangement to boot? 
Hon Dr MICHAEL CULLEN 
: Only somebody whose nose was rather close to Australia could possibly think that it got a United States free-trade agreement—it was a trade agreement not a free-trade agreement. When Australia also abolishes its capital gains tax and payroll tax and when it restores accelerated depreciation for companies then perhaps we may talk about comparability. The fact is that at the moment Australia has a higher top tax rate a payroll tax a capital gains tax and generally speaking Australians are more highly taxed than most New Zealanders. 
Peter Brown 
: Will the Minister give further consideration to adopting New Zealand First’s policy of gradually transferring more of the petrol tax which goes into the Crown account into the National Land Transport Fund so that it can be invested in roading for safety purposes and for our economic well-being? 
Hon Dr MICHAEL CULLEN 
: I am pleased to inform the member that we have already done that once and we are planning to do it again. That was part of the Auckland—and indeed the New Zealand—road transport package announced just before Christmas. 
John Key 
: I seek leave to table the  
Australian Financial Review 
 of 12 February outlining Latham’s new tax-cut push. 
Mr SPEAKER 
: Leave is sought to table that article. Is there any objection? There is. 
Refugees—Deportation Sri Lanka 
8.  
KEITH LOCKE (Green) 
 to the  
Minister of Immigration 
: Does she agree that deporting a 16-year-old Sri Lankan girl who suffered years of rape and sexual abuse in her homeland is in the words of the Children’s Commissioner “difficult to comprehend” and appears as stated by Save the Children New Zealand to be contrary to New Zealand’s obligations under the United Nations Convention on the Rights of the Child; if not why not? 
Hon LIANNE DALZIEL (Minister of Immigration) 
: 
 No because the primary responsibility for the care of the child in such circumstances is with the parents. The father is in Sri Lanka and the mother is in Hong Kong and it was she who in this case arranged for the grandmother to take her daughter to New Zealand where she had no family connections or support. The Refugee Status Appeals Authority has considered this matter twice. The Associate Minister has declined to intervene on removal procedures on both occasions. New Zealand’s international obligations were taken into account by the Associate Minister and his decision has been upheld by the High Court of New Zealand. 
Keith Locke 
: Why is the Minister attacking the lawyers for alerting the New Zealand people to the serious injustice that has been done to that girl and is the Minister saying that if it had all been kept hidden then the Government would have been saved from the huge public outcry against the cold-hearted expulsion of that sexually abused girl and would have also been saved the wrath of Save the Children the Children’s Commissioner the United Nations Children’s Fund End Child Prostitution in Asian Tourism and other reputable organisations? 
Mr SPEAKER 
: That question was too long and the first part of it was out of order. But the Minister can comment on the second part where the second question began. 
Hon LIANNE DALZIEL 
: My objection has been the half-truths that have been told in the public arena. I want to read from the Refugee Status Appeals Authority decision. That member rails against me in the House on the topic of the Refugee Status Appeals Authority whose decision will stand so I want him to listen to this: “The appellant’s fears of serious harm at the hands of S or J are not well founded. J’s predicted pursuit of the appellant and the grandmother would be motivated by revenge which is not a legitimate convention reason. Were J to pursue the appellant or her grandmother they would have the resources of their family at their disposal and State protection would be available and would be sought. Any lack of medical treatment would not amount to persecution nor would it be unavailable for a convention ground. For these reasons the authority finds that both appellants have no well-founded fear of being persecuted on return. In view of these findings the issue of jurisdiction does not need to be considered.” 
I say to Mr Locke that he should be consistent. 
Moana Mackey 
: Does the Minister stand by her statement on  
3 National News 
 last night that she thinks New Zealanders have been the subject of a deliberate campaign of manipulation in order to invoke public sympathy in this case; if so what is her concern in that regard? 
Hon LIANNE DALZIEL 
: I have become used to people seeking to win in the court of public opinion what they cannot win in a court of law. However in this case it is much more serious because the integrity of the care plan that the Associate Minister took great pains to have put in place for her return could have been jeopardised by her being publicly identified in the way that she has. That is what I believe has been unethical behaviour. 
Judith Collins 
: Does she agree with Damien O’Connor’s statement in respect of this case: “There are only claims that one or two members of her family have not been kind to that girl.” when the New Zealand Immigration Service and the Refugee Status Appeals Authority have accepted that she was a victim of rape and does the Minister think New Zealand women will find it acceptable for her Government to describe rape as “not being kind”? 
Hon LIANNE DALZIEL 
: In all the material I have read including that of the Refugee Status Appeals Authority there has been an acceptance that there was sexual abuse. I have not seen any report that has accepted the allegation of rape. However the important issue in this particular case is that this has been the subject of two hearings in the Refugee Status Appeals Authority the first of which was a complete fabrication. If that member agrees that it is OK to come to this country to use our health services to use our care and protection services and to use our education services by fabricating a story— 
Mr SPEAKER 
: I have called the member to order. The member is going on far too long. [ 
Interruption 
] I am on my feet not the member. Please be seated until I am sitting. I said to the Minister that as far as I am concerned she should specifically answer the question. I do not require all the other extra points. A comment or two is of course justifiable but I think the Minister has gone on a little too long on this occasion. 
Hon Dr Nick Smith 
: I raise a point of order Mr Speaker. My colleague’s question was very specific: did the Minister agree with the Associate Minister referring to sexual abuse or rape as being “men being a little unkind” or phrases to that effect? The Minister made no attempt to answer that question—thus my interjection and thus I think you should ask her to answer whether she thought the Associate Minister’s terminology was acceptable. 
Mr SPEAKER 
: I listened carefully to the Minister. She gave a long answer and she did address that particular question. 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. You will have no doubt been taken as I was with the conclusion of the Minister’s answer. It really requires a request from me as to whether she will table it because she is actually reading my speeches back to me without ascription and she should table them back to the House now. 
Mr SPEAKER 
: That is not a point of order; it was a comment made. 
Sue Bradford 
: Is it not one of our obligations under the United Nations Convention of the Rights of the Child to protect children and how can that be consistent with handcuffing and forcibly sedating a young girl for what seems to have been the whole trip from Auckland via Seoul and Bangkok to Colombo? 
Hon LIANNE DALZIEL 
: There is no legal obligation on New Zealand to offer protection to this individual child or her grandmother. The decision was made by the mother in Hong Kong to send her daughter to New Zealand in order to claim refugee status on completely fictitious grounds. I know that the member opposite is nodding because he is absolutely correct in his statement that there has to be a robust provision in place to ensure that people do not use our refugee determination process in order to gain access to services they are not entitled to gain access to. 
I seek leave to table the Refugee Status Appeals Authority decision. 
Document by leave laid on the Table of the House. 
Sue Kedgley 
: When the Associate Minister Damien O’Connor said: “The girl’s removal to Sri Lanka had been done with her welfare in mind including proper medical supervision before and during the flight.” did he mean that he considered bundling the girl out of an ambulance with her hands tied and drugging her throughout the flight to the point where she appeared to be unconscious unable to stand and confined to a wheelchair when she got off the flight constituted proper medical supervision; if so why? 
Hon LIANNE DALZIEL 
: In response to the first part of the question in fact I believe that the Associate Minister was referring to the fact that neither her mother nor her father—none of her family members—is in New Zealand and New Zealand is not in a position to offer her the family support she needs. 
Local Government Act—Treaty of Waitangi 
9.  
Hon Dr NICK SMITH (National—Nelson) 
 to the  
Minister of Local Government 
: Is he satisfied that the new Treaty of Waitangi provisions of the Local Government Act 2002 and special provisions for councils to consult with Maori are working as intended? 
Hon RICK BARKER (Minister for Courts) 
 on behalf of the 
Minister of Local Government 
: Yes. 
Hon Dr Nick Smith 
: Does the Minister consider it fair to all New Zealanders that the Canterbury Regional Council in considering an application for a major dairy farm adjacent to Lake Ellesmere has determined that iwi are to be consulted but neighbouring farmers Fish and Game New Zealand and the Royal Forest and Bird Protection Society are not and if he like National believes this unfair will he review the provisions of the Act that have led to this situation? 
Hon RICK BARKER 
: If that member wanted to ask specifically about that matter I would have hoped that he would put down the question particularly for me and I could respond in more detail. But the obvious answer it seems to me is that it is a matter for the council to determine who it will respond to. 
David Parker 
: Does the Local Government Act 2002 transfer or impose Treaty of Waitangi obligations on to local authorities? 
Hon RICK BARKER 
: No. Section 4 of the Local Government Act 2002 clearly states that the provisions to maintain and improve opportunities for Maori to contribute to local government decision-making processes are recognition of the Crown’s responsibility in relation to Treaty of Waitangi obligations and not that of councils. 
Jeanette Fitzsimons 
: Does the Minister of Local Government now accept that the limited notification provisions of the Resource Management Amendment Bill introduced by National and passed by Labour against strong opposition from the Greens have led not only to the Royal Forest and Bird Protection Society Fish and Game New Zealand and the public but his own Department of Conservation being shut out of the submission process on this proposal and that only the treaty right of the tangata whenua is ensuring that it gets any proper environmental scrutiny at all? 
Mr SPEAKER 
: The question is a little wide but I will allow it. 
Hon RICK BARKER 
: It seems to me that question is mainly about the Resource Management Act and I am not the appropriate Minister to put that question to. 
Hon Dr Nick Smith 
: Noting the Prime Minister’s answer earlier today in saying that the Government’s response was based on need and not on race can the Minister please explain to the House why there is a greater need to consult iwi in respect of Lake Ellesmere than Fish and Game; that there is a greater need to consult iwi than neighbouring farmers; that there is a greater need to consult iwi than legitimate organisations like Forest and Bird or are the Prime Minister’s statements a load of wash? 
Mr SPEAKER 
: The last comment I think was a little bit too much but the Minister can answer the first part of the question 
Hon RICK BARKER 
: The matter of who is consulted is the regional council’s decision; it is not the Government’s. If the regional council decides it wishes to consult all those groups it will do exactly that. 
Hon Dr Nick Smith 
: For the benefit of the Minister I seek the leave of the House to table the specific provisions—notably clause 14(d) of the Local Government Act and also clause 81 of that same Act—that impose specific responsibilities on councils to consult Maori. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is. 
Child Youth and Family Services Department—Confidence 
10.  
JUDY TURNER (United Future) 
 to the  
Associate Minister for Social Development and Employment (CYF) 
: Does she have confidence in the Department of Child Youth and Family Services’ ability to manage the approximately 4700 children in its care at any one time? 
Hon STEVE MAHAREY (Minister for Social Development and Employment) 
 on behalf of the 
Associate Minister for Social Development and Employment (CYF 
): In general yes. However there have been some cases where high-quality social work practice has not been happening consistently. They have been acknowledged by the department and a range of initiatives either have been implemented or are in the process of being implemented to ensure a consistent quality service nationwide. 
Judy Turner 
: In light of the fact that the Department of Child Youth and Family Services failed to follow the established procedure of ensuring bimonthly visits to the caregivers of 3-year-old Tamati Pokaia—who later died from massive internal injuries inflicted by the man whom the department had chosen to care for him Michael Waterhouse—does the Associate Minister agree that the department simply does not have the capacity to provide adequate monitoring of children’s safety while in care which is a core component of its operation? 
Hon STEVE MAHAREY 
: Trying to anticipate the cases that might be raised I did familiarise myself with others but not with the particular case that has been raised. So let me answer in general that what I said in my initial answer on behalf of the Associate Minister was that there have been cases where plans have not been put in place in the way that we would want. The particular case that has been raised is clearly one of those and that is why for example we have just put an extra $119 million into this organisation to lift its capacity to carry out that core function. 
Georgina Beyer 
: What specifically is the Government doing to ensure that public confidence in the department is further restored further to what he has already answered? 
Hon STEVE MAHAREY 
: Since this Government was elected in 1999 we have been committed to improving social work practice. We have recruited more staff increased baseline funding by more than 50 percent instituted professional social work registration and strengthened regional management. The department is implementing initiatives to improve care management practices with the implementation of the baseline review. We have continued those improvements with the new investment I have just mentioned of $119 million. 
Katherine Rich 
: Will the Associate Minister confirm in relation to the Department of Child Youth and Family Services’ confirmation that there were 3132 unallocated cases of abuse last November—a 76 percent rise in 4 months—that uncounted at the time were hundreds of backlogged notifications waiting to be entered into the department’s computer and in effect creating a waiting list for children to get on to the department’s waiting list; if not why not? 
Hon STEVE MAHAREY 
: One of the issues has been the rising number of unallocated cases and we know that that has at times meant that staff have been under pressure to put their notes into the computer so that we can come up with the number of unallocated cases. My understanding is that as of now all the cases are accounted for as they should be. 
Sue Bradford 
: Has the Department of Child Youth and Family Services actually employed the 112 extra social workers and 28 other frontline staff provided for by the Government 4 months ago as a result of the baseline review; and do the three babysitting Government departments also appointed have confidence that this “unbalanced and unstable department”—as it was then described by the review team—is now functioning at at least an adequate level? 
Hon STEVE MAHAREY 
: My understanding is that the department is still in the process of employing social workers but one of the pleasing elements of this is that more people than were anticipated have applied for jobs with the department. Many are returning to the service which is a very good sign indeed. The three departments that conducted the baseline review rather than the “babysitting review”—it was not called that; it was called the baseline review—are still involved in ensuring that the department does live up to its obligations during this transition period while a new chief executive is found. 
Judy Turner 
: Does the Minister agree that the failure of the Department of Child Youth and Family Services social workers in the Pokaia case to provide “a coherent explicit and documented case management strategy” which resulted in little Tamati being passed through eight placements from 2000 to his death in April 2002 is symptomatic of the findings of the baseline review that “on average children in CYF care spend 2.5 years in care experience 10 different placements and are allocated to four different social workers” and points to a department that is unable to provide the quality care services that our children deserve? 
Hon STEVE MAHAREY 
: The statistics reported by that member do point to the problems with this department that we have been trying to get on top of. But I want her to acknowledge that in many cases children move for very good reasons during the time that they are with the department. They may well be moving between family members for example during that period of time. We should not take the fact that they move as an indication that things are not working for them. 
Judy Turner 
: In light of the chief social worker’s findings in the Kelly Gush review of December that the caseworkers involved “minimised or failed to recognise and acknowledge the level of violence” not to mention reports that staff ignored the grave concerns of both counsel for the child and specialist mental health services for the children’s safety under the care of their stepfather Darren Mackness how can the Associate Minister have any confidence that her overworked front-line staff will make the necessary decisions to prevent other children from being kicked to death for throwing up while they eat their dinner? 
Hon STEVE MAHAREY 
: I would stress—and can I say I am answering on behalf of the Associate Minister—that I did try to familiarise myself with cases but I could not anticipate every case that might be raised and I did not look at this particular one. The important point here of course is that the social workers themselves did no harm to this child at all; the harm was done by people to whom the member pointed in her question. But we would also say that this service is an emergency service. Just as the police and hospital staff are placed in very difficult situations so too are social workers and they have to make difficult judgments. This Government is committed to giving them resources. We have acknowledged as has the department that mistakes have been made. We will keep going until we get it right. 
Home Detention—Reoffending 
11.  
RON MARK (NZ First) 
 to the  
Minister of Corrections 
: Was Kevin Moana Jarden described as a predatory paedophile on home detention at the time that he raped sodomised and sexually molested three girls one of whom lived in the home in which he was placed? 
Hon PAUL SWAIN (Minister of Corrections) 
: 
 Yes. After serving time in prison for charges relating to burglary and stealing a bike he was released on home detention for 2 months by the district prisons board in 1999. This offender did not have a background of offending against young children prior to his most recent convictions. 
Ron Mark 
: Does it concern the Minister that this man who has been described as a predatory paedophile and a serial offender was deemed by the Parole Board to be suitable for placement on home detention in a home with children; if he does will the Minister be seeking to have that Parole Board held accountable for the subsequent attacks on these other three little girls? 
Hon PAUL SWAIN 
: The events are appalling—there is absolutely no question about that. However this offender has been described as a predator and a paedophile; he is certainly a serial offender—there is no question about that—but the reality is that apart from an association with a girl who was 15 at the time he had no other convictions relating to anyone under the age of 16 years. I understand now that this particular case is back before the court. 
Martin Gallagher 
: What has the Government done to ensure that people who agree to take home detention offenders into their residences are fully aware of the offenders’ offending background? 
Hon PAUL SWAIN 
: Although in this case the probation officer did tell the resident about the offending history the Government determined that the legislation could be made clearer on this point. A specific clause was added into the Parole Act 2002 requiring probation officers to ensure that every relevant occupant of the residence where it is proposed the offender be detained is aware of the nature of the offender’s past and current offending. 
Hon Tony Ryall 
: Noting those changes in the Sentencing Act what is the Government doing to prevent a recurrence of the situation where a man who went to jail for beating his wife so badly that he had to give her CPR to keep her alive was able to serve out part of his sentence on home detention with the very woman he had originally bashed only to bash her within weeks of his release on home detention? 
Hon PAUL SWAIN 
: Of course that also is appalling. At the end of sentences obviously criminals are released back into the community. In some cases instead of serving their full time they are released to home detention. What that member will realise given that his Government introduced home detention is that the reoffending rates of those who were on home detention are much better than those of people who served their full sentence in prison. 
Ron Mark 
: Is the Minister not aware that the details show that this person’s first offence was committed against a girl who was younger than 15 and that indeed the sponsor was not given the full details of his offending; and does the Minister not agree that when the Department of Corrections fails the public so badly that it lets a man with 80 criminal convictions carried out over a 40-year period against a multitude of victims go on home detention it and the State should be held accountable to the victims and their families? 
Hon PAUL SWAIN 
: There are about four questions there; I will try to answer a couple of them. Firstly I was not aware that the girl was under 15; I had been advised that she was 15. [ 
Interruption 
] I see that the member thinks that is a minor detail. Secondly I was told that the people living at the place to which the offender was to go had been advised of his conviction history. The third point is that it is not the department’s role to recommend home detention; it was a decision made by the prisons board and that board should be accountable for the decision. 
Race Relations Commissioner—Human Rights Act 
12.  
STEPHEN FRANKS (ACT) 
 to the  
Associate Minister of Justice 
: Has she asked the Human Rights Commission whether Joris de Bres was acting jointly with the chief commissioner pursuant to sections 15(1)(d) and 16(c) of the Human Rights Act in making the comments reported as “De Bres slams Nat Maori policies” and does she have any concerns about Mr de Bres as a tax-funded appointee making the claims reported? 
Hon MARGARET WILSON (Associate Minister of Justice) 
: 
 No and no. 
Stephen Franks 
: How can we be reassured that Mr de Bres’ call for what he called “ground rules for treaty debate” does not simply reflect her Government’s anxiety to close this debate down especially considering Mr de Bres’ position that National’s advertising is “dangerous” and that references to “race-based policies” and “racial privilege” are broad slogans that do not fit the facts and are therefore out of order? 
Hon MARGARET WILSON 
: Mr de Bres has a statutory obligation to act independently. He is acting independently which is why I have had no contact with him. 
Russell Fairbrother 
: Has she seen any subsequent reports on Joris de Bres’ comments? 
Hon MARGARET WILSON 
: Yes this morning’s  
Dominion Post  
acknowledged that it misrepresented what Mr Joris de Bres said. He was not attacking a political party he was saying something applicable to all politicians some of whom reacted differently from others. 
Gerry Brownlee 
: Is she concerned about suggestions that appointees to public positions nominated by her as Minister have to display a willingness to do the Government’s business or have Labour Party activist credentials? 
Hon MARGARET WILSON 
: No and no and I would just draw the member’s attention to the fact that the Deputy Prime Minister Michael Cullen was also attacked but did not behave in quite the same hysterical way as the Leader of the Opposition. 
Stephen Franks 
: Can I ask whether that is acceptable? 
Mr SPEAKER 
: I just want to contemplate the word “hysterical”. I think that word should be withdrawn. 
Hon Margaret Wilson 
: I withdraw. 
Rt Hon Winston Peters 
: If Joris de Bres cannot find any offence or infringement against legislation that he is meant to be acting upon why on earth is he continuing to make statements and why does the Minister not fire him? 
Hon MARGARET WILSON 
: The position requires the member to act independently. He acts independently. Members in this House comment upon that and I thought that was what free speech was all about. 
Stephen Franks 
: Given that the Race Relations Commissioner’s duty is to act jointly with the Chief Commissioner and he has a statutory duty to promote understanding of the treaty what restrictions or ground rules should there be against a publicly paid appointee taking a biased position in a political debate and has she taken any steps to ensure the Human Rights Commission is observing them? 
Hon MARGARET WILSON 
: To follow the course of action that the member has suggested would in fact be interfering with the independence of the office. 
Stephen Franks 
: I raise a point of order Mr Speaker. I asked what restrictions or ground rules there should be. I did not suggest any and the Minister has not addressed the question. She has assumed a position on my part and completely ducked the question. 
Mr SPEAKER 
: I will ask the Minister to comment further. 
Hon MARGARET WILSON 
: To lay down any ground rules would seem to me to be in direct contradiction to the statutory obligation to in fact act independently. That would be acting according to the Government’s directions which is exactly what the member has been accusing us of doing. We are not doing that. If the member does not agree with what the Race Relations Commissioner says he should express that as others do also. 
Question No. 2 to Minister 
Hon Steve Maharey 
: I seek leave to table documents in relation to a supplementary question from Dr Newman on question No. 2. 
Documents by leave laid on the Table of the House. 
Debate on Prime Minister’s Statement 
Debate resumed from 12 February. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
:  
I raise a point of order Mr Speaker. You will be aware that we do not have the full complement of 13 speeches in respect of this matter and I therefore seek leave to amend the original motion in the following way. 
Mr SPEAKER 
: Leave is sought to move an amendment. Is there any objection to that course being followed? There is not. 
Rt Hon WINSTON PETERS 
: I move  
That the amendment be amended by omitting all the words after “this House has no confidence in the Labour-led Government because” and the following words inserted: “that Government has no policies to raise New Zealand’s living standards back to the mid part of the OECD; it complacently accepts more than 300000 working-age adults being dependent on benefits and it continues down the dangerous road of promoting policies commenced by Labour and continued and promoted by National that treat New Zealanders differently on the basis of their race. 
” 
Mr SPEAKER 
: The question is that the amendment to the amendment be agreed to. 
Hon RICHARD PREBBLE (Leader—ACT) 
: 
 If the House is prepared to allow the New Zealand First member to move such an amendment on the basis that there are no other speakers I have no other speakers and I seek leave to also move an amendment somewhat shorter. 
Mr SPEAKER 
: Is there any objection? There is objection. 
Hon Dr MICHAEL CULLEN (Deputy Prime Minister) 
:  
It is clear to us that New Zealanders face a choice. We can go forward on a path of progress and cooperation or we can go back to the divisions and extremism of the past and the not too distant past at that. This Government stands squarely for progress and cooperation and we have the numbers and the achievements to demonstrate it. We have had an economy over the last 3 years growing faster than the OECD average. We have been catching up on the OECD for the first time in a very very long time. As a result we have the lowest unemployment that we have had for many many years—more New Zealanders in work and fewer New Zealanders out of work than we have seen since the mid-1980s. We have restored the pension after the savage cuts carried through by National and New Zealand First and we put in place a funding arrangement to secure the pension for the baby-boom generation. 
 In health we have restored partially elected health boards we have more doctors more operations more patient satisfaction and a health system that is respected. In education we have increased enormously the number of people in tertiary education. In industry training we have increased the funding for low-decile schools. We have improved standards across a whole range of areas of achievement and of course household income has risen in part because of that rising employment. 
Yes we face problems. We have problems with a rising dollar largely caused by the falling dollar in the United States. Why is it falling? It is falling because President Bush is following National Party policy of tax cuts and spending increases and therefore large deficits. We have the problems of the foreshore and seabed where extremists at both ends are trying to wind things up and make life difficult and as nature has demonstrated in the last couple of days from time to time we always face weather problems in this country. 
However this picture of progress and cooperation is anathema to Dr Brash and National. Dr Brash is now some kind of pseudo-intellectual Mr Bean wandering through the world of politics falling over everything in sight and determined to destroy. National’s new agenda is based around so-called race-based policies. The only race-based policy I have heard in recent times is one that states that rights that are held by Maori should be abolished because they are held by Maori; rights that are held by anybody else should not be abolished. That is a race-based policy. 
But when challenged to say which policy he is talking about Dr Brash can come up with no more than trivial examples and he is usually wrong. So-called tangi leave does not exist in the bill—an invention of his own limited mind. When he talked about customary title conferring veto power in the Government’s proposals he was wrong and was laughed at by the lawyers representing the Maori participants in the debate. 
When it comes to education he said things were all right there because there is choice. If there is choice it would cover anything in terms of so-called race-based policies. In fact it is about decile funding. It is funding for low-income areas and it is funding for people who need assistance to achieve better. What does Dr Brash want? Does he want a nation of illiterate and innumerate people—an underclass that is overwhelmingly brown by the mid-21st century? Is that the society he wants to create instead of the 1950s English society he seems to want to recreate? 
National in Government accepted decile funding. It carried it through. At times National even claims it invented it. He then talks about the fact that there are some scholarships only for Maori. There are a few—he set up some of them as Governor of the Reserve Bank. The great majority of funding that Maori get in terms of paying their fees comes from iwi trusts etc. which is exactly the same as European Pakeha families paying for their own kids. But of course he says that Maori families should not be able to pay for their kids at university and polytech but Pakeha families should. If that is not a race-based policy then I would like to see one. 
With all these sorts of strange things coming from Dr Brash we have to question his inability to marshal any real evidence. He accepts any strange story and tittle-tattle about Maori that is running around so what is actually underlying all of this? What is going on in that vast dome of Dr Brash’s cranium that he seems to think that he can pick up these ideas? What is going on in there is like St Paul’s Cathedral. It is a big empty space with only ethereal sounds coming through it and a lot of dead bodies buried underneath it. 
One of our jobs is to describe those dead bodies because we have started to see the lids coming off the coffins in the last day or two. We have started to see the politically dead rising from their graves. Yesterday morning we saw Alan Gibbs. That was the man who said that as long as everything in our health system was market-based we would save $500 million a year. Eight hundred million dollars a year of extra spending later after failed restructuring and a total collapse of public faith in the health system National started to pour money into it to try to fix it up. If Alan Gibbs represents the future National wants to promote then we on this side of this House are feeling very very happy. 
We know what the agenda is: Mr Gibbs and National stand for privilege; they stand for tax cuts for the rich and for lowering everybody else’s incomes. As I have said so many times—but keep repeating it so it is worth repeating yet again—National believes that somehow or other to have the rich work harder they have to earn more and to have the poor work harder they have to earn less because there are two sorts of people in this world—the rich and the rest. National is for the rich and we are for the rest. 
Labour supports needs not privilege and those needs are many in our society. Mr Franks is not one of them. He objects to tax-funded people criticising the National Party and ACT. He is tax-funded himself of course though I suspect that is only a small part of the income he receives as a member of Parliament. When it comes into position the new register of interest will be very interesting indeed. 
What is Dr Brash’s actual policy? He has already said it many times. He has given many speeches and these will come back to haunt him. He believes in cutting the pension. He said it was too generous and National did it last time it was in office—even in its dying days in Government. He believes in raising the age for the pension so as to push it up beyond the next election for him. He believes in taxing the owner-occupied home—one of the very few people in this country who does. He believes in slashing benefits. 
He believes in cutting the holidays of the workers who have the least power to protect themselves. He believes in reducing workers’ rights and he believes in making workplaces less safe because it does not matter if ordinary working people get killed at work. They do not contribute to the wealth of this country according to Dr Brash. Only people like him contribute to the wealth of this country so his workplace should be made very safe indeed. 
He has a lot of questions to answer and as the answers come out people who thinkit is nice to have a go at Maori will start to say: “But he will have a go at me as well. He will cut my pension. He will make me work 5 years longer. He will cut my workers’ rights. He will take away the funding from my school. He will take away the funding from my public health organisation and I will be a lot worse off as a consequence of that.” Dr Brash stands for a peculiar form of elitism and privilege. We stand for need and if he follows his policy he will be dog tucker at the next election. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I raise a point of order Mr Speaker. We might have misheard but when Dr Cullen started his speech there was a degree of noise. We believe he said—and we take offence at this—that New Zealand First was part of cutting the pensions for the elderly. We are in no way associated with that and we strongly object. 
Mr SPEAKER 
: The member has made a debating point. It is not a point of order. 
Hon RICHARD PREBBLE (Leader—ACT) 
: 
 I raise a point of order Mr Speaker. I thought of raising this point of order and stopping the Minister’s speech. Perhaps you might say that I should have done it then but I am raising this under Speaker’s ruling 48/5 which states that temperate and decorous language should be used with regard to persons outside of Parliament. I cannot raise this matter in debate because all our time is used up but I think it was wrong for the Deputy Prime Minister to say in the House that a person outside the House Mr Gibbs is in favour of privilege. I happen to know Mr Gibbs very well and he is a distinguished New Zealand businessman. Yes it is true that he wrote a health report for the last Labour Government but if the Deputy Prime Minister looks at that report again I think he will see that nowhere does it advocate privilege. I know that Mr Gibbs is on record many times as saying that he is personally very strongly opposed to privilege. 
Mr SPEAKER 
: That is neither intemperate nor indecorous and it certainly is not outside the Standing Orders. 
DONNA AWATERE HUATA (Independent) 
: 
 What is amazing to me is how a so quietly spoken and essentially dull a man as Dr Brash can excite such emotion. That was the most lively speech I have heard from Dr Cullen in quite a while but I must take issue with him when he claims that Dr Brash wants Maori to be illiterate because I for one know that that is certainly not the case. I have heard Dr Brash speak at a number of conferences. One was the Ngati Kahungunu economic summit and the other was the education summit and I thought that his prescription for Maori education and the development of the Maori economy was absolutely spot on. I thought at the time that he had the makings of being one of the most important politicians of the new millennium. He was not at that time a member of Parliament. 
The second time I heard him speak he was not the leader of the National Party but he certainly had the seeds of leadership within him as he spoke. He talked about education and the importance of choice. He talked about kohanga reo and kura kaupapa Maori as being examples of choice. I think the important point that he has made surely is that we must have policies that work for all and in his description of choice as one of the key ways we achieve that I certainly could not agree with him more. Where we have individuals who can make their own choices as in kura and in kohanga reo we know that people will develop. I thought also that when he talked about education and set standards in assessment I could not have agreed with him more. 
The other area where I agreed with him most was in his discussion on literacy and the importance of every New Zealander being able to read and write to world-class standards. For the first time in the 7 years I have been in this Parliament I heard a man talk about reading with as much passion as I do myself. I talked about closing the gap between Maori and non-Maori reading achievement. I heard him prescribe the way we could get teachers to do that—by offering standards by offering assessments by offering support to teachers and by retraining and all the rest of it thus bringing reading research right down into the classroom. 
When I heard that I was excited—as excited as I was when he rolled Bill English. But I have to take issue with the way he has marketed his policies to New Zealand and certainly with the way he has set the ground rules or created an environment where now there is an open season on Maori. I feel that in doing that he is taking us back to the 1970s and 1980s—an era that I for one never want to return to. If members can remember the mentality of the 1970s and 1980s they will know that it was an era where more New Zealand high schools had the Japanese language available than the Maori language where we had the regional superintendent of Auckland education saying: “Over my dead body will that barbaric language of Maori be introduced into any school in my region.” and where we had legislation like the Maori Land Act by which Maori land could be taken—just like that; at the whim of Government—if someone deemed it uneconomic. I for one never want to return to those days but I fear that is where Dr Brash is taking us. 
When Dr Brash said that there had been a huge pent-up feeling of frustration and anger on the part of a large number of people and that they were now saying: “Thank heavens! We now feel able to say we are concerned about this.” I fear that what Dr Brash is really saying is: “If you hate Maori please say so. Don’t feel frustrated about it. Let your feelings out. Don’t worry about what Maori think. Their feelings don’t matter.” I believe that the real story is how most Pakeha have maintained cultural separation after being here for so long—how they still cannot pronounce let alone speak the Maori language. 
I have to say to Dr Brash: “Maori are still fragile so please stick to choice in education stick to fixing the economy stick to freedom of choice and do not whatever you do allow Pakeha to give vent to their frustrations and anger.” Therein lies danger for all New Zealanders. 
Mr SPEAKER 
: The time for this debate has concluded. 
A party vote was called for on the question That the amendment be amended by omitting all the words after “this House has no confidence in the Labour-led Government because” and the following words inserted: “That Government has no policies to raise New Zealand’s living standards back to the mid part of the OECD; it complacently accepts more than 300000 working-age adults being dependent on benefits and it continues down the dangerous road of promoting policies commenced by Labour and continued and promoted by National that treat New Zealanders differently on the basis of their race.” 
Ayes 22 
New Zealand First 13; ACT New Zealand 8; Independent: Awatere Huata. 
Noes 98 
New Zealand Labour 52; New Zealand National 27; Green Party 9; United Future 8; Progressive 2. 
Ayes 31 
New Zealand First 13; Green Party 9; ACT New Zealand 8; Independent: Awatere Huata. 
Noes 89 
New Zealand Labour 52; New Zealand National 27; United Future 8;  Progressive 2. 
Amendment to the amendment not agreed to.Amendment not agreed to. 
A party vote was called for on the question  
That all the words after “this House has no confidence” be omitted and substituted with the following words: “in the Labour-led minority Government because despite there being some positive elements in its programme its decision to allow the release of genetically engineered organisms exposes our health our environment and our economy to significant and quite unnecessary risks.” 
A party vote was called for on the question That this House has no confidence in the Labour-led Governmentbecause that Government has no policies to raise New Zealand’s living standards back to the mid part of the OECD; it complacently accepts more than 300000 working-age adults being dependent on benefits and it continues down the dangerous road of promoting policies that treat New Zealanders differently on the basis of their race. 
Ayes 49 
New Zealand National 27; New Zealand First 13; ACT New Zealand 8; Independent: Awatere Huata. 
Noes 71 
New Zealand Labour 52; Green Party 9; United Future 8; Progressive 2. 
Motion not agreed to. 
Public Finance (State Sector Management) Bill 
First Reading 
Debate resumed from 16 December 2003. 
DAVID BENSON-POPE (Labour—Dunedin South) 
: 
 I am delighted to have a further opportunity to rise in support of this legislation. 
JOHN KEY (National—Helensville) 
: 
 I rise this afternoon to address the bill and to tell the House that National will support this legislation going to the select committee but with some reservations. The bill cuts to the heart of the State sector: the way it is run the way its business is carried out and the way it is reviewed. If the Government is to secure National’s long-term support for the Public Finance Act we will demand that the bill ends up achieving its goal of building integrity efficiency and accountability for the State sector. 
This bill is timely—in fact it is overdue in some respects—and there are a number of things over the last decade such as the Crown entity accountability regime that have needed review. I should caution also that the bill looks to incorporate one of the landmark pieces of New Zealand legislation the Fiscal Responsibility Act into the Public Finance Act. The Fiscal Responsibility Act should be updated in light of 10 years of experience but National would caution its consolidation into the Public Finance Act. Any moves to water down the importance or significance of the Fiscal Responsibility Act could have a dramatic impact on the financial resilience of the Crown. 
It is worth reflecting just for a moment on the history of the Public Finance Act. It is a piece of legislation that was passed into law in 1989 and was internationally unique in the way it balanced managerial freedom with accountability for finance and performance. Even today it remains on the frontier of best practice in seeking that balance. But we need to stand back and ask what the purposes are of the bill before us today and whether they have a great chance of achieving those goals. 
The Public Finance Act set out to locate financial management in the centre of an integrated performance-based public sector management system. That vision I would contend is as appropriate today as it was then in 1989. Over the past 15 years a few leading departments have made progress in performance management and an overdue effort has been made by central agencies in articulating policies and methods for managing outcomes. Therefore the revisions to the Public Finance Act should cement in what is best about the Act tidy up loose ends and promote and facilitate the leading practices in policy development performance management and accountability. As the law is unlikely to be revised for some time—we suggest maybe another 15 years—this is a rare opportunity to extend the boundaries again and make New Zealand once more a global leader in public sector management to the benefit of its citizens. If we look just for a moment beyond the integration of the Fiscal Responsibility Act there are a number of elements that National will be seeking assurances about at the Finance and Expenditure Committee including performance specifications classes for Crown entities and forecasting. 
I want however to spend my time today discussing potentially the most important element of the Public Finance Act—the appropriation structure. This bill allows the Government to aggregate classes of outputs into one appropriation. That has the aim and the potential to assist greatly in allowing the State sector to manage by outcomes as opposed to inputs. Equally it poses great risks. By permitting the aggregation of all output classes for any ministry into as few as one appropriation it could mean the combination of very dissimilar types of services within an appropriation. That could be disastrous if implemented inappropriately. 
Parliament has a duty to ensure via its members its select committees and indeed the Auditor-General that public spending is professionally carried out and appropriately accounted for and that value for money is achieved. Such an amalgamation of appropriations threatens that very process. What is being proposed could trigger an unwinding of the system of financial management back to the situation before the reforms of the 1980s. National will support this change only if it is accompanied by conditions that are both necessary and sufficient to ensure that it leads to a superior format for managing outcomes. Currently the bill does not provide that insurance but it could be modified to do so which is why National will support its going to the select committee. 
Under the present Public Finance Act the transfer of funds between output classes is restricted as each is a separate appropriation. Transfers up to 5 percent are permitted through an Order in Council. This detail and process allows for rigorous scrutiny not only by Ministers but also by the Auditor-General the select committee and interested parties. Indeed when such a scandal is unveiled it takes up much of question time. Currently the bill as proposed would allow the transfer of resources at an administrative level—that means without ministerial approval—in one huge lump sum which even the most terrier-like of an Opposition MP would struggle to dig into. 
The removal of the requirement for each output class to be an appropriation weakens the concept of authority and the concepts of information and audit. Therefore some of the questions National will raise at the Finance and Expenditure Committee will include: is it really necessary to aggregate output classes in order to achieve the goals the bill seeks? If the proposal goes ahead are there other measures capable of preserving the quality and availability of the information even though its role as an appropriation is diminished? Will the new system produce information for budgeting performance management and accountability that is superior to output classes that will be no longer needed? 
National believes that several steps are needed to move forward the agenda of outcome-focused management and the proposed easing of the appropriation constraints at the output-class level. These would include but are not limited to a much stronger base of knowledge research and experience from which to build evidence-based policies and interventions linking what Government actions take to outcomes with results; outcomes that are expressed in practical and accessible terms and not in the grandiose woofterish statements sometimes in evidence in Government documents which make no sense to anybody; management plans and resources that are clearly linked to the services being provided in pursuit of the outcomes; a Budget system that allocates the resources on the basis of those plans and that responds to performance information and detail about the Government’s actions; and a reorganisation of ministerial portfolios that reflects their responsibilities. 
Further we would contend that the aggregation of output classes is done without considering the more comprehensive package noted by my good self which is likely to result in weaker performance and a weakening of the State sector which may be at the heart of some of the architects of this bill. It is likely to have a reverse of the very plan for this bill and the very methodology behind it and it risks threatening a move back to the situation prior to the Public Finance Act of 1989. 
Parliament has a very very important role indeed in scrutinising Government departments to ensure that appropriations are spent on what they are intended for and that accountability can take place within Government departments and ministries. The Public Finance Act is critical legislation for driving the State sector. We must ensure that integrity and the ability to audit those Government departments are held paramount. Therefore we will support the bill going to the select committee but not without some great reservations. 
DAVID PARKER (Labour—Otago) 
: 
 I too support the bill going to the Finance and Expenditure Committee. This 350-page bill will get good scrutiny in the committee and some of the issues raised by Mr Key will be dealt with. 
PANSY WONG (National) 
: 
National supports the referral of the Public Finance (State Sector Management) Bill which will be further divided into five separate bills to the Finance Expenditure Committee. The only reason we are doing so is that we believe that these five pieces of legislation should be subject to public submission and a lot of scrutiny. 
Personally I am very sceptical about the Labour Government’s agenda of collapsing the Fiscal Responsibility Act into the Public Finance Act. We know that this stand-alone Act has been seen as a landmark in terms of the accountability of the New Zealand Parliament for the way it conducts its financial scrutiny of Government spending. 
I would say that most of the business community and a lot of professional bodies I have talked to over the years have become increasingly sceptical whenever Labour Governments put up legislation that seems to be well meaning but can be a real disaster to implement. So as a member of the Finance and Expenditure Committee I welcome the opportunity to give particular parts of this bill real scrutiny. 
I want to raise some of the questions we will look at during the select committee process. One of those questions concerns the changes to the Budget Policy Statement. Currently the statement which the Finance and Expenditure Committee has just finished examining contains two parts. One is the Government’s spending strategy; the other one is the longer-term objective. This particular legislation proposes that in future the Budget Policy Statement will not draw on the longer-term objective. Rather it will simply focus on short-term spending. 
We already have the business associations commenting in last week’s select committee that the bill removes a very important part of the Budget Policy Statement. We all know that there is great danger in any Government telling the public about its short-term spending without that public at the same time gaining an appreciation of the wider longer-term horizon in terms of where that spending will occur and what the Government’s financial position is. 
Interestingly during the debate on the Prime Minister’s statement today the Deputy Prime Minister pleaded that the Government was already cash-strapped and was looking at a cash shortage. Last week the Government announced to the public that its initiatives included a family assistance package and big spending in all sorts of areas but today our Minister of Finance is pleading that for the coming year the Government is already short of cash. 
I think the proposed change to the Budget Policy Statement might be received with a lot of scepticism that the Government can fail in any one period to give the total position. [ 
Interruption 
] Exactly and it might just signal that Labour after being in Government for 4 long years—and has already put up tax in 18 areas and in various forms like the petrol tax—may make the poor taxpayer face more charges. I have a lot of scepticism about the Government’s proposed changes to collapse the Fiscal Responsibility Act. We are looking forward to the submitters examining that particular issue. 
I also want to focus the public’s attention on another matter that the legislation is meant to address and that is the issue of the State sector providing standards value and integrity. Certainly during the last 4 years we have seen a very sad state of affairs regarding how some senior management in entities such as New Zealand Post and TVNZ handle their financial statements which were supposed to be scrutinised by their internal auditors and executive management. 
But when there are scandals when there are outrages over spending as far as the taxpayer is concerned those matters eventually have to be pursued by very hard-working members of Parliament—such as my parliamentary colleagues the Hon Murray McCully and ACT’s Rodney Hide. Without the dedication and tenacity of those members of Parliament the senior management of those State-owned enterprises would have refused to answer questions from the select committee and would have had to be dragged to the Privileges Committee and that wastes more taxpayers’ money. 
The Audit Office took 12 months to find the truth of the TVNZ matter and I would say let the chairman off the hook. I do not think that that is the type of behaviour the standards or the values that the public should tolerate. The Labour Government always likes to introduce legislation and use a lot of glossy terms such as “to raise the high standard of the State sector provide leadership and have a coordinated approach”. But I want to say on the record that Labour’s past performance simply does not stack up. 
When this legislation is referred to the Finance and Expenditure Committee the hard-working members of Parliament—particularly from National ACT and New Zealand First—will certainly make sure the bill which makes changes to the well-received Fiscal Responsibility Act is well scrutinised. I have to include the Greens in that because every now and then they put in some good work and we cannot rely on Labour and United Future to raise any questions during those select committee hearings. Secondly we want to ensure that the bill steps up to the mark in terms of setting new standards of accountability for State sector performance. 
The Labour Government should not take National’s support for the referral of this billto the select committee as an indication of anything other than that we believe it should be subject to public scrutiny. National members have a lot of reservations about the changes proposed and we certainly have a lot of reservations about whether the words in the legislation can actually be implemented adhered to and monitored properly. 
Bill read a first time and referred to the Finance and Expenditure Committee.referred to the Finance and Expenditure Committee 
Meat Board Restructuring Bill 
First Reading 
Hon JIM SUTTON (Minister of Agriculture) 
: 
 I move  
That the Meat Board Restructuring Bill be now read a first time. 
 At the appropriate time I intend to move that the bill be referred to the Primary Production Committee for consideration and that the committee present its final report on or before 27 May this year. I also intend to move 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; on a Friday in a week in which there has been a sitting of the House; and outside the Wellington region on a day the House is sitting despite Standing Orders 191 193(a) and 194(1)(b) and (c). 
The Meat Board Restructuring Bill restructures the New Zealand Meat Board and replaces the Meat Board Act 1997. That current Act provides the board with statutory powers to allocate and manage access to meat export quota markets and to collect levies from livestock farmers for industry-good activities such as research. The board does not trade in meat or meat products. The bill provides for the Meat Board to focus on its quota management role. It will continue to allocate monitor and manage access to markets where New Zealand has access for specified quantities of meat at zero or concessional tariff rates. 
The bill also provides for the Meat Board to retain the livestock industry’s reserves. It also enables the meat industry to join with the wool industry to fund industry-good activities under the Commodity Levies Act. The impetus for this reform arises from the meat and wool industries’ desire to combine their industry-good functions into one entity. They would like to do this when the transitional levy on wool under the Wool Industry Restructuring Act expires on 30 June this year. The desire for a single meat and wool organisation was demonstrated in a referendum of meat and wool farmers in August last year in which farmers strongly supported the proposal to bring meat and wool industry-good functions into one entity funded under the Commodity Levies Act. Bringing together meat and wool industry-good activities will assist the two industries to achieve synergies and cost efficiencies. The industries will also benefit from the better accountability provisions in the Commodity Levies Act particularly the requirement to seek a levy payer mandate every 6 years for the continuation of the levy. 
The bill retains and enhances the board’s powers to allocate monitor and enforce access rights and conditions in relation to meat export quota markets. These markets are of significant value to the New Zealand meat industry and to the economy and access to them must be safeguarded. Given that quota administration is a regulatory activity and the fact that quota rights are owned by the Crown it is appropriate that quota functions remain with a statutory body like the Meat Board. 
The bill contains new provisions for compliance audits of the board’s quota management systems set against the yardstick of New Zealand’s international treaty obligations relating to meat export quota management. The audits will increase the board’s accountability to the Government for its role in ensuring compliance with international obligations relating to quota market access. Like the current 5-yearly performance and efficiency audits which the bill discontinues the compliance audits will be funded by the board. The board will have the power to recover the costs of its quota management systems including the costs of audits from meat exporters to whom the board allocates quota. 
The Meat Board holds around $100 million in reserves. These reserves ultimately belong to livestock farmers. Livestock farmers have voted in support of retaining the reserves in the Meat Board. The bill strengthens the provisions around the spending of the reserves and provides for the board to hold the industry’s reserves for three key purposes: to assist the meat industry in responding to any major industry crisis; to safeguard quota markets and the integrity of its export quota management systems; and to fund specific industry-good projects. The bill provides for the board to maintain and make available its reserves policy and to consult farmers on any changes to this policy. 
The Meat Board will have a board of directors comprising eight or nine directors who will also be directors of the meat and wool industry-good body plus another two independent directors appointed by the Minister. The two ministerial appointees will ensure that the board has directors with in-depth expertise in the international meat trade quota management and international trade relations. Six of the eight or nine directors to come from the industry-good body will be elected by meat and wool farmers. 
The bill applies normal tax rules as far as possible. This treatment of tax issues is largely consistent with how tax issues were handled in previous producer board reforms. The key differences relate to the meat industry’s desire for the Meat Board to hold the industry’s reserves but enable the industry-good body to spend reserves on specific projects. To facilitate this the two entities will be consolidated for tax purposes. This means that any movement of funds between the Meat Board and the industry-good body will have no income tax gift duty or GST consequences. 
This bill has a high level of industry support as demonstrated in the farmer referendum in August last year. The bill will enable greater safeguarding of the benefits flowing from access to quota markets greater accountability to levy payers and the capture of synergies and cost efficiencies in the joint delivery of meat and wool industry-good functions. The Government would like to see the bill enacted by 30 June 2004 to enable the meat and wool industries jointly to commence their levying and industry-good functions under the Commodity Levies Act on 1 July 2004. I commend the bill to the House. 
PHIL HEATLEY (National—Whangarei) 
: 
 I rise on behalf of the National Party and certainly do support on behalf of those 26 good members of Parliament this bill going to a select committee. Who would fly in the face of the overwhelming support of farmers as expressed in the referendum held in August 2003? A huge majority of farmers clearly said that this was the direction in which they wanted their industry to go. No one with any sense will fly in the face of those farmers—certainly not in light of what happened over the flatulence tax. That was an issue where the Government flew in the face of every farmer in New Zealand. The Government did that and it got a big lesson from it because it realised that not only do farmers—those in the agriculture horticulture and forestry sectors—pay the country’s bills but all the people in the towns and cities know it. When farmers say they want something and they have considered it at length with some common sense and pragmatism then we should support them. National is not foolish about that. So we support this bill going to a select committee. 
But we do have reservations regarding the process. Interestingly that referendum was taken in August 2003. At that time it was overwhelmingly clear as I said that farmers wanted to head in this particular direction. This bill has just come into the House. The Minister of Agriculture expects a report back by 27 May which is roughly 3 months away. He wants to pass the legislation by 30 June. That begs the question of why it has taken from August last year until now to introduce this bill to the House. I know that the Minister had 6 or 7 weeks off during the Christmas period to sun himself in the South Island but why did it take as long as that to make the decision that the Government would support the way farmers want to go? Yet the Government is asking the select committee in the period of 3 months to advertise for submissions hear submissions consider submissions ask questions fully investigate and bring the bill back to the House. Why is the Minister asking us to do that? It puts us under tremendous pressure. 
He might argue that he has requested the House to bypass the Standing Orders—that is to say he has asked the House to bypass due process—in order to have us meet on Mondays and Fridays and at any other time that is not question time in the House. I am willing to help pass this legislation. I know that my colleagues on the select committee are largely willing to help pass this legislation. But riding roughshod over due process is not the way to do it. 
I bring members’ attention to Standing Order 191 “Meetings on Fridays”. It states: “Except by leave of the committee a select committee may not meet on a Friday in a week in which there has been a sitting of the House.” I will not go into the reasons for that. We all know what they are. Apart from the detailed reasons related to the running of the House we represent electorates as far-flung as Whangarei and Invercargill and we need to be in those electorates serving those people on Fridays. But apart from that the fact of the matter is those are the Standing Orders and this Government has asked us to ride roughshod over them so that we can get this bill through Parliament simply because the Minister did not pay attention to the fact that farmers overwhelmingly said last August that they wanted this legislation passed. I raise that with you Madam Chair so that you can make a note that rushing legislation through the House should not become a habit with this Government. 
Sure farmers may agree with it. I understand that on weighted stock numbers 76 percent voted for the sheepmeat proposals 77 percent for the beef proposals 72 percent for the wool proposals and 67 percent for the goat meat proposals. So there is overwhelming support amongst the farming sector. But that is no excuse for cutting through due process and rushing the legislation through the House. We need to get it right. The meat industry is hugely important to New Zealand and by rushing the bill through the House and not paying attention to detail we could make mistakes that would have massive repercussions for our export industry and for our economy at home if we fail particularly in relation to our trade obligations with other countries. I raise that with you Madam Chair and wish you to note it. 
On the substance of the bill it is to— 
Madam DEPUTY SPEAKER 
: The member should not use the term “you” to the Speaker and it is “Madam Speaker” not “Madam Chair”. 
PHIL HEATLEY 
: That is rather petty Madam Chair but I do apologise. 
Madam DEPUTY SPEAKER 
: The member will withdraw and apologise for that remark. 
PHIL HEATLEY 
: I withdraw and apologise. The substance of the bill provides for the restructuring of the board while maintaining the board’s quota and reserve management functions. I am interested in how the board is to fund itself now given that its ability to levy will be extinguished. I notice that clause 36(1) provides that fees can be charged in relation to quota management systems and I will be interested when the bill is before the select committee in checking whether that will be the sole or major way that the board funds itself. I understand that it is allowed only to charge fees that: “(a) are fair and reasonable; and (b) provide the Board with adequate funding to carry out its quota management function for the relevant quota management system including general administration costs.” I am not sure how far that extends to other activities of the board that are so minor that they are not even mentioned in the bill. That will be quite interesting. As a member of the Primary Production Committee I will be checking that those things in clause 36 have been considered. 
I do note that the Regulations Review Committee under the Regulations (Disallowance) Act will have the ability to scrutinise those fees in the future. The Minister will correct me if I am wrong but I believe that is the case. Those entities or individuals being charged fees will be able to go to the Regulations Review Committee annually and have those fees reviewed if they should go through the roof without justification. It will be interesting to see that. I am pleased to see that there will be a check on those fees. Levies by their nature provide a check because with the board structure farmers can directly challenge them but now that the levying powers are being taken away I note that the fees can be readdressed through the Regulations Review Committee and I am pleased to see that. 
The New Zealand Meat Board will remain in existence. It is authorised to distribute the assets of livestock farmers. Currently I understand those assets to be about $100 million in terms of reserves—which is an awful lot of money. I am sure lots of people in the industry have lots of good uses they could put it to. But as long as the board remains prudent it will certainly have the support of this House. 
The bill also provides for the board of directors to comprise eight or nine farmers and meat-processing representatives. It is interesting that the Minister of Agriculture may appoint two directors and I encourage the Minister to pay a lot of attention to the industry over the next few years so that when he nominates those two directors he does not just put in party hacks—it is not just a quango—but puts in those who will honour the industry with integrity and attention to detail and who will have some sort of experience or interest in the industry itself. I encourage the Minister of Agriculture to pay attention to the meat industry. He does not have to fly overseas every week for meetings to do with his trade responsibilities but I encourage him to pay attention for the very reason that he will have a direct influence due to his appointing those two directors on the process. 
DARREN HUGHES (Labour—Otaki) 
: 
 I rise to support the first reading of the Meat Industry Restructuring Bill which is an important bill and one that I know will be welcomed in my electorate of Otaki where there is a significant economic sector in this area. The bill meets the Government’s criteria for this kind of reform. It has the support of the participants of the industry. That was made pretty clear in the referendum in which farmers voted overwhelmingly for the new structure. It is fair to minority interests—nobody is disadvantaged by the changes—and of course it is in the economic and national interest of New Zealand. So it meets the criteria that we have put up for reforms in this sector and it will enable the New Zealand Meat Board after its restructuring to enhance its ability to manage meat export quotas for the country. It is very important legislation and I am sure it will receive the full attention of the Primary Production Committee as we continue this series of important reforms for New Zealand agriculture. I support the bill. 
R DOUG WOOLERTON (NZ First) 
: 
 New Zealand First likewise will support this bill to the select committee. In doing so I say that people in New Zealand tend to forget that meat wool dairy and all the other forms of agriculture in spite of all the initiatives we have had over the years are still— 
Phil Heatley 
: Are not the sunset industries of this country. 
R DOUG WOOLERTON 
: —are not the sunset industries of this country; they are the main things that bring money into the country for us to spend on our lifestyles. We depend on those things and they set the benchmark for how well we live in this country. What is less understood are the efficiency gains that farmers have made over the years. For example meat and wool exports are up 35 percent to $6.3 billion— 
Phil Heatley 
: I raise a point of order Mr Speaker. Annette King and the Minister of Agriculture have had a liaison now for at least 7 minutes with Mr Sutton standing there speaking to Ms King with his back to the House. I ask that Mr Sutton pay some sort of respect to those on this side of the House—and to himself. Perhaps next time when they liaise he could sit and speak to the Minister. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I thank the honourable member for drawing that to my attention. I was somewhat diverted by other issues within the Chamber. I am sure the honourable Minister is well aware of Standing Order 82. 
R DOUG WOOLERTON 
: I was saying that people may well be aware of the importance of the meat industry but I do not think they are aware of the efficiency gains made by some of the industries in the agricultural sector. Meat and wool exports are up 35 percent to $6.3 billion with 8 percent less stock. Lambing is up from 100 percent to 123 percent and more than that in parts of the country so there is a huge gain there. Beef exports are up 17 percent overall. These are the sorts of efficiency gains coming off a high base that are hugely important to this country and I have— 
Phil Heatley 
: I raise a point of order Mr Speaker. There are now— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Thank you I know exactly what is being said. I will rule. Can I just say to members that under— 
Hon Annette King 
: I raise a point of order Mr Speaker. The whip has just come to speak to two members of the House which happens all the time with whips from any party and I think the member is being incredibly precious. He is showing off. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I understand the situation with the whip helping out on that occasion. I think the member was referring to other members. Can I just say to members that under Standing Order 82 it is not permitted to stand while in the Chamber. Members must take a seat. 
Hon Brian Donnelly 
: He’s deliberately trying to break up your speech. 
R DOUG WOOLERTON 
: I have forgotten where I was up to but I think I was talking about the efficiency of the meat industry. 
It is hugely important for us to guard our quotas overseas. I have spoken about efficiencies and now I want to speak about quotas and how valuable they are to this country. We have seen a much-lauded “free-trade agreement” that was to be negotiated by the United States and the Australian Government. We note with some concern but no surprise unfortunately that meat is not part of that although it will be in 18 years or something I think. Sugar is the same which is not a matter of interest to New Zealand but it certainly is in Australia. In other words countries are very keen to do deals when it comes to manufactured goods but certainly not when it comes to agriculture. 
Across the world unfortunately and especially in the countries that we trade with there is a situation of huge tariffs and huge protection for the home industry. Therefore quotas have been negotiated with blood sweat and tears and I applaud the Minister for Trade Negotiations and the Government as I applaud the international trade Minister in the previous Government of a different persuasion because they do a very very difficult but hugely important task for New Zealand. 
These quotas must be guarded to the nth degree because they are gold. They are our only guarantee into countries with high tariffs and they must be nurtured. Therefore like Mr Heatley I have no problem with the Minister on behalf of the Government appointing a couple of directors to the New Zealand Meat Board. I have no problem with the extent of the legislation that ensures the Meat Board will nurture those quotas for without them we have no guarantees. We sell a huge amount of meat over the quotas in various countries but it is quotas for which we get the most valuable amount of money. Unfortunately I do not have the figure with me but I am sure that subsequent speakers will tell members the exact difference in price between quota meat and other meat but it is huge and it is valuable. 
I commend those who are searching out—and the Meat Board is one of them—trade with China Taiwan and lots of other emerging economies that will be hugely important to New Zealand in the future and in the near future as well. I make a plea to remind members that it is Europe the United States and countries of that ilk that have the taste for the products we sell in New Zealand. We understand those markets and we have traded with those markets for years—sometimes hundreds of years. 
They are countries with high levels of disposable income a high standard of living and they are carnivores—they eat meat. We sell meat and the more we can sell to them the better. Mr Donnelly is giving me a look. I do not know what he is thinking of at the present time but no doubt he is thinking of some steaks on the barbecue or something like that. But that is an important point because when one talks about new countries it takes a wee while to get those markets going. It is the countries that we have traditionally sold to and where we hold quotas that we need to protect and nurture because that is where the main amount of good dollars comes from. Those quotas need to be looked after because they have been hard won. 
I want to talk for a couple of minutes about the danger of a high dollar to the farmers of this country and in this case to meat exporters. For every rise in the dollar there is a subsequent erosion of the spending power of our agricultural people. New Zealand First as opposed to some other people does differentiate between the export dollar that comes into our country and we would like to see economic activity generated by our exports. We believe that consumer-driven economic activity is a different thing altogether. It leads to inflation and to false pricing within our country. It is simply not based on productive enterprise so it is false. The bubble is doomed to burst at some stage if economic activity is looked for from that area. With productive exports from farms and agriculture we are not so reliant on imports and so there is a larger percentage of that dollar returned to this country. It is the one that sets our standard of living and the one that we must seek. 
It is important that we at least see the Government trying to talk our dollar down. We cannot continue to have the dollar at US70c and prosper. New Zealand is coming down off the back of the Kiwi at US45c which created a huge amount of economic activity in this country but going into the year ahead with the dollar at US70c all New Zealanders—I repeat all New Zealanders—will notice the lack of income that that creates. We support this bill to the select committee. 
IAN EWEN-STREET (Green) 
: 
 The Greens are pleased to support the progress of the Meat Board Restructuring Bill to the select committee. Members will be aware that this legislation became essential when the Wool Industry Restructuring Act passed into law as the meat and wool industry-good bodies were to be combined under that Act. 
I am personally very pleased that the farmer vote on this bill was considerably less equivocal than the vote on the restructuring of the New Zealand Wool Board. Some members may recall that the Greens voted against that bill for a couple of reasons. Firstly we perceived that there were doubts over the farmer mandate for the proposed new structure in terms of the numbers of farmers who voted and secondly the new governance network as outlined in that Act appeared to at least have the potential to disenfranchise farmer shareholders. 
Subsequent events have shown that at least some of our fears have been realised but this is probably not the time to debate them. So yes I am relieved that there is a mandate from farmers and that it is more secure for the New Zealand Meat Board than for the restructuring of the Wool Board. 
In essence this bill is quite straightforward. It divides the Meat Board functions into two. The board itself remains with a number of functions. First of all and perhaps more important as my colleague Doug Woolerton said the quota management functions especially in respect of sheep products to the European Union and beef to the United States. The quotas are hugely important not just to the industry but to New Zealand as a whole and they must be protected. I think everybody recognises that. 
The board will also have responsibility for management of the industry’s financial reserves in response to the wishes of the farmer shareholders and I am really pleased to see that that remains. They will also have accountability for the actions of the board which is more than I fear may happen in the Wool Board restructuring. They are also responsible for the registration of exporters. 
On the other hand the Meat Board will lose a number of functions. First of all its industry-good function; secondly the power to collect and spend levy moneys; and thirdly its 5-yearly performance and efficiency audits which are to be replaced with compliance audits and the farmer vote—although I remain unconvinced that a farmer must have such a high minimum number of sheep or cattle to be entitled to vote. I still have trouble with the idea that a farmer must have had a minimum of 250 sheep to vote even though farmers have been paying levies in some instances for many many years. 
The Greens are very pleased to note that the financial reserves of the industry will be managed by the board and spent by the industry-good body. I am not sure whether it has a name yet; the most recent one that I have heard is the Single Organisation Ltd. Is that still the case? 
Darren Hughes 
: It’s quite catchy. 
IAN EWEN-STREET 
: Yes whatever. The kind of spending that is being mooted is to cope with crises such as outbreaks of foot-and-mouth disease or BSE—mad cow disease—or something of that order that would obviously bring the meat industry to a standstill overnight and probably bring the whole of the New Zealand economy into free fall very soon thereafter. 
The industry-good body should also spend money on the integrity of the quota functions. First of all managing the quota functions is important but as I said earlier maintaining their integrity is also essential. 
The third issue that the industry-good body is to look at is projects. Now these are not very explicit but I have thought about them and personally I would like to see these projects include research into the costs and benefits of moving the meat industry into an increasingly organic regime for instance. I know that many farmers and a number of members like my colleague Mr Eckhoff who is sniffing at me— 
Gerrard Eckhoff 
: I haven’t said a word. 
IAN EWEN-STREET 
: —who is about to sniff at me take fright at the very word “organic”. They think there is something desperately wrong with it. Maybe they still have these outdated— 
Gerrard Eckhoff 
: I’m organic. 
IAN EWEN-STREET 
: The member is genetically engineered. Maybe they are locked into their outdated perceptions of the people who practise organics rather than the organic processes themselves. Almost all farmers are intuitively aware that for the industry to survive in the longer term it must embrace sustainability not only in an ecological sense but in an economic one as well. For many years now we have been embroiled in a constant pursuit of higher productivity: more and more productivity from the same area of land. But that I am sure will eventually be replaced by the realisation that we have to live within the capacity of the planet and more particularly in respect of farmers to live within the capacity of the soil to sustain the industry. 
In this industry in particular that of course means pasture crops. At the same time as living within the carrying capacity of the land using organic techniques we also get the benefit of having lower input costs because chemicals cost a lot of money. There are transportation costs company profits—all that sort of thing. And there are also economic returns to farmers—higher farm-gate returns—from having organic produce. 
I remind the House that ours is a market-driven economy and the market signals for this industry in particular are unequivocal. Consumers particularly in our elite markets of Europe Japan and the United States increasingly want high-quality meat products. They want them with little or no chemical residue and they are also very interested in the traceability of the product. We hear stories about supermarkets in the European Union for instance that have television screens above the lamb chops department where they show videos of frolicking white little sheep. The implicit understanding is that those frolicking white little sheep have become their nice little lamb chops on the other side of the world. It is important to them. And of course the lambs are tended by a kindly green farmer with a crook rather than a motorbike and dogs. 
At the same time those very same markets that are saying they want high quality low chemical residue and traceability are also saying that they do not want genetically engineered product. Whether they are logical or rational is irrelevant. The fact is that consumers utterly reject genetically engineered food products at least at this time. It certainly seems to be going into the foreseeable future as well. 
There are utterly compelling economic reasons for not embracing genetic engineering. I have been through them on a number of occasions in this House and it is probably not appropriate for me to revisit them now—to the great relief of my colleague Mr Eckhoff. But I encourage the industry-good function Single Organisation Ltd to spend time and money on investigating the question of genetic engineering for livestock farmers. It really is an important area. We are being forced to embrace it by the Government and Federated Farmers of New Zealand is also supportive. But the grass-roots farmers—by most polls around 70 percent of farmers—simply do not want it. I believe that one of the major functions of the industry-good body is to do some independent work and establish hopefully once and for all whether it is worth New Zealand embracing genetic engineering. The economic analyses that have been put together so far and this includes the Government’s own one that was released the day before Easter—which shows us how good the news was—show without any doubt at all that embracing genetic engineering will be disastrous not only for the agriculture industry but for the economy as a whole. 
Returning to the bill itself the Greens are pleased to support its passage to the Primary Production Committee. 
GERRARD ECKHOFF (ACT) 
: 
 I rise to speak in this debate as something of a rather rare species if not an endangered species. I am probably the only MP in this House who returned to the farm this weekend and got my hands dirty. I shifted a few sheep and turned off the irrigator. I am sure the House would be delighted to learn that the exodus of the million or so lambs out of the east coast of the South Island has stopped and we can be extremely grateful for the rains that have occurred. 
In listening to the previous speakers—and many made very good points of course—one thing I can say is that the importance of the agricultural industry and the pastoral industry is still grossly underrated in the eyes of many New Zealanders. It is not that long ago that the Tourism Board did a survey. In that survey it asked visitors to New Zealand what the most iconic aspect of New Zealand was. What was it that they most recognised when they were overseas or in New Zealand? What was the thing they most wanted to see? Interestingly enough it was not the kiwi or Janet Mackey or whomever else. It was in fact the sheep. That is what visitors to this country recognised as being the most important iconic thing—or certainly animal—in this country. It is quite an interesting aside. 
I support of course—as everybody else does in this House—this bill going to the select committee which is not to say that we in the ACT party do not have some concerns about this bill. I will reflect on the meat industry’s not too distant past. Prior to 1984 we had things like supplementary minimum prices and we had Government controls and we even had at one time the Meat Board actually exporting meat. What a disaster that turned out to be. It is also worth thinking about what life for a farmer after subsidy was like. We were getting approximately $10 for a lamb and for an old ewe we were lucky if we did not get a bill. Many farmers did get a bill for their old ewes back in those days after subsidies were removed. 
The industry was forced to get itself together and I am delighted to say that many farmers in this country have received up to $120 for a lamb when the exchange rate was down at shall we say more favourable levels. Today we are getting between $50 and $60 and between $30 and $40 for old ewes. I say those things as a tribute to the way this industry has picked itself up over the last 20 years and has really started to swim. 
One of the most successful companies still farmer owned is the Alliance Freezing Company in the scenic south—when it picked up Waitaki I think at politicians’ behest many years ago. I believe that Alliance is now our leading meat-processing company. We have moved on so far to the extent that we now have robots processing carcasses. That is a huge advance for this industry just in the period of 20 years. 
Other speakers have alluded to possibly the most important aspect of this bill which is to manage the hugely important quota system that allows exporters access to the high-priced markets. For far too long New Zealand was pouring product into low-priced markets in the Middle East and others. We now recognise that the most important markets to us are in Europe and the USA. We are unfortunately still under the quota system. I would love to see a total free-trade system where we can export and import to our heart’s desire. But in fact we do have this quota management system in place and the board’s duty under this bill is to continue to administer this quota. 
Can I just offer a moment or two of thought about this quota system? The Primary Production Committee has just gone through over a year’s inquiry into the scampi quota. That was all about who got what under a quota system. The potential—I emphasise the word “potential”—is possibly there for something similar to occur in the meat industry if we are not very very careful. As I understand it a case is going to the Privy Council very shortly alleging unfairness in the distribution of this very valuable meat quota. We certainly do not want to get into a system where some sort of old boys’ club is developed where the existing exporters receive an appropriation of any new quota and the new players that we all welcome into this industry receive little or nothing. The allocation system that the board has developed and will probably refine over a period must be transparent so that farmers and other companies can see that it is being totally fair and totally up front that everybody is getting their fair share and not having a system where the allegations—as I alluded to earlier—of unfairness and even corruption were levied at many players within the fishing industry during this scampi inquiry. 
One of the other concerns I have is that the new board that now incorporates part of the wool industry must not get top-heavy. It has real potential now with its developing size to get bigger and bigger and therefore more costly. The board must continue to look at ways of downsizing itself. I think it was Mr Ian Ewen-Street who said there were some very real concerns about the restructuring of this industry. I do recall members of the board expressing some concerns about the vote—whether we continued with a meat board. So the board moved to continue with the quota system and rightly so. But there was a very strong body of opinion that said to the board that it did not want to see this industry get top-heavy and bureaucratic and that we want to be able to retain our control. There is now an industry board where exporters and farmer representatives work together hopefully for the good of this industry. That is as it should be but we must always make sure that the balance is right. 
One thing that does concern me is the need—as the Government puts it—for some form of oversight by the Labour Government. I ask the simple question—why? This industry right now manages itself. It does not need oversight or political influence. That is what I do not like about this bill. Many farmers have a concern that there will be a continuance of political interference and oversight of this industry—something the industry does not want or need. I am concerned about the very wide powers given to this Minister under clause 11 “International obligations”. Speaking as a member of the Primary Production Committee I am sure we will be looking at that issue in very close detail to ensure that the level of influence of the Government is kept to an absolute minimum if at all. 
I must say we are suffering a little bit under the high dollar at this time but I might add that the high dollar also provides a driving impetus for the industry to decommodify. So I look forward to a very exciting time in the meat industry in the future. 
LARRY BALDOCK (United Future) 
: 
 I rise on behalf of United Future to support the first reading of the Meat Board Restructuring Bill. I believe that this bill is a sensible and proper response to the request by the Meat Board for reform of its institutional structure. The overarching objective of this restructuring is based on the realities of international competition and best practice. Reconstituting the organisational structures and processes of the meat industry will help to ensure not only that its ongoing success within an increasingly tight global marketplace will be enhanced but also that the chance of it being sustained will be greatly increased. 
New Zealand’s distance from international markets together with a highly competitive playing field demand both a level of prudence and initiative. These two traits have been clearly exercised by the Meat Board and farmers alike by way of recognising the need for institutional change to better their ability to compete and manage their collective cause. For this I congratulate both parties on their instructive in the finished product as detailed in this bill before us today. 
Some may question whether the Government should play a part in the residual statutory board. When it comes to the question of the country’s specific tariff quota the necessity for Government involvement is both proper and justified. The significance of such quotas is not bound to any one industry. Their importance transcends micro-benefits and affects the economy at a macro level. They are important to the economic well-being of the country as a whole and as such should be seen to serve the national interest above and beyond the interests of a particular industry. 
A Government role in the board will ensure that the issues regarding the administration of the country’s specific tariff quotas will be addressed with due consideration given to the best interest of the country as a whole. A board consisting of only industry-elected officials may result in a greater potential to view any development opportunity or issue within the prism of their respective industry. This bill ensures that the chances of this happening are greatly reduced by the retention of Government involvement and United Future supports this. 
This bill will help to bolster our competitive advantage internationally by improving conditions for growth and innovation. In order to remain in the lead pack we must ensure through legislation that the structures put in place perpetuate conditions that allow innovation and growth to flourish without undue restraint. This bill will foster such conditions by improving efficiency. Any concerns of wavering efficiency over a prolonged period should be allayed by the bill’s provision for compliance audits of the board’s quota management systems. I am happy that these new 3-yearly audits will ensure a benchmark of efficacy of enforcement systems. By measuring standards of efficiency against our country’s international treaty obligations efficiency performance will not be a factor in the demise of international competitiveness. Moreover these audits will impose upon the board a heightened level of accountability to the Crown to ensure appropriate standards are maintained. 
There is however one issue relating to the new audit regime of which we must be watchful. This issue concerns the provision that allows the Minister to seek an unscheduled audit at any time. Although I understand the conceptual rationale behind these audits I wonder whether a clear reason-to-act provocation guideline should be drawn up—such guidelines that enable the board to set parameters in their duties to ensure that certain lines are not crossed. I put it to the House that it would be only fair for the auditing authority to communicate clear and applicable terms of reference as a guiding doctrine of best practice. Surely this would be in the best interests of all parties concerned and would go a long way to ensure that efficiency and operational success are sustained. 
United Future supports the ongoing management of industry reserve funds by the residual board. Notwithstanding the large amount under management and mindful that these assets ultimately belong to livestock farmers it is comforting to see that the bill provides for constraints on the management of these reserves. This check and balance will ensure that the board can mobilise funds only for certain reasons framed within certain broad-based best-for-industry activity. This is a judicious and responsible control of funds that honours the primacy of the farmer in the industry. It will create both a hedge for times of crisis and allow the industry to weather periods of distress that may impact on the vigour of the industry. 
It is vital that the Meat Board in its deliberations not only takes an inclusiveness approach but also is seen to act in such a manner. Perception matters nearly as much as reality. Not only will goodwill and ongoing support be offered by farmers if consulted but it will also convey to the board an awareness of the practical effects of their decisions on the farm. The gains from having a single entity are plentiful. The new organisation will be better able to position itself as an authoritative body on pastoral issues. It will be better able to provide the impetus for healthier farm profit. A single organisation will be better able to influence relevant trade policy and dealings with key markets. A new revitalised Meat Board will have a raised public and institutional profile giving more leverage to champion agricultural causes. 
The flow-on effects of this raised profile are clear and beneficial to both the industry and the wider economy. The quality of recruitment across the board will improve and an environment that promotes innovation will be crafted. The organisation’s contribution to the economy will be more recognised compliance costs will be kept at a more manageable level and the new organisation will be better positioned to leverage more Government funding as needed. Let us not forget that the backbone of our economy still lies in the hands of those who work the land and they are facing a mountain of issues that must be climbed in order for our country to move forward. To name but a few issues: sheep and beef farm profit is down 17 percent the rising exchange rate is eating away at profit there is a need to secure footholds in new beef markets in Asia and there is the spectre of a host of biosecurity threats that could devastate the industry at any time. 
This bill will go a long way in managing the risks faced ensuring operational efficiency improving the administration of the quota system and promoting the best interests of both the industry and the country. Once again I am pleased to confirm to the House United Future’s support for the first reading of the Meat Board Restructuring Bill. 
JANET MACKEY (Labour—East Coast) 
:  
I am pleased to stand today and support the Meat Board Restructuring Bill which will enable the meat industry to join with the wool industry to bring industry-good functions into one entity funded under the Commodity Levies Act. As a member of the Primary Production Committee I look forward to receiving this bill in the committee so that we can apply our usual excellent and close scrutiny of it. 
BRIAN CONNELL (National—Rakaia) 
: 
 National supports the passage of this legislation through to the select committee but I say that with some reservations and I ask the select committee to be cognisant of that. I have noticed that people are taking a pretty liberal approach or broad definition in this debate and I want to recap what this bill will do. I will read through some notes as I want to get this right. The bill provides for the restructuring of the New Zealand Meat Board to retain in legislation the board’s meat export quota management functions the management of the board’s reserve funds and the removal of the board’s industry-good functions along with some other minor changes. 
As colleagues in this House have already indicated livestock farmers have overwhelmingly voted in favour of establishing a new entity called SheepCo to manage the industry-good aspects of their enterprises as they will fall out of this restructuring. Anyone with any sense would find it hard not to support this initiative given the overwhelming farmer support for it though we must not take anything for granted. It is this Government as I recall that ignored popular opinion when it came to the “fart tax” and when it came to the Norm Withers referendum on tougher sentencing in law and order. The Government was able to thumb its nose at common sense then and I believe it could have done so now. So I am relieved to see that the Minister got on his feet and in a very constructive way said he wanted to ease the passage of this legislation through the House. 
Conceptually having an organisation dedicated to the management of quota access which is another way of saying market access makes sense. But I am struggling to see along with some other speakers in this House why we need to have Government oversight of this process. Of course I am referring to the board’s composition and the Government’s determination to have two of its own directors appointed to that board. I note that Meat New Zealand management agrees with my view. This is another example of Labour saying to industry: “We know best” and yet another example of the National Party saying: “We listen to business.” Is it any wonder that we are the 45 percent party and the Government is the 38 percent party and going west very quickly? 
On what basis would the Government claim to have a role? [ 
Interruption 
] That got Mr Cosgrove awake! When that question was put to the Minister of Agriculture he pontificated with this justification: “Quotas belong to a nation rather than the industry. Their administration was an internationally sensitive area with potential spillover effects extending beyond the meat trade. The specialist understanding of this in a clear national perspective cannot be guaranteed on a 100-percent industry elected board.” What arrogance this Minister has and I have to say what ignorance as well! Farmers today are hugely experienced. [ 
Interruption 
] They operate I say to Mr Cosgrove in a highly scientific highly technology driven environment and it is because of their success their expertise and their energy that we have these quotas in the first place. 
Clayton Cosgrove 
: A real farmer like Shane Ardern! 
BRIAN CONNELL 
: I raise a point of order Mr Speaker. I thought it was a tradition in this House that if members interject they have to do so from their own seats. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: That is the case. However it is only such if a member deliberately moves to interject. Mr Cosgrove has been sitting there for some time. 
BRIAN CONNELL 
: I did not mention Mr Cosgrove by the way. New Zealand farmers are the best in the world. I would like to think that they would get acknowledged rather than have the Government put some sort of watchdog body on them. This Government has the perception that all farmers are just a bunch of cow-cockies knee deep in cowpats. That is insulting. Their use of science and technology in best practice is world-renowned. This board comprises eight to nine farmer representatives and meat processing and exporting sector representation. If they are skilled enough to be selected to the board then the last thing they need to feel is the constraining hand of this bungling Government and its bureaucrats. What is the point of having a dog and barking at the same time? The role of the board is clear. Its instructions are mandated for goodness’ sake! 
Phil Heatley 
: I raise a point of order Mr Speaker. Mr Peck over there should not be allowed to stand up all the time to interject in that way. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I did not notice Mr Peck standing. 
Phil Heatley 
: I thought he was standing. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The member is trifling with the Chair. I warn the member that that behaviour is not acceptable in this Chamber. Points of order are serious issues. 
BRIAN CONNELL 
: I raised the matter of interjections with you a few minutes ago and Mr Peck continued to interject and he is not in his seat. He has interjected constantly and you are now allowing that to continue. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The situation with regard to members sitting in another seat is covered in  
Speakers’ Rulings 
. It is an indication that members must not move to facilitate interjection. The honourable member has been sitting in that seat all during this debate. 
Phil Heatley 
: I raise a point of order Mr Speaker. We appreciate that Mr Peck shifted there some time ago but he has interjected consistently while he has been there. That is the point we are making. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: If I notice that that is happening I will remedy the situation. 
BRIAN CONNELL 
: The point I was making is that the role of the board is clear. Its instructions are mandated. It is therefore highly insulting to put on the board two members who are simply there as the Government’s guard dogs. The message is very clear: “We the Government do not trust you.” That is something the National Party takes very strong exception to. Why should farmers trust this Government to make appointments when its track record does not stack up? After all the Government can claims guys like John Davy and Ross Armstrong. That will certainly fill the farming community with huge confidence! And it is rather rich coming from a Government that has devastated relationships—I repeat devastated relationships—with Australia and America to such an extent that America and Australia have done a trade deal and we have been left out in the cold. We will pay dearly for that as a country. To those poor misguided souls opposite who argue that Australia did not get much anyway—and that is code for their self-justification for their appalling handling of this process—I say that Australia is pragmatic. Australia knows that to do a deal with the sole superpower at least puts it in the game. Australia’s deal is a starting point not a finishing point. 
When we compare that with what we have—thanks to Mr Sutton and his cohorts—we see that we do not have a course of dialogue with two of our major trading partners. It will cost this country billions of dollars. The great irony of it is that we are speaking about quota access yet because of this Government’s bungling Australia has just had its beef quota increased with America while we languish out in the cold. I have more faith in our sector’s experts than I do in this Government’s gofers and accordingly I ask the select committee to be very cognisant of this. It is bad enough that this Government ignored the agricultural sector for so long without adding insult to injury. 
The other issue that concerns me is the spectre of compliance audits. This smacks of Government interference: “We know best. Do it our way or else.” This is not an oversight role; this is just straight-out interference. I say to members in this House that they should simply set the board some performance criteria and ask it to report against those as any other board would. I think this is something the select committee has to have a very hard look at to make sure that those criteria are carefully set. 
One other issue I want to raise before I conclude is clause 55 which provides for the board to charge fees for recovery of costs in relation to its registration function. For the sake of the officials I point out that there is an error on page 5 of the explanatory note of the bill. It is fine to charge fees but implicit in this relationship is an obligation for the board to perform against farmers’ expectations. After all it is their money. The select committee needs to make this very clear when it addresses this in its final draft of this legislation. 
JILL PETTIS (Labour—Whanganui) 
: 
 I am surprised at that member’s rather revealing and Freudian comments about attitudes towards the farming community. I suspect that his comments reflect perhaps something that he might think but not necessarily say out loud and it most certainly is an attitude that is not shared by this Government. 
This bill has a high level of industry support. That was demonstrated by the very strong support that came through in the referendum held in the farming sector in August last year with a very strong result in favour. The bill will enable greater safeguarding of the benefits that will flow from access to quota markets greater accountability to levy payers and the capture of those synergies and cost efficiencies that are achievable in joint delivery of meat and wool industry-good functions. This is a good bill and I believe it is in the interests of the sector to get it passed as quickly as possible. 
SHANE ARDERN (National—Taranaki - King Country) 
: 
 It is with some pleasure that I rise to speak in favour of this bill being put to the Primary Production Committee and it is for a number of reasons. One is that unlike the Government the National Party understands the importance of these industries and we understand the importance of farmers to New Zealand. Unlike the Government we understand how much the meat industry is worth to this country. The combined efforts of these industries produce $6 billion worth of exports annually. 
It is with some joy I guess that I know I now have in this House some farmer support from my colleague from Rakaia who like a limpet from 100 yards away latched on to what this Government is about—that is once again getting its sticky fingers into an industry in which it has no place of which it has no knowledge and where it should not ever bother to go—and I will talk to my colleague later about what that means. 
Farmer support for this measure was overwhelming. I heard the member for Invercargill say that it was overwhelming but he did not know how overwhelming—or it might have been the member for Whanganui; it was one or the other. However I inform the member over there that 76 percent voted in favour of a stock number weighting. There will be a variance in figures if we use the farmer numbers but this was on a stock number - weighted vote. The farmers were in favour of it. They looked at all the pros and cons and said that this was the way to go. They wanted this to go through a robust process to a select committee and into being as soon as possible. We in the National Party will do our best to make sure that happens. 
Quota are negotiated Government to Government. That is how it is done—Minister to Minister Government to Government. Quota are hugely important and that is why this bill is important. It would be absolutely devastating to this industry and to New Zealand if these quota were damaged in any shape or form through the process of changing from the two separate entities we currently have to the one proposed. For that reason huge effort needs to go in to make sure that no damage is done to the quota and that the process cannot be used as an excuse by foreign nations that do not want us to have quota access to opt out of their negotiated position in some way or another. I know that the select committee will consider this deeply and will put in a huge amount of effort on it. 
However that does not mean to say that the quota belong to the Government. Quota are negotiated between Governments. They do not belong to them; they belong to the industry. Here is the philosophical difference. Without the industry producing the goods with which we can negotiate quota access we do not have any industry. It is as simple as that. Labour socialists do not understand but somehow consider that the industry magically produces high-quality product for export and develops the markets but do not have the nous the wherewithal or the business acumen to manage the process. So they get their sticky fingers into it. They say: “Look you can’t have a board of farmers running this important industry.” They have only built it from nothing to a $6 billion industry! What would they know about it! The same thing applied in the dairy industry when we had that debate: “These farmers are incompetent. We cannot have them managing this. The Government has to manage it. It has to get involved and start managing it.” 
The reality is that the Government does not have to get involved; it does not have to start managing it. The Government has to set the standards and the rules and get involved in the negotiation when it comes to State-to-State quota access but it does not have to get involved in the management of the export industry. Therefore I tell the farmers out there who may be listening to take particular notice of who the experts are that the Minister decides need to be appointed to this board. It is good to see that eight or nine farmer directors will be on the board when it is put together. 
I have just come from the Dairy Farmers of New Zealand conference in New Plymouth a few hours ago. It was refreshing to listen to a bunch of farmers talking about Government policy. They do not muck about in the way we hear bureaucratic and socialist types muck about—like this Government has. That is why as we can tell from reading the polls this Government is on the slippery slope. Its numbers are up. Government members might start getting out around the traps and finding out what they did wrong. Here is a classic example of where they have decided to get their sticky fingers involved. I accept that when it comes to negotiating market access and generating markets an expertise is required. If we look within all the primary production industries we will find a huge depth of expertise that will not be found in any other industry anywhere else in New Zealand. If that is not so why have other industries not passed them out? Why is it that year after year our primary production industries have had growth that exceeds that of any other industry? Despite the fact that we had Labour Governments that said it is a sunset industry and we can kiss it all goodbye and the sooner all the land between Auckland and Wellington is turned back into a nature park reserve the better—despite the fact that that was the forecast of Labour Prime Ministers—this industry has grown year on year faster than any other industry and it is still the backbone of the country. 
It is for that reason that farmers will line up behind the National Party and vote this lot out. They have had enough of the Government’s sticky fingers getting involved in things such as negotiating quota and appointing people to boards. The formation of SheepCo and the process that the industries went through in getting to that point has been an evolution. Some would argue that some of this should have happened more quickly and I know that our colleagues from the ACT party would say that it should have happened years ago and probably that it has not gone far enough. Some on the left would say it has gone too far and it should not have happened as quickly. At the end of the day pragmatic business people whether they be farmers industry leaders or people out there running a normal small business in Wellington City ultimately will come up with the right decision. Their track record demonstrates that is so. If there is any evidence that that is not so on a wholesale basis then people who oppose this kind of approach should bring it to Parliament and demonstrate it to us. I have never seen it. On the other hand what we have seen when we allow Governments and Wellington-based bureaucrats to make decisions on behalf of the wider community and to make decisions on behalf of industry is some major damage being done. When that has been allowed to happen over the years some major damage has been done. 
This bill is necessary and is important. The farming industry wants it to happen. The National Party will be vigilant I am sure on the select committee. When the bill goes through to select committee they will be making sure that all the things that are taken care of in this bill like industry-good functions are brought together in a way the industry is happy with so that it can go forward and be prosperous and so that New Zealand can be prosperous as a result. 
MARK PECK (Labour—Invercargill) 
: 
 I thank the member for his contribution and for acknowledging that there is a very strong level of support amongst farming communities for this bill—a matter that was ignored by the National speaker previous to him who seemed to be unaware of that. I also say to the member that it is a real pity he is not the Opposition spokesperson on agriculture. I had the privilege of sitting on the Primary Production Committee in the last Parliament. That member contributed very very well indeed to the workings of that select committee. At the very least he should be the associate spokesperson. One would think they would have a good north/south split but to put Katherine Rich a list member from Dunedin on the list as associate spokesperson I think is an insult. 
Clayton Cosgrove 
: He should be on the committee. 
MARK PECK 
: Indeed he should be on the committee because he did contribute and contributed quite well. 
I do not want to take up a heck of a lot more time except to congratulate those who have been involved in putting the bill together. I mention just in passing the work of Jeff Grant. He is someone who is well known to this House. The Minister remembers him well. He was a junior whip for the National Party some years ago and has worked very very closely with the Government as this particular legislation has been put together. 
It might come as an enormous shock to many on the opposite side of the fence that I spend a lot of my own time on farms and spent time on Taranaki farms in my younger days. Shane knows about my Manaia days and I tell him that I am still a member of the Manaia Golf Club by the way. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The member must use the member’s full name. 
MARK PECK 
: Yes indeed—Mr Ardern. Can I also say that having two brothers-in-law who farm in Southland I spend quite an enormous amount of time in and around the Southland farming community even to the point of going to a drought meeting in Lumsden which the member for Clutha-Southland did not even bother to turn up to. We know there are some issues for those farms as a result of the drought and so on so this particular bill is all part of assisting farmers in their marketing efforts as they look at how they are going to move away from the pure commodity thing to the value-added etc. 
This is a very good bill and I am sure that if Shane Ardern were on the Primary Production Committee the National Party would scrutinise it with great relish. 
Bill read a first time. 
Hon JUDITH TIZARD (Minister of Consumer Affairs) 
 on behalf of the  
Minister of Agriculture 
: I move  
That the Meat Board Restructuring Bill be referred to the Primary Production Committee 
referred to the Primary Production Committee 
 for consideration that the committee report the bill by 27 May 2004 and that the committee have the authority to meet at any time while the House is sitting except during oral questions and during any evening on a day on which there has been a sitting of the House on a Friday in a week in which there has been a sitting of the House and outside the Wellington area on a day the House is sitting despite Standing Orders 191 193(a) and 194(1)(b) and (c). 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 71 
New Zealand Labour 52; Green Party 9; United Future 8; Progressive 2. 
Noes 46 
New Zealand National 24; New Zealand First 13; ACT New Zealand 8; Independent: Awatere Huata. 
Motion agreed to. 
Resource Management (Energy and Climate Change) Amendment Bill 
Second Reading 
Hon JUDITH TIZARD (Minister of Consumer Affairs) 
 
 on behalf of the  
Convenor Ministerial Group on Climate Change 
: I move  
That the Resource Management (Energy and Climate Change) Amendment Bill be now read a second time 
. This is a small bill—it has only nine clauses. Excluding the preliminary provisions and transitional matters there are only three key clauses. The first clause changes section 7 of the Resource Management Act—that is matters to which those exercising functions and powers under the Act must have particular regard by adding the explicit requirement to consider the efficient use of energy the benefits derived from the use and development of renewable energy and the effects of climate change such as changes in typical rainfall patterns and sea-level rise. The remaining two clauses ensure the Government’s preference for national control of greenhouse gas emissions does not result in emitters facing duplication of controls. 
Except when considering the benefits of lower greenhouse gas emitting renewable energies or implementing a national environmental standard the bill removes the ability for regional councils to consider the effect of greenhouse gas emissions on climate change when writing rules and deciding on consent applications. These provisions include national direction on energy efficiency and climate change matters. They provide clarity about what councils should and should not be considering in this regard and accordingly will assist consistency in approach between councils. 
The Local Government and Environment Committee received 40 submissions along with a number of late submissions and further information. I understand that a significant amount of the material was of a very detailed and often technical nature. I thank the select committee for its thorough consideration of this material. The committee reported back to the House on 8 December last year and recommended by majority that the bill be passed with amendments. 
The amendments provided by the committee are constructive and helpful. They add clarity and correct drafting errors without requiring substantive change. Three key amendments recommended by the committee are: clarifying that efficiency of use of energy refers to “end use”; removing the unintentional narrowing created by references to “industrial and trade premises”; and clarifying that in considering the benefits of lower greenhouse gas emissions from renewable energy consideration should be given in both the absolute and the comparative sense. 
The Government’s intention when explicitly providing for the efficient use of energy in section 7 of the Resource Management Act relates to efficiencies in the use or application of energy rather than efficiencies in the initial conversion processes—for example when planning land use activities and roading networks. Accordingly the Government supports the clarification provided by the committee in narrowing the consideration to “end use”. Similarly the Government supports the clarification provided by the committee in recommending that all reference to industrial and trade premises be removed from the bill; leaving it in would narrow the scope unintentionally. 
On the last matter the committee was concerned that reference to “reduces the discharge” is ambiguous. It recommends that both an absolute discharge and a comparative one be explicitly provided for in the bill. The Government agrees to that. I commend the bill to the House. 
Hon Dr NICK SMITH (National—Nelson) 
: 
 This confused muddled bill is nothing more than a triumph for political correctness over sound policy. I do want to acknowledge the effective job that the chair and my fellow members of the Local Government and Environment Committee did in trying to make something of this mess. But I want to set out where the Government’s policy in this area is so confused and uncertain. This bill compounds the dumb decisions that have already been made by the Government in respect of climate change. It adds to the huge uncertainty that we already have in the Resource Management Act and it dumps on to councils yet another responsibility and on to ratepayers yet another cost for no good reason. This bill is not good for the environment. It will not be of any help in dealing with the approaching energy crisis and it will damage New Zealand’s growth prospects. It is just another plank in this Government’s flawed approach to the issue of climate change. 
Most New Zealanders realise it was a huge error of the Labour Government to ratify the Kyoto Protocol ahead of all of our major trading partners and that is an issue of some controversy. The Government has promised that in 2007 it is going to oppose— 
Hon Harry Duynhoven 
: Who signed the original agreement? 
Hon Dr NICK SMITH 
: We did—after Canada Australia and the United States. Our position is quite consistent I tell that member. I would like him or the Minister to explain why Labour chose to take that action. Furthermore I want the Minister to explain to the House how it is in New Zealand’s interests to impose a carbon tax on all New Zealand fuel users energy users etc. when no such tax is going to be imposed on such users in the United States and Australia or by our major trading partners. That carbon tax—and I understand that Government members want to tax anything that moves plus some others—is a major threat to the growth of our nation. 
Then we bring on top of that the silly provisions that are contained in this bill. Let us go through and look at some of those. We see clause 3 will require every single council in New Zealand to plan for the effects of climate change. Well! 
Hon Members 
: Wow! 
Hon Dr NICK SMITH 
: I am reminded of that wonderful quote from the Minister Pete Hodgson who said it was the Government’s responsibility to provide a stable climate for the people of New Zealand. Well I bet there will be a few people in the Manawatu and Rangitikei areas who want a cash-in from Mr Hodgson—the weather has not been very stable for the last 4 weeks. The global climate has not been very stable for the last 10 years the last 100 years the last 1000 years nor the last 10000 years and I am not quite sure just why this Government believes it can somehow promise stability. We know the history of the global climate. We know for instance that in the 1700s the climate was substantially colder. There was a mini - ice age. We know that in the 1300s the climate was substantially warmer. We know there was a warm period. 
There is huge uncertainty about climate change. It is very interesting that all the information that is provided by the Intergovernmental Panel on Climate Change refers to scenarios but the Government refers to predictions. The Government gives a level of certainty to the science around climate change that simply is not there—and now it is going to require all 92 of New Zealand’s local authorities up and down the country to plan for something that even the international scientists have difficulty working out. It is a dream for consultants. We all know that consultants will be employed by every council up and down New Zealand and that the costs will be passed on to the poor old ratepayer. We ask given that even scientists cannot accurately predict the effects of climate change on a global level how the poor old Rangitikei District Council or our small authorities will be able to predict and plan for it. It is a nonsense. 
I come now to the provisions in this bill about energy efficiency. Energy efficiency is one of those things like motherhood and apple pie. One has to be in favour of energy efficiency. But this bill has holes in it that we could drive a bus through. What is absolutely significant is that the bill says that people have to have energy efficiency for the end use of energy—for the end use. Let us see what that means. That means that if a person wants to build a huge coal-fired power station and applies for resource consent the council need not have any regard at all as to whether that person is efficiently using the coal—that is outside the scope of the bill. If a person wants to produce an inefficient hydro or geothermal scheme that wastes huge amounts of energy there is no problem. The Government does not seem to be concerned with that. But if one has a small business that is building a factory then the council can crawl its fingers all over that person to make sure that he or she is energy efficient because of that definition and the inclusion of the words stating that this bill will affect only “the end use of energy”. 
We all heard the Minister for Small Business John Tamihere getting stuck into business around New Zealand last week and proclaiming himself to be the great advocate for small business. Well where is that Minister? Where is he in terms of debating this bill? The provisions of this bill put an imposition on the end users of energy and those users will predominantly be small businesses. Yet the generators who are to be exempt from these energy-efficiency requirements will be mainly big businesses. That says something about the double standards of the Government the illogicality of its policy and its lack of true commitment to do anything for small business. 
Then there is the argument about the intent of what the Government is trying to achieve with this bill. I have pointed out for instance that if a person wants to get a consent for a house a farm shed or a small factory that person will now have council officials crawling all over him or her about the issue of whether that dwelling or building is energy efficient. There is an argument about energy efficiency but primarily that is for the business owner to determine. Of course a person building a house a factory or whatever other type of building will be concerned about those issues—and so he or she should be. But why have council bureaucrats crawling all over people and telling them what they think are the best ways in which people can use energy efficiently in their resource consent proposals? That is particularly anomalous when companies such as BP the Marsden Point oil refinery Contact Energy and the State’s four energy companies will be completely exempt from those requirements—that is nuts. 
National and ACT have strongly opposed this bill because there is a fundamental flaw in it: one would think that there is no such thing as a market. Under this bill one would think that there is no such thing as anybody buying electricity or paying for it. We will have a bunch of planners and stickybeak bureaucrats getting into the whole argument about efficient energy use rather than using market tools. It is National’s view that there is a very valid argument for this House to have about ensuring that the pricing of all forms of energy reflects the true costs. So it should. That is a good argument to have and we are happy to have it. What we do not want is another confused Resource Management Amendment bill that just adds to the hotchpotch and the uncertainty. That is such an important issue. 
The issues of energy the environment and the economy are absolutely pivotal for this country’s success but we will not make progress on them with these sorts of muddled ad hoc bills. We had the Resource Management Amendment Bill last year and that changed some of the rules. We have another bill—the Resource Management (Waitaki Catchment) Amendment Bill—which is going to create another special set of rules in one catchment of New Zealand. And now we have another hotchpotch bill that states that energy efficiency is important for some people but not for others and we are to have a whole bunch of council bureaucrats getting into the climate change argument. 
I simply say to Government members that we need a clear policy and a comprehensive approach. We do not need more piecemeal resource management bills. I say to this House that we should reject this bill and do a comprehensive reform of the Resource Management Act so that we can get the sort of law that will provide for New Zealand’s economic development and for the proper protection of our environment. 
MARK PECK (Labour—Invercargill) 
: 
 I have one sentence to say to that member in respect of his speech: 9 years and he did nothing. For 9 years he had his head in the sand and he did nothing about these particular issues and now this Government has to address them. 
I thought the Minister outlined the position very well indeed. This particular bill has nine clauses. It is not a very big bill at all. It does have some important principles in it and it does make some fairly important statements about energy efficiency and the role of local authorities in respect of the Resource Management Act when looking at those particular matters. I ask the member this question: what is wrong with a landfill in my area which is now taking the waste from most of our urban centres using the methane that is produced from the rotting vegetation and so on to fire a lime kiln that will be used to provide fertiliser for Southland farmers thereby reducing the reliance on coal? What is wrong with that? 
Hon Dr Nick Smith 
: It’s good. 
MARK PECK 
: It is good that that should be done. And what is wrong with that occurring in other projects as well as we look at the issue of climate change? 
I say to the member that there is no difficulty in arguing and dealing with the issues of climate change in this House. Indeed we probably need to have more debates on them. It used to be a competitive advantage in Southland that we never had to worry about drought. Yet I was in Lumsden a couple of Mondays ago to meet with farmers because of drought. What those farmers could not be guaranteed by the climate specialists who were there was whether that was a particular weather pattern or whether we were facing climate change. 
Hon Ken Shirley 
: There have always been droughts. What drivel! 
MARK PECK 
: The member can rant and rave if he likes but the truth of the matter is that as we look at what is going on not just in our country but globally we see that the changes in weather patterns around the world are such that climate change is in fact big news. 
This legislation is part of the response to climate change. It is not the Government’s total response to climate change issues. Neither is it the total response to our energy requirements either. But it is part of that. It is part of a raft of changes that will be needed as this Government addresses those issues. I think the Local Government and Environment Committee did a very good job on this particular bill and I look forward to its continued progress through the House. 
JIM PETERS (NZ First) 
: 
 This selective small bill before us is interesting because just over a year ago some members of the House took very seriously an amendment of the Resource Management Act—unlike the Government. Today this is one of two bills before the House—one shortly to be debated—that are again selective amendments to the major Resource Management Act. Neither take into account or reconcile—and this one particularly—the purpose of the Resource Management Act and neither give the direction that the Act ought to give with regard to these matters. 
In the case of New Zealand First this particular small bill is one that we utterly reject because unlike National and Labour we do not give any assent or confidence to the Kyoto Protocol. In a day and age in which first the United States and Australia and shortly Russia are about to firmly veto any part in the Kyoto Protocol—in the words of a recent  
Time 
 article it is a “dead duck”—why is our Government pursuing some first aims: to be first in the world at high cost to our economy particularly with regard to the resolution of the energy crisis that we are about to face? We are facing an emerging shortage of electricity. We are at a very critical stage in this country. We need to have a secure and stable energy supply. The bill refers to energy conservation and energy efficiency but it is not even a mid-term—and certainly not a long-term—solution to that problem because unfortunately it misses out on a major possible solution to our problem which is the modern effective use of coal. 
Our party therefore strongly opposes the bill. We believe it is an inadequate answer to the issues before us with regard to energy supply. Our stance was supported by a number of submitters. We turn to the narrative and what does it state under “Purpose”? “The purpose of the bill is to … give effect to the Government’s climate change and energy policies”—such as they are. “The bill recognises the Government’s preference for national co-ordination of controls” and I will come back to that shortly. It further states that it requires that “persons exercising functions and powers under the Resource Management Act have particular regard to the effects of climate change the benefits of efficient energy use and the benefits of renewable energy.” 
I come back to the statements made by one of the members of the committee—and I will be interested to see United Future’s stance subsequently in the debate because I concur absolutely—that: “Given the high degree of uncertainty surrounding all projections based on the science of climate change stronger guidance from central government is needed to assist local authorities in planning for the potential effects of climate change.” Unlike what the last speaker said local authorities will do that and could do that if there is guidance. Unfortunately that has not been given at all. 
If we skim through the bill in the way that Dr Smith did we see there is a lack of real guidance to local authorities. I do not believe at all that local authorities would wish to have anything other than firm direction and I therefore suggest that the Government stop the wishy-washy approach that the Minister enunciated in his opening speech in the first reading when he said in effect that there was a case for national policy standards but that they should wait. In the course of the bill’s consideration we heard further that there were no plans to give national policy statements with regard to the matters inherent in it—not at all. So we have as Dr Smith has already said a very confused bill. It might not be confusing to the Government but I can assure members that it will be confusing to those people who unfortunately have to consider applications and more important have to consider lodging applications. There is no consistency to give them guidance. There is no purpose to give them guidance. To that degree it will not be a helpful feature in our economy. 
Who would not support the idea of more efficient energy use? With regard to the bill’s intention to give effect to the Government’s climate change and energy policies I suggest very strongly that this House ought to give further consideration to the impact of the modern technology that is available for the use of coal for generation. I cannot conceive—and I spoke recently about these matters with people involved in electrical supply authorities—why we have turned aside so quickly and so easily from serious consideration of the modern coal industry. There are numerous examples. Just over 1400 miles from here in Australia there are modern technologies where pollutants are not an issue any more. In Victoria they are almost right down to every conceivable use of the by-products of coal generation. 
Hon Harry Duynhoven 
: CO². 
JIM PETERS 
: And that as well. This country has generous coal reserves. There is no energy crisis. But for some obtuse reason the Government and those who advise it are standing aside from any further development of our coal resource. Instead we have a haphazard piecemeal approach— 
Hon Harry Duynhoven 
: No. 
JIM PETERS 
: —it is—to the issue of energy. The upsides are no problem any more and any further development and research would show that exactly. Instead we do not give encouragement in this country to those who favour the use of coal for energy at all. So we are not likely to ever get to the state of the advanced technologies that are used in Australia and Europe which could be available here. By the way last year the future source for dealing with any likely shortage this year would have been coal. We use coal in its ancient form really when before us— 
Gerrard Eckhoff 
: It’s imported. 
JIM PETERS 
: As the member said imported coal when before us is the ability instead to be progressive and to pick up the whole nature of coal burning in its modern sense. 
We have a small bill which is piecemeal. It is a small bill that does not incorporate I believe—and I will develop this theme further in the Committee stage—the actual reconciling of the principal Act to this minor bill that is before us. 
In conclusion New Zealand First does not support the selective amendment of the Resource Management Act which is an effects-based Act—and this bill is not. We do not support legislative and Government bias of only one or another renewable energy source and generation. We do not support what will be a costly impost upon the community as we look to this and other energy sources as constrained and limited by the bill. We believe very strongly that there must be if this bill is to work a national policy statement. We do not want some loose ideas that will give to local authorities the very result that Dr Smith envisages could happen. Instead we need firm and consistent guidelines for all applicants—as I said earlier—for all administrators of the bill and not least for regional planning so that those can be incorporated into regional plans for the future. There is a very strong case for an affordable energy source rather than the costly one being admitted and developed in this bill. That source is coal. We do not support the further reading of this bill. 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 This bill goes to the heart of the question of what is the role of local government in restraining greenhouse gas emissions and in helping to meet our climate change obligations. So much environmental regulation and environmental policy-making has been devolved under the Resource Management Act to local government that their role in this is obviously crucial and needs to be clarified. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
JEANETTE FITZSIMONS 
: As I said in my 30 seconds before dinner this bill goes to the heart of the question of just what the role of local government is in addressing greenhouse gas emissions and climate change. That was the subject of a select committee inquiry some 3 years ago carried out by the Local Government and Environment Committee. The committee took more than a year to look at that question with the very close cooperation of Local Government New Zealand which was very pleased that the issue was being addressed. A number of our recommendations are actually implemented in this bill. 
I am very sad that in the debate so far the argument has simply become one about the Kyoto Protocol and whether New Zealand should have ratified it: as though a hundred other nations ratifying before us was not sufficient precedent as though all of Europe Japan and Canada who have ratified are not sufficient trading partners of ours to join them—collectively they are more important trading partners than the United States—and as though if Kyoto is not ratified then there will be no need to do anything about climate change. It would be just as if it would be fine for us all to go out and start killing each other if we were suddenly through some legal aberration to have no law against murder. The fact is whether or not Kyoto is ratified climate change is a serious environmental issue and the world will have to get to grips with it. Whether it is Kyoto now Kyoto later or some other agreement later there will be an international agreement on climate change and it will require us to limit greenhouse emissions. The later we start the harder we will have to cut them and it is already too late to prevent some effects of climate change affecting our children and our grandchildren. 
There will be some global warming from the emissions that have already happened so we need some policies to adapt to it. Even if the minority was right—even if the National Party and ACT were right—and global warming is not the result of human actions which I do not believe it would not make any difference. We would still have to adapt to the global warming that is clearly occurring now. Only local government can do the planning that is needed to deal with the effects of climate change because it will be a question of local infrastructure and local land use. The details of those climate change effects are still unclear as is frequently pointed out but the direction of them is quite clear. We know that sea levels will not fall. We know that they will probably rise. We do not know quite how fast and when but it does mean that when planning coastal infrastructure—which is the sort of thing that local government deals with—we need to plan it with that in mind. It is about building in more resilience to all the planning we do so that it will be more resistant to sudden changes or even slow changes in climate rainfall and sea levels. It will build in asking the “what if” question whenever we plan new developments. How will this plan cope if and when the temperature rises if and when rainfall patterns shift and if and when new pests and diseases become established. It is a matter of not relying on things just staying the same. That is one of the purposes of the bill. The select committee did not change that and a majority of the members agreed with it. 
The second purpose is to recognise the significance of the development of renewable energy and energy efficiency in trying to adapt to a climate-constrained world. If we want to continue to have a liveable way of life and a successful economy we need energy. If we are to avoid greenhouse emissions then we have to get that energy from renewable sources and we have to use it more efficiently. That is the second purpose of the bill. Section 7 of the principal Act is amended so that particular regard has to be had in planning decisions to the benefits of renewables and efficiency. So far that matter has turned in the debate today to a debate about coal. Why should we not just burn coal? We have enormous quantities of it that will last us a very long time. It is right there in the ground in New Zealand. Why do we not just burn coal? 
Let me tell the House why we do not just burn coal. There has been a huge public relations exercise going on by Solid Energy New Zealand and by those supporting the coal lobby stating that there is something available called “clean coal”. It is a myth. When one looks into their claims one sees that it is a myth. There is no doubt that modern technology can reduce the sulphur and the particulate emissions and the oxides of nitrogen from burning coal and the local air pollution—the sort of smog that really damaged London in the 1950s—does not have to be a part of coal burning these days. But that says nothing at all about its effects on climate change. Carbon in equals carbon out. It is a very simple principle of chemistry. The amount of carbon in the coal will combine in combustion with oxygen and it has to go somewhere. The ultimate place it goes is up in the atmosphere. That is where it is a greenhouse gas and that is where it causes global warming. Work has been going on around the world to try to find some way of trapping that carbon dioxide and locking it up for ever. The methods that do that all turn out to be more expensive than the energy itself is worth. 
So telling us that sequestering carbon dioxide is just around the corner scientifically is nonsense. Yes there is ongoing work on it. The principles of thermodynamics tell us that it is very unlikely that we will have a cost-effective way of doing it. If someone comes up with a cost-effective way of doing it that will be time enough to decide that we no longer need to worry about burning coal. Until somebody does that we cannot afford to replace the natural gas that we have just lost with coal which has twice the greenhouse impact for every unit of energy. It would take us so far away from our Kyoto objectives that we would have to give up. 
The definition of “renewables” in the bill was something the committee had to spend some time on. The definition as it stood had a number of problems and a number of unclear things about it and it was decided in the end that simply listing renewable energy sources was the way to go. We also had a considerable debate in the committee about whether geothermal energy should be on that list of renewables. Ultimately it may not be renewable. The heat in the ground and the fluids do eventually deplete. Over what time frame should it be renewable? More important even that that we learned in the committee—and it was news to me and possibly to everyone else on the committee—that sometimes geothermal energy can emit more carbon dioxide than a combined-cycle gas power station and there was no reason for this bill to give a leg-up to geothermal energy that was actually less climate-friendly than gas. 
We spent a considerable amount of time dealing with that but found that in the end that matter could be addressed by the regional council under other provisions in the bill. Therefore it is not given a limitless leg-up regardless of its carbon-dioxide emissions. It is important that the concept of “renewable” does not override the other environmental effects that energy developments can have. If geothermal developments are going to destroy other geothermal features like geysers and hot pools and are going to affect ground subsidence and so forth those matters will still have to be considered under the legislation despite the fact that it is listed as a renewable resource. Hydro developments do not get a free ride either. It is fine to say that hydro is renewable because water will continue to fall from the sky and run down the valleys. But braided rivers are not renewable. They are not making any more of those and therefore it is still perfectly OK under the bill to consider the environmental effects of destroying our largest braided river in order to get hydro energy which is one of the proposals on the books at the moment. 
GERRARD ECKHOFF (ACT) 
: 
 I listened with considerable interest to the Green Party member as one does in this House in her reflections on the doom-casters the prophets of doom. It is interesting to realise that the world has always had people who have predicted the end of the world: “The end of the world’s resources is just around the corner.” I guess the whalers did it 150 years ago when they thought about what they would use when they ran out of whale oil for goodness’ sake. Then somebody discovered that foul black substance that was totally ruining their water wells. The world then decided to get a few people alongside and find some new development—and up it came. They had a fantastic new resource and I have not the slightest doubt that in years to come—indeed it is already happening with hydrogen cells etc.—new energy sources will be found that the world has not even thought of at this time. 
In looking at this bill—and I am standing in here for my colleague Mr Ken Shirley who is on the Local Government and Environment Committee—I wondered about its curious timing. I ask the members of this House whether it could be that there is a major hydro development due somewhere in New Zealand. Oh my goodness me—there is one on the Waitaki River. Oh dear! Does anybody listening or any member in this House really believe that it is just some sort of coincidence that this huge scheme worth about $1.2 billion—or probably $1.5 billion or maybe even $2 billion by the time it is finished—is due? Does anybody really believe that this amendment bill is not before the House at this time to assist a Government State-owned enterprise Meridian Energy to get resource consent to build on that river? 
Surely this bill is all about forcing Project Aqua on to the public of this country whether or not they like it. I can just see some of the protesters down my way in Otago singing the song: “We don’t believe that we should be on the edge of destruction.” That is what will happen to the Waitaki River according to the protesters. I will not stand here and say Project Aqua is wrong or right because I do not have the technical detail but I do know there are 36 or maybe even 38 other sites in New Zealand that would be better utilised before the Waitaki site. There are sites right throughout this country from Hawke’s Bay to Northland where those opportunities could be used to generate renewable energy but that is not being done. Meridian Energy has decided on the Waitaki River and that project will proceed with the direct help of this bill. Project Aqua on the Waitaki River is a foregone conclusion because we are short of energy and when it comes to this Government the environment goes out the window. 
It is quite ironic that the Green Party member chairing the select committee—whatever recommendation they make—is on the one hand totally opposed to Project Aqua I am told but then on the other hand says: “We will just shut the people down in New Zealand. We will get them not to use energy and everything will be sweet.” That is just totally and utterly unrealistic. 
I agree with my colleague Mr Jim Peters who gave a very good speech I thought justifying the clean use of an old fuel resource—that is coal. If a country like Germany which is hugely concerned about environmental standards can have state-of-the-art coal fire power stations then surely we can have the same in New Zealand. We have 700 years’ supply of coal—gracious me! Some say it is a thousand years’ supply of coal if we continue to use it at the same rate. But it is horrendous to think we are using up energy to import coal from I think Singapore. How much energy are those ships using? How much energy will be used by the jet engine that will power the stand-by generation at a cost of $150 million just in case we might need it? 
We would be far better building coal fire power stations. There could be a small one in Otago I say to Mr Parker to fuel the energy needs of our growing regions like Wanaka and Queenstown. There are millions upon millions of tonnes of high-grade lignite in Otago. Southland has some of the best coal in the world—as has the West Coast—and that option is being totally ignored. Under this bill those options are being totally ignored. 
And there is another one—a thing called nuclear power. Now I know some members throw their hands up in horror but I think the public has moved on a lot further than the politicians. I think the hysteria that once was generated around nuclear power—or nuclear weapons of course—is still there in terms of weapons but in terms of nuclear power countries like France are in the vicinity of being 75 to 80 percent reliant on it. It is one of the cleanest fuels in that sense. With the concerns the Green Party are expressing about carbon dioxide emissions into the atmosphere nuclear power becomes a very viable alternative. So why will we not at least discuss it? It is not even in the ballpark and I think that is an absolute shame. 
New Zealanders will pay for this policy—not the Government not the regional councils but New Zealanders. That is superannuitants families and whoever else will pay the increased cost of electricity—and they are paying today. Many people are upset about the level of increase there has been in just relatively recent times. Not so very long ago while on a plane by chance I spoke to a representative of Delta Utility Services. I said that it seemed to me the cost of electricity in this country would double within the next 10 years and he said: “No it will not. It will treble.” That came from a representative of the electricity lines company and I think they have some idea about those sorts of cost structures. Electricity costs will probably treble according to that representative. 
So why are we going to impose on ourselves a carbon tax? I am asking a rhetorical question I guess but why impose a tax on ourselves when we do not have to? We do not have to impose a carbon tax—in fact we should never think about doing such a thing because we will lose a lot of our competitive advantage. Being 1200 miles away from Australia—just out at the end of the road and not so very far away—and having the European markets and the United States 12000 miles away there are high energy costs we will have to pay for. So why would we impose on ourselves an energy tax? This Government is like some sort of energy dominatrix who seems to think that pain and paying more and more for electricity is good for us. I say again that our competitive advantage is the rain that comes out of the sky and the coal that is in the ground. We must use that advantage. 
I finally say to the Greens and to those who believe in this concept they call global warming that nobody has ever explained what it was that caused global warming when the Vikings raped pillaged and plundered their way around the world. They called Greenland “green” because it was green. Grapes grew in the north of Scotland in the time when Robin Hood ran around Sherwood Forest in short pants—in the Middle Ages. Gracious me! Was it ICI synthetic petrol plants and the industrial revolution that caused global warming in those times? Well my history must be totally skewed. In fact it was one of the best times according to historians for human species on this Earth; it was mild and pleasant. There was global warming back in the Middle Ages. What caused it at that time? The Green Party representative does not choose to answer that. What caused drought in Southland? It is the same thing that causes drought in Otago and everywhere else every 10 or 20 years—just sunspots and a few other physical features. 
LARRY BALDOCK (United Future) 
: 
 Anybody who is unsure about whether climate change is occurring around the Earth should just look at our statistics for February. We have already had more rainfall than since I think 1934 or 1936 and we are only halfway through the month. What is unclear is what the cause of climate change is and that is something that is still debated widely by the scientific community. 
I begin my address on this bill by first of all replying to some of the criticism about our support for this legislation on the basis that we have consistently opposed the ratification of the Kyoto Protocol yet we are supporting the second reading of this legislation. That is true. We have opposed and still do oppose the Kyoto Protocol and we take considerable heart from the signals from Russia at the moment that it might not ratify which would spell the end of the bureaucratic nightmare called the Kyoto Protocol. We take heart as do many business people in this country and as do many sensible New Zealanders who thought that the “fart tax” was the sort of nonsense that the Kyoto Protocol would generate. We also opposed that tax. New Zealanders will be glad that we will not be tied in with such obligations which our major trading partners have had the good sense to avoid. 
Our opposition to the Kyoto Protocol however does not mean that we are opposed to supporting measures that are sensible that still retain our sovereignty as a nation and that make reasonable requirements for the reduction in greenhouse gas emissions and the encouragement of renewable energy. If we look at Australia and the US—our major trading partners and friends—we find that even though they had the good sense to reject the ratification of the Kyoto Protocol they have not buried their heads in the sand and ignored the possible implications of climate change and the effect of greenhouse gas emissions on climate. No they have also adopted legislative measures such as this to prepare for some of the potential changes and to mitigate effects. 
The bill before us does three things. It removes the requirement for regional councils to consider the effect of greenhouse gas emissions and places that responsibility where it should rest—with central government. Almost all parties have supported this part of the bill. With a country our size it does not make sense to have so many regulatory bodies deciding on environmental issues along boundaries that create confusion and uncertainty. For example the Environmental Protection Agency in the US manages to function as a regulator for that entire nation. It is possible here I believe for us to limit the amount of regulation required in individual cases. It makes perfect sense for the Government to assume the responsibility for greenhouse gas emissions. Allowing local authorities to take greenhouse gas emissions into account would only serve to add a whole new layer of complexity cost delay and uncertainty to the Resource Management Act. 
What has given me the most concern about this bill is the requirement for all persons exercising functions and powers under the Resource Management Act to have particular regard to the effects of climate change. As I mentioned earlier the science of climate change and global warming is in no way an exact science. There are still many qualified competent and sincere scientists who differ widely on what the causes and potential effects of global warming might be. Some of my concerns have been reduced though by the discovery that the Resource Management Act already requires this. As most Resource Management Act practitioners would agree the Act is effects-based legislation and itself defines the meaning of “effect’. In this Act the term “effect” includes: “Any past present or future effect and any cumulative effect which arises over time or in combination with other effects.” 
Local councils are already considering the impacts and effects of climate change and this bill gives them some direction. At least in part this bill really only seeks to emphasise the need to consider one particular set of future effects called “climate change effects” that it already—in broad general terms—required. My concerns were that since there were no guidelines on how councils might interpret the scientific predictions on climate-change effects we might end up with some very large variations on how councils carried out their responsibilities. That is why United Future inserted a minority view in the select committee’s report urging the Government not only to do what it is promising to do now—to have the Climate Change Office issue some non-statutory guidelines—but if that leads to confusion to also follow up with national policy statements that will give even greater clarity to local councils. 
The third issue in the bill which I will address now is that it seeks to require consideration of resource consents for energy generation on the basis of whether they are renewable sources of energy. Renewable energy means solar wind hydro geothermal biomass tidal wave and ocean current sources. We had a number of discussions in the select committee about whether geothermal belonged in this list as a renewable source. I think it was splitting hairs to suggest that the heat from the Earth’s core will expire in the next few generations and therefore should be excluded from the list. If that were the case we would also need to exclude solar because perhaps the Sun will expire one day and probably then we would have no wind no moon and no tides either. But I might be in danger of sounding too gloomy and Armageddon-ish—“woe woe the end is nigh!” To the contrary I believe as do my United Future colleagues that this Earth has been designed to provide considerable sources of renewable energy that will be sufficient to meet all of our needs for a long time to come. Clearly geothermal energy is one of them. 
We support encouraging the uptake of renewable energy sources. We believe it is a sensible thing to do. The reason for that is ostensibly to level the playing field between renewable and traditional sources of energy. There is anecdotal evidence to suggest that renewable sources of energy are at a disadvantage in the current resource consent process because of their diffuse nature which greatly increases the number of affected persons and therefore potential objectors. For example gas-powered generation facilities tend to get resource consent far more easily than wind farms because as far as local residents are concerned wind farms are big noisy and unsightly whereas gas-powered generation plants are relatively small and quiet. They can be hidden away and do not really come to people’s attention on a day-to-day basis. The relative merit of renewables versus more traditional energy sources is a highly contentious issue which I will not get into in great detail here. 
The real issue for United Future when deciding whether to support this bill is whether it will skew the electricity market by picking winners or whether—as the Government argues—it really does level the playing field. We certainly do not want to end up with New Zealand having to import huge amounts of fuel such as liquefied natural gas or utilise some other expensive energy source when we have hundreds of years’ worth of economically accessible coal reserves just sitting here unused. On the face of it however this bill does not require local authorities to develop renewables to the complete exclusion of other fuel sources such as coal. It merely allows them to consider renewables and make them a priority if they so choose. Given this relatively moderate approach the “picking winners” issue may not become a problem. 
We do however support the comments that have been made earlier by Jim Peters and others that coal is an excellent source of energy for this country and we believe its use should be promoted. It makes no sense for us to be importing other forms of fossil fuel to the detriment of our balance-of-trade deficit and other economic issues when we are sitting on such large reserves of coal. Jeanette Fitzsimons earlier said that it is something of a myth that we will have technology that can burn coal without any effect upon greenhouse gas emissions. I wish to remind her that one day not so long ago space travel was considered to be a myth and it now is an almost everyday occurrence. Technology is being investigated. Major breakthroughs occur almost every day and we believe it is important that the Government pursues the possibility of using our coal reserves for energy generation. 
We are confident that this bill in its current form will add to the sensible use of our resources in this country and United Future will be supporting it. We look forward tocontinued debate in the Committee stage. 
DAVID PARKER (Labour—Otago) 
: 
 I want to respond to a couple of the comments Mr Eckhoff made. Listening to him we would think this bill banned the burning of coal for power generation. It does not do that. Listening to Mr Eckhoff we would think it banned the building of nuclear energy plants. It does not do that. What it does do is make it easier to get consents for renewable energy projects. 
But what it does not do in terms of renewable energy projects is apply to Project Aqua. So I am afraid that Mr Eckhoff has three out of three incorrect—he is completely wrong on each one of them. The transitional provisions of this bill make it absolutely explicit that this bill does not apply where resource consent applications have already been filed. The Project Aqua consent applications have been filed and the legislation does not apply to them. We checked on that at the Local Government and Environment Committee and it was confirmed. 
The select committee did some other things to the legislation that I think improve it. We simplified the definition of “renewable energy” and we simplified a couple of other provisions. But I reinforce that this bill does not ban the burning of coal for power generation or for other purposes and neither does it ban nuclear power—not that I favour that form of energy. The bill does encourage renewables and it does not apply to Project Aqua. 
SHANE ARDERN (National—Taranaki - King Country) 
: 
 I rise to speak in opposition to the Resource Management (Energy and Climate Change) Amendment Bill for a range of reasons. But before I start on those I want to say that one of the things we learn when we are in Opposition is that if we have to get up and speak on a bill about something we do not know a lot about then we should at least try to be entertaining. What we had from both the speaker from United Future and the member for Otago—soon to be the former member for Otago—was not just non-entertaining contributions but very silly contributions. One member said: “We are going to vote in favour but we oppose almost everything that is in it.” and the other member challenged one of the previous speakers in the House on a range of issues but gave no explanation as to why he thought the way he did. 
This bill has come about as a result of socialist Governments believing they can even interfere with what happens with the climate. A Prime Minister who knows she is about to expire politically speaking goes overseas stands on a world stage and tries to find her post - prime ministerial job by signing up to ratify the Kyoto Protocol before our trading partners do thus getting herself into a bind whereby she has to come back to New Zealand and come up with a mad half-baked idea in legislation that will achieve none of the Government’s objectives. The Government had an opportunity through the reforms to the Resource Management Act to achieve most of what it wants to achieve in this bill but it completely ignored it. It did nothing. There were 12 recommended changes to the Resource Management Act in the Owen McShane report and the Government put a red pen through the whole lot. It would not adopt any of them. 
So what will this bill do? It will load on to local authorities the extra cost of consultants and a range of other experts who will be pulled in with no clarity whatsoever as to what they are trying to do because in everything that local authorities do now when it comes to issuing consent for whatever they have to take into account climate change. So what does it mean? Why does a Minister not actually stand up and explain to us in simple terms what each local authority in New Zealand—there are something like 92 when we add up the regional authorities and territorial authorities—will have to do when it comes to taking account of this legislation? They will not know. There will be huge ambiguity. They will be employing consultants and lawyers to try to wade through it and they will not be able to come up with a solution. 
It is another form of carbon tax and is just like the stupid proposal to introduce the “fart tax”. It is as mad as that and it should be voted out. That tax was pretty mad. New Zealanders saw that and walked away from it and the Government was forced to back down on it. This bill is almost in the same camp. If we go through each section of what is proposed we find out that it is about nothing more than adding a cost with absolutely no possible positive outcome to business in New Zealand. It is just another cost on all small businesses. 
If there are no clear rules and if there are no clear guidelines as to what regional and local government have to do how are they supposed to know? That is a simple question that I know the academics on the other side of the House would never want to answer because to them white can be many shades of black and vice versa. To me it is either black or white—it is that simple. 
Why does one of the members on the other side not take a call and explain to us why they think ratifying the Kyoto Protocol in the first place then introducing this legislation will actually bring about the outcome they want? How will it enhance renewable energy development? How will it do that? We had a situation recently where a hydroelectric station proposed for the South Island—in Card Creek with the Dobson dam—was turned down by a Minister on environmental grounds. That renewable energy source would have gone on generating electricity for years and years but it was turned down in the middle of an energy crisis. Now the Government has got it into its head that it needs to come up with some emergency generation and it is going to fire it with coal. How is that consistent with this legislation? How will the Government replace the Maui gasfield when it expires? It has been one of our major sources of energy over a number of years. What work is being done to find out how we will replace with renewable energy the energy that has been sourced from the Maui gasfield? 
This legislation acts as a total deterrent to any energy company that wants to develop gasfields or oil or coal. It is an absolute deterrent. Those companies will pick up this legislation and say that this Government does not want their foreign investment here that it does not want them in this country exploring options as far as energy goes and that it is going to make it hugely difficult both through the Resource Management Act and through this piece of legislation for them to achieve that goal. So why does the Government not take account of that? Why does it not say to those people overseas that it understands that they have one or two problems some of which are generated by Government regulation and that it will smooth the path so that they can invest the millions of dollars that are required by high-risk exploration for new energy sources? Why does the Government not do that? There is no answer from the other side. The reality is it does not have an answer. 
The Government has made a big mistake by ratifying the Kyoto Protocol. It is time it admitted that was wrong and it is time it addressed that issue and came up with something that would be meaningful with regard to climate change. But no that would be asking for leadership from a Government that has no leadership is on the rocks and is about to expire. 
There has been a lot of talk up and down New Zealand about the discharge of greenhouse gases but nobody has been able to identify clearly exactly what is meant exactly what will be done about it and exactly how that outcome will be achieved. Nobody has been able to do that. Scientists around the world have argued about it. There is a huge amount of debate about what actually constitutes a greenhouse gas and what does not. When we start muddling around with this type of legislation—and I notice that both the ACT and National parties put in a minority report on this legislation outlining a lot of this nonsense—we have to ask ourselves—[ 
Interruption 
] 
Well when we hear that member over there the senior Government whip Mr Benson-Pope roaring away like a walrus we have to ask ourselves what that member actually knows about climate change. Obviously when we look at this legislation we can see that he knows absolutely nothing about climate change; otherwise he would stand up and make a contribution and tell us what he knows about greenhouse gas emission. The reality is he knows nothing. 
What would that member know about renewable energy? Is hydroelectricity not a renewable source of energy? It is raining on the West Coast at the moment—if the member had not noticed. If that dam had been allowed to be built it would be full. It would be spilling water in fact; the turbine would be going full bore and there would be a continual flow of renewable energy at a low cost with environmentally sound future generating capacity. But instead of accepting that the member sits there makes silly noises about other members’ contributions makes no contribution himself and presides over this legislation which is an absolute cost to those types of development. It will not achieve the outcomes it sets out to achieve it does absolutely nothing in terms of finding ways to produce renewable energy and it does nothing to assist local authorities in their roles. It just makes their lives more difficult. All it does is fund people whom that member would be opposed to—lawyers consultants. It is a “buy a new Mercedes for the consultants” piece of legislation if ever there was one. Why does that member not take a call and talk about those issues— 
Sandra Goudie 
: Because he doesn’t understand it. 
SHANE ARDERN 
: That is absolutely right. We need to fix the Resource Management Act. It needs to go through a major reform process. We need to bring in clear guidelines as to what local government is meant to do with regard to this issue and we need to get rid of this socialist Government to achieve it. 
Hon TAITO PHILLIP FIELD (Minister of State) 
: 
 I think most New Zealanders understand the importance of environmental issues and the importance of meeting our obligations as a signatory to the Kyoto Protocol. It is important that we acknowledge the damage that has been done to our environment in relation to climate change from carbon dioxide emissions and I give enormous credit to the Government for this bill which confirms our efforts to reduce the greenhouse effect and climate change on this region and on the world. I support this bill. 
Hon DAVID CARTER (National) 
: 
 Can I take the opportunity of assuring the Labour member Taito Phillip Field that most New Zealanders do not understand our commitments to the Kyoto Protocol. I think it is amazing that we are standing here tonight debating the Resource Management (Energy and Climate Change) Amendment Bill on the very evening that the lower half of the North Island has experienced the most severe flooding in living memory. Farmers have lost livestock buildings and fences. Their very livelihoods have been destroyed. One hears scientists all around the world saying that the sorts of events we have witnessed over the last 24 hours here in New Zealand are occurring because the climate is changing. 
It is interesting to note that when the east coast of the North and South Islands experienced drought conditions through the latter part of this summer the same scientists again said that that was because of climate change. As a politician I am not sure about this climate change story. I read a huge amount of information about it. We now have credible scientists on both sides of the fence. 
David Benson-Pope 
: That’s not right. 
Hon DAVID CARTER 
: That man ought to study some literature and he would find that some very— 
David Benson-Pope 
: You should study some— 
Hon DAVID CARTER 
: I tell Mr Benson-Pope that he should do more than read comics. He would find that some very credible scientists are saying they are no longer sure of climate change and its effect. 
But regardless of that what we have seen is that New Zealand has accepted the word of some self-appointed experts in this regard and has rushed headlong and as fast as anybody else in the Southern Hemisphere into ratifying the Kyoto Protocol. In fact I can think of no other country in the Southern Hemisphere that has ratified the protocol and has a commitment to reducing emissions. It is certainly not Australia our major trading partner; certainly not the United States of America our next major trading partner; and certainly not countries such as Singapore a country that is now wealthier on a per capita basis than New Zealand is—it was only in 1964 that we used to give foreign aid to countries such as Singapore—and certainly not a country such as China which is perhaps one of the most significant emitters of greenhouse gases today. Those four countries I have just named do not have any commitments at all as New Zealand rushes headlong into its commitment to ratify the Kyoto Protocol. 
As we move towards the next general election one has to place some credence on the arguments advanced as we approached the last election that Helen Clark was very keen to ratify the Kyoto Protocol. In fact she had planned to ratify the protocol on the world stage in September 2002 at an international conference so that she could get maximum exposure to the world. I do not know whether she is already looking for her new job; I suspect she is. There is a suggestion that she has her eye on the job of Secretary-General to the United Nations when Mr Kofi Annan retires. But if that was her reasoning for rushing New Zealand headlong into a commitment to the protocol then I think she may well have done this country a huge disservice. 
I think back to 2001 in this House and during question time over a period of about a couple of weeks when Helen Clark regularly promised that she had a programme to lift the economic growth of this country back into the top half of the OECD within 10 years. I noticed that one or two Labour members acknowledged that that was her statement to this House. Then very quickly when she realised how hard it was to deliver the sort of economic growth to New Zealand that was required to lift us back into the top half of the OECD she abandoned that target completely. 
As we debate the Resource Management (Energy and Climate Change) Amendment Bill I ask members to keep those comments in mind. I suspect that this is the sort of legislation that will create more compliance costs for our regional councils as they are now expected to consider emissions under greenhouse gas policies when granting resource consents. 
The most interesting comment I heard tonight in the debate was from Mr Baldock of United Future. He stood before this House and gave a 10-minute speech stating that United Future continued to oppose New Zealand’s ratification of the Kyoto Protocol yet it would vote for this legislation. That is exactly what the United Future member said. That is exactly United Future’s policy. United Future opposes New Zealand’s ratification of the Kyoto Protocol but tonight in the House the United Future member said it will vote for this particular legislation which is part of a package of legislative measures being advanced through Parliament because New Zealand has ratified the protocol. 
Stephen Franks 
: So talk is free and votes are for sale! 
Hon DAVID CARTER 
: Well that could be the case. But I just ask members to reflect on the logic of somebody coming to the House tonight to say that he or she opposes the principles behind the legislation yet intends to vote for it. 
This bill is just political correctness gone mad. It is legislation that is difficult for business to comply with. That is why the great raft of submissions before the select committee were from people who had an interest in this legislation because they are the ones who will bear the brunt of it. We recently had a press release from Don Elder the Chief Executive Officer of Solid Energy pointing out that as we face another year—another winter—when this country may well be short of energy there is a solution on the West Coast. Various estimates suggest that the coal resources there would be enough for this country’s energy requirements for 800 years. But this legislation simply eliminates the possibility of New Zealand considering the use of that energy. 
We have had two energy crises since the Labour Government has been in power. There have been no attempts at all by the Government to address those crises. It has a “hope and pray” attitude as to whether the lake reserves will be enough to get us through the next winter. That is not what governance is all about. This country will require more energy. The economy as noted in an interjection earlier from Mr Benson-Pope has grown quite well over the past 4 years. 
That growth means the energy requirements of the country have also continued to grow. We know of only one major project on the books—Project Aqua—and that is the only project that will make a significant difference to energy generation in this country over the foreseeable future. 
Sandra Goudie 
: The Dobson Dam facility. 
Hon DAVID CARTER 
: Yes as Sandra Goudie correctly suggests there is the Dobson Dam facility but that has been stopped by the Minister of Conservation Chris Carter who does not want to see the destruction of another plot of gorse and broom. 
I oppose this bill for a raft of reasons as outlined tonight. The most important of those reasons is that again this legislation does absolutely nothing to advance the long-term growth rate of this country. The bill does nothing to deliver aspirations to many many New Zealanders. It may be about Helen Clark looking for her next job in the United Nations because God help us she certainly knows she needs it. 
A party vote 
Ayes 71 
New Zealand Labour 52; Green Party 9; United Future 8; Progressive 2. 
Noes 47 
New Zealand National 26; New Zealand First 13; ACT New Zealand 7; Independent: Awatere Huata. 
Bill read a second time. 
was called for on the question That the Resource Management (Energy and Climate Change) Amendment Bill be now read a second time. 
Crimes and Misconduct (Overseas Operations) Bill 
Second Reading 
Hon PHIL GOFF (Minister of Foreign Affairs and Trade) 
: 
 I move  
That the Crimes and Misconduct (Overseas Operations) Bill be now read a second time 
. This bill allows New Zealand to exercise criminal jurisdiction over New Zealand Police personnel and civilians serving overseas as part of a non - United Nations deployment. It covers the situation that has arisen out of the current police deployment under the Regional Assistance Mission to the Solomon Islands and will also cover future operations of this nature. 
Under current law New Zealand jurisdiction can be exercised for offences committed overseas by New Zealand armed force personnel under the Armed Forces Discipline Act. Police serving overseas as part of a United Nations force are similarly covered under the United Nations (Police) Act. However in other circumstances there is no New Zealand jurisdiction to deal with offences committed by police and civilian personnel serving overseas. They may therefore be subject to prosecution and possible imprisonment by those countries in which they operate. This bill ensures that such personnel will be able to be tried under New Zealand law not under foreign jurisdiction and can be held to account by the laws of our land. It ensures that prosecution takes place in accordance with New Zealand procedures and standards of justice. Equally it ensures that where there is a bilateral arrangement with the receiving State and where a person is immune from prosecution locally that person does not enjoy impunity. 
The Foreign Affairs Defence and Trade Committee—and I understand it has done so unanimously—has recommended that this bill be passed with minor amendments which the Government accepts. A number of issues were considered by the committee. An amendment is recommended so that the New Zealand Police have the power to arrest personnel covered by the bill in order that they can be tried in New Zealand. This complements New Zealand’s power to assert its jurisdiction in respect of such offences. The arrest power will also mirror similar arrest powers contained in the United Nations (Police) Act and the Armed Forces Discipline Act. 
The committee considered whether it was necessary to include a reference to the New Zealand Bill of Rights Act in the bill but in the end decided against it. I concur with that view. The reference in the bill to the arrest provisions in the Crimes Act means that anyone arrested under this new legislation would have similar rights to those set out in the New Zealand Bill of Rights Act. 
Another issue was the possible difficulty that might arise with the prosecution of a national of a third country for an offence under New Zealand law that might not exist under the law of that third country. Such a person would be likely to be subject to participation arrangements between the third country and New Zealand that would cover the allocation of responsibility and jurisdiction. It is unlikely that such a situation would arise where a particular offence under New Zealand law was not mirrored by a similar offence under the law of the third country. The bill in any event provides for the Attorney-General to withhold consent to a prosecution under the bill. If the situation outlined above arose the Attorney-General could opt to withhold her consent to such a prosecution if it were judged inappropriate to prosecute that individual. 
A further issue raised in a submission on the bill was whether it would be clear to personnel in a New Zealand overseas operation force what law would be applicable to them. The submission suggested that this might not be the case until after proceedings had been brought. The aim of the bill is primarily to ensure that a person is subject to New Zealand jurisdiction rather than that of the country where he or she operates so that he or she can be prosecuted in New Zealand. Bilateral arrangements between the host and sending States normally make it clear in advance the manner in which jurisdiction will be divided or shared. Further the practice followed by the New Zealand Defence Force and by the New Zealand Police prior to the current Solomon Islands deployment is to provide information to personnel before departure on the legal arrangements for the operation including issues of jurisdiction. They are also informed about the requirement to respect local laws and customs and are normally provided with information about those laws and customs. The provision of such information prior to deployment should be sufficient to address doubts as to what law is applicable to New Zealand personnel. 
Another issue raised was the lack of scope for New Zealand to bring a further prosecution if overseas authorities bring proceedings and the individual in question is subject to a punishment that is more lenient than the one he or she might have received in New Zealand. The bill has been drafted to allow New Zealand to exercise jurisdiction over its personnel serving in operations overseas so that to the maximum extent possible they will face prosecution here rather than in the host State. However if the host State does in a particular case have jurisdiction—as in some instances it may have—for acts committed outside the course of official duties then it would be inappropriate for a person to face a second trial in New Zealand because the penalty was considered too lenient. To do so would be to subject the person to double jeopardy. The same principle is applicable to our defence personnel as set out in the Armed Forces Discipline Act. 
This bill will bring consistency to the law applied to New Zealand personnel serving overseas. It will ensure that our police and civilian personnel serving in the Solomon Islands and in similar future operations enjoy the same protections as defence personnel and police personnel serving in United Nations operations. This is a non-controversial bill. It was agreed to unanimously by the select committee and I commend it to the House. 
Hon TONY RYALL (National—Bay of Plenty) 
: 
 The National Party members of the Foreign Affairs Defence and Trade Committee and indeed the National Party caucus will support the progress of this bill. There are a couple of points I would like to raise with the Minister of Justice that he might be able to reply to by way of interjections or maybe some comment later in the House. 
It is clear that the purpose of this bill is to ensure that New Zealand police officers and civilian personnel engaged in these overseas operations which include peacekeeping the maintenance or restoration of law and order or the functioning of governing institutions or other activities are indeed subject to the jurisdiction of New Zealand laws for offences against our laws committed overseas unless there is a good reason for them not to be subject to that jurisdiction. It is worth noting that this bill will have retrospective effect from 24 July. 
Members will be aware and this is the point I want to raise with the Minister of Justice that the United States has military personnel serving in Japan under an agreement that sees jurisdiction of their prosecution rest with the American Government. However some years ago a number of those personnel were involved in allegedly at the time quite serious sexual offences against young Japanese women. There was a major furore in Japan about the fact that those military personnel would be removed from Japan and be tried under American law. Subsequently the American Government waived its right to apply its jurisdiction to those military personnel and as a result they were tried under Japanese law. The point the National Party would like to raise with the Minister of Justice is that if a jurisdiction does require that New Zealand waive its right to have extraterritorial control of a person’s criminal proceedings is there enough flexibility and facility within this bill to allow the New Zealand authorities to waive that power? It appears to me there may be cases when a country would want to prosecute an offence committed by a New Zealander and the pressure may be such that New Zealand accepts that that jurisdiction should prosecute the offence. The offence might have happened while the person was on active duty—it was suggested that the American personnel in Japan were on active duty. We would want to make sure there was sufficient flexibility so that if New Zealand wanted to waive the right to have extraterritorial effect on those personnel it would be able to. 
We look forward to a response from the Minister of Justice on that point. The National Party is prepared to facilitate the swift passage of this bill at a later date. 
DAIL JONES (NZ First) 
: 
 I had the privilege of attending one or two Foreign Affairs Defence and Trade Committee meetings on this legislation and the opportunity to question officials on it. I am concerned about the way in which the wording in clause 6 has been arrived at. It seems to be fairly clumsy legislation in that respect. It jumps around the place a little. Being a lawyer I like to see things set out much more clearly than they are in this bill. The first subclause of clause 6 refers to subsection (2) then to section 5(3). We have to work our way through the bill. It seems to be a provision under which New Zealanders have the power to arrest people in a foreign country. 
Obviously the bill is clearly set out in that it relates to members of the police and an overseas operation force. The interpretation provisions in clause 4 are good. One can work one’s way through the minefield. 
New Zealand First is supporting this legislation. I would have appreciated better drafting of clause 6 but I will be interested to hear what any other Government member or other member of the select committee may have to say. We look forward to the passage of the bill. 
JILL PETTIS (Labour—Whanganui) 
: 
 I want to take a brief call in support of the bill. The bill is significant in the new jurisdictions it will allow New Zealand to exercise over police and civilians who serve in special operations internationally. The bill is important and it will have good and full consideration during the Committee stage. I certainly look forward to it returning to the House. 
I am pleased to support the bill and I look forward to receiving further reports in due course. 
KEITH LOCKE (Green) 
: 
 The Green Party is happy to support this bill. I think it is important that there be proper legal jurisdiction over New Zealanders serving overseas in the police or as part of a civilian component of an operation such as we have currently in the Solomon Islands. Of course it does not include people who may be in the Solomon Islands separately from the Government such as members of non-governmental organisations; they have an independent status. But those who are part of the official Government operation be they police civilian or military should be covered by this jurisdiction. 
It is good the way this bill has evolved. As the commentary from the Foreign Affairs Defence and Trade Committee states the agreement in relation to the Solomon Islands that led to this legislation concerning the operations and status of police armed forces and other personnel deployed to the Solomons was brought before the select committee. It is good that as a result of the consideration in this Parliament by the Foreign Affairs Trade and Defence Committee of the treaty examination flowing from my International Treaties Bill more attention is being paid to international treaties by this House and its select committees and the Ministry of Foreign Affairs is distributing a list of treaties under negotiation periodically. It allows us to engage with issues like this on a more informed basis than in the past. 
This legislation is in the context of status of forces agreements. One of the things we note about status of forces agreements—the agreements that govern the operations of one country in another country particularly when they concern military and police operations—is that they are different for each country. There are virtually no two status of forces agreements that are identical. They depend very much on the particular situation. If we look at the general picture of status of forces agreements—and this relates to the point Tony Ryall brought up in an earlier contribution—we see there are generally three categories of offences. Firstly there are offences committed within the overseas force. In this case this legislation applies mainly to the New Zealand contribution to the Solomon Islands. These are offences that are internal to the overseas force. If one New Zealand police officer beats up another New Zealand police officer in his or her barracks then that offence is internal to the overseas force and it is generally accepted in status of forces agreements that any criminal action would be undertaken under the jurisdiction of the country contributing the overseas forces rather than it coming under domestic jurisdiction. 
At the other end of the scale are offences committed against locals by personnel of the overseas force who are off duty like an off-duty police officer raping a Solomon Islander. Of course we do not expect that to happen in the case of our contribution. I think Tony Ryall mentioned sex offending by American soldiers in Okinawa as a background to that. If it is clearly an offence against local people or against the property of local people then generally the case is prosecuted by the local jurisdiction. 
In the middle of these two extreme categories there is often a grey area. The soldier or police officer might be on duty and performing his or her functions but commits a crime like getting enraged and unnecessarily hurting or killing a local person or destroying some local property. That is a grey area. 
 The term “concurrent jurisdiction” which appears in the commentary on the bill and was mentioned by Phil Goff earlier means theoretically that there could be jurisdiction by the local country or by the overseas force there. In the Solomon Islands case it seems that the intent of this bill in that sort of grey area is to take the jurisdiction back to New Zealand or even to intrude into the area of off-duty people committing an offence against a Solomon Islander. There are of course particular arguments in the case of the Solomon Islands and although the bill is not specifically a Solomon Islands bill it is shaped with that particular operation in mind. There is in the Solomon Islands case an envisaging that the jurisdiction would be very much New Zealand’s partly because of the lack of at this stage—and particularly when the troops and police went in—an operating judicial system; so one could not really prosecute the overseas force through that jurisdiction. But as we go along in the Solomon Islands—and in other countries where we might be engaged in similar peacekeeping operations—we want wherever possible the jurisdiction in status of forces agreements to be local. 
Of course a status of forces agreement will always envisage some situations where the discipline is that of the foreign force but we want as much local jurisdiction as possible because that is part of the process of recognising the sovereignty and self-determination of the country in which the troops police or civilians are operating. We want to see that in the Solomon Islands too. We want to see the Solomon Islands restore its judicial system and its police system so that it can properly prosecute people who commit offences. However we do have to be wary and the point Tony Ryall made is an important one—that the local people do not feel that the foreign troops police or civilians on their soil are getting away with crimes against the local people or their property. That is the background of the case he mentioned in Japan I think in Okinawa where there is a big US base or else in the Philippines and South Korea where there have been similar very high-profile cases involving American troops over the years. Those incidents can produce huge hostility in the local populations if they feel that justice is not being done because soldiers or police are being tried exclusively by the overseas forces and are excluded from access to the court of the country concerned. That is something we have to consider very strongly. 
The other tricky point in the legislation which was mentioned by Phil Goff is if New Zealand had a third-country national involved in its contingent—and we may have that in the Solomon Islands particularly in the civilian component of the operation whereby specialists who are not technically citizens of New Zealand are nevertheless part of our organised force there. It is good that the law provides for the Attorney-General to have discretion as to whether to proceed with a prosecution on a crime that might be a crime under New Zealand law but may not be a crime under Australian Canadian or the law of whatever country the person who is part of the New Zealand force comes from. 
It is also good that the bill excludes a double-jeopardy situation whereby if there is some prosecution in the local jurisdiction then when the person gets back to New Zealand he or she cannot be tried again even though New Zealanders might grumble that the person got off lightly because of the nature of the judicial system or the penalties in the local country. We do not want a situation of double jeopardy. 
It is recognised in the commentary on the bill provided by the Foreign Affairs Defence and Trade Committee that the police for example have their own system of dealing with misconduct that is not a criminal justice offence as such but could involve discipline on top of the offences that a police officer may have committed in a foreign jurisdiction. I think the bill covers most bases pretty well but I finish with the caution that we want to get to a situation where as much as possible of the prosecution is done in the local jurisdiction and not back in New Zealand’s. 
STEPHEN FRANKS (ACT) 
: 
 I rise for the ACT party to address the Crimes and Misconduct (Overseas Operations) Bill. The bill was referred to the Foreign Affairs Defence and Trade Committee on which ACT does not have a member and accordingly the report of that committee I have studied with some care. When this bill came into the House I made a number of comments that I want to refer to. I said we should not treat this bill as a mere formality as a matter that is just administrative tidy-up because the relationship between locals and occupying forces—the parallel that was drawn by the National speaker and mentioned by Keith Locke—or simply the forces of a country that is exercising a significant influence over another country’s population is very fraught. Over many years that relationship between the Roman legions and the subject peoples the behaviour of brutal and licentious soldiery or the policing personnel is one of the most likely causes of a destruction of a relationship the flashpoint the reason for a breakdown and the eventual embroiling of the contributing country in a very nasty and long-lasting involvement. 
I raised that issue when the bill had its first reading because I believe that New Zealand is slipping without being aware of it into re-colonisation. I see that in East Timor. For example the Australian Government admitted as reported in  
The Economist 
 last year that it has now spent US$2 billion in its involvement in East Timor. Quite a bit of that of course was military but there is also a lot of reconstruction aid. That is an enormous sum. As far as one can tell there is no assurance that there is going to be a return on that money other than a continuation of a very untidy and uncertain status quo an irritant with Indonesia and some justified good feeling on the part of Australians and New Zealanders that they did rescue the East Timorese from an oppressor. But whether that converts without proper colonisation—in other words without taking responsibility that colonisers learnt hundreds of years ago that they had to take—into a happy experience is really very much in the lap of the gods. I do not think there is anything in this bill that tells us that any of Mr Goff’s officials have gone back and looked at the experience of colonising powers and the way the relationships in the end slipped toward unhappiness on both sides. 
Because there is a great risk in these kinds of involvements that which seems so simple and straightforward at the start ends up with each side feeling vastly put upon. The contributing country—in this case New Zealand—may spend an enormous amount of money. It may even incur loss of life or health or long periods for its personnel away from home; and the locals may in the end feel nothing except resentment. 
This bill is obviously attempting to ensure that there is an authority to make sure the locals do not have quite as much reason for thinking the people in their country are affronting them; it does not do anything for example about the discipline there should be where the occupiers offend against the religious culture of the land they are in or immodesty or drinking or any of the other offences that tend to create real resentment. It might be argued that that does not matter—if there is a law against it in the host country then the host country will assert jurisdiction. It may be that the select committee can assure us that this issue has been dealt with. Does the agreement to cede authority extend to those kinds of offences? I do not know. Maybe they have ceded authority only in respect of things that are offences in New Zealand so that the host countries will retain the ability to discipline soldiers and prevent this kind of often unintended but sometimes very casual and arrogant offence. There is nothing in the select committee’s report that tells me. 
I am also concerned that it looks a bit casual that this committee did not deal with the problem of offences that are stupid here and would look even more stupid in the country where they are. Let us think for example of the Privacy Act. Are people going to observe the Privacy Act in these foreign countries? Half the job will involve breaching people’s privacy by getting a very good knowledge by any means one can of what is going on and turning it to good effect in peacekeeping. Are people going to observe the occupational safety and health legislation in all its manifestations? This bill says that they will be subject to New Zealand law in countries where it may simply not be feasible to observe a lot of the requirements that are expected of people in New Zealand. 
I think of some laws about to come. This bill would say that someone who gave out the criminal record of an offender who had not been recorded for a crime for 7 years would be subject to a $10000 fine. It may be argued that the Attorney-General has to consent to a prosecution and the Attorney-General will know that New Zealand has some pretty stupid laws and will not afflict New Zealanders serving overseas with those silly New Zealand laws when they are in those countries doing a job that probably requires them to ignore some of our more silly laws such as the forthcoming Clean Slate Bill. 
Let us look at it again in policing terms. I seriously wonder whether the New Zealand law would require the policeman over there to apply the Victims’ Rights Act. It is patently unsuitable. There will not be any records there that allow it to happen but one day we may get a local saying: “You assured us New Zealand that your people would be subject to New Zealand law. What did you do to ensure that I got my rights observed as a victim under New Zealand’s victims’ rights law?”. It may seem fanciful. It may seem that the Attorney-General’s discretion will protect in most cases but it does not really address the underlying question which is that when we are in someone else’s country there is inevitably cultural offence and there will be also inevitable expectations from the people in that country that simply cannot be met. We will not be able to live up to our own standards in the environment we are in sometimes and I do not see anything in this bill that addresses that. 
I am also concerned that the bill does not really address the situation that operation forces as they are called often have. They may have say Filipinos or Fijians or seamen from other nations—people from other countries who are part of a New Zealand force because that is their way of life. They go around the world assisting forces in strange and uncomfortable places. The select committee simply says that it feels sure that there is adequate scope for any tensions to be resolved amicably. 
The preceding sentence in the select committee’s report is simply incomprehensible. It is on page 4 and it starts: “Such persons should be included by the provisions of the bill and thereby be able to assert jurisdiction over such persons”. What does that mean? That those third country’s nationals assert jurisdiction over themselves? I cannot tell what the committee was meaning there and I suspect there is muddled thinking that is reflected in a muddled report. 
I am concerned also that clause 5(2)(a) and (b) may be tidy drafting but may be overreach. In the Committee stage it may be desirable to look at whether paragraph (i) of subclause (b) should be omitted because it appears to me as it reads that this Act could apply if a person were subject to an obligation to cede jurisdiction—in other words the country did have to cede jurisdiction to New Zealand in respect of a criminal act but brought criminal proceedings nevertheless. It seems to assume that it is seamless. If they are obliged to cede jurisdiction they will but maybe there is a situation where they are obliged but do not and as a matter of practice the New Zealand Government has not been enforcing the delegation. I do not think that is covered. I think that again it is taking a precedent relating to the Army and has not looked at it closely. 
Lastly I am concerned about the right to hold a person in custody for as long as is necessary to enable the person to be taken to New Zealand. It does not say that that should be as quickly as possible. 
Hon PETER DUNNE (Leader—United Future) 
: 
 I want to speak briefly in support of the Crimes and Misconduct (Overseas Operations) Bill which was the subject of reasonable consideration by the Foreign Affairs Defence and Trade Committee. As I begin I want to pay tribute to the joint submission we received from Alberto Costi Fran Wright and Naresh Perinpanayagam of Victoria University Law School which helped guide us through some of the issues that are relevant to this bill. Despite what some members have said I think this bill is relatively straightforward legislation and I think the danger in a matter like this is to try to make it more complex than it need be. It arises from the fact that we now have deployed on an increasing basis overseas people representing New Zealand who would not come under the normal rubric of the relevant armed forces disciplinary procedures that have been in place for many years and consequently a new category of operation has in effect been created by the description of this bill. 
I listened to some of the comments regarding the scope of the jurisdiction and in that respect I would draw members’ attention to the relevant sections of the select committee’s report which set out quite clearly what those limits are. I would further draw the House’s attention to clause 5(2)(a) and (b) and clause 5(3) of the bill as reported back. The concern is that situations might arise that require a degree of flexibility in determining whether a prosecution should proceed although I do not really believe that the Okinawa-type example is one that I could imagine New Zealand wishing to cede jurisdiction on to another country. But that concern is dealt with in clause 5(3) which says in effect that no information can be laid against a person unless the consent of the Attorney-General has been obtained. So there is a regulating procedure involved in that. 
As to the point that the occupational safety and health legislation the—dare I say it—new anti-smoking legislation and various other pieces of our domestic law could suddenly be applied on an extraterritorial basis I think that that is simply a matter where commons ense would dictate otherwise. This bill is focused not on those silly items but on criminal offences and in fact that I suspect is why the bill is called a crimes and misconduct bill. I think that the scorn that would apply to any New Zealand Attorney-General or any set of New Zealand officials who sought to employ all sorts of pieces of New Zealand domestic legislation that could be deemed to carry offences to people employed on overseas operations would be such as to render the exercise of the power unnecessary. It would simply be too much of a farce. 
So in reality this bill deals with a limited set of circumstances and as such it mirrors parallel provisions in our existing legislation in terms of forces overseas and a bill that we actually still have before the select committee relating to forces who may be resident in New Zealand. It is important to see this as part of a trilogy of measures rather than an isolated case. The fact that it attracted only one submission albeit a quality submission demonstrates that there is not a huge concern in the wider community. There is some interest but not a huge concern. The fact is that the committee has reported that we dealt with a range of the issues that we imagined might be at the heart of some of the concerns about the bill and have spelt them out in our narrative report reasonably fully. We had a situation where I gather there was near unanimous if not total unanimous support for the bill and that demonstrates that the balance is about right. So I think that the House simply ought to proceed certainly to pass the bill through this stage and hopefully before too much longer pass it through its remaining stages. We will be supporting that. 
Hon TAITO PHILLIP FIELD (Minister of State) 
: 
 I am very pleased to contribute briefly in support of the bill. There is a gap in our legislation that needs to deal with particular offences or misconduct that may occur when people are serving in an operation—in this case the Solomon Islands. We know that New Zealand is contributing to the restoration of law and order in the Solomon Islands as are other Pacific nations. It is only appropriate that those who go there to represent New Zealand respect the laws of that country as well as New Zealand law. Through this bill New Zealand will exercise jurisdiction over police and civilian personnel serving overseas. I am very pleased that the select committee has done a good job and that there is unanimous support for this bill amongst all the parties. I support the bill. 
JUDITH COLLINS (National—Clevedon) 
: 
 There are a couple of issues that are a little concerning to me. The first is that this legislation has a retrospective element to it. I understand from reading the seven pages of the report back from the select committee—for what is a 4-page bill—that it is intended the bill take into account personnel serving in the Solomon Islands. That may well be a very good reason but this should have been done before the personnel went to the Solomons and I am sure that all parties would have helped to facilitate it. 
Retrospective legislation is by its very nature something that we should avoid in this country. To tell people that they will be subject to a law that was not in effect when they committed an action or an omission or undertook to serve overseas is a very bad precedent. Certainly I have noticed that in quite a lot of the legislation that has come before the House in the last 18 months that I have been here an element of retrospective nature has come in often. That points me to the very shoddy nature of the Government and its processes whereby good legislation is allowed to languish while other rubbish goes through. 
My other concern is about exactly how the bill is supposed to work. I look at clause 5(2)— 
Hon Taito Phillip Field 
: I raise a point of order Madam Speaker. With respect I took offence at the member describing the business of the House as rubbish. I think it was quite unparliamentary to refer to the work of this Parliament in that way. 
JUDITH COLLINS 
: Speaking to the point of order I say that I certainly was not referring to the business of the House but to some of the legislation put before it. 
Madam DEPUTY SPEAKER 
: I think that is perfectly OK. 
JUDITH COLLINS 
: Coming back to my point I am concerned at just how this bill will work. In clause 5(2) the tense seems slightly unusual. It states: “If any person to whom this section applies does or omits to do any act outside New Zealand”—so if we are talking about the Solomons an act or omission in the Solomons—“that if done or omitted within New Zealand would constitute an offence”—that is fine—“that act or omission is deemed to have taken place within New Zealand unless—(a) the person is subject to the criminal jurisdiction of the place in which the act or omission took place;”—in other words the Solomons— “and (b) the authorities in that place—(i) are not subject to … cede jurisdiction.” 
My problem with this clause is that it means the person must have done the act or omitted to do it. Surely that is something a court of law would have to find before the rest of the clause could come into play. I am just a little confused about that and I would really like to hear from the Minister or perhaps the officials are available to give me some advice on that. It seems just a little bit as though someone who is accused or charged under this bill when it becomes an Act could say: “I have to have been proved to have done it before I come under it.” It is all a little confusing and I am a little concerned that with the very best will in the world—which I am sure the House has towards this bill—we might have a bit of a chicken and egg situation whereby we are not quite sure what is supposed to come first. 
One of the things lawyers look at when they are acting for and defending someone charged is this sort of possible inconsistency. I am quite happy to be shown wrong by the Minister and I would really love to hear from him on this. It just seems as though the tenses are a little bit out. 
The other provision in this clause is about the authorities in that place—in other words the Solomons in the example we are using—not being subject to any obligation to cede jurisdiction to the New Zealand authorities. I wonder in what circumstances authorities in another jurisdiction would be obliged to cede jurisdiction to New Zealand authorities. I take up the point of my colleague the Hon Tony Ryall in his very good speech about this who raised the issue of the American servicemen accused of committing an offence in Japan. The Americans wanted to have the case tried in America and that was absolutely unacceptable to the Japanese. I wonder what sort of situation that would be so I would be happy to hear from the Minister on that. 
The other thing too is that we need to make sure that when people are serving overseas—whether they are part of the police or part of the civilian population that happens to be serving—they know full well about this bill and when it becomes an Act about it as an Act. That is because this is a totally new situation for our peacekeeping people and it is very important that they know fully about it. These are people who risk their lives often for not particularly substantial pay and they need to know what they are going into. It concerns me that some of them may feel they will not necessarily be subject to it and we need to be assured by the Minister that current and future personnel in the Solomon Islands will be properly advised of this. I would like to make sure that there is proper procedure to have that documented. 
I close now with the thought that this is good legislation but there are a couple of points I would like to have sorted out during the Committee stage. I really would like to hear the Minister on those points. 
DAVID BENSON-POPE (Labour—Dunedin South) 
: 
 I am pleased to rise in support of this legislation. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 Was that not a measure of how this Labour Government has fallen? The senior Government whip stood up presumably to support a piece of Government legislation and spoke for what was it? Five seconds I think. That shows how Labour Party members have lost confidence in what they are doing. They know now that the mood of the country is running against them. They are not even prepared to argue the case for the laws they put in front of this Parliament. David Benson-Pope should be able to do better. 
In speaking to the second reading of the Crimes and Misconduct (Overseas Operations) Bill I think it has been made very clear to the House that National supports this legislation. I think it has also been pretty clear this evening that there are members who are a little concerned about the detail of the bill. In some ways this bill is interesting because one could almost say it overrules the old law. The old law was: “When in Rome do as the Romans do.” but this bill says: “When in Rome do as New Zealanders do.” 
It pays to think about that a bit because although it might be a simple argument to say that New Zealanders when serving overseas should comply with New Zealand law—and I think that is a very good argument—we have to make sure there are no fishhooks around all of this that the simplicity of the legislation overlooks. Of course the role of the select committee has been to consider those issues. 
My good colleague Judith Collins—a very very good new member for National—has pointed out that the bill is retrospective. The members of the select committee noted that as well and sought advice as to the implications of that. It is retrospective as stated by clause 2 “Commencement”: “This Act is deemed to have come into force on 24 July 2003.” That date was over 6 months ago so there are issues there. What about our servicemen and women serving in the Solomons right now? Are they aware that they will be subject to this law once Parliament passes it? 
We were assured at the select committee—and I made notes to that effect on 28 August last year—that New Zealand men and women serving in the Solomons who would be subject to this legislation and who were not already subject to the United Nations (Police) Act and various other acts that cover our armed forces were advised prior to deployment. We were told that prior to deployment clear notice had been given to New Zealand men and women serving in the Solomons which is the theatre where there is a risk of retrospectivity catching people unawares. 
I suppose we in Opposition have to trust the Government on that point—that it has properly advised people serving on our behalf in the Solomons of this new law. It is important because retrospective legislation by and large should not be supported by Parliament. There are good reasons to support it in this case and one reason worth mentioning is that the old law of “when in Rome do as the Romans do” could leave New Zealanders serving overseas very vulnerable. If we did not have this new law in place it would mean that certain New Zealand citizens would not be immune from the idiosyncrasies of jurisdiction in places where they were serving overseas. 
Clearly that could have unsatisfactory ramifications for New Zealand men and women serving overseas. Not all countries—especially where New Zealand men and women might be serving—have the sophistication of law that New Zealand has. I do not want to be unkind about that but it is fair to say that the standard of law in our country is reasonably sound. It is based on Westminster law and has stood the test of time. There are a number of countries around the world where New Zealand men and women might be serving where law as we know it has been in place for less time and might be less certain. We do not want New Zealand men and women serving on our behalf caught up in a jurisdiction in which the certainty of the law that might protect them is less clear. 
The concern about retrospectivity is very valid and New Zealanders serving overseas—particularly in the Solomons—must have been advised of that but we want New Zealanders overseas to have the protection of our law rather than being vulnerable to some of the idiosyncrasies of law elsewhere that might be less sound than our own. To me that is the balancing issue. 
The select committee looked at a few technical issues especially around the implementation of the bill. It is all very well to say that a New Zealander overseas would be subject to the new law but the question arises of how to give effect to it. Members will note that the select committee recommended an amendment to clause 6 in order to make sure that a New Zealander arrested outside New Zealand could be detained in custody outside New Zealand for as long as is reasonably necessary to enable that person to be brought back to New Zealand. That was a practical measure the select committee saw as being sensible so that this law could be given effect to overseas. 
Issues were raised about how the situation might work when a citizen of a third nation is serving with a New Zealand force overseas and that is an area where this bill is perhaps least clear. In that circumstance we have a person working—employed if you like—with the New Zealand force and one could almost argue therefore subject to New Zealand law. Yet I am not sure that that is as unequivocally clear as it might be. That is one issue that the select committee did grapple with a little and when we get to the Committee stage I would like to hear Government members comment more on it because we do not want to put law in place that is really messy around any particular issue. We should not get too neurotic about it but there is an issue there about how this law technically applies to people from a third nation serving as part of a New Zealand force overseas. 
Those are the main issues that occupied the minds of the members of the select committee as we looked at this bill. It is needed legislation. Our servicemen and women overseas who are not already protected by other legislation need to be protected by New Zealand law. They need immunity from the idiosyncrasies of foreign law and for those who might argue that people overseas might not know about this legislation that is a good balance. The important thing is that the group it will affect the most are the people serving in the Solomons. We have been advised that they have been given clear notice that this legislation will apply to them retrospectively. In many ways it provides more security than anything else. That is why the National Party is supporting this measure and will be voting in favour of it. 
STEVE CHADWICK (Labour—Rotorua) 
: 
 I rise to support the bill. 
Bill read a second time. 
Social Security (Long-term Residential Care) Amendment Bill 
First Reading 
Hon RUTH DYSON (Minister for Senior Citizens) 
: 
 I move  
That the Social Security (Long-term Residential Care) Amendment Bill be now read a first time. 
 At the appropriate time I will propose that the bill be referred to the Health Committee. The bill fulfils the Government’s commitment to introduce legislation to remove asset testing. The current legislation regarding the income and asset testing of older people in residential care is quite frankly unfair. Older people are required to use up their assets to contribute to their care costs whereas other users of health and disability services do not have to do so. In deciding the best way to change the current policy the Government had the difficult task of balancing considerations of fairness for older people against the significant cost of changing the current asset-testing provisions and the demands of other priorities for social spending. This bill correctly balances those considerations. 
The asset-testing policy is very complex. The current legislation is the result of many legislative amendments and additional regulations over many years. We now have the opportunity to set out the changes in plain language in a straightforward bill that contains all the related provisions. That will help everyone’s understanding of the requirements. As the proposed changes to asset testing are significant the Government wants to encourage people to make submissions on the legislation and to allow full examination and debate at the select committee stage. 
The key proposed changes in the legislation are as follows. From 1 July 2005 people aged 65 and over who require residential care indefinitely will retain significantly more of their assets than under the current regime. Currently single people in care can retain $15000. Couples where both partners are in care can retain $30000. That figure will increase to $150000 from 1 July next year. Couples where one partner is in care can currently retain $45000 plus their home and car. That figure will rise to $55000 in 2005 with the retention of the home and car as exempted. The amount that both single people and couples can retain will increase by $10000 every year after that. 
We consider that it is legitimate to expect people to contribute towards some of the cost of their care because those costs would need to be met if the person was living at home. As such the income test will be retained. At the moment the partner of a person in care is required to contribute up to $636 per week towards the cost of the partner’s care. That is considered unfair and it creates significant disincentives to working. Therefore from 1 July next year the partners of older people in residential care will not have to contribute from their personal earnings from paid employment towards the cost of their partners’ care services. 
People will be able to retain a substantially increased amount of assets. Income from those assets such as rent will be included in the income test. The first $780 of income from assets per person per year will be exempt from income testing. That is broadly equivalent to the interest generated by $15000 in the bank. The bill also states that people who are needs-assessed as requiring care have to contribute a maximum of $636 a week towards the cost of their care only if they have assets above the exemption thresholds. From 1 July 2005 that amount will be adjusted in line with inflation. 
The bill sets out the residential care subsidy scheme in a clear and comprehensive manner including the obligations to pay for care and the processes of needs-assessment and financial means - assessment. Those changes will make further progress towards fair and affordable policies for older people who need long-term care. At the same time there is an appropriate mechanism for older people to contribute to the costs of care that they would expect to pay for if living in their own homes. 
The changes are forecast to cost $110 million in the first year of implementation. That figure will rise significantly over time reflecting the $10000 annual increase in the exemption threshold and the growing number of older people in our population. The Government has made separate provision for the additional funding needed to pay for these changes. That funding will not reduce the amount allocated to current health and disability services. 
At the same time that the progressive removal of asset testing is implemented non-residential services are to be improved to support people to remain living safely in their own homes and their communities. That recognises that in contrast to earlier decades people are choosing to stay in the community longer and are now entering residential care at an older age and for a shorter period when they are frailer have complex needs and require a high level of care. That is consistent with the objectives of the positive ageing strategy 
and the Health of Older People Strategy. They promote the development of flexible and coordinated community-based services to enable older people to stay at home if that is their choice. Improving services to support older people in the community is the key to developing a successful integrated continuum of care whereby older people can access the services they need at the right time in the right place and from the right providers. 
The new $150000 threshold substantially increases the assets that people can keep. Single and widowed people will be $135000 better off than at present and married couples where both partners are in care will be $120000 better off. For many people their houses will be immediately exempt. People who have sold their houses will be able to keep a significantly increased level of saving. All assets will be eligible for exemption including people’s home holiday home car shares bonds and savings. That supports our objective of encouraging retirement savings. 
It is estimated that 31000 or 7 percent of older New Zealanders are currently in long-term residential care. The new policy will benefit people already in care who are not currently eligible for a residential care subsidy and all new people who are assessed as needing long-term residential care from 1 July 2005. The new policy means that 5600 additional people will be eligible for the subsidy from that date taking the proportion of those in care who receive the subsidy to 70 percent. 
To conclude the progressive removal of asset testing for older people in residential care recognises that older people have the same rights as all other New Zealand citizens and acknowledges their important contribution to our communities. I commend the progress of this bill to the House. 
Dr LYNDA SCOTT (National—Kaikoura) 
: 
 I think Ruth Dyson will feel really bad when she faces up to Grey Power with this half-hearted lukewarm response that tries to keep a promise. Here we are in the depth of the night bringing in this bill. It has been brought in at this time to minimise its impact because Ruth Dyson knows very well that the Social Security (Long-term Residential Care) Amendment Bill has been a long time coming. It was promised through two elections that this Labour Government would remove income and asset testing. Well has it? 
Simon Power 
: Have they? 
Dr LYNDA SCOTT 
: No. Has this Government removed asset testing? Absolutely not! Has it removed income testing? Absolutely not! Not only is that the case but what it has done is to put some clauses in this bill that will probably bring the rest home industry in this country to its knees. 
For two elections this Labour Government has dangled the carrot of the removal of income and asset testing for residential aged care before the noses of Grey Power and older voters. Finally tonight we see the bill. Why do we see it at this time? Why has it been rushed on to the Order Paper? Simply and utterly so no one will hear what is going on. Yes I think Grey Power and most of New Zealand expected more than this bill from Ruth Dyson. But they have got very little because the Government has not removed income testing or asset testing. 
Let me quote from new section 145(1) of the Social Security Act which is proposed to be inserted by clause 4: “An eligible person who has been needs assessed as requiring long-term residential care services indefinitely”—now that raises the question of what will happen because we do not always know whether someone will need care indefinitely so that will be interesting—“may apply at any time for a means assessment.” A means assessment! New section 146(1) then states: “The first stage of a means assessment is a means test as to assets” and new section 147(1) states: “The second stage of a means assessment is a means assessment as to income”. 
Income and asset testing remain. All that has happened is that the threshold has been lifted. Guess who did that back in 1998? National lifted the threshold then. This bill makes no changes to the actual regime of income and asset testing. It does not remove it. This Government is simply increasing the amount of assets that a person can keep. In 1998—or it might have been 1997—the then National Government did the same thing. It increased the amount that a single person could keep from $6000 to $15000 and increased the amount for a couple from $15000 to $30000. A married person with one person in care keeps the house the car and $45000 in assets. That is what the threshold was raised to then. 
 Now under this bill which does not come into force until 1 July 2005 a single person or married couple can keep $150000 in assets. The amount does go up by $10000 per year but that in no way removes asset testing. Members can just think about what a house was worth 10 years ago. Most houses have doubled in value over that time and some have risen in value a great deal more than that. So we can think about house prices now and expect them to double over the next 10 years. But assuming that the average price of a New Zealand house now is $230000 and that under this regime someone can keep $250000 in 10 years we know the house is likely to be worth a great deal more than that then. So to say that this bill removes asset testing is simply and utterly a con. All that it does is increase the amount of assets a person can keep. 
There is one very socialistic part of this bill where the Government has decided that there will be a maximum contribution that an individual can pay for any type of care: rest home hospital or dementia care. That maximum contribution will be $636 per week. Any top-up of that will be down to the Government. At the moment if someone wants to go into hospital care that is the case and that has been so since the mid-1990s. But that provision is now to be applied to rest home care. It means that if people want to pay more than the maximum—because they happen to have the money to do that they choose to live somewhere that happens to have high property values they want to be at the home that is down the road and they can pay for it—they cannot do so. They will not be able to do that under this Government. They will not be able to pay more because $636 is the maximum that anyone in this country will pay. 
What will that measure do to the industry? It will bring people to their knees in an industry that has developed and provided excellence in aged care. I have travelled through the United States through Australia and through Britain and I know that our aged-care sector has done an excellent job. Where is the freedom of choice in that and where is the equity? There is none. This Government is deciding the maximum amount that people can pay. What about the price difference between Auckland and Invercargill and the difference in investment needed to meet the cost of developing a rest home in those areas? The cost is far higher in Auckland so in Auckland rest homes would want to be able to charge more than in Invercargill. But they will not be able to do so under this Government which is going to dictate what can be charged above that figure of $636 per week because the Government will fund it. That will constrain the value of the industry but the Government does not care about the wages of the people who work in it. We have heard so much about this Government caring about workers but it does not care about the wages of those people. It is only by the sector being able to make more money that it can pay its care workers more. 
This measure is inequitable. This one rate to fit all does not fit New Zealand’s health-care sector and it will mean that we will see the rest home industry brought to its knees. The level of dependency of people going into rest home care has increased markedly. Someone was telling me just today that when that person’s mum went into care years ago she drove to the door and the home needed a certain number of car-parks for the residents. Now they go there in an ambulance because in the 1990s National put a huge amount of money into what was called Ageing in Place to pay for home care and personal care in people’s own homes. We put a huge amount of money into that. 
Hon Rick Barker 
: Wrong wrong. 
Dr LYNDA SCOTT 
: I know that happened because I happened to be a geriatrician—a doctor working in that area—at the time. I think I know a lot more than the member sitting over there on the Government benches who has probably had nothing to do with the aged-care sector in his whole life. If he wants to say something why does he not get up and actually take a call? 
The fact is that if people want to move into rest home care they should be able to pay more than the maximum if the services cost more or if it is in an area of high cost. But this Government does not understand the principles of business and it does not understand free choice. It believes that everyone should be the same and brought to the lowest common denominator. Rest homes around New Zealand have been struggling and this measure will kill some of them. 
The removal of asset testing for 50 to 64-year-olds will affect a small number of people and those are people who have things like multiple sclerosis and early-onset Alzheimer’s disease. We have yet to really determine the cost of the legislation—I see that Ruth Dyson said that it would be $110 million in the first year. Older New Zealanders need to realise that if $110 million gets spent under this legislation it will not be spent on new services for the elderly—not on carer relief not on increasing home-based care not on equipment not on more rehabilitation and not on more day care for people with Alzheimer’s disease. This is where the money will go and who will benefit from that? It is not the older person who will benefit but his or her children—it is their inheritance that will be increased. Older people need to realise that. We think that $150000 is a very high level to raise the asset level to and we consider that older New Zealanders will get very little from this legislation. 
In summary asset testing remains but the level has increased for the assets that people can keep. Income testing remains. Older New Zealanders will receive very little in the way of any new services because of this legislation. Wages will not go up in the industry and the $636 cap all over New Zealand is inequitable and will lead to industry failure. We very reluctantly support this bill going to a select committee but we will want to see major changes occur in this bill after the submission process before we can support it any further. 
SIMON POWER (National—Rangitikei) 
: 
I raise a point of order Madam Speaker. To avoid interrupting her speech I did not want to raise this point of order while my colleague was speaking. During the Minister’s speech on this bill she was allowed to conduct her contribution with very little interruption from this side of the House. During the speech made by my colleague Dr Lynda Scott we on this side of the House had to endure a constant barrage from the Government’s senior whip and from the junior Minister of Customs. I seek from you some guidance with regard to a fair and impartial way of conducting proceedings in this House when members from different sides of the House are making their contributions. 
Madam DEPUTY SPEAKER 
: I thank the member for his contribution. There was interjection on both sides. 
STEVE CHADWICK (Labour—Rotorua) 
: 
 I certainly rise to support this bill. I found the speech made by the Opposition’s spokesperson for the older person very sad because they are now being led by a spokesperson who is carping on about not enough money going into care for older people. She has gone around Grey Power asking: “When is this Government going to keep its commitment to the older person to introduce asset-testing removal legislation?” 
Well here it is and thank goodness it has come in. When I go out to Grey Power its members are going to be very pleased to have certainty at last. Grey Power has not known how to manage its affairs when the Government has been saying that it would be bringing in the removal of asset testing. Grey Power members have asked: “When are you going to do it? I need to have certainty about how to manage my affairs in my old age.” 
I also found it amazing that the Opposition carps on about this bill saying that it will bring the residential aged-care sector to its knees. This is not about protection of the residential sector at all; it is about protection and certainty for older people so that they can have a decent standard of living in their old age and while they are saving for it. 
I am proud to say that I came from a socialist Government where I did not hang on the threads and from a family who also believed in looking after their old people. I never ever planned what I would do with the legacy my parents would leave behind for me. The legacy they gave me was about decency and looking after them in their old age. I did not give a hoot about an inheritance and frankly whatever I inherited was there to look after my parents when they went into aged care. I did not care what crumbs we got at the end of it. 
It is an appalling indictment to see the member talking about how we will protect the industry. That is not what this bill is about—this bill is about looking after older people. It is a substantial investment and the member could not even acknowledge that—a $110 million cost. That has been costed several times and that is why the removal of asset testing will be implemented progressively increasing by 10 percent per annum over time and is inflation adjusted. This legislation is about protection for older people and about certainty in their old age. 
In conclusion one thing I want to say about certainty in old age is this: let us ask that member in Opposition what her leader is going to do about superannuation for older people. Let us get honest about superannuation for older people because we know jolly well what will happen there for older people. I will be pleased to go around Grey Power meetings and tell them about the sort of security that that party is proposing for people in their old age. It is becoming manifestly apparent that all that party is interested in is propping up the residential-care sector. 
It is delightful to hear the Opposition talking about wages—improved wages for aged-care nurses and care attendants. Before we came into Government—and that member knows because she received the Nelson petition—the increases that went to nurse and care-attendant salaries over the 9 years National was in Government were absolutely abysmal. Wages were frozen and we have been having to incrementally increase their salaries as well as put money into ageing-in-place strategies.We cannot have it all. That is why this is a moderate bill bringing in the removal of asset testing over time. It has been costed it is very expensive and I am very proud to support its coming in today. 
BARBARA STEWART (NZ First) 
: 
 New Zealand First supports this bill going to the select committee. We know that this bill has been on the Government’s pledge card for the last two elections and it is really pleasing to see that it is now at the stage to be debated and heard through the select committee process. The elderly in New Zealand have been waiting for this bill for quite some time and will be pleased to see this change in legislation. We hope they are not disappointed when we go through it in the select committee. 
New Zealand First has been pushing for a law change since 1998 when we succeeded in removing asset testing only to have National renege on the agreement. Our policy is to remove income and asset testing for elderly needing long-stay geriatric hospital care services and to remove asset testing for those in long-stay geriatric private hospital care. 
The current regime needed to be set out in a clearer and more comprehensive manner because it has been totally unfair to many elderly within New Zealand. Many have saved all of their lives only to see their houses and most of their assets taken away by the cost of rest home care. The small sum left was barely enough to bury them. Others who had not saved were totally supported by the State. From New Zealand First’s point of view any policy designed to impoverish our senior population is destructive and short-sighted. Elderly people in New Zealand need certainty in their old age and hopefully this bill will help in that respect. 
It was interesting to see in the bill that asset testing will be removed for those aged 50 to 64 in residential care who are currently required to use all their assets. This is a very small group of people and in my experience the larger group in rest homes are in the older age group and therefore do need that certainty. So New Zealand First will be supporting this bill going to the select committee and we look forward to following it through the process. 
SUE BRADFORD (Green) 
: 
 The Green Party like some other parties in this House has mixed feelings about this bill as presented to the House this evening. On the one hand we welcome these Government moves to improve the income and asset-testing regime as it applies to older people in long-term residential care. On the other hand we are disappointed that the bill only moderates the asset-testing regime rather than abolishes it. The Green Party would prefer to see asset testing for residential care abolished altogether. We do not believe that people should be penalised because of their age and feel at the moment that asset testing is a form of discrimination against our older citizens. 
 Indeed the bill as it stands has both human rights and New Zealand Bill of Rights Act implications in that it continues although moderates a means-testing practice that discriminates on the grounds not only of age but also of disability. The initial threshold increases on 1 July this year from $15000 to $150000 for a resident who has no spouse with a whole series of other related increases. The lower threshold for those with spouses not requiring residential care takes into account the fact that any interest in a residential dwelling that is the principal residence is exempted from the asset test. Each of these thresholds progressively increases by $10000 over each of 20 years till 2025 to eventually reach $350000 for those in residential care with no spouse and $255000 for those with a spouse not in care. 
However the impact of the progressive increase in the asset-test threshold over the 20 years following 1 July next year is largely illusory. The asset threshold increases by just under 7 percent for a person with no spouse or a spouse in residential care and by around 18 percent for a person not in care. In the 20th year the respective percentage increases are only around 3 and 4 percent. In many cases the increase in the asset-test threshold will fail to keep pace with the appreciation in value of the assets and/or the invested return on the assets of a person in residential care. As the year 2025 nears it may not even keep pace with increases in the consumer price index. Although there will be an initial dramatic reduction in those subject to the asset test as of 1 July 2005 a progressively increasing number of people will again be required under the proposed asset test to contribute towards the cost of their care over the 20 years between 1 July 2005 and 1 July 2025. 
During the course of considering this bill the Green Party may well be looking at lobbying for certain options such as considering whether we should work towards an annual consumer price index adjustment of the asset-test threshold in addition to the $10000 annual increase and/or a reduction in the period over which the progressive increase in the asset threshold occurs. These options could provide for a much more genuine phase-out of asset testing than that I have described as taking place between 2005 and 2025. 
We will also of course be interested in hearing what I am sure will be a goodly number of submissions during the select committee process. I am sure there are many interested groups and individuals already gearing up to make fairly powerful submissions right now. This issue has been around for many years. 
In conclusion the Green Party will be supporting this bill because it at least begins the process of improving some of the worst aspects of the current regime. I must congratulate the Government on at least taking these long awaited first steps towards clarifying the situation and improving it for many of our older generation. 
Dr MURIEL NEWMAN (ACT) 
: 
 I rise on behalf of the ACT party to speak on this bill. I have to inform the Government that our party will not be voting for this bill for a number of different reasons. But to start off with what is really disturbing is the fact that this bill does not remove income and asset testing as the Labour Party has been promising for two elections. In fact it lifts the threshold for asset testing. It puts out the spin that Labour is dealing to income and asset testing when it is actually not. This is just another example of a pre-election bribe by the Labour Party. We are getting used to this sort of legislation passing through the House because it was not too many weeks ago that we debated the Holidays Bill which was going to give workers 4 weeks’ holiday a year to start in the year 2007 for goodness’ sake! 
 This social security bill does not begin until 1 July 2005. The interesting thing is that before Saturday’s poll by Television New Zealand the Government probably thought the election would be over by then. Now there is nothing surer than that it will have to go its full term before it goes to the polls. Instead of the Government being able to use this bill as a bribe at the next election the commencement date means that the bill will have already become law. Labour will have lost its negotiating power with older New Zealanders whom it hopes to tempt into voting for Labour. This bill is a bribe aimed at a group of New Zealanders who are very important New Zealanders. There are 450000 retired Kiwis. They are a significant voting bloc and it is sad that those people will be misled by a Government that will go around the country telling them that it will remove income and asset testing when it will not. One of the worst aspects of Labour Party politics is that its spin is so big but in reality what it is doing is often so small. 
This bill is about the intergenerational transfer of wealth—taking money from the next generation to pay for the debts of this generation. That is immoral. Why should we expect our children to have to pay for our care and for the care of this generation? When we actually look at the cost of paying for the baby boomers we see that this amendment to the legislation will end up costing this country billions and billions of dollars. The Minister brushes off the fact that it will cost $110 million in the first year. So in the second year it will be $110 million plus because the threshold will increase by $10000 a year and then on top of that the next lot of $110 million or $115 million. By the third year there will be another lot of retirees coming on. 
Remember that every year the number of people retiring goes up. The figures are something like 15000 retiring this year and in 30 years’ time it will be about 55000 people retiring a year. So the cost will become unsustainable for this country. The Labour Government does not care about that and that is what makes it such an irresponsible socialist Government. All it cares about is power. It does not care about what is good for this country. What is good for this country is what is good for the next generation of this country and the generation after. 
The Minister had the audacity to claim that this bill will encourage people to save for their retirement. What a laugh! If this Government really wanted people to save for their retirement the first thing it would do would be to reduce taxes so that working New Zealanders could take home more of what they earn and be able to afford to put it into a retirement fund and not have to rely on the Government to look after them in their old age. When I said that taxpayers should be allowed to take home more of what they earn there was a collective groan from the socialists sitting on the benches opposite. I wonder whether those members have actually stopped to realise that taxation is legalised theft. People have a gun held to their heads and if they do not pay up they face penalty rates which just about ruin them. This Government is quite happy to hold the gun at every taxpayer’s head and take more and more tax. 
 In the future there is nothing more certain than that tax rates will have to increase to pay for this policy. The Minister did not tell us what the projections are. She was silent on that because she is embarrassed; so are those members sitting opposite. If they are not embarrassed I challenge any one of them to stand and tell us what the cost of this policy will be in 10 years’ 20 years’ and 30 years’ time when the baby-boomer bubble hits this country because by that time we will be in a financial crisis if we are not prudent now. 
New Zealanders want to know that their kids will not be ruined by socialists who want to spend more money than the country can afford just because they want to win the next election. I think it is despicable to bring in a bill like this for that reason. Ordinary New Zealanders will look at it and think: “Gosh isn’t that Government being kind.” They will not understand the real implications for this country as we go forward of a policy that will be so costly in the future. 
I ask the Labour Government to justify why working taxpayers who are struggling so hard to pay the bills pay the mortgage—and these days pay off their student loans and all the other debts they have lined up—should have to pay to reap the costs of residential care for millionaire New Zealanders who can afford to pay for themselves. Where is the justification in that sort of policy? It does not make any sense at all in my mind. 
Good public policy means providing help for those in need but asking those who can afford to look after themselves to do so. It means that the small funding that a Government has available should be focused on those who cannot get by without Government support. Why would a Government bring in a bill that provides a blanket lifting of asset-testing levels for New Zealanders when many of those people do not need the threshold lifted because they can manage for themselves? 
The most honourable thing the Labour Government could do if it really is concerned about people in their old age is give people back more of the money they earn so they can save it in a decent retirement fund. When they turn 65 they will not only have the pension but they will have a sizeable income coming into their household. They will be able to afford to pay for any of the bad things that might happen to them or incapacitate them in the future. That is the sort of honourable policy that a Government could bring in instead of trying to use this bill to buy votes to win the next election. That is what is so despicable. 
JUDY TURNER (United Future) 
: 
 There is a much-quoted saying: “The measure of a society is how it treats its most vulnerable members.” We often apply this to children to the sick to mental health consumers and to those with disabilities. Maybe it is time we also applied it to the elderly. 
At the end of March 2002 we had 463000 people aged over 65. This number is set to rise to 551000 by 2010 and to 1 million by 2030. United Future along with Age Concern believes that asset testing is an era of social policy best forgotten. But important human rights lessons need to be learnt. In an age when we value the dignity of those with disabilities and no other group has had to pay for long-term residential care it is unbelievable that it has taken us 6 years to remove this policy. 
Debate interrupted. 
The House adjourned at 10 p.m.