Volume 659 Week 30 - Tuesday 24 November 2009(continued on Wednesday 25 November 2009) 
Text is incorporated into the Bound Volume 
Volume 659 Week 30 - Tuesday 24 November 2009(continued on Wednesday 25 November 2009) 
[Sitting date: 24 November 2009. Volume:659;Page:7967. Text is incorporated into the Bound Volume.] 
Tuesday 24 November 2009 
( 
continued on Wednesday 25 November 2009 
) 
Climate Change Response (Moderated Emissions Trading) Amendment Bill 
In Committee 
Debate resumed. 
Part 1 Amendments to Climate Change Response Act 2002 ( 
continued 
)  
NICKY WAGNER (National) 
: 
 Today I will talk about Supplementary Order Paper 98 in the name of the Minister for Climate Change Issues but before I do so I need to clarify some important issues. Yesterday I spoke about the complexity of the emissions trading scheme legislation and about the problems that people have in interpreting the issue. I spoke about the lack of information partial information and misinformation. This morning after watching Phil Goff on the  
Breakfast 
 television programme I want to bust a few myths that have been swirling around this legislation and I will expose some of the misinformation. 
Myth No. 1 is that this measure is a limp-wristed pathetic response to climate change. It is a bill. like Labour’s that covers “all gases all sectors” and we are the first country in the world to include agriculture. The Rio Tinto smelter in Bluff will be the first aluminium smelter in the world to be under an emissions trading scheme. It is a reasonable rational response to a difficult issue. 
Myth No. 2 is that the public will be subsidising big business. In fact with the exception of the first 2½ years and the half-priced transition to the system under National to protect our fragile economy post-recession until 2018 the Labour and the National schemes are very similar. Until 2018 the costs are about the same. After 2018 the schemes diverge. National’s scheme has a much more gentle phase-out than Labour’s scheme. 
But the difference between Labour’s and National’s schemes is how they deal with the free international carbon credits allocated to New Zealand. They are allocated to New Zealand because we have committed to a carbon price and we have committed to making changes to our economy. Under National they will continue to be passed on to our trade-exposed and emissions-intensive companies to ensure that they and their jobs survive. That is the reason those credits are allocated to us and that is what this Government will do. In contrast under Labour’s scheme they would be seized and the money would be put into the Government’s coffers. So there is no subsidisation; there is only a passing on of allocated carbon credits and Labour knows that. David Parker himself when talking about the allocation of international carbon credits in relation to Labour’s emissions trading scheme refuted the concept but all the Labour members are talking subsidisation now. The Minister has also made it very clear that the National Government will not be purchasing credits to allocate. Our scheme will be fiscally neutral. 
Myth No. 3 is that there is a $110 billion debt for the people of New Zealand. I repeat: there is no $110 billion debt for the people of New Zealand. I thought we had sorted this out. I thought even the most illiterate financial manager could understand this issue but I saw Phil Goff on  
Breakfast 
 this morning trotting out the same old misinformation. It is scaremongering at its very worst. Let me explain. The $110 billion figure was obtained by crystal-gazing to 2050. It would apply only if firstly Labour’s emissions trading scheme went ahead and secondly if Labour seized the free carbon credits and did not pass them on. That would have produced maybe a $23 billion profit at the expense of the people of New Zealand. Thirdly it would apply only if Labour did not spend the seized credits. We must remember that once the public realised that Labour was making a profit at their expense it promised to spend them; it said it would spend them on low-carbon initiatives. So they would have been gone. It would apply only if fourthly Labour invested the money it had already spent and had compounded the interest. That is a whole lot of ifs and a whole lot of impossible buts and this members should remember is in the year 2050. People can be assured that there never was and there never will be a $110 billion debt. It was a computer-generated what-if scenario that cannot happen. Besides there will be regular reviews starting in 2011 to monitor the process and to make sure that any decisions are for the good of New Zealand. 
Now that I have explained that misinformation I want to talk about the Minister’s Supplementary Order Paper 98 and the two policy changes within it. The changes have come out of the submissions process of the Finance and Expenditure Committee which dispels the myth that the process was so rushed that we did not learn anything from it. The first change concerns tree weeds. Tree weeds and the managing of tree weeds—for example wilding pines—were of significant concern to submitters. We heard from a large number of organisations including local government that wanted to see changes in this area. The amended emissions trading scheme had fixed the problems that had arisen under Labour’s emissions trading legislation which had meant that organisations and councils that were removing wilding pines were liable for deforestation payments. However there was a further problem and after hearing the latest submissions National has introduced a Supplementary Order Paper to deal with one further aspect of the situation. The problem occurs when trees have been deliberately planted often by the Government as in some parts of Southland and the Marlborough Sounds and it is from these plantations that wilding pines are being seeded. The changes in the Supplementary Order Paper will deal with this issue. 
The second issue I want to talk about is the burning of waste wood. Over the last few years some industries have moved away from fossil fuels to renewable biofuels. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 It is interesting to follow on from the member who has just resumed her seat Nicky Wagner in the Committee stage of the Climate Change Response (Moderated Emissions Trading) Amendment Bill and to have clarification that Treasury appears to have a crystal ball that is also a computer. We just heard from Ms Wagner that the computers are to blame. The machines have taken over at Treasury. Nobody is putting any data in; there are no actual people. I do not know what Aaron Gilmore thinks of this. He is a former Treasury person and he must have been part of the crystal-gazing over the road there. 
Moana Mackey 
: He was the crystal ball! 
GRANT ROBERTSON 
: In fact he was the crystal ball at Treasury. That is what we heard. The problem for Ms Wagner is that Treasury did make this estimate. Treasury made this estimate for 2050 and National has been very very happy to talk about the emission reduction targets that it has for 2050. It has been very happy to stake its credibility on reducing emissions out to 2050 but suddenly when Treasury—the brains that drive the financial management of New Zealand—comes up with a projection and National does not like it it is crystal-gazing. It does not matter any more. 
New Zealanders will have to pay for this emissions trading scheme. Ms Wagner shakes her head but someone has to pay. I quote somebody she knows very well: “Are there fairies at the bottom of the garden with money?”. Somebody has to pay for this and Part 1 shifts the burden for that payment from heavy emitters to taxpayers. It shifts the burden from heavy emitters to ordinary taxpayers. It shifts the burden from this generation to the next generation. Last night we heard a disgraceful interjection from the National side of the Chamber on one of my colleagues. Jacinda Ardern was speaking about the impact of this bill on future generations and we heard an interjection that said she had no right to talk about that because she did not have children. 
Hon David Parker 
: It was Amy Adams. 
GRANT ROBERTSON 
: That was who the interjector was I say to Mr Parker. I was appalled by that interjection as I myself am somebody who does not have children. I will tell members of some other people in our history who have not had children and who have made a big influence on this Parliament: Michael Joseph Savage and Peter Fraser. They did not have children but they cared about future generations. On this side of the Chamber we also care about future generations whether or not we have children. Part 1 of this bill is pushing the burden for paying for this for paying for our future on to future generations without taking responsibility for it now. I believe that that is a great shame. 
We need to recap a little on where we have got to. I am a relatively new member in this House so I take the advice of experienced members who have been here for some time. I want to quote from one of those members: “The importance of getting this legislation right cannot be overstated. [The development of an ETS] represents the most significant economic reform since the deregulation of the economy in the late 1980s. Getting this bill right is also important for the environment. Poor policy can also have unintended adverse environmental consequences.”—I think we can agree with that. The quote continues: “the legislative process has been rushed and inadequate given this bill’s complexity and significance. The public has not had adequate time to examine and submit on the bill and it is inevitable that serious mistakes will be made that will adversely affect New Zealanders … this process has not been conducive to getting such an important bill right nor in getting the cross-party support needed to ensure the stability and longevity of New Zealand’s ETS.” 
Moana Mackey 
: Who said that? 
GRANT ROBERTSON 
: I will tell members that the Minister in the chair the Hon Nick Smith said that and he was talking about Labour’s climate change legislation last year. 
That legislation had had over a year’s worth of work on it extensive consultation prior to it being introduced with working groups working alongside the Government throughout the process and a proper select committee process with a wonderful chair in Mr Chauvel and Mr Smith told us last year that it was inadequate. I ask members what we are seeing now. We are seeing a process rushed through select committee legislation rammed through in urgency and we heard yesterday that the deal with the Maori Party was agreed to 18 minutes before it was announced to the public. Is that the proper scrutiny this bill deserves? Is that the proper scrutiny that Dr Smith was talking about last year? 
Paul Quinn 
: Absolutely! 
GRANT ROBERTSON 
: No it is not. This bill has been rushed through and this process is a shambles. Over there is Mr Quinn the politiciser of the Public Service. I wonder whether he will be organising something in association with the Ministry for the Environment in his electorate over this. I do not think so. 
This process has been deeply deeply flawed. This is what the Treasury which the Government side of the Chamber does not want to listen to said about this bill: “The level and quality of analysis presented is not commensurate with the significance of the proposals which represent major design changes to the Emissions Trading Scheme and the Regulatory Impact Statement does not provide an adequate basis for informed decision-making.” Treasury made that comment in all seriousness; the people at Treasury are not frivolous people. The National Party campaigned on respecting the professionalism of public servants but it has completely failed to do that in this case. Treasury made a serious statement and it further stated that the changes to the emissions trading scheme “come at a cost to the economy as a whole by delaying the transition of the New Zealand economy to a carbon constrained world.” [ 
Interruption 
] I repeat for Mr Quinn’s benefit that the changes to the emissions trading scheme “come at a cost to the economy as a whole by delaying the transition of the New Zealand economy to a carbon constrained world.” 
That is the problem with Part 1. National seems to believe that we can somehow reduce our emissions and meet our international targets without having to really change. Nicky Wagner described Part 1 as a “gentle phase-out”. What that really means is that the people who need to be fronting up—the large heavy emitters—are being given a gentle phase-out and the taxpayers of New Zealand out to 2050 and beyond will shoulder the burden of this legislation. Future generations will shoulder the burden because this Government has not been prepared to front up take some responsibility and take some time to develop a scheme that is sustainable and has cross-party support. That is shameful. Part 1 is deeply flawed. 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 I raise a point of order Mr Chairperson. I did not raise the point at the time because I did not want to interrupt the flow of the debate but a member in the Chamber Mr Paul Quinn has maintained a running commentary of interjection which is I think disruptive. It is also contrary to the Standing Orders for a person to shift his seat in order to interject. I suggest that if Mr Quinn wishes to continue to scream his lungs out he is returned to a seat over there from now on. 
Paul Quinn 
: Mr Chairperson— 
The CHAIRPERSON (Hon Rick Barker) 
: No I do not need any comment. This is a well-worn path; we have been here on many occasions. I say to members that I am very tolerant of these things. If people want to shift around the Chamber and sit closer down this end of the Chamber because it intensifies the debate I think that is a good thing. Interjections are part and parcel of a robust debate in the Committee stage and both sides have interjected quite robustly. I think it adds to the flow of the debate to have interjections backwards and forwards. I could certainly hear all of the comments being made by the speaker when Mr Quinn was interjecting. The member speaking had the advantage of the microphone. I did not find the interjecting particularly disruptive. 
I also say to the member who raised the point of order that a point of order needs to be raised at the time. It cannot be retrospective. If at the time the member feels that interjecting is disruptive the member must raise the point of order then and there. Once time has flowed the point of order has gone; it cannot be retrospective. 
But I took the member’s point that we should be careful about interjections and make sure the debate can be heard. I am sure Mr Quinn will take cognisance of that as will those who have made the loud robust comments that I have heard from my left-hand side as well—the many and several and I will not name them all. 
Hon DAMIEN O’CONNOR (Labour) 
: 
 When I was in the Chamber last night I heard an interjection from the Minister in the chair the Hon Nick Smith and I thought it important to clarify that comment this morning before I get into other points in my speech. He accused my colleague Chris Hipkins of double standards I guess for raising the point of the outrageous rise in power prices because he said Labour was campaigning for changes to the Climate Change Response (Moderated Emissions Trading) Amendment Bill that might increase power prices. Well there is some truth in both of those statements. What Mr Hipkins has been raising is the outrageous rorting of the system by State-owned enterprises by dominant players. That point has been clearly identified in reports in this country and Mr Hipkins has every right to point out the reality that the Minister is part of a Government that is demanding more return from power companies. Unless we raise that concern no doubt the Minister Nick Smith and his mates will extract more money from the State-owned enterprises through excessive electricity prices. 
On the other hand we know that the impact of this bill will mean increasing costs for any area of energy utilisation. That is the reality of the emissions trading scheme legislation. We cannot shy away from that. But we have to ask the question why we are doing it. Members on the other side of the Chamber say they are great champions of the market. They believe that market signals will determine behaviour. Well that is fairly true I have to acknowledge so where we have increasing costs we will have decreasing demand or so the saying goes. The emissions trading scheme is designed to apportion climatic costs environmental costs on to the whole economy so that we will change our behaviour reduce our emissions and become more efficient in the utilisation of hydrocarbons or any form of energy. The Minister in the chair the Hon Nick Smith nods his head. I think that is what we are trying to achieve here. But the issue Labour members are raising is whether this amended legislation will give effect to what we want which is to reduce international emissions. 
I will concentrate on New Zealand because I speak on behalf of the agricultural sector a sector that will have the lion’s share of concessions along with the fishing industry and along with some sectors in our society that are into forestry. There is an inherent unfairness here because what we are seeing is a shift in wealth; low-income New Zealanders—people who do an ordinary job work hard and try to look after their families—will be paying more. Treasury gives us forecasts for many areas—accident compensation for example. The Minister has been happy to use forecasts from Treasury on accident compensation moving out to 2030 to say that the scheme is broke. Well I challenge his assumption but he is happy to use forecasts there. Contrary to Nikki Kaye’s assumptions we have to rely on forecasts from Treasury in other areas. When we come back to the emissions trading scheme the Treasury forecasts say that we may be shifting wealth from ordinary New Zealanders to some polluters—to some major emitters—to the tune of $100 billion. That is a huge transfer of wealth. The question is whether it will assist our achievement of the goals of meeting our international obligations and ultimately reducing our emissions into the atmosphere. It is about having some positive effect on global warming on climate change—call it what you like. That is what we are trying to do here. 
What Labour members say is that the compromises and the sweet deals between the Maori Party and the Government including shifting out the inclusion of agriculture from 2013 to 2015 are the kinds of deals that will reduce the effectiveness of the legislation we put in place last year. We say that this bill is a sham. In fact it is not just a sham from the point of view of ordinary New Zealanders who will pay another $100 billion; the major beneficiaries of the Government’s wheeling and dealing—arguably the forestry sector and the farmers—also think it is a sham a shambles and a mess. So if the major beneficiaries of the Government’s wheeling and dealing think this whole legislation is a shambles then perhaps it begs the question of whether we should be passing it at all. Sensible New Zealanders—the few who are listening to this debate and a few more who might have been listening last night—who are starting to understand what the emissions trading scheme is for know that we have to be part of an international movement to try to reduce the human contribution to climate change and that if we are not part of it we will not be able to sell anything to the members of that movement and we certainly will not be able to sell anything to the high-value markets. The farmers will not be able to get rid of their goods. Those countries that currently buy our goods will say that we are not part of the international effort to reduce climate change so they will not want our goods which may have been produced in an unsustainable way. 
Labour brought into this House legislation that moved us in that direction. It was a compromise all round. It did not go so far as to put at risk our world trade obligations by providing a huge subsidy to farmers that might have undermined our efforts and our moral high ground in asking for freer trade around the world. We had reached that compromise. The question I have for the Minister is whether his shifting out of the date of the inclusion of agriculture puts at risk our position in world trade negotiations in that we are seen to be giving a huge subsidy to agriculture and thereby undermines our ability to get free-trade agreements with Europe and other high-value markets. This scheme might put that at risk which may be one of the reasons that Don Nicolson the president of Federated Farmers says this bill is a sham and a shambles we should step right away from it and maybe he says we should go back to a carbon charge. 
Hon David Parker 
: That would be silly. 
Hon DAMIEN O’CONNOR 
: That would be silly. I have to say that I thought the carbon charge idea was a good step in the right direction when we discussed it and introduced it. However who campaigned against it? Federated Farmers. They called it a “fart tax”. Well with the wisdom of hindsight or call it what one likes—a road to Damascus moment or whatever; I do not care—Federated Farmers— 
Hon David Parker 
: You know why they liked it? Because they didn’t have to pay. 
Hon DAMIEN O’CONNOR 
: Of course they do not want to pay any more than they have to but they are now coming to the realisation that to trade long term into high-value markets they must be part of an international effort to reduce climate change. The question is why they would think this legislation that Nick Smith with his Ministers and Cabinet has negotiated with the Maori Party will work. Sweet deals have been offered to some iwi groups. Sweet deals have been offered to quota owners—but not for catch not for fishermen. The quota owners will get all the benefit of the transfer. The Minister in the chair shakes his head. In fact 50 percent of the fish caught in this country is caught by foreign vessels and they will not have any impost from our emissions trading scheme; the fishing industry and the quota owners will have further incentive to use foreign boats to catch fish in New Zealand waters. That is an outrage along with most of the things that this Government has negotiated behind closed doors in dark rooms to try to get this flawed legislation through the House. 
If farmers who are the greatest beneficiaries of this change think it is a sham then maybe the rest of the country is justified—and the Opposition certainly is—in saying that this change to the legislation that Labour introduced to the House is a waste of time. It will not give effect to what we really want from the scheme which is to incentivise people to change their long-term behaviour in order to reduce their emissions. Yes there will be an additional cost on electricity and on all other hydrocarbons. That is the reality. The Minister knows that. Whether it is his legislation or sensible amendments from the Opposition yes there will be additional costs. They must be affordable and they must ultimately give the right signals to people who emit. The problem is that National has done enough sweet deals to not leave in place incentives for the major emitters to use technology and use science to try to reduce emissions over time. In fact the Government halved the amount of money that the previous Government had put in place for agricultural research. It is an outrage. 
Hon Dr NICK SMITH (Minister for Climate Change Issues) 
: 
 I am really enjoying the Committee stage of the Climate Change Response (Moderated Emissions Trading) Amendment Bill. Out there members opposite can get their sound bytes and their cheap shots away but under the blowtorch treatment of the scrutiny of this Parliament we are finding that Labour’s views do not stand up to scrutiny. 
Let me go through three areas where I think Labour is making a big strategic mistake. The first is that we have repeatedly heard Labour members use the figure of $110 billion as the cost of the bill. The truth is that it depends on the way the question is asked about those costings. I will tell the Committee where Labour members are tying a noose for their own necks. If they want to apply that sort of approach to the pricing of policies it will work as follows: for instance Labour has said that part of its policy is to restore a research and development tax credit worth $400 million per year. But if we apply the $110 billion rule—that is if we compound the figure over 42 years the cost of the policy would be $20 billion. I say to Labour members that if that is the approach they want to use for costing then for every single promise they make up to election day in 2011 I want them to price it on the same rules—that is the figure should be added up for every single year all the way up to 2050 and compounded at 6 percent each year. That is how the figure of $110 billion is arrived at. I say to members opposite that if those are the terms of their approach they will blow any credibility they have. There is not a day in this House when they are not making commitments to spend money on this or that cause so we will now apply that funding approach to their promises and that will come to bite them very hard in the behind. 
The second thing that is really interesting is the way the language changes. You see when Labour does a deal with the Green Party and New Zealand First to get its emissions trading legislation through that is MMP politics working well. But when we do an agreement with the Maori Party then that is a dirty secret deal. Let me give members another example. When the previous Labour Government made an allocation to industry the Green Party challenged them; the Green Party said that it was a subsidy for big industry. Mr Parker said that it was not a subsidy. So I say to hang on; I want members of the Labour benches to answer this question: why is it that when Labour makes an allocation to industry it is not a subsidy but when National makes an allocation in this bill it is? 
Then we come to some of the other areas around the bill. Let us remember and recite the history. There were 800 amendments tabled a year ago in this House and what was the reason that Labour wanted to pass that legislation? It was purely political. Labour wanted the legislation through before the election to try to save its skin. Why do we want this legislation through? I will tell members why. We want it through for very practical reasons. What is the biggest issue for New Zealand right now? I tell members that it is the recession and it is jobs. If we do not get this bill through on 1 January there will be a 10 percent increase in the price of electricity and there will be a $400 million cost on industry next year. 
Do we want to snuff out the recovery in the economy? This is not an ideal process but members on this side of the House will put the national interest of this country first. The national interest of this country is overwhelmingly in favour of fixing the mistakes in that legislation and getting a sensible and balanced emissions trading scheme in place for 1 July next year. That in my view is the absolutely responsible thing for the House to do. I am yet to hear any member set out a realistic and balanced view of an alternative approach. 
I will say one other thing. Members ask us just to leave this scheme where it is on 1 January. Well every member of this House knows that that would be a real shambles for industry. I was advised by officials that even if we rushed to implement the current scheme the allocation plan could not be done. 
PHIL TWYFORD (Labour) 
: 
 I am speaking against the Climate Change Response (Moderated Emissions Trading) Amendment Bill this morning and I will follow on from comments made earlier by my colleague Grant Robertson. He referred to the interjection made by a National member last night a member who told Jacinda Ardern that she had no right to talk about or reference the rights of future generations given that she had no children. Well I have a son and my son will be 60 years old at a time when he will be paying half the costs of the subsidies for high-intensity industry emitters. When my son is 60 he will be paying half the costs of the subsidies for high-intensity industry emitters. Something is seriously wrong with that; there is a very disturbing pattern with this Government to push off the costs of today’s decisions on to future generations. 
I will make some comments about process because there is a direct relationship between the quality of process and the sausage that comes out the other end. The process of this bill has been shambolic shoddy and shonky. The result is a piece of legislation that I think quite frankly should not be before this House. If this Government had a shred of self-respect it would take this bill back to the drawing board. I have been in this House only a year but I have learned one or two things about parliamentary process. I have watched the progress of two of the Auckland super-city bills as they went through the House and I thought that they were bad! 
There is a strange Alice-in-Wonderland principle at work with this Government. The more important an issue is to the country’s future the less scrutiny and the less attention is paid to it and the more rushed its process is. I do not know why that is. Could it be the perpetually relaxed Prime Minister grinning aimlessly while his coalition partners in major legislation spin off into the ether? Could it be the genial incompetence of Gerry Brownlee and his House management or has Nick Smith finally blown a gasket and what we are seeing with this emissions trading scheme process is a result of that? At least Rodney Hide has an excuse for his shambolic handling of the Auckland super-city reforms. He was off around the world going to Universal Studios and attending weddings in London. What is this Minister’s excuse for this shambolic process? 
Let us talk about some of the similarities between the Auckland governance process and this emissions trading scheme process. Some things that I think have a very strong parallel between the two processes include the misuse of urgency which has been another hallmark of this Government’s record over the last 12 months; a rushed and inadequate process; inadequate select committee scrutiny; important decisions made behind the scenes while the committee was actually receiving submissions from the public—and we have seen the sweetheart deal that the Government made with certain iwi in order to get Maori Party support—and shambolic last-minute changes. In the case of the Auckland super-city it was the panicked last-minute decision to bring the Rodney district into the super-city; in the case of the emissions trading scheme we have seen very similar things. 
Let us continue with this issue of process. We have seen the chair of the select committee try to limit oral submissions to 30 and the hearings to a single day. I ask members how bizarre that is. In the end submitters were given only a few hours’ notice to appear before the committee—far too short a time to actually speak prepare and communicate on issues of this complexity. The Government withheld key documents including the Treasury analysis of long-term fiscal costs and the details of an agreement with the Maori Party. Treasury officials looked at each other in confusion and had to ask for a break so they could go out and discuss what the real estimates of the long-term fiscal consequences were. It was utterly bizarre and both Treasury and the Parliamentary Counsel Office said to the committee that they simply did not have the time to do their work properly in order to provide advice to the committee. The process was a shambles and Government members should be ashamed. To rescue this bill at the last minute we have seen a cobbled-together deal. 
Dr KENNEDY GRAHAM (Green) 
: 
 This Climate Change Response (Moderated Emissions Trading) Amendment Bill presents perhaps the greatest challenge ever to come before this House in its 150 years I believe. We are of minor significance in the greater human drama that is unfolding around us but what we do has an importance proportionate to size. We can never shirk our responsibility to contribute to the common good which in the 21st century means the good of humanity. This bill holds the mirror up to that responsibility. If our climate change legislation is inadequate we not only shall condemn our children to a miserable and precarious life but also shall have committed a new crime: the crime of global negligence. As Russel Norman said yesterday future generations will curse our memory. 
Along with the Minister Dr Nick Smith I attended the Rio Earth Summit back in 1992. The Minister has recently been wont to recall that attendees at Rio thought climate change could be solved within 5 years and he cheerfully admitted to having underestimated the challenge. I can attest before members today that Dr Smith was alone in that belief at Rio. No other delegate not one thought for a second that climate change would be solved within that impudently short time frame. That is why the United Nations Framework Convention on Climate Change was concluded that year. That is why its Kyoto Protocol was negotiated 5 years later with its binding obligation to keep our national emissions to 1990 levels an obligation we are cravenly violating today by 22 percent. 
I have scrutinised the framework convention and the Kyoto Protocol I have read the 2008 Climate Change Response (Emissions Trading) Amendment Act and I have read the 2009 Climate Change Response (Moderated Emissions Trading) Amendment Bill. I have sat through some of the committee hearings I have read the committee’s report and the Supplementary Order Papers from the Government Labour and the Maori Party and I have sat through the whole of this debate. What have I learnt? I have learnt that National has scored eight times more solar panels in 1 year than Labour did in 9 years. I have learnt that an allocation is not a subsidy and that it is. I have learnt or at least I have been told that Labour’s emissions trading scheme would cost households $6 per week and National’s only $3 per week. I have learnt that it is unpatriotic for an Opposition member to attend the UN conference on climate change in Copenhagen. Amidst the verbiage I can discern one thing and that is that any emissions trading scheme whether the balance of responsibility is by design or accident weighs most heavily on the New Zealand taxpayer or consumer the businessman or farmer the forester or fisherman whether Pakeha or Maori; it will all ultimately fall on each of us as humans all breathing the same air all worrying about our children and theirs. 
But at a more fundamental level I have also learnt that humanity is in deep trouble for as a species we seem to have become afflicted with a cognitive dissonance and have lost our ability to perceive reality with any clarity. We have lost—perhaps never possessed—a true depth of field of historic proportionality. We stare unblinkingly into the void that is the 21st century mindless of magnitude oblivious to its portent. In this country and in this House we have become so preoccupied with inter-sectoral interests and inter-party point-scoring that we fail to comprehend the truth of what is happening around us. As the beautiful southern icebergs begin their slow and menacing northward drift into our waters we pretend that it carries no meaning. The searing plight of the polar bear so far away and yet so near to our fate we prefer not to acknowledge; we are too busy worrying about our national export earnings. This bill with its uncapped trade-intensive indulgent wink at “New Zealand Incorporated” constitutes a threat to the global climate and thus to the future of this country. 
Let us seek to restore the broader picture that frames the debate we are having in the New Zealand House of Representatives. The global objective of the 1992 climate convention was to protect the climate system for the benefit of present and future generations of humankind. The aim was to stabilise greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate quickly enough to allow ecosystems to adapt naturally. The Intergovernmental Panel on Climate Change judges that the critical threshold to avoid catastrophic climate change is 2 degrees above the present which means a threshold of 450 parts per million volume carbon concentration. The emissions cuts prescribed for that by the rich North are 25 to 40 percent by 2020 and 80 to 90 percent by 2050. The UN Secretary-General urges countries to accept these targets. 
Down here on Earth’s last islands the Government—befuddled with its mantra of balancing economic opportunity with environmental responsibility as if they were competing weights on the blind scales of justice—talks of doing its fair share in its national contribution to the global interest. So what are its national targets for the global good? They are less than half the prescribed target for 2020 and just over half that for 2050. That is an abject failure to do our fair share a failure that borders on criminal negligence. It is one to be ashamed of as indeed we shall all be before much time has elapsed. 
Last night Kevin Hague described the degraded planet that our descendants may inhabit at the end of the century. To most of us the year 2100 sounds far enough away for political if not intellectual absolution. Yet my four granddaughters aged from 3 months to 5 years will God and Gaia willing be alive at that stage. I truly fear for their future. Can an agreement be achieved at Copenhagen to avert catastrophic climate change? There is something existentially dysfunctional about 192 nation States each claiming untrammelled sovereignty purporting to negotiate a global solution to a global problem through competitive pursuit of the national interest as traditionally perceived. If there is a single global interest there needs to be a single global institution empowered to identify and enforce the solution. The only legitimate national interest lies in meeting that responsibility. 
The underlying issue of sovereignty surfaced recently when Anzac Ministers forewarned that a binding global agreement may not be achieved at Copenhagen and we should turn to plan B—a schedule of voluntary commitments for cuts. That of course would be the ultimate regression to the 19th century. We must never be persuaded to drop global aspirations simply by the siren call of the complexity of the problem. 
The Government has provided no causal linkage between its 10 percent cut by 2020 and the impact that it would have on our contribution to the critical global threshold. It follows that the Government is engaging in the obsolete method of policy making of determining a priori its national interest and disavowing the global consequences rather than accepting the global objective determining the national obligation from that then determining how intersectorally we reach it. In New Zealand we have no choice but to meet our national responsibility targets of 40 percent by 2020 and 90 percent by 2050. The 2020 target means a cut of about 48 million tonnes. 
The Green Party’s report released in August showed that a 36 million tonne cut in domestic emissions is feasible requiring only 12 million tonnes in international credits to be purchased. The sectoral share of domestic cuts was calculated not on the basis of interminable mutual recrimination and sweetheart deals but on what is scientifically and economically optimal. That is the rational basis for national salvation. We have studied the environmental ministry’s critique of our report. We adhere for the moment to our own calculations and we are ready to debate the matter constructively. 
Each economic sector in New Zealand—business farming forestry fishing and energy—has a vested sectoral interest that is sub-national. Claims advanced by each of Business New Zealand Federated Farmers and the Coalition for Climate Change Policy should with due respect to each institution be viewed in that light. It is only the Government that forms policy for the national interest in the context of the global interest. How the Government does that is what this debate is all about. It is about a question of method and that depends on one’s world view. Jeanette Fitzsimons and I will be at Copenhagen conducting ourselves in the most patriotic manner of all: seeking to ensure that our Government does this country and its children proud in this moment of global need. 
JOHN BOSCAWEN (ACT) 
: 
 I have been very disappointed in the performance in this House from the Minister for Climate Change Issues Dr Nick Smith on the Climate Change Response (Moderated Emissions Trading) Amendment Bill. Last night in answer to allegations by Jeanette Fitzsimons that this bill generated no net savings in emissions Dr Smith quite correctly stood up and raised four or five examples of how this bill will reduce emissions. In my view everything Dr Smith said was absolutely correct. However this morning we heard from Dr Smith a statement that we should be concerned about the recession. He said that we have a recession and unless we pass this bill electricity will be going up by 10 percent on 1 January. Dr Smith and the National Government know that that is absolutely incorrect. The ACT Party opposes this bill and we do so because it is being rushed through before the United Nations Climate Change Conference in Copenhagen. There is no need to do that. 
We oppose this bill because it is based in part on following Australia. Australia is not finalised. We oppose this bill because our key trading partner the United States has not made any formal binding commitment and this bill will put our trade-exposed industry at risk. The ACT Party offered the National Government support in legislation to defer the introduction of the effective date of Labour’s emissions trading scheme. For Dr Smith and the National Government to hide behind this bill as the reason for having to postpone the electricity price increase is nothing more than dishonest. 
Last night Dr Smith said that he was enjoying this debate. He commented in particular on the comments of Chris Hipkins on electricity. Dr Smith said that if we remove the two-for-one discount New Zealanders will pay more for their electricity. Dr Smith is absolutely correct. If we remove the two for one discount New Zealanders will pay more for their electricity. Under this bill that discount is removed on 1 January 2013. The Labour emissions trading scheme that was passed last year would have a 10 percent increase in electricity from 1 January. The National Party proposed that we reduce that increase in electricity from 10 percent to 5 percent and then institute that full increase of 10 percent before 1 January 2013. I stand in this House this morning as one of five ACT MPs the only MPs in this Parliament who are prepared to stand up and ask why we are increasing the price of electricity by 10 percent from 2013. 
Last night the House heard from Hekia Parata who is a distinguished former public servant in New Zealand. She said that the Maori Party and National should be proud of supporting this bill. I ask Hekia Parata how the National Party and the Maori Party can be proud of supporting a bill that will increase the price of electricity by 10 percent from 2013. How can they be proud? We have heard debate as to whether we allocate fishing quota to the fishermen or to the quota holders. We could argue that is irrelevant; it does not matter. We are talking about only 2½ years of allocations. Dr Smith wrote the National Party minority report on Labour’s emissions trading scheme legislation last year. He said the fishing industry was trade-exposed and energy-intensive and he questioned why we would not extend support to the fishing industry beyond 2013. He has the chance to do that now and he is choosing not to do it. I again ask Hekia Parata how she National and the Maori Party can be proud to tax the fishing industry $15 million from 1 January 2013. How can they be proud? The ACT Party stands up and represents all New Zealanders who are facing a 10 percent electricity price increase from 1 January 2013. 
Hon Dr NICK SMITH (Minister for Climate Change Issues) 
: 
 Having heard the contribution from both the Green Party and the ACT Party there are a couple of points to which I would like to respond. Firstly I respond to the claim by ACT MP John Boscawen that somehow the Government is being dishonest because I do take offence at that. Let me tell him why. The truth is that the ACT Party does not believe in climate change and does not want to take action. When we had a debate about a carbon tax the ACT Party said no we should have an emissions trading scheme. Then when we said we would have an emissions trading scheme it said we should have a carbon tax. Now I think the ACT Party needs to be honest with this Parliament and say what it really believes: that we should do nothing. 
So right at the very last moment when it was well speculated in the media that we had reached an honourable agreement with the Maori Party ACT suddenly fronted up and said we should delay things for 12 months. Let us think that through. Can I be any more confident than I am today that in 12 months’ time National—which believes we should take action on climate change and which has long said we need to have an emissions trading scheme—and ACT could reach agreement? The honest truth is that I cannot. The truth is that we had a special select committee inquiry. The truth is that the ACT Party’s position at the end of that inquiry was exactly the same as at the beginning albeit it was a single view. So do I think the right step forward for New Zealand today is to defer things for another 12 months? No I do not. 
John Boscawen says that we are doing this ahead of other countries. Let us think that through. I think Kennedy Graham’s point on this is quite true: that if New Zealand takes the approach of saying we will move only when another country has moved and if every one of the 196 countries takes that approach nobody will do anything. 
So we have said we want to realign this emissions trading scheme with Australia’s scheme. I have been to Australia three times. Most recently I had a long discussion with Malcolm Turnbull on Monday so that I could ensure that this legislation took into account the most recent accounts of what is occurring in Australia. The reports continue to be that its scheme is likely to be passed into law this week. Given all the arguments about process I remind the New Zealand Parliament that the Australian Government has not yet tabled its amendments and is intending to both introduce them and pass them all in the same week. This issue—[ 
Interruption 
] 
I do want to respond to a point that has been made by Grant Robertson and the likes of him. Those members have said the process is a shambles but they take no responsibility for their role in that. I will say why they should. 
Hon Members 
: What? 
Hon Dr NICK SMITH 
: Well let me tell those members this. During the first reading of this bill Labour members argued strongly that it should be referred to the Finance and Expenditure Committee. I have long held a view that it would be better if National and Labour could reach an accord on this issue. So in discussion with Gerry Brownlee we said it was not a big deal and we would allow the bill to go to the Finance and Expenditure Committee. I sought leave to do that. Can members believe that the Labour members voted against it when I sought leave for the bill to be referred to that committee? A large number of technical amendments were agreed to at the select committee. Members of the Labour Opposition agreed with the changes around tree weeds. If they agreed with those changes why were those amendments not made at the select committee? It is because Labour wanted to make the process as bad as possible and because it is simply being destructive. 
I challenge the Labour members. I say this issue is too important to play those sorts of political games with. This is the sort of issue on which this Parliament should rise to the occasion rise to the huge challenge and not be involved in that sort of silly exercise. I say if the Labour members want to make claims about the process they need to answer to New Zealand on the role they took in the process to make it as destructive as they possibly could. They must bear responsibility for that and they must eyeball their children and grandchildren about that as we confront the issue of climate change. 
The CHAIRPERSON (Hon Rick Barker) 
: I think we have had so much urgency that we have almost worn the bell out. If members hear this sound in the future it is the normal bell. We are trying to get it fixed. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 Thank you for that technical briefing Mr Chairperson. Some of us were wondering whether baked beans had perhaps been on the menu this morning! I make one observation about the Minister for Climate Change Issues the Hon Dr Nick Smith. We have now reached the point in this debate where that Minister will say absolutely anything. I was astounded by his last contribution. He effectively tried to make a case that New Zealand should show international leadership should be out there and be one of the first to have an implemented emissions trading scheme should lead the world and should do the right thing. I think he asked how we can expect others to do the right thing—and I paraphrase—if we are not prepared to step up to the plate. 
I am not allowed to use the “h” word but I say to that Minister that he is full of it. When it comes to the “h” word I say that he is the archetypal definer of that word. In Opposition that member stood up and lambasted the then Labour Government for showing international leadership and for saying we should be out there leading. As we said we cannot expect others to follow us if we are not prepared to step up to the plate and to put this scheme in place. It was that member who is now the Minister who led the charge every day saying exactly the opposite. He nods his head because he knows he is the parliamentary definition of the “h” word. He will say anything now absolutely anything. 
Hekia Parata 
: Keep calling him a hero! 
Hon CLAYTON COSGROVE 
: No the word is not “hero”; I am not allowed to use the unparliamentary word. What it is about for Hekia Parata is having a different position in Opposition when it lambasted the then Government. The Minister when in Opposition asked why New Zealand should be first why New Zealand should show leadership why we should be ahead of our trading partners why we should not wait for the United States and others and the big polluters and why we should not wait until the large contributors in terms of pollution have got their acts together before we do anything. Yet today I say to Hekia Parata the Minister stands up and says exactly the opposite. 
The Minister has no credibility at all. Nick Smith as Minister for ACC cannot find any money for accident compensation. His Government cannot find any money for superannuation or for real training for the unemployed. It cannot find any more money for health. It tells teachers that there will be no money next year. But when it comes to a little deal in the back of a darkened room with the Maori Party—a very slippery deal that has never been put under scrutiny and that opens a can of worms around the whole Treaty debate—then oh it is all OK! A Treaty clause that was done in 18 minutes or with 18 minutes to go is OK! I say to that member that he is a disgrace as a Minister. 
I thought that even Nick Smith would not have the gall to get up and say exactly the opposite of what he said not a year ago when Labour’s emissions trading scheme was going through. He lambasted us for it. He said we should not show leadership. He said we should stay behind and do nothing until the great polluters—the United States and the European countries—had got their act together and today he stands up and says the opposite. He makes the case that his Government is showing leadership. It is appropriate he says that his Government is out there as the No. 1 or No. 2 country to put together an emissions trading scheme. I ask the Minister Nick Smith how on earth he can exhibit such gall. 
The Minister grins away in his boyish way. Does he not realise that these things are recorded in  
Hansard 
 and that editorial writers and journalists actually listen and report what he says? Does he not realise that embassies around the world and ambassadors in preparation for Copenhagen take note of what happens in this place and what Ministers say in this place? There will be Governments ambassadors and international officials around the world who are laughing at that Minister. No they will probably not be laughing; they will be shaking their heads in dismay as we proceed to an international conference that will deal with possibly one of the most important issues of our time and of our generation. That Minister will get up and try to be credible at an international conference. Does he not know that ambassadors and his ministerial equivalents around the world will have read what he said a year ago and will have made file notes to their capitals? As he said we are the first or second country possibly that will do this and some of the eyes of the world look at what happens in this place around this issue. 
Hon Dr NICK SMITH (Minister for Climate Change Issues) 
: 
 Personal denigration has always been Clayton Cosgrove’s approach to such issues. 
Hon Clayton Cosgrove 
: Deal with the facts. 
Hon Dr NICK SMITH 
: I am happy to deal with the facts. Let us go through the facts. 
Hon Clayton Cosgrove 
: What did you say before when you were in Opposition? 
Hon Dr NICK SMITH 
: Let me quote directly from what National did say in its minority report and let us compare it with the bill. The first thing I said was that New Zealand should not be leading the world and that New Zealand should be doing its fair share. That is exactly what this bill does. We said in that minority report and in our policy that we should take an intensity approach to allocation. What do we do in this bill? We do exactly that I say to Mr Cosgrove. 
Hon Clayton Cosgrove 
: You didn’t say that in Parliament. 
Hon Dr NICK SMITH 
: We did indeed say that. 
Hon Clayton Cosgrove 
: You didn’t say that in Parliament. 
Hon Dr NICK SMITH 
: Well I challenge Mr Cosgrove to read the record. He is a johnny-come-lately to this issue. He was not on the select committee. I challenge him to read our policy because that is exactly what we said we would do— 
Hon Clayton Cosgrove 
: Read your  
Hansard. 
Hon Dr NICK SMITH 
: —and that is what is in my  
Hansard. 
 I also said we should provide a greater level of support for the fishing industry and we have done that. I said we would provide 90 percent support for the fishing industry—and we have done that. I expressed the view— 
Moana Mackey 
: Not the whole fishing industry. 
Hon Dr NICK SMITH 
: I will come to a point made by Moana Mackey. She will be interested because she has misunderstood a provision but first I want to finish my comments to Mr Cosgrove. We also said that the 8 percent phase-out rate was too great and we said we would take a different rate. We said we would align with Australia—Australia is 1.3 percent and we are 1.3 percent—in every key respect and I challenge members opposite to find a single area in our emissions trading policy that we took to the last election that is not consistent with this bill. We are doing exactly what we said we would. 
I now want to deal with a specific point because I think that Moana Mackey actually does not understand the bill. Moana Mackey made a mistake and I do want Parliament to know exactly what we are addressing. The question with this bill is whether we are providing the support for the quota holders or the fishing operators. The argument from officials has been relatively balanced and Moana Mackey said that all the support in the amendments is going to the quota holders but that is not actually correct. Let me explain why. As a consequence of these amendments the fuel price increase will be halved in that period. Because of the two for one rather than the price of diesel going up by 7c per litre it will go up by 3.5c per litre. Who benefits from that? The fishing vessel operator. In effect and if we look at the fiscals that have been provided in the advice we have the choice of providing the support for the quota holder or providing the support for the fishing vessel operator. The reduction in the increase in the price of diesel is a benefit for the fishing vessel operator. The other provision which provides the allocation to the quota holder provides the other benefit. 
So the member’s claim is simply incorrect. She does not understand the bill. The reality is that there is a benefit from these amendments to the fishing vessel operators and that is part of the package of reforms that we have provided for in this bill. 
SUE KEDGLEY (Green) 
: 
 George Orwell coined the terms “newspeak” or “doublespeak” to describe language that makes the bad seem to be good the unacceptable and the truly terrible seem to be acceptable and the inappropriate seem to be appropriate. They are the terms for a whole new language and they seem to me to encapsulate the whole approach of this Climate Change Response (Moderated Emissions Trading) Amendment Bill and what it is about. It is Orwellian. The whole thing tries to make it look as though we are reducing our emissions when in fact we have a bill that will increase our emissions. This bill tries to make us look good so that the Minister can to go to Copenhagen and stand up and say: “Look! We have an emissions trading scheme in place. Isn’t it fantastic!”. He will be able to go out to New Zealanders and say the Government cares about climate change and really worries about it. He will also be able to say he has a bill in place but when we look at the fine print we see that it will increase our carbon emissions for at least the next 10 or possibly 20 years. The Minister in the chair Dr Nick Smith is shaking his head. The Minister will not tell us for how long emissions will increase but it seems that it will be for the next 10 and possibly more years. 
Here we have a bill that we are pretending will reduce our emissions when it will increase our emissions. Here we have a bill that basically tells the major industries of New Zealand: “Look guys it’s business as usual. Just carry on using your coal. Let’s carry on building our motorways. Let’s just carry on as we are. We have this fig leaf this emissions trading system in place so we can say to the world and to New Zealanders that we really care about climate change. Let’s just pay for the polluters and just carry on as usual.” 
Then we had the extraordinary spectacle of a member of this Committee standing up to say that we should be doing nothing about climate change and that climate change is all nonsense. It is interesting that my colleagues Moana Mackey and Shane Ardern are here in this Chamber. All three of us went recently to Tanzania for a Commonwealth Parliamentary Association conference. The major issue there was climate change. Were the delegates there sitting around and debating whether climate change was real and whether we should do nothing? No they were not. There was an intense discussion. Delegate after delegate said they were not discussing in the abstract whether climate change existed; delegates said they were confronting the reality of it every single day. They were horrified by the slow progress of nations like New Zealand in the face of what they saw as overwhelming evidence of climate change—for example floods and droughts. 
When the President of Tanzania opened the conference he said that everywhere in Tanzania people were confronted with the effects of climate change. The snow on Mount Kilimanjaro is melting there is salination of coastal islands there is coastal erosion in the whole coastal area and there is desertification. We went on a trip and everywhere we saw animals—cows—that were starving and so thin that the SPCA would consider them to be cases of animal cruelty. Everywhere there was evidence of desertification. Animals are stressed. Tourists go to Tanzania to see the migration of the magnificent animals but the animals are very stressed. Because their breeding grounds are affected people worry that there will be no migration of animals so the tourists will have nothing to go to see. Those are just some of the examples from Tanzania. 
Last year I went with my colleague Steve Chadwick to a Viet Namese seminar on climate change and I found the Viet Namese were passionate about it. They said that 20 million people who are living in their low-lying coastal areas will be affected and this could happen in the next few years. The Bangladesh delegates said a 1 metre rise in sea level would inundate 17 percent of their country displace 15 million people and so on and so forth. The fact is that everywhere I have been every developing nation delegate whom I have talked to says— 
The CHAIRPERSON (Eric Roy) 
: Before the member proceeds can I just have a wee go at this bell. I want to see whether I can give it a decent work over. No so we will be working to a manual system. 
SUE KEDGLEY 
: We can all pretend to ignore the bell and say we cannot hear it. 
I want to talk about the idea from the ACT member. It is embarrassing that we have someone sitting here like King Canute with his head in the sand and pretending that all of this is nonsense. All of us will not just be called to account by future generations but will be called on to assist the millions probably billions of people who will suffer if we do not respond to climate change quickly enough. But also more particularly there will be the millions—billions—of environmental refugees. They will be heading for New Zealand and here we are with our heads in the sand. 
John Boscawen 
: Speaking up for the poor. Speaking up for second-class citizens. Speaking up for the underprivileged. Speaking up for the have-nots. 
SUE KEDGLEY 
: Here we have the member saying he is speaking up for petrol users and about the price of petrol or electricity next year. 
John Boscawen 
: Everyone. 
SUE KEDGLEY 
: Hang on a minute. I presume the member has children. We all say in this Chamber that we are worried about children. We are always wringing our hands about children. But the single most important thing for our children is that they will have a world that is habitable. The idea that we can just sit here and worry about the price of electricity next year while allowing our children to inherit a world that will be uninhabitable is quite frankly unthinkable. But the trouble with many members of this House is that we think in terms of 1 or 2 years; we do not think about the future. 
At the conference on climate change in Viet Nam there was a debate about the idea that countries with the highest per capita emissions—and of course we do not need to be reminded that New Zealand has the sixth-worst carbon footprint in the world per capita—should have added global responsibilities for combating climate change and assisting low carbon - emitting countries. In particular delegates said that countries with the worst carbon footprint like New Zealand should have a special obligation to take in the millions of climate change refugees who will need to find somewhere to live. That is already being debated so we need to be aware of that. That debate may well develop momentum. We can sit here like the ACT member saying we contribute only point something or other of one percent of global emissions but the truth is that we are on a per capita basis the sixth-worst country in the world. We may well find ourselves being confronted with an obligation because we are a high-emitting country on a per capita basis to take in all of those climate change refugees. 
To get back to this bill I say that most of us in this House accept that there is an issue that needs to be dealt with. That is progress considering that only a few years ago many members of this House perhaps most were denying that there was even an issue. However what we have now is a bill that makes it look as though we are doing something when we are not. That is really what it is; it is a public relations bill. It is like a fig leaf that we put in front of ourselves in order to pretend that we are taking action and doing something. But this bill will actually increase our emissions not decrease them. So it is an Orwellian bill: it makes the bad look good; it makes the unacceptable look acceptable; and it gives the Government and the Minister Nick Smith something to talk about. But how can the Minister in all conscience come up with a bill that he knows will increase our emissions and will enable the major polluters to carry on polluting? 
This bill sends the signal that it is business as usual. In the rest of the world particularly in Europe everyone is switching to a low-carbon economy yet we have no incentive to switch to a low-carbon economy. Because there are no incentives to do so we will be left behind. If we think of this issue simply from a business perspective why would we allow New Zealand to be left behind and not give anyone incentives to move to a low-carbon economy? This bill does not make sense. It is Orwellian and is designed simply for public relations purposes. As Russel Norman said our children and our children’s children will curse us for doing this. Thank you. 
The CHAIRPERSON (Eric Roy) 
: The next call will go to the Hon David Parker but let me make some observations at this point in an attempt to assist the Committee. Firstly in respect of where the call goes by convention if a member has had a call or two calls and someone else has not had a call the call normally goes to the person who has not spoken. I see affirming glances and assurances from members in the Chamber. That is the process. If a party wants a member to have a second call when someone else is seeking the call for the first time that becomes a matter for the party’s whip. It is not for me to rule on that convention because I would give the call to someone who has not taken a call. That is the first thing. Secondly Part 1 is very big and contains the substance of the bill but the debate seems to have developed into a general debate on climate change. It would be very helpful to the Chair and to everybody else if members could reference their speeches to the clauses of this large bill so that we might make some progress. The member indicating to me should not do that; I am just saying where we are going. No one particularly is being accused; I am making a general statement. 
Hon DAVID PARKER (Labour) 
: 
 I would note for listeners that I have been seeking a call for 4 hours. The Minister in the chair the Minister for Climate Change Issues has been making accusations that I will not explain the difference between subsidy and transitional assistance. I am grateful for the call in order to be able to respond to some of the issues that have been raised. 
For a start I shall respond to something that Dr Paul Hutchison said last night. He used the example of Hunua and said there are two major sources of employment up there that are affected by emissions pricing: greenhouses that use fossil fuels for heating and the steelworks. There are two points to be made there. Firstly in respect of greenhouses the conversion of their fuel source for heat from coal to renewables is happening. I have had reports recently that woodchip boilers are now close to economic and they are made economic in comparison with coal by this legislation as it stands. Secondly in respect of the steelworks it is interesting that in terms of the ridiculous rate of free allocation the Engineering Printing and Manufacturing Union which represents most of those steelworkers told the Finance and Expenditure Committee that it was not impressed by the huge subsidy extending out for many years in respect of free allocation for industry because the union knew that it would be to the cost of other members it represents in other parts of the economy. 
While Dr Nick Smith is temporarily engaged elsewhere I will flick quickly to the Treaty of Waitangi issues. Firstly the process around the Treaty of Waitangi clause was terrible. It did not go before the select committee. We have not had enough time to consider it properly. So far as I have been able to gauge from reading it now it looks quite a well-drafted clause. It is likely that Labour will support that amendment. I feel a little bit at risk in doing that because I have not had the benefit of the normal checks and balances of the select committee process in order to ensure that my understanding of it is correct and that I am not making a mistake. None the less we will probably take that risk. 
What we do not approve of is the special deal for some landowners of pre-1990 forests. That is an unprincipled decision. There was no withholding of information by the Crown and there is no justification for the special deal that has been done in respect of those assets. It breaches the full and final settlement Treaty principle. 
Paul Quinn 
: You did the same deal. 
Hon DAVID PARKER 
: We did not I say to Mr Quinn. That is just nonsense. That is not correct. 
I refer members to an amendment that I have prepared on the Treaty issue. It inserts a new section 226 which states: “No additional compensation will be accorded to any pre-1990 forest landowner on the basis that the land was transferred to the owner under a Treaty settlement unless it is proven that the Crown made misrepresentations or withheld material information about emissions pricing at the time of settlement.” So if there was misrepresentation or withholding of material information then yes there should be recompense but if there was not there should not be. I encourage all members of the Committee to vote for that amendment because if as Dr Smith says there was misrepresentation or withholding of information then those landowners can get additional compensation; if they cannot get it then they are in the same position as any other landowner in just the same way as everyone is subject to the Income Tax Act the Resource Management Act and now the emissions trading legislation. That is as it should be. We have not for example taken back the windfall gains that come from advantages that were not thought of at the time when the settlement was agreed such as the advantages that accrue from the New Zealand - China free-trade agreement. 
I will just respond briefly on the issue of electricity emissions. We heard Dr Smith saying that giving a discount to major emitters in the electricity field saves consumers money. Well that is a moot point. That is not clear. The reality is that electricity is heavily influenced by the cost of new generation and the cost of new generation does not change with that sweetheart deal for the electricity emitters. So I have an amendment to deal with that. It inserts a new section 222C(4) which states: “That before the 2 for 1 emissions discount for electricity emissions is allowed the emitter must prove”— 
The CHAIRPERSON (Eric Roy) 
: I call the next speaker. 
Hon David Parker 
: Mr Chairperson— 
The CHAIRPERSON (Eric Roy) 
: No the member has had two consecutive calls. 
Hon David Parker 
: No I have not. 
The CHAIRPERSON (Eric Roy) 
: I have very exact records. 
Hon DAVID PARKER (Labour) 
: 
 I raise a point of order Mr Chairperson. My understanding of the agreement is that members were entitled to consecutive calls and that there is no restriction on the number of occasions that could occur. 
The CHAIRPERSON (Eric Roy) 
: Your understanding is incorrect. We had a clear ruling on this yesterday. Members get consecutive calls on one occasion per part. The member had his yesterday. We are still on Part 1. 
Hon DAVID PARKER (Labour) 
: 
 I raise a point of order Mr Chairperson. The underlying Standing Order says that members are entitled to up to four calls per part. 
The CHAIRPERSON (Eric Roy) 
: I do not really need any assistance. What happened yesterday was that leave was taken. Any member could have objected to that leave. It was quite specific. I read it out twice yesterday and members I thought had some understanding of it. I will read the portion to the member again so that we understand it: “The direction of the House allows members to have unlimited calls of 5 minutes each but not more than two consecutive speeches on each part of any provision.” That is quite clear. We have ruled on that and there is acceptance of it. 
Hon Dr NICK SMITH (Minister for Climate Change Issues) 
: 
 I raise a point of order Mr Chairperson. I seek leave because I do have great respect for Mr Parker and he has a number of amendments and considerable knowledge in this area for him just on this occasion to have the second continuous call so he can speak to his amendments. 
The CHAIRPERSON (Eric Roy) 
: Leave is sought for that purpose. This is a one-off. Is anyone opposed to that course of action? No one is opposed. 
Hon DAVID PARKER (Labour) 
: 
 I appreciate it I say to Dr Smith. While the Minister is in the chair I also acknowledge that in respect of tree weeds I agree that the amendment that is proposed is appropriate. I thank the Minister for addressing that issue. It is an issue that I came to him about privately outside the House as well as raising it through the select committee process and I accept that the solution is appropriate. But that is about the only good thing in this bill in my opinion. 
I will deal with another of our amendments. We have an amendment in my name saying that if we will not bring in methane at least we should bring in nitrous oxide at a decent date. My nitrous oxide amendment says that notwithstanding any provision under this legislation nitrous oxide comes in from 1 January 2013 with free allocation based on 90 percent of 2005 emissions and any revenue collected between 1 January 2013 and December 2014 shall be used to subsidise the use of nitrification inhibitors. 
I want to return to the issue that Dr Smith talked about—the difference between free allocation being transitional assistance and a subsidy. There is a point of principle here I say to Dr Smith. He has acknowledged that 80 percent of the extra free allocation goes to the agricultural sector— 
Hon Dr Nick Smith 
: 80 percent of the total. 
Hon DAVID PARKER 
: —80 percent of the total—and we know that by 2050 relative to the current scheme that is approximately 80 percent of $50 billion which is $40 billion. Including interest—and I know that the Minister disagrees with that—that is responsible for $80 billion of the $110 billion of extra debt. The question is whether that is a subsidy or whether it is something other than a subsidy. How does one define what a subsidy is? It is not a subsidy if it is a short-term transition assistance for what is already happening. It is a subsidy if it goes on for ever. That is one way in which it becomes a subsidy. It is no longer transitional assistance. It is only abating at 1.3 percent per annum. It is a subsidy. 
Another way it is a subsidy is the way Jeanette Fitzsimons articulated it to me last night and I think she is right. She said that if it is covering existing base emissions one can actually argue that it is transitional assistance as we move into a new paradigm; but if it is covering new emissions because there is increased production or a new factory then that is not transitional assistance; that is a straight subsidy. That answers that point quite clearly I think. 
The reality is that we have now have a “cap and trade” scheme without a cap. There is no cap. That is another point. Dr Smith tried to say that Labour’s scheme had no cap. Of course it did. Free emissions allocation rights were capped. Now they are not. Free emissions allocated rights were capped at 90 percent of 2005 levels. Now they are absolutely uncapped. In the case of agriculture which does not come in until 2015 emissions growth between now and then is largely not covered by the scheme. So between 1997 when the Kyoto Protocol was signed and 2015 all the emissions growth in the agricultural sector will be free for that sector. That is just wrong and it is economically inefficient. As a consequence our country gets poorer rather than wealthier. 
The other example the Minister used was the fishing sector. He said that the fishing sector was like the agricultural sector and that the compensation there was for loss of value rather than loss of production out of the country because the fishing would of course still happen in New Zealand. I absolutely agree. The same would happen in agriculture. The land cannot move the cows cannot move the factories cannot move. Production is not at risk of moving. Therefore the basis of free allocation is not to stop leakage to another country. It is to fairly compensate for lost value as a consequence of the change in value brought about by emissions pricing. 
That will not be done until 2050 and even in 2050 more than 50 percent of the agricultural emissions will still be subsidised. It is economic nonsense. It is like supplementary minimum prices. It is like going back to the 1980s and phasing out tariff production but during the transitional period instead of having tariffs going down increasing the protection during the phase-out period. That is what we would be doing if this system were applied to the tariff example. A better example is supplementary minimum prices where land prices were artificially held up by highly subsidised agricultural prices. That is what is happening here. We have the additional disbenefit here of curbing afforestation which of course soaks up carbon. 
Hon Dr NICK SMITH (Minister for Climate Change Issues) 
: 
 I always enjoy dialogue and debate with Mr Parker because he is thoughtful and well informed and I think he has genuinely made a significant contribution to New Zealand in climate change policy by advancing an emissions trading scheme as the Minister responsible for Climate Change Issues under the previous Government. But I also want to debate in a proper way a number of the points he raises. 
He says that there is no economic analysis on which to base the approach with which we are doing the allocation. I accept that it is a debatable point; there is a range of views. But let me read very clearly the in-depth analysis that was done by the New Zealand Institute of Economic Research and Infometrics in the conclusion of their inquiry. They said: “Our recommendation in the short run is to introduce an ETS with free allocation to competitiveness-at-risk sectors with agriculture excluded if measurement of its emissions is prohibitively expensive. Free allocation should be output-linked and phased out as competitors adopt carbon pricing. If agriculture is initially excluded it should be transitioned into the ETS as measures become economic.” That is the key conclusion of the major analysis that was done this year in that regard. 
I want to cover a couple of other points. I want to deal with the question of economic analysis and how costings are done. I want to make this analogy for Mr Parker and Labour members so they understand. If they want to argue that the $110 billion figure is the way in which we need to cost policies that is we need to add up the cost every year and if it is a loss of income—because it is a loss in terms of these changes—then we need to add interest at the standard rate which is what those figures involve. Let me tell members what that means. 
Hon David Parker 
: Or borrowing costs. 
Hon Dr NICK SMITH 
: Labour has said that it will proceed with its tax policy in respect of research and development tax credits. That policy is described as costing $260 million. Labour members mean that there will be foregone revenue of $260 million per year. If we apply the same costing approach that Labour members are adopting and we run it through to 2050 the cost of that policy is $43 billion. Is it fair when Labour announces such a policy as we go before the next election for us to use the same pricing method on a research and development tax credit that results in a loss of revenue in exactly the same way as they would want to use the $110 billion figure? The third point I will make— 
Hon David Parker 
: Then explain away the $50 billion. 
Hon Dr NICK SMITH 
: The member challenges the figure of $50 billion. The real crux—and I have an interesting analysis here that the member may be interested in—and the key sensitivity of that number is the phase-out rate. We are starting the phase-out rate a little earlier. We are doing it in 2013 at 1.3 percent. Agriculture tax starts in 2015 at 1.3 percent. If we change the rate to 2 percent the number would reduce to $40 billion. It we reduced it to 4 percent it would be $20 billion. If we phased out at 6 percent per year it would come out at about zero. 
Hon David Parker 
: We could have compromised with that. 
Hon Dr NICK SMITH 
: Members on this side of the Chamber are saying this and this is an invitation to the Opposition. I am not sure where international negotiations will go. I am not sure where the carbon price will go. I am not sure where the technologies that we are spending significant money on will go. I am not married absolutely to that 1.3 percent rate. That is why it is one of the key features that will be reviewed in 2011. Our policy position is that that phase-out rate should be in line with our major trading competitors as per the comprehensive analysis from the New Zealand Institute of Economic Research and Infometrics. When the Government says that the 1.3 percent rate is only in the short term for Labour members to put great weight on what the implications of that will be in respect of 10 20 30 or 40 years’ time is in my view quite misleading. When we do the review in 2011 I invite Labour to engage with the Government because the analysis is very sensitive to that rate. The last point I will make is this: if we scratch the surface of what Mr Parker just advised us if the allocation is just to 2030— 
CHARLES CHAUVEL (Labour) 
: 
 I want to talk about the issue of phase-out for industry and agriculture because I have tabled Supplementary Order Papers that would deal with this issue. They set out a position that I really wish the Minister in the chair Dr Nick Smith would consider in light of the comments he has just made about the unlikelihood of the 1.3 percent rate surviving. One of those Supplementary Order Papers changes the phase-out of free allocation to industrial emitters to a defined 18-year phase-out with all assistance ending in 2030. It does that by amending clause 22. It inserts new sections 82 and 85A into the Act. The phase-out rate is too slow. One of the problems is that there is no specified date at which allocation will end. Under the existing legislation in force now there would be a phase-out of all free credits by 2030 but under the Climate Change Response (Moderated Emissions Trading) Amendment Bill there will be an indefinite continuation of free credits. 
Hon Dr Nick Smith 
: Same as Aussie. 
CHARLES CHAUVEL 
: We have a completely different emissions trading profile from Australia. 
Hon David Parker 
: Because they’re wrong doesn’t mean we should. 
CHARLES CHAUVEL 
: That is a good point. Just because another jurisdiction is doing something that is flawed does not mean that we ought to copy them. That is one of the problems with harmonisation. I said to the Minister earlier half-jokingly that it might be the end of the career of the Liberal Party today or the next day thanks to the stance he has taken—which I happen to agree with—on its Carbon Pollution Reduction Scheme. It just shows the folly of harmonisation which is another argument that we will have to have. David Carter was reported as saying the other day that the Government plans to provide free credits for agriculture for 90 years. That seems to be pretty close to the truth given what others have said. The 1.3 percent per annum phase-out rate for free carbon credits means that taxpayers will still be funding over half of the emissions for high-intensity industry in 2050. According to the Parliamentary Commissioner for the Environment the phase-out rates will stop the Government from achieving its 50 percent reduction target by 2050. The effect of this absurdly slow phase-out rate on free emission rights compared with the status quo is shown in a couple of graphs in the Labour Party minority report. 
The comparison between the phase-out of the existing scheme and the scheme that the Minister proposes is quite instructive. Members will see on this graph the point where all assistance would phase out under the current scheme and under the amendments that the Minister proposes. Basically for high-intensity industries it continues indefinitely. For medium-intensity industries it continues for a long time. 
Compare that with another graph I have here which shows the situation under the Waxman-Markey Bill which is the leading proposal in the United States. One can see that at 2030 there is a very steep phase-out for all assistance. For all the Minister likes to say that he proposes the same sort of thing that is being done by our trading partners and our competitors it is actually not so because of the design of these amendments. 
It is not just industry where we need to be concerned about the phase-out. There is another Supplementary Order Paper dealing with agriculture. Again the Supplementary Order Paper phases out all assistance for agriculture by 2030 consistent with the industrial allocation amendment that I have just spoken about. It would also return the entry date for agriculture into the scheme to 1 January 2013 rather than 1 January 2015. This is an essential amendment for fiscal responsibility because it is the ridiculously generous allocation to agriculture in the amendment that causes the blow-out in the accounts that we have had so much debate about in the House and which is so unjustified. 
This assistance as David Carter told us will go on for another 90 years. The country cannot afford it. The Minister has admitted that it is unlikely to survive reviews. Why on earth we are enacting it and sending the signal to the market that cannot simply be maintained beyond the next review period is beyond members on this side of the Chamber. It is useful to recall what was said by the select committee on this topic. We said in our minority report that there should not be a change to the current entry date into the emissions trading scheme for agriculture of 1 January 2012. We all know the argument: agriculture contributes nearly 50 percent of all New Zealand emissions. However under this bill the agriculture sector is required to be responsible for only 4 percent of the total costs of meeting our international obligations. There cannot be any policy justification for delaying the date of entry for agriculture or not dealing to the phase-out. 
JOHN BOSCAWEN (ACT) 
: 
 First of all I owe you an apology from last night Mr Chairperson because I misunderstood the advice I had received from Mary Harris about the consecutive speech motion. When I checked that this morning your ruling was absolutely right on point. 
I want to respond to the comments of Dr Smith who said the ACT Party is opposed to an emissions trading scheme. Yes it is. But the ACT Party has also made it very clear that if we are to have any sort of tax on carbon it should be a carbon tax. So there is the option of negotiating a carbon tax with the ACT Party. But Dr Nick Smith also said if he did not do this deal with the Maori Party there was no guarantee that he could have done a deal with ACT next year. I ask Dr Smith why he could not have done a deal with the Maori Party then. If the Maori Party had more time to consider the implications of this bill it might well have done a much better deal for itself and for all New Zealanders. 
I want to talk a little about the electricity industry. I do this for the benefit of Sue Kedgley. Let me see whether I can explain how the electricity industry works in the simplest possible terms. Electricity is generated either from renewable sources like geothermal or water or from thermal sources like gas and coal. Essentially the emissions trading scheme puts a price on the carbon discharges from thermal power stations. So for example if Contact Energy was to generate electricity from gas it would have to pay a tax on its emissions from its thermal power plants. That has the effect of costing Contact Energy—and another example is Genesis Energy in respect of the Huntly power station—more to generate that electricity. It has been estimated that at $25 a tonne for carbon it will add about 10 percent to the cost of electricity. But it goes further than that because that 10 percent increase in the price of electricity is charged across the whole market. Everyone pays more for electricity. 
In respect of the power stations that operate from renewable sources from hydro and from geothermal generation they do not pay that carbon tax and that increase in the price of electricity is a windfall gain. In other words Contact Energy TrustPower Mighty River Power and Meridian Energy which all own hydro stations will be able to charge more for their electricity and it will not cost them any more to produce it. That will result in windfall profits. If Sue Kedgley takes objection to the ACT Party being the only party that is prepared to stand up and speak out about a 10 percent increase in the price of electricity from 2013 I wonder whether she actually understands what she is talking about. Essentially she is condoning a massive increase in profits and a massive windfall gain not just to State generators but to privately owned power operators. I ask Hekia Parata again how she can support a bill that will increase the price of electricity and have massive windfall gains going to those companies. 
Let us come back to fishing. Officials have calculated that the diesel that the fishing industry uses to drive its trawlers and its operations will generate some 600000 tonnes of carbon. It has to pay for those emissions. It will get a 90 percent allowance for those emissions. But from 2013 it will need to pay for the full cost of those 600000 tonnes of carbon. At $25 a tonne that is $15 million a year. That is despite the fact that New Zealand gets an allocation of free units under the Kyoto Protocol because our fishing industry was generating carbon emissions in 1990. 
The CHAIRPERSON (Eric Roy) 
: I thank the member for his acknowledgment. It was not necessary but I thank him for it. 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 At its heart the Kyoto Protocol is designed to take a problem that is environmental in its essence and turn it into a challenge that is economic. That is what a “cap and trade” system does. The Kyoto Protocol has also managed the awkwardness of only a few of the Western nations in the world signing up by inventing the so-called flexibility mechanisms the joint initiatives and the cleaner development mechanisms. It does not work in practice I freely can see that but at least in theory we have a chance of the world moving along the cost curve at the same time. That is the idea of the Kyoto Protocol. For it to work the full marginal price of pollution needs to be faced by the polluter. That is the essence of it. The full price at the margin has to be faced by the polluter in question. That is the case in theory. 
In the Climate Change Response (Moderated Emissions Trading) Amendment Bill we do not see anything of the sort. We see the right price not being put in place in a timely manner. There are no right signals to the right players at the right time. That is as a result of an admixture of phase-outs and of arrangements that have come into play and distorted the original theory of the Kyoto Protocol and the original idea of “cap and trade” to the point where it is now well short of what it could be. That is a shame. The essence of our opposition to this legislation is around that. 
Let me put it to the Minister in words of one syllable. If we as a nation have the goal of reducing our greenhouse gas emissions by 50 percent by 2050—if we will halve them in the next 41 years—how come we are about to adopt legislation that does not have a complete phase-in of the economic signals until 2090? If we are supposed to be getting ourselves to halfway by 2050 why are the signals not fully coming in until 2090? Under the Parker legislation which will now be repealed that 2090 date would have been 2030. There is much more that I could say about that in the detail but instead of going on about the environmental shortcomings of it I want to speak of the social shortcomings. 
This Kyoto Protocol and emissions trading legislation seeks to transfer wealth. That is the guts of it. If there is no change in signals from a non-polluter to a polluter then there will be no reaction by the polluter which of course includes all of us. In this legislation in short the big end of town is winning. It does not matter whether it is the big end of “white town” or the big end of “brown town” the big end of town is winning. The corollary to that is that the small end of town both white and brown is losing. 
Last night we heard Jeanette Fitzsimons giving a careful anatomy of the sell-out of the Maori Party. She did it more in sadness than in anger. But she looked at the criteria that the Maori Party used to vote against the Parker legislation and put the same criteria against the current legislation. She said that she was bewildered she was sad and she was confused. She was really saying that the Maori Party has lost its principle. Let us leave aside the fact that Ngai Tahu has a deal for its trees or that there are another few thousand houses in the mix. That is the essence of it for the Maori Party and for Maoridom that will not work. Maoridom will be subsidising Comalco and other big polluters—foreseeably. That is not OK. Maori are disproportionately at the small end of town; relatively few Maori are at the big end of town. Therefore nearly all Maori will be worse off under this legislation than under the Parker legislation. The Maori Party said that the Parker legislation did not go far enough for them. It is now supporting legislation that goes nowhere near as far as the Parker legislation did and that has caused the Green Party to express its bewilderment. I say in a much more direct way that it is a sell-out and that the small end of “brown town” loses. They are taxpayers. They are trying to make their way as families year by year and they will not see a reduction in their taxes—they will see an increase in their taxes—as a result of this legislation. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I am happy to take my first call on the Climate Change Response (Moderated Emissions Trading) Amendment Bill. The people in my electorate whom I have spoken to about it over the last few days have had one question for me: why should we pay through our taxes or through a lower level of public services in order to subsidise the big polluters? Their question is very simple. We can get engaged in all of the detail of the debate here but the people in my electorate want to know why they should pay higher taxes or have a lower level of public services so that the big emitters such as Rio Tinto and its Canadian and Chinese owners can make a larger profit and be subsidised by the Government for their emissions. Fundamentally that is what this is all about. 
I want to respond to some of the comments made last night by Te Ururoa Flavell from the Maori Party. He accused me of not listening to him but I assure him that I listened very carefully to everything he said. I found his speech about the principles of the Treaty of Waitangi and the need for a Treaty clause in legislation quite interesting. I do not think members on this side of the House have ever had the level of difficulty with those ideas that the party he now sits beside on the governing side of the House has had with them. It was the party he now sits with that talked about the drift towards racial separatism and that ran the “Iwi/Kiwi” campaign. It is no wonder that the Maori Party’s core supporters on seeing the Maori Party voting for a bill like this which was introduced by the National Government and which the Maori Party is now supporting have gone into an absolute revolt as we have discovered from the news stories that have been coming out in the last half-hour or so. They say that the Maori Party’s national council is having a special meeting this afternoon to discuss whether it supports the position taken by the Maori Party leadership to support this bill introduced by the National Government. 
This bill will increase the costs on some of the lowest-income New Zealanders. Of course we know that National would rather tax people at the lower end of the income spectrum because the very first thing that it did when it came into Government—and the Maori Party voted for it—was to increase taxes on the lowest-income New Zealanders so that it could give bigger tax cuts to those on the highest incomes. That has direct relevance to this debate. If National’s proposed amendments to the emissions trading scheme go through the taxpayer—and because of the way that National has structured the tax system the lowest-income taxpayers now pay a higher rate of tax than they otherwise would have—will end up footing the bill for emissions. 
I say to the Maori Party that it is not too late. I know that National’s junior whip sitting over there with them there is trying to make sure that National still has the votes to get this legislation through the House but I tell the Maori Party members to listen to their members who are having meetings as we speak. They have called meetings to tell the Maori Party leadership not to do this to Maori voters. I tell the Maori Party members to listen to what their members and supporters are saying. They are saying it is not too late to vote against this bill. I encourage the Maori Party members to listen to what they are saying. As one of the Maori Party members said: “Even though there is a signed deal on the table between the Maori Party and National the third and final vote is yet to be taken”. It is not too late for the Maori Party members to say that no they made a mistake; that they stand by the minority report that they wrote in the first place that said that Labour’s scheme did not go far enough and they wanted something tougher; and that they will not vote for something that waters down the scheme and gives Maori an even worse deal than what they would have got previously. 
The Maori Party members could stand up; it is not too late for them to change their minds vote against this bill and stand up for the people who voted for them. As is now being reported in the media “The Maori Party membership are becoming increasingly aware of the huge debt that our people are going to have to pay despite all the window dressing going on by the leadership about deals struck with Iwi and the $4 per week being saved with cheaper petrol and electricity prices … That figure fails in comparison with a 40 year debt of anything between $110 and $220 billion.” That is what the Maori Party’s membership is saying to the leadership. It is not the Labour Party’s position; it is the Maori Party’s grassroots membership saying that. I tell Te Ururoa Flavell to listen to what those people are saying. It is not too late. The final votes— 
Te Ururoa Flavell 
: The foreshore! 
CHRIS HIPKINS 
: He can talk about the foreshore and seabed but this issue is the biggest sell-out by the Maori Party since it has been in Parliament. His membership will desert his party over it if the reports coming through now are anything to go by. The Maori Party will be abandoned by its membership if it goes ahead and votes for this bill. Maori Party sources calculate that Maori will pay $500 million to $1 billion a year through the cutting of services increases in taxes or the sale of assets. How on earth can the Maori Party justify that? 
Hon Dr NICK SMITH (Minister for Climate Change Issues) 
: 
 I really enjoyed that contribution from Chris Hipkins. It was a truly remarkable contribution given the news release that he put out on Sunday where he said that he had had a rush of constituents to his office concerned about— 
Hon David Cunliffe 
: I raise a point of order Mr Chairperson. It is certainly a convention in this House if not binding under the Standing Orders that the Minister in the chair in the Committee stage of a debate is there to serve the Committee by responding to the questions that it poses on the policy in the bill. It seems to me to be at odds with that convention that the Minister has launched into an attack on a member of this House about a press release from the previous week on an arguably unrelated aspect of business. I ask you to restrain the Minister and bring him back within the normal conventions— 
The CHAIRPERSON (Eric Roy) 
: The Minister in the chair was responding to an issue raised by the member and I am prepared to hear the argument at this stage. 
Hon Dr NICK SMITH 
: A key part of the amendments we are making to the emissions trading scheme is to prevent a 10 percent increase in the price of power on 1 January and to put in place on 1 July next year a lesser increase while having a responsible climate change policy. I challenge Mr Hipkins to say how he can challenge the Maori Party about integrity when on Sunday he said: “I’m going to Parliament this week to do all I can to fight power-price hikes.” and then his own colleague tabled a Supplementary Order Paper to reverse changes in those amendments which would put power prices up. I say to Mr Hipkins that he is an embarrassment to his electorate and to himself if he is going to run those sorts of lines and then challenge the Maori Party about impacts on low-income earners. 
The advice is absolutely consistent. The changes the Maori Party is supporting will result in the lesser cost of $165 per year on every single New Zealand household. That is absolutely consistent in the advice. The real question for Mr Hipkins is whether he will support the Maori Party and the National Party in reducing that price impact. The very first issue that the Maori Party put on the table in its negotiations was the same issue that Chris Hipkins raised: lower impact costs on households. So I simply say to Mr Hipkins that he should be supporting the Maori Party and he should be thanking it for helping not only Maori but all families in reducing the impact of the emissions trading scheme on those households by $165 per year. If he is true to his word he will be voting with the Maori Party and National for these very sensible amendments. 
Hon MARYAN STREET (Labour) 
: 
 I want to go back to some of the entry points for the Climate Change Response (Moderated Emissions Trading) Amendment Bill. I did not come into this House to make life worse for my daughter her peers and any children whom she might have in the future. I did not come here for that purpose and one of the reasons why we as the Labour Party are voting against this legislation is that it does nothing to advance the future for New Zealand. 
National has always been the party of the status quo. What we have here is spin upon spin upon spin layered on what is essentially a status quo document. The National Party has always been the party of big business. It is only recently that its members have discovered Maori big business but it is still the party of big business. 
We are concerned—deeply concerned—about this legislation because of not only its content but also its process which I will come back to in a moment. The content of this legislation does nothing to incentivise our producers—it does not matter whether they are agricultural producers or industrial producers—to do things differently: to build a new economy and to build a new productive base in this country on the basis of new methods. It does not help to build productivity and economic output for this country based on new methods that are sensitive to not only the environment that we are blessed to live in in this country but also the needs of the planet’s environment. That is the fundamental concern for us in Labour. This legislation provides no incentive to reduce emissions. 
If there is nothing else that National understands about climate change can it please understand this? This watered-down scheme—it is in effect a return to supplementary minimum prices—panders to the corporates by giving them vast handouts and it does nothing to incentivise them to change their behaviour in order to reduce greenhouse gas emissions. At least that is what we all understand; surely we all understand that. The public knows that greenhouse gases need to be reduced if this planet is to survive in any kind of reasonable condition for our children and their children. So it is absolutely essential that some of the amendments that have been put up get proper consideration and support. If I am allowed to take a second call in a moment I will go over some of those Supplementary Order Papers. 
But I also want to talk about the process around this bill. The Government would not be in such distress now about the numbers or be in such a shambles about the passage of this legislation had it simply taken a breath and done it in a more consultative way. To give legislation of such importance as this only 6 weeks in front of a select committee is a travesty of the process. This Government has prostituted the processes of Parliament in order for the Minister for Climate Change Issues to say there is legislation with his name on it when he goes to Copenhagen. That is not a good enough reason for doing that. I say to Dr Smith that this legislation is not about him; it is about the future of New Zealand. It is about our contribution to the reduction of global warming which is a man-made phenomenon. 
If this bill had gone through a proper process and had taken some time we might have arrived at legislation that was durable—at an emissions trading scheme that was durable. Instead of ramming through these completely inadequate—worse than that; destructive—clauses in this legislation all that the Minister needed to do was in fact to extend the implementation date for the previous Labour Government’s emissions trading scheme. All that he had to do was to delay the implementation of our scheme give it a greater hearing and let the Maori Party work out whether it was going to be advantageous to its people—that is not simply advantageous to five iwi corporates but advantageous to Maori and Pakeha families in the lower socio-economic brackets in our country. This legislation will not do what the Government is trying to spin that it will do. It will not reduce power prices as it stands. It will require taxpayers to foot the bill for subsidies to large emitters to carry on with their emissions. Those large emitters will not only carry on but also increase their emissions. They will be allowed to increase their emissions; there will be no progress. 
This issue is not meant to be about the Minister’s ego in Copenhagen. He could easily have said New Zealand has an emissions trading scheme in place—he could have said that in Copenhagen. He could even have said we were still in discussions about amending it. This is not about going to Copenhagen with nothing; we have something in place so we could have held our heads up. When the first soundings of this legislation were broadcast through the diplomatic channels in the pre-Copenhagen conference people laughed—people laughed. The Minister thinks he is going to achieve something by way of reputation by having this bill—this legislation with his name on it—held up in Copenhagen. But when people look at it closely they will continue to laugh. This legislation will do nothing to reduce greenhouse gas emissions and worse than that it will require the low-paid the low-income households to pay for this scheme through a reduction in services—whether they be reductions to education to health to other infrastructure or to public services that they draw on and require in order to live with dignity in our country. 
I ask the Maori Party members not to be influenced by National sending its Maori members to cuddle up with them on their benches right now. They just need to be aware of what the Maori Party’s membership is saying. They should be aware that the party’s membership has dropped to the fact that this spin is completely transparent and that this bill will not deliver the kinds of relief wanted by low-income Maori households—relief that they would wish that their party would represent for them in this Parliament. It is time for the Maori Party to withdraw its votes and to listen. It is not too late. It is time now for the Maori Party to withdraw its votes on this bill and to vote it down. 
We have an emissions trading scheme in place. Let us spend more time on achieving a durable consensus around that. It was the Minister who walked away from the bipartisan talks—from the multiparty talks. It was the Minister who walked away thinking he could sew up the Maori Party votes on this bill and get it passed. That is not good enough. It is a travesty it is an abuse of parliamentary process and it is not what I would suggest many National members came into this House to do. Regardless of the issue surely they would not subscribe to that kind of abuse of process. This is the moment for the Maori Party to withdraw its votes on this bill to listen to its membership and to understand that what has been said by the Government in terms of relief for low-income households has been just spin. 
Let us take time. Let us build I say to the Minister a durable consensus around the emissions trading scheme. This bill is a shambles. This process is a shambles. It is now getting to the point where the votes in support of the bill are at risk. The best thing that the Minister could do is to withdraw this bill rather than suffer the ignominy of a defeat. He could withdraw it and say “All right let us go back. Let us see if we can gain some multiparty consensus.” The last thing that our farmers need is instability around the emissions trading scheme. 
JEANETTE FITZSIMONS (Green) 
: 
 I will begin by just briefly awhi-ing the Maori Party which is a membership-based grassroots party like the Greens. We know what that means. We know that it leads to some difficult internal decisions. We know what it is going through at the moment. The Maori Party members should not withdraw their votes because Labour has asked them to and they should not withdraw their votes because the Green Party has asked them to; they should listen to their members and do what their members are asking them to do because that is who they are accountable to. 
I want mainly to talk now about what I think is the primary reason for the unease that is being caused to members of the Maori Party to the Greens and to most other people who oppose this legislation. It all comes down to the intensity basis for the allocation. That is what creates the huge inequities and the huge debts going forward into the future that this legislation creates. There has been a lot of talk about the phase-out rate of free allocation. Nobody seems to have twigged that under this legislation there is no phase-out. The 1.3 percent is a complete mirage. Any industry getting an allocation that grows by more than 1.3 percent a year gets no phase-out at all. 
Let us look at the dairying industry for a moment. Dairying output has been growing by 4.4 percent a year recently. That is a huge rate of growth and the National Government and Fonterra want it to go on for ever. I do not know where they will put the cows I do not know what they will do about the rivers etc. but the fact is that is its output growth and the free allocation depends on output. So we will get a 4.4 percent increase each year in the basis for the allocation then a 1.3 percent decrease leaving—if my school maths serves me well—a 3.1 percent increase in free allocation to the dairy industry every year. There is no phase-out. If Comalco manages to increase its production by more than 1.3 percent a year it gets no phase-out either. If Methanex manages to ramp right up to full production in two plants it gets a massive increase as well. The free allocation goes on then for ever. 
The key difficulty with it is not what happens in the next few years. It is not about how much we might help people with sunk investment in existing plant transition to a new world. What it means though is that new investment decisions—people building new plants that will be trade-exposed or existing plants significantly expanding in the trade-exposed area—will not take the price of carbon into account in making those investment decisions. Investors who are looking at a choice between a low carbon investment and a high carbon emissions investment will have no encouragement at all to take the low carbon investment because the intensity-based allocation says “You go for it and the taxpayer will cover 90 percent of your increase in emissions virtually for ever.” 
The other thing the intensity allocation does is it takes away what limited cap there was in the existing legislation. We had some argument previously between the Minister for Climate Change Issues and David Parker about whether there was a cap in the existing Parker legislation. In a sense there was and in a sense there was not. The Act that is law now has no cap on emissions. Emissions can continue to grow but at the full cost of carbon. What it does cap is free allocations and that is what creates the full cost of carbon for growth in emissions. But that cap on allocation is taken away in this legislation so in this bill neither emissions nor free allocations are capped. There is no sense at all in which it could be called a “cap and trade” scheme. 
Let us go back to the fisheries management system of individual transferable quotas which is often held up as the ideal “cap and trade’” system. Imagine a fisheries system with no total allowable catch: fishers had quotas and could trade them but there was no total allowable catch. That is how stupid this is. 
Hon SHANE JONES (Labour) 
: 
 Kia ora ano tatou e te whanau. Tena koe e te Heamana. There is a famous story in Te Ao Maori. It is about a kahawai—not unlike the Maori Party—and a great white shark. The great white shark said to the kahawai: “Let’s learn to live together. Let’s swim in a common current and get the feel of the environment.” So the kahawai joined the shark and they were swimming cavorting etc. But the shark got tired of that and said “Let’s get even closer.” The kahawai came closer and said “How close?”. The shark went “Gulp!” and said “That close!”. This is the day the great white shark consumed the Maori minnow. 
As the Maori Party minnow disappears down the long throat of the great white shark we can hear the shrieks of anguish from its membership. Some of those shrieks have been brought to our attention. Supporters are leaving the party as the real issues behind this legislation are becoming known by the wider public. This legislation could spell the end of the Maori Party. Actually that happened when the Maori Party entered into a tawdry deal to reward the gentrified 1 percent of Maori with a foul settlement with a narrow group in the South Island leaving the vast majority of Maori taxpayers to bear that burden for 40 50 or 60 years. Does the member for Te Tai Tonga think she will not go the way of Tutekawa Wyllie who pulled a similar stunt believing that he would save the interests of South Island Maori by going against the interests of wider Maori? He disappeared in 1999 never to be heard of again. That road lies before that member because of this dreadful sell-out in this House. 
Fortunately the amplification of the Maori Party’s perfidy has captured the attention of the media. The supporters of Hone Harawira have now got hold of the guillotine he brought back from France and they are applying it to the real culprits in this wretched affair—the leadership of the party who have taken the proud name of Maoridom into this House and debased it. They have debased it through supporting this dangerous anti-Maori anti-public emissions trading legislation. That point needs to be made because the burden for bearing the costs of this wretched scheme does not fall on the gentrified elite. It falls on the hard-working garden-variety living in “Struggler Gully” Maori families who can ill afford to bear the burden of those expenses whilst at the same time finding dough for whanau ora finding the money for hospitals and finding the money for education which has been slashed. 
It is bizarre. The Maori Party is willing to acquiesce and bring this legislation into the House that is an embarrassment for our entire country internationally. It defeats and negates every single ethic of kaitiakitanga. How dare those members stand and use those proud Maori terms in this House whilst their actions indicate that although the mouth might say something—kei nga ngutu he korero engari kei raro te rahurahu—every other element of their anatomy is doing the opposite. That is what we have seen today. 
This is a very sad day not only for the country and not only for taxpayers because it is a reversion to the terrible days when taxpayers subsidised negative producers in the economy; this is the day when Maori voters realise they made an egregious error when they placed their trust in that party which for a trivial amount of money something like $25 million has turned round and imposed $110 billion worth of bills on future generations. Why did those members think the proud legacy of Maori environmentalism stewardship and belief in future generations should be passed off for such a trivial miniscule amount of money? Up and down the country people have viewed the emissions trading scheme as something that is largely international and hard to understand but boy they smell betrayal and they recognise treachery when they see it. This bill as a consequence of this new development shows that that party has decided to be treacherous to the interests of their own people to not stand for the legacy of Maori environmentalism and to sell out their own people. 
History must record that even if this bill does pass it passes because of an act of deceit an act that abrogates the very reason that Maori were sent to this House. They were not sent to this House so that the people who are ruining the environment can be paid to do so. They were not sent to this House to turn their backs on struggling families struggling youth and communities looking for a remedy to climate change. No they were not sent here to do that but that is what we see today. 
It is a sad development that the Treaty of Waitangi settlement process has been held to ransom and actually lacerated as a consequence of this legislation. When society invests goodwill and trust into the process of settling historical grievances it wants the nation to move on from that epoch and for all of us to be able to absorb and stand in the face of our international competitors as equally patriotic. Why should the Maori Party go around listening to the mischief-making lawyers and their deluded gentrified Maori clients—a very narrow band who have no concern whatever for the majority of Maoridom and are concerned only for their own specific agenda? They have ruined Maori credentials of a patriotic nature. When we stand as Maori with our fellows whether they are Pakeha Asian or whatever their ethnicity we should all face equally the obligations of meeting our international duties and we should not use the Treaty of Waitangi to deepen and feed the mentality of victimhood and grievance. 
The whole theory and the spirit underlying the Treaty settlement process is for Aotearoa to move on but National was keen to open that wound again. It was keen to use simple trinkets hiriwa pieces of gold and silver miniscule in form to open up the prospect that there can never ever be full and final settlements. Whenever a Government feels that it is expedient to go back and open up those historical wounds it will do it. National does this to the shame of Doug Graham and to the shame of Jim Bolger who took heroic steps. They never lied to Ngai Tahu; this nonsense that there was a great conspiracy to devalue their settlement to defraud them of their assets etc. is absolute rubbish. Dr Cullen himself hired an eminent Queen’s Counsel and not a skerrick of evidence was found that that level of larceny or villainy might have taken place. Doug Graham was a proud and honourable man unlike members on that side of the House who on this particular issue use grievances as a crutch deepening the grievance mentality that keeps the Maori Party alive. 
Craig Foss 
: I raise a point of order Mr Chairperson. The member is in full flight but he did question whether members across the House were honourable and I take offence at that. 
Hon SHANE JONES 
: I used the context of this issue. However I am pleased—no drama—to withdraw and apologise. The point is taken. 
Not only is the Maori Party membership abandoning the Maori Party because it does not listen to its members; unfortunately for its leadership its only member of Parliament who at this stage is listening to the membership is the person it is trying to sack. But no doubt he will be back. I predict that if that party survives that man will take it over. Then we will see. [ 
Interruption 
] We are hearing profane emissions from the descendant of Ngai Tahu over there but that is another matter. I will leave Mr Harawira and the Maori Party to the side and I will come back to the bill. 
The emissions trading legislation in the unlikely event that it does pass will not stand the test of time. It will be taken internationally as a watered-down hackneyed version of something that could have been created had there been a grand coalition. Our colleagues made multiple entreaties. They were rejected at every particular point in the process. That is why this legislation not only is bad for the Treaty of Waitangi not only is bad for Maori but in particular is fatal for the Maori Party and the sell-outs from National. 
Hon DARREN HUGHES (Labour) 
: 
 I seek leave to table this document which states: “to avoid taking decisions and approaches that lead to division and disharmony within the organisation;” The document is the Maori Party constitution. 
The CHAIRPERSON (Lindsay Tisch) 
: Leave is sought for that purpose. Is there any objection? There is objection. 
Hon RODNEY HIDE (Leader—ACT) 
: 
 Once again I find myself in complete agreement with the Hon Shane Jones. Maybe I will not use his great oratory to reinforce the point but I say that what we have here is good Government making atrocious policy and also following an atrocious process. I just want to pick up the point that the Hon Shane Jones made which I think is a very serious one for this Parliament to consider—that is the Government by this decision in this Parliament is saying that there is now no such thing as a full and final settlement. This bill is saying that any settlement can be reopened and relitigated if the Government ever makes a decision that might somehow have a cost on an iwi that has had a settlement. Everyone knows that there was no underhand business in the settlement of the Ngai Tahu deal but back then we never knew we would have an emissions trading scheme. God knows we never thought the country would be so stupid! But there we go. This means that if any Parliament makes a decision about the Resource Management Act or anything like that with an impact on an iwi that has had a settlement then suddenly the iwi will come back to Parliament there will have to be some cash go across to it and there will have to be some resources go across to it because presumably the Government says there is no such thing as a full and final settlement. That is one of the real tragedies of what we have seen here today. 
I think we all know in this Committee that that is not true. We know that the Government is not doing this because of the principles of the Treaty; it is doing it because it needs five votes. The Government has gone across to the Maori Party and asked what is necessary to get its support through all stages of this bill. That has meant that they have had to construct the idea that somehow a Treaty settlement has been breached when in fact it has in no way been breached. That is not me saying that; that is Crown law saying that. So this is simple pork-barrel politics which means that we have bad policy and bad process. 
There has also been a transfer of wealth to a particular iwi. Pre-1990 forest owners have not been treated in the same way so the settlement is actually for just five iwi. Maori owned a lot of forests pre-1990 but unless those Maori are part of the five iwi they will completely miss out like everyone else. So it is not particularly a race issue. It is not about Maori benefiting to the exclusion of Pakeha; it is actually about five iwi benefiting to the exclusion of all other Maori and of all other New Zealanders. We have a policy there that is not about affirmative action for Maori or anything or a special case for Maori; it is a special case for just five iwi and it is saying that all the other iwi can go to hell. It is saying that all the other forest owners can go to hell—they will not get a deal. 
We also have National agreeing to take its emissions trading scheme and insert into it the principles of the Treaty of Waitangi. I ask members to ask themselves what on earth the principles of the Treaty can inform us about climate change. Nothing actually—nothing! And National knows it. Why does National know it? Because in 2005 National pointed out that we could not have the principles of the Treaty in education legislation or in resource management legislation because what on earth was it informing decision makers about? It was nothing because the principles had not been defined. We do not know what that means; its vague and woolly thinking is setting us up for endless litigation. 
So we now have a poorly constructed emissions trading scheme that has been hacked around in the select committee with businesses trying to make it somehow palatable by having a pound of flesh taken off everyone equally. Then the scheme has been hacked around to get the support of five iwi so that they benefit but no other iwi in the country does. On top of that we have inserted the principles of the Treaty of Waitangi. 
No one in the National Government is prepared to stand up and say what those principles are and to put them on the record so we know what this amendment is all about. I would quite like a member from the Maori Party to take a call to say what the principles are. I am looking at my friend the Hon Parekura Horomia and I am asking him how many principles there are. Are there three are there five or are there 10? Let us say there are 10. We need to stand up and say: “Here are the 10 principles of the Treaty and here is what that means for climate change policy.” That is what I would like to hear. 
Why could we not just have a clause that states: “to give effect to the Treaty”? That was what was signed. Actually I would vote for that because the Treaty is about citizens being equal in New Zealand it is about respecting every New Zealander’s property rights Maori included and it is about having one Sovereign—not a bunch of five iwi who can run the Government ragged because they can somehow determine five votes in this Parliament. That is what the Treaty is about. Why do we not put in “Let us have regard to the Treaty” not some airy-fairy principles that can never be defined? The National Party knows that. Why? In 2005 it was National’s campaign promise. But if we jump ahead 4 years we see that not only is National not ridding us of the principles of the Treaty in all the legislation on the statute book but it is reinserting it into legislation on the emissions trading scheme. So I say that we have atrocious policy we have an atrocious process and we have a process that is empowering and enriching five iwi to the exclusion of other Maori. 
What else do we find? Not surprisingly when we go to the Stuff web page we find that the Maori Party’s ruling council is in revolt. We do not know even now whether the Maori Party will finally vote for this legislation because members of its council are saying publicly that the Maori Party should not do so. I ask the Government why it does not take this legislation with its amendments and send it to a select committee for public scrutiny and for parliamentary scrutiny so that all Maori can see what it says—not just the five iwi but all Maori—and more particularly so that every New Zealander can look at it and every member of Parliament can have the debate so that we do not have a decision that was hatched between the Maori Party the five iwi and this Government 18 minutes before it was made public and the day before it was being passed into law. In God’s name how can that be good lawmaking process? It cannot be. It is a disgrace. 
CHRIS TREMAIN (Senior Whip—National) 
: 
 I move  
That the question be now put 
. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Kia ora tatou katoa. I will respond to some of the issues that have been put before the Committee this afternoon. I happily sat and listened to some of the comments. The first thing I would like to do is thank Shane Jones for issuing a press release on behalf of the Maori Party this afternoon. Unfortunately he got his facts wrong. 
Hon Shane Jones 
: I raise a point of order Mr Chairperson. I want this Committee to know that I have not been releasing press releases. Hone Harawira has been doing that himself. 
The CHAIRPERSON (Lindsay Tisch) 
: That is not a point of order; that is a debating point. 
Hon Rodney Hide 
: I raise a point of order Mr Chairperson. I think it is important not to show that there is any confusion about this process. It is morning. 
The CHAIRPERSON (Lindsay Tisch) 
: I understand the comments at this hour of the debate. 
TE URUROA FLAVELL 
: I confirm that the Maori Party will stay with its stand and that there is no discussion on the part of the national council in respect of the Climate Change Response (Moderated Emissions Trading) Amendment Bill today. The second thing I will say is that I have found some of the comments made today a little bit sad in the sense that Mr Hide all of a sudden has a view about the Treaty that has been raised by the Maori Party for the last 4 to 5 years on the issue of its principles. In fact I spoke about them last night so I will not go back and reiterate those comments. They concerned cases from the Court of Appeal and the Waitangi Tribunal which are there for anyone to read. They are a good starting point in respect of how to move forward. 
The third thing I want to say is that the Maori leadership group has been hung out in the public forum as being a select few. I am not going to debate that; suffice it to say I was at Hopuhopu when a large number of the tribes came together to provide a working party to give a view in respect of the emissions trading scheme. I cannot remember whether Mr Jones was present but they put forward a view and they represent for better or for worse a large number of people. The fourth point I want to make is that getting lessons from the Labour Party about Maori Party members going back to speak to their leadership is I think a little bit rich. Members should bear in mind that about 3 or 4 years ago there was a particular bill before the House and a large number of people made their views clear in terms of what they thought of it at that time. Did some people listen to that? No they did not—they did not actually. So we have that to think about. 
CRAIG FOSS (National—Tukituki) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 63 
New Zealand National 58; Maori Party 4; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1. 
Motion agreed to. 
The question was put that the following amendments in the name of Rahui Katene to the amendment set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to: 
to add to new section 2B in new clause 5 the following subsection: 
“(4)Before recommending the making of an Order in Council under section 2A(8) or (9) the Minister must consult or be satisfied that the chief executive has consulted persons (or their representatives) that appear to the Minister or the chief executive likely to have an interest in the order.”; and 
to insert the following new clause: 
5BNew section 3A inserted 
The following section is inserted after section 3: 
“3ATreaty of Waitangi (Te Tiriti o Waitangi) 
In order to recognise and respect the Crown’s responsibility to give effect to the principles of the Treaty of Waitangi— 
“(a)with respect to section 2B (which relates to Orders in Council in relation to Part 5 of Schedule 3) before recommending the making of an Order in Council under section 2A(8) or (9) the Minister must consult or be satisfied that the chief executive has consulted representatives of iwi and Maori that appear to the Minister or chief executive likely to have an interest in the order: 
“(b)with respect to section 76 (which relates to consultation on a pre-1990 forest land allocation plan) before making a recommendation under section 73 the Minister must consult or be satisfied that the chief executive has consulted representatives of iwi and Maori that appear to the Minister or chief executive likely to have an interest in the pre-1990 forest land allocation plan: 
“(c)with respect to section 77 (which relates to consultation on a fishing allocation plan) before making a recommendation under section 75 the Minister must consult or be satisfied that the chief executive has consulted representatives of iwi and Maori that appear to the Minister or chief executive likely to have an interest in the fishing allocation plan: 
“(d)with respect to section 161 (which relates to the appointment and conduct of a review panel)— 
“(i)the Minister must when appointing members to a review panel under section 160(6) ensure that the review panel has at least 1 member who in the Minister’s opinion has the appropriate knowledge skill and experience relating to the principles of the Treaty of Waitangi and tikanga Maori to conduct the review; and 
“(ii)the review panel must consult with the representatives of iwi and Maori that appear to the panel likely to have an interest in the review; and 
“(iii)the terms of reference for the review panel must incorporate reference to the principles of the Treaty of Waitangi: 
“(e)with respect to section 161G (which relates to regulation-making powers in relation to eligible agricultural activities) before recommending the making of a regulation under section 161G(1) the Minister must consult or be satisfied that the chief executive has consulted representatives of iwi and Maori that appear to the Minister or chief executive likely to have an interest in the regulation: 
“(f)with respect to section 162 (which relates to regulations adding further activity to Part 2 of Schedule 4) before recommending the making of a regulation under section 162(1) the Minister must consult or be satisfied that the chief executive has consulted representatives of iwi and Maori that appear to the Minister or chief executive likely to have an interest in the regulation: 
“(g)with respect to section 163 (which relates to regulations relating to methodologies and verifiers) before recommending the making of a regulation under section 163(1) the Minster must consult or be satisfied that the chief executive has consulted representatives of iwi and Maori that appear to the Minister or chief executive likely to have an interest in the regulation: 
“(h)with respect to section 164 (which relates to regulations relating to unique emissions factors) before recommending the making of a regulation under section 164 the Minster must consult or be satisfied that the chief executive has consulted representatives of iwi and Maori that appear to the Minister or chief executive likely to have an interest in the regulation: 
“(i)with respect to section 224 (which relates to the gazetting of targets) before the Minister responsible for the administration of this Act may set amend or revoke a target the Minister must consult or be satisfied that the chief executive has consulted representatives of iwi and Maori that appear to the Minister or chief executive likely to have an interest in the target: 
“(j)with respect to section 225 (which relates to regulations relating to targets) before recommending the making of a regulation under section 225(1) the Minister must consult or be satisfied that the chief executive has consulted representatives of iwi and Maori that appear to the Minister or chief executive likely to have an interest in the regulation.” 
Amendments to the amendment agreed to. 
The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to: 
to insert before the definition of  
animal welfare export certificate 
 the following definition: 
“ 
1990 baseline 
 means the level of New Zealand emissions in 1990”; 
to insert after the definition of  
animal welfare export certificate 
 the following definition: 
“ 
Committee 
 means the Climate Change Advisory Committee established by section 245”; 
to insert after the definition of  
Crown holding account 
 the following definitions: 
“ 
emissions for which New Zealand is responsible 
 in relation to a period means net New Zealand emissions reduced by the quantity of Kyoto Units retired during that period 
“ 
intermediate target  
means a target set for the level emissions for which New Zealand is responsible for a target period under section 225 
“ 
New Zealand emissions 
 means emissions of greenhouse gases from sources in New Zealand 
“ 
New Zealand removals 
 means removals of greenhouse gases from the atmosphere due to land use land-use change or forestry activities in New Zealand 
“net New Zealand emissions 
 in respect of a period means the amount of New Zealand emissions in the period reduced by the amount of New Zealand removals in the period”; and 
to insert after the definition of  
solid biofuel 
 the following definitions: 
“target for 2050 
 means the target set for the level emissions for which New Zealand is responsible in 2050 in section 224 
“target period 
 means each succeeding period of five years beginning with the period 2013-2017”. 
A party vote was called for on the question  
That the amendments to the amendments be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendments to the amendment not agreed to. 
The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to: 
to omit from new section 82(1) the formula “” and substitute the following formula: 
; and 
to insert after the definition of “OSY” in new section 82(1) the following definitions: 
EBis the total emissions produced by eligible industrial activities in the baseline year of 2005 
ESY is the total emissions produced by eligible industrial activities in the year immediately proceeding the specified year as determined in accordance with regulations made under this Act. 
A party vote was called for on the question  
That the amendments to the amendments be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendments to the amendments not agreed to. 
The question was put that the following amendment in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to: 
to omit from new section 82(1) the definition of “LA” and substitute the following definition: 
LAis the level of assistance for the activity for the specified year being— 
(a)for a moderately emissions-intensive eligible industrial activity— 
(i)0.6 in 2010 2011 and 2012; and 
(ii)in each year after 2012 and before 2030 the level of assistance from the previous year less 0.033 (the phase-out rate for a moderately emissions-intensive eligible industrial activity) (expressed to 2 decimal places): 
(b)for a highly emissions-intensive eligible industrial activity— 
(i)0.9 in 2010 2011 and 2012; and 
(ii)in each year after 2012 and before 2030 the level of assistance from the previous year less 0.05 (the phase-out rate for a highly emissions-intensive eligible industrial activity) (expressed to 2 decimal places). 
A party vote was called for on the question  
That the amendment to the amendments be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment to the amendments not agreed to. 
The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to: 
to omit from new section 84(1) the formula “” and substitute the following formula: 
; and 
to insert after the definition of “OSY” in new section 84(1) the following definitions: 
EBis the total emissions produced by eligible industrial activities in the baseline year of 2005 
ESY is the total emissions produced by eligible industrial activities in the year immediately proceeding the following year as determined in accordance with regulations made under this Act. 
A party vote was called for on the question  
That the amendments to the amendments be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendments to the amendments not agreed to. 
The question was put that the following amendment in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to: 
to omit from new section 85A(2) the definition of “LA” and substitute the following definition: 
LAis the level of assistance for the activity for the specified year being— 
(a)for a moderately emissions-intensive eligible industrial activity— 
(i)0.6 in 2010 2011 and 2012; and 
(ii)in each year after 2012 and before 2030 the level of assistance from the previous year less 0.033 (the phase-out rate for a moderately emissions-intensive eligible industrial activity) (expressed to 2 decimal places): 
(b)for a highly emissions-intensive eligible industrial activity— 
(i)0.9 in 2010 2011 and 2012; and 
(ii)in each year after 2012 and before 2030 the level of assistance from the previous year less 0.05 (the phase-out rate for a highly emissions-intensive eligible industrial activity) (expressed to 2 decimal places). 
A party vote was called for on the question  
That the amendment to the amendments be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment to the amendments not agreed to. 
The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to: 
to omit from new section 85A(2) the formula “” and substitute the following formula: 
; and 
to insert after the definition of “OSY” in new section 85A(2) the following definitions: 
EBis the total emissions produced by eligible industrial activities in the baseline year of 2005 
ESY is the total emissions produced by eligible industrial activities in the year immediately proceeding the following year as determined in accordance with regulations made under this Act. 
A party vote was called for on the question  
That the amendments to the amendments be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendments to the amendments not agreed to. 
The question was put that the following amendment in the name of Charles Chauvel to the amendment set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to: 
to omit from new section 86(2) the formula “” and substitute the following formula: 
; and 
to insert after the definition of “OSY” in new section 86(2) the following definitions: 
EBis the total emissions produced by eligible industrial activities in the baseline year of 2005 
ESY is the total emissions produced by eligible industrial activities in the year immediately proceeding the following year as determined in accordance with regulations made under this Act. 
A party vote was called for on the question  
That the amendments to the amendments be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendments to the amendments not agreed to. 
The question was put that the following amendment in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to: 
to omit from new section 86(2) the definition of “LA” and substitute the following definition: 
LAis the level of assistance for the activity for the specified year being— 
(a)0.9 in 2013; and 
(b)in each year after 2013 and before 2030 the level of assistance from the previous year less 0.053 (the phase-out rate for an eligible agricultural activity) (expressed to 2 decimal places). 
A party vote was called for on the question  
That the amendment to the amendments be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment to the amendments not agreed to. 
The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to: 
to omit from new section 160(3)(a)(ii) “5” and substitute “3”; and 
to omit new section 160(4). 
A party vote was called for on the question  
That the amendments to the amendments be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendments to the amendments not agreed to. 
The question was put that the following amendment in the name of Dr Kennedy Graham to the amendment set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to clauses 43 to 49 be agreed to: 
to omit new section 188(1)(c)(i) in new clause 46 and substitute the following subparagraph: 
“(ii)the post-1989 forest land in respect of which the application is submitted contains no areas with significant numbers of tree species that are identified as a pest or unwanted organism under the Biosecurity Act 1993.” 
A party vote was called for on the question  
That the amendment to the amendment be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment to the amendment not agreed to. 
The question was put that the following amendment in the name of Charles Chauvel to the amendments set on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to: 
to omit new section 222A. 
A party vote was called for on the question  
That the amendment to the amendments be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment to the amendments not agreed to. 
The question was put that the following amendment in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to: 
to omit new section 222B. 
A party vote was called for on the question  
That the amendment to the amendments be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment to the amendments not agreed to. 
The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to: 
to omit from new section 222C(2)(a)(ii) “$25” and substitute “$100”;  
to omit from new section 222C(2)(a)(iii)(B) “$25” and substitute “$100”; and 
to omit from new section 222C(2)(b)(ii) “$25” and substitute “$100”. 
A party vote was called for on the question  
That the amendments to the amendments be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendments to the amendments not agreed to. 
The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to” 
to omit from new section 222D(1) “$25” and substitute “$100”; 
to omit from new section 222D(1)(a) “$25” and substitute “$100”; 
to omit from new section 222D(2) “$25” and substitute “$100”; 
to omit from new section 222D(3) “$25” and substitute “$100”; and 
to omit from new section 222D(3)(a) “$25” and substitute “$100”. 
A party vote was called for on the question  
That the amendments to the amendments be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendments to the amendments not agreed to. 
The question was put that the following amendments in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to: 
to omit from new section 222F(b) “4” and substitute “2”; and 
to omit new section 222F(d). 
A party vote was called for on the question  
That the amendments to the amendments be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendments to the amendments not agreed to. 
The question was put that the following amendment in the name of Charles Chauvel to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to: 
to insert the following new section: 
“222GA Transitional provisions regarding prohibition on banking of New Zealand Units 
“(1)Despite anything in this Act no New Zealand Unit issued in the period 1 July 2010 to 31 December 2012 may be surrendered after 31 December 2012. 
“(2)Despite anything in this Act the Registrar must not convert any new Zealand unit issued in the period 1 July 2010 to 31 December 2012 into a designated assigned amount unit for the purposes of transferring that assigned amount unit to an account in an overseas registry. 
“(3)The Registrar must not transfer to an account in an overseas registry under section 18C any New Zealand unit issued in the period 1 July 2010 to 31 December 2012. 
“(4)This section does not apply to New Zealand units— 
“(a)received in respect of removals for an activity in Part 1 of Schedule 4; or 
“(b)transferred following a determination of the Minister under sections 78 or 79 in accordance with an allocation plan providing for the matters in section 73.” 
A party vote was called for on the question  
That the amendment to the amendments be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment to the amendments not agreed to. 
The question was put that the following amendment in the name of Hon David Parker to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to: 
to omit new sections 222C and 222D. 
A party vote was called for on the question  
That the amendment to the amendments be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment to the amendments not agreed to. 
The question was put that the following amendment in the name of Hon David Parker to the amendments set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to: 
to add to new section 222C the following subsection: 
“(5)That before the 2 for 1 emissions discount for electricity emissions is allowed the emitter must prove to the satisfaction of the Commerce Commission that but for the 2 for 1 discount electricity prices would have been higher.” 
A party vote was called for on the question  
That the amendment to the amendments be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment to the amendments not agreed to. 
The question was put that the amendments as amended set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to Part 1 be agreed to. 
A party vote was called for on the question  
That the amendments as amended be agreed to. 
Ayes 63 
New Zealand National 58; Maori Party 4; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1. 
Amendments as amended agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 90 in the name of Dr Russel Norman to insert new clause 10A be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 94 in the name of Charles Chauvel to insert new clauses 11A to 11D be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment not agreed to. 
The CHAIRPERSON (Lindsay Tisch) 
: We have an amendment to new section 70 in the name of Jeanette Fitzsimons as set out on Supplementary Order Paper 91. This is out of order as being inconsistent with a previous decision. 
We now move to Charles Chauvel’s amendment to new section 70 as set out on Supplementary Order Paper 94. This is out of order as being inconsistent with a previous decision. 
We move to Rahui Katene’s typescript amendment to new section 77(1). The question is that the motion be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to 
. 
Ayes 116 
New Zealand National 58; New Zealand Labour 43; Green Party 9; Maori Party 4; Progressive 1; United Future 1. 
Noes 5 
ACT New Zealand 5. 
Amendment agreed to. 
The CHAIRPERSON (Hon Rick Barker) 
: The amendment set out on Supplementary Order Paper 97 in the name of Charles Chauvel to insert a new section 86A in clause 22 is out of order as the Clerk has ruled it is outside the scope of the bill. 
The amendment set out on Supplementary Order Paper 89 in the name of Russel Norman to clause 23 is ruled out of order as it is inconsistent with a previous decision of the Committee. 
The question was put that the amendment set out on Supplementary Order Paper 97 in the name of Charles Chauvel to insert new clause 23A be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment not agreed to. 
Result corrected after originally being announced as Ayes 53 Noes 69. 
The question was put that the following amendment in the name of Charles Chauvel to clause 38 be agreed to: 
to omit from new section 160(5)(g) “including (but not limited to) Australia’s carbon pollution reduction scheme”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment not agreed to. 
Hon DARREN HUGHES (Senior Whip—Labour) 
: 
 I raise a point of order Mr Chairperson. Could I just check with you for the vote cast before the vote we have just dealt with what the voting tally of the Maori Party was as there is some understanding that five votes were cast but I understood that they were casting only four votes today. 
The CHAIRPERSON (Hon Rick Barker) 
: It is recorded that the Maori Party cast five votes on Mr Chauvel’s amendment on Supplementary Order Paper 97. 
Hon DARREN HUGHES 
: The whip for the Maori Party might want to correct that figure because the trouble is it might not be correct. 
TE URUROA FLAVELL (Whip—Maori Party) 
: 
 I thank Darren Hughes. The Maori Party vote should have been recorded as four against. That number has been consistent throughout the morning. 
The CHAIRPERSON (Hon Rick Barker) 
: Is the member seeking leave to change the vote from five to four? 
TE URUROA FLAVELL 
: I seek leave to have our vote changed accordingly. 
The CHAIRPERSON (Hon Rick Barker) 
: Leave is sought. Is there any objection to that course of action being followed? There is none. The vote is now amended and the Ayes recorded as 53 and the Noes as 68. 
The question was put that the following amendment in the name of Rahui Katene to clause 38 be agreed to: 
to insert in new section 161(5) the following paragraph: 
“(ab)must consult persons (or their representatives) that appear to the panel likely to have an interest in the review; and”. 
Amendment agreed to. 
The CHAIRPERSON (Hon Rick Barker) 
: The amendment set out on Supplementary Order Paper 92 in the name of Dr Kennedy Graham to new section 160 in clause 38 is ruled out of order as being inconsistent with a previous decision. 
The amendment set out on Supplementary Order Paper 94 in the name of Charles Chauvel to new sections 160 and 161 in clause 38 is ruled out of order as being inconsistent with a previous decision. 
The amendments in the name of Charles Chauvel to amend subsection (2) omit subsections (6) to (8) amend subsection (9) and add new subsection (10) in new section 161A in clause 38 are ruled out of order as being inconsistent with a previous decision of the Committee. 
The question was put that the amendment set out on Supplementary Order Paper 94 in the name of Charles Chauvel to insert new clause 41A be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 94 in the name of Charles Chauvel to insert new clause 41B be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment not agreed to. 
The CHAIRPERSON (Hon Rick Barker) 
: On clause 44 Jeanette Fitzsimons’ amendments set out on Supplementary Order Paper 102 are out of order as they are inconsistent with a previous decision. 
The question was put that the following amendment in the name of Charles Chauvel to clause 57 be agreed to: 
to omit from new section 217(1)(d) “1 January 2015 to 31 December 2015” and substitute “1 January 2013 to 31 December 2013”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment not agreed to. 
The CHAIRPERSON (Hon Rick Barker) 
: Charles Chauvel has amendments to clause 61 set out Supplementary Order Paper 95. These are out of order as they are inconsistent with a previous decision. 
The question was put that the following amendment in the name of Charles Chauvel to insert new clause 61A be agreed to: 
to insert the following new clause: 
61AComplementary Measures 
The following new section is inserted after section 223: 
“223CComplementary Measures 
“(1)This section establishes a fund for the purpose of reducing greenhouse gas emissions through the promotion of complementary measures additional to the Emissions Trading Scheme (the Complementary Measures Fund). 
“(2)The annual appropriation for the Fund shall be at least: 
“(a)20000000 New Zealand Dollars per year; or 
“(b)10 percent of all revenues accruing from the Emissions Trading Scheme 
whichever is the greater. 
“(3)The Complementary Measures Fund may be used for purposes that included (but are not limited to) the delivery marketing and promotion of and provision of grants or loans relating to— 
“(a)incentives for households to improve energy efficiency; or 
“(b)incentives for businesses developing renewable energy projects; or 
“(c)incentives to replace energy inefficient home appliances with energy efficient ones; or 
“(d)incentives to purchase fuel efficient low emission vehicles; or 
“(e)investment funding to help quickly commercialise new lower-emission technology invented in New Zealand; or 
“(f)assistance to sell New Zealand emissions reduction technology to other countries. 
“(4)The Minister— 
“(a)must as soon as practicable after this section comes into force determine the criteria for the use of the Complementary Measures Fund; and 
“(b)may re-determine the criteria at any time. 
“(5)Before determining or re-determining the criteria for the use of the Complementary Measures Fund the Minister must seek and consider the advice of the Energy Efficiency and Conservation Authority. 
“(6)When advising the Minister on the criteria for the use of the Complementary Measures Fund the Energy Efficiency and Conservation Authority must have regard to— 
“(a)the degree to which any measure will reduce New Zealand’s long-term emissions pathway including by encouraging broad technological change; and 
“(b)the cost-effectiveness of expenditure from the Complementary Measures Fund in relation to the purpose of the Complementary Measures Fund; and 
“(c)any other matters that the Authority considers relevant. 
“(7)The Energy Efficiency and Conservation Authority must manage and administer the Complementary Measures Fund in accordance with the criteria determined by the Minister.” 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 94 in the name of Charles Chauvel to omit clauses 62 and 63 and substitute new clause 62 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rahui Katene to insert new clause 62A be agreed to: 
to insert the following new clause: 
62AGazetting of targets 
Section 224 is amended by inserting the following subsection after subsection (2): 
“(2A)Before the Minister sets amends or revokes a target the Minister must consult or be satisfied that the chief executive has consulted persons (or their representatives) that appear to the Minister or the chief executive likely to have an interest in the target.” 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 72 
New Zealand National 58; Green Party 9; Maori Party 4; United Future 1. 
Noes 49 
New Zealand Labour 43; ACT New Zealand 5; Progressive 1. 
Amendment agreed to. 
The question was put that the following amendment in the name of Rahui Katene to clause 63 be agreed to: 
to insert in new section 225 the following subsection: 
“(1A)Before recommending the making of an Order in Council under subsection (1) the Minister must consult or be satisfied that the chief executive has consulted persons (or their representatives) that appear to the Minister or the chief executive likely to have an interest in the order.” 
Amendment agreed to. 
The question was put that the following amendment in the name of Hon David Parker to clause 63 be agreed to: 
to add the following section: 
“226Compensation to pre-1990 Forest Owners 
“(1)No additional compensation will be accorded to any pre-1990 forest landowner on the basis that the land was transferred to the owner under a Treaty settlement unless it is proven that the Crown made misrepresentations or withheld material information about emissions pricing at the time of settlement.” 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 58 
New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1. 
Noes 63 
New Zealand National 58; Maori Party 4; United Future 1. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Hon David Parker to clause 63 be agreed to: 
to add the following section: 
“226Nitrous Oxide 
“(1)Notwithstanding any other provision in this legislation nitrous oxide emissions from agriculture will be included in the scheme from 1 January 2013 with free allocation based on 90% of 2005 emissions. 
“(2)All revenue collected under subsection (1) between 1 January 2013 and December 2014 shall be used to subsidise the use of nitrification inhibitors.” 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment not agreed to. 
A party vote was called for on the question  
That Part 1 as amended be agreed to. 
Ayes 63 
New Zealand National 58; Maori Party 4; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1. 
Part 1 as amended agreed to. 
Part 2 Consequential amendments 
CHARLES CHAUVEL (Labour) 
: 
 I understand that there is going to be a wide-ranging debate on the title and commencement of the legislation and that it is unlikely that calls will be taken on this part. I just wanted to advise the Committee of that understanding. 
The CHAIRPERSON (Hon Rick Barker) 
: If there is no further debate on Part 2 we will move to the amendments. 
Hon Steve Chadwick 
: Do we vote on Part 2? 
The CHAIRPERSON (Hon Rick Barker) 
: Yes. I am moving to the amendments. That is why I said to the Committee that we are now moving to the amendments which means we will have a vote. Unusual for the House I know but brace yourselves members. 
The question was put that the amendment set out on Supplementary Order Paper 98 in the name of Hon Dr Nick Smith to Part 2 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 63 
New Zealand National 58; Maori Party 4; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1. 
Amendment agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 94 in the name of Charles Chauvel to add new clause 67 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment not agreed to. 
A party vote was called for on the question  
That Part 2 as amended be agreed to. 
Ayes 63 
New Zealand National 58; Maori Party 4; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1. 
Part 2 as amended agreed to. 
New schedule 
The question was put that the amendment set out on Supplementary Order Paper 98 in the name of the Hon Nick Smith to add a new schedule be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 63 
New Zealand National 58; Maori Party 4; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1. 
New schedule agreed to. 
Clauses 1 to 3 
Hon DAVID PARKER (Labour) 
: 
 It gives me no pleasure to rise after we have just voted through those terrible amendments to the emissions trading scheme. Effectively they have rendered largely ineffective New Zealand’s main response to our growing emissions. 
Hon Steve Chadwick 
: A sad day. 
Hon DAVID PARKER 
: It is a terribly sad day. The effect of that decision on future generations is that our children and their children will have visited upon them many billions of dollars and emissions will grow more than they would otherwise have done. I think it is timely to record the fact that if a country like New Zealand with our comparative wealth—we are one of the richest countries in the world on a world scale; we are not as rich as Australia but we are still very wealthy—with our good environmental ethic which is not held by the National Party or the Maori Party but generally held by most New Zealanders who think we should do our bit for the environment; with the benefit of the rule of law; and with our wonderful scientists and our understanding of these things cannot do this right what hope is there that the world will do it right in time? What hope is there that the world will get on top of these problems in time for them not to be catastrophic? I am not a man of hyperbole—I do not use the word “catastrophic” often in this Chamber—but scientists warn us that if the world does not reduce its emissions very soon then the climate change effects will see millions of people displaced by rising sea levels changing patterns of food production caused by drought and conversely terrible storm events meaning that millions of people will not have enough food to eat and that thousands of species that currently exist on our planet will be lost. I think that is very sad. 
I will move on to why I disagree with something that the ACT Party contributed at the end of the last part of the debate on the Climate Change Response (Moderated Emissions Trading) Amendment Bill. An ACT member said that we had to protect property rights. That member was saying what Business New Zealand said in its submission to the Finance and Expenditure Committee which was that there is a property right to pollute. I might not agree with much that the Minister in the chair Dr Nick Smith has done on this amendment bill but I hope that he agrees that there is no property right to pollute. We have to stand down that notion in this country. There is no property right to pollute—whether it be the right to pollute a river; whether it be the right to pollute with ozone gases destroying the ozone layer; or whether it be the right to put lead in petrol because it was cheaper for oil companies. There was no property right to do that. There is no property right to pollute in any area. 
It is not a private property right to pollute. That is where the business lobby has made a fundamental error in its logic. I correct myself: not all of the business lobby is wrong but the Business New Zealand business lobby is fundamentally wrong. I think it is such a lazy error; it is so patently wrong. There is no property right to pollute. We did not have to compensate oil companies when we took lead out of petrol. We did not have to compensate refrigeration companies when we took out ozone-damaging substances from their refrigerants. We do not have to compensate farmers when they are told not to pollute rivers. We did not have to compensate councils when we stopped them pouring raw sewage into harbours. We did not have to compensate factories when they stopped polluting rivers with the freezing works blood and guts that they used to just dump in them. We do not have to compensate businesses to do what this country and the world needs to be done when it comes to reducing carbon emissions into the atmosphere. 
This principle needs to be reiterated. I ask the Minister in the chair to state clearly that he disagrees with Business New Zealand and that he disagrees with the ACT Party’s notion that there is a property right to pollute. That is what lies behind the right-wing agenda of those who say that we should protect property rights in this bill. That is what they mean. They say it should protect their property right to pollute. I disagree with that in principle but even if Dr Smith disagrees with it in principle he is doing it in practice with this bill. 
Some of the amendments that I have put up change the name of this bill to more properly reflect what it is. It could be the “Greenhouse Gas Emissions (Property Rights Creation) Bill”. It creates that property right. It entrenches those rights to create and persist in creating carbon pollution well past 2050. In fact the emission abatement curve is so slow that it does not abate fully for 80 years. We will all be dead and gone. Actually most of our children will be dead and gone by the time the free emissions rights completely abate under this bill. It effectively creates such a long period of tradability of that pollution right that one could not but say that in practice it creates a property right to pollute. 
In doing so we know that it increases Government debt. It increases Government debt because the free emissions rights that are given to major emitters long after they had a fair adjustment period are so enormous that Government gives away an extra $50 billion worth of emissions right. We can argue with the Minister as to whether it is proper to include the interest on that increased Government debt as Treasury did to get the figure of a $110 billion increase in Government debt but there is no doubt that it substantially increases Government debt. So an alternative name is the “Climate Change Response (Increased Government Debt) Amendment Bill”. 
At question time yesterday the Minister wriggled and wriggled and tried not to answer the question about Brian Fallow’s statement in the  
New Zealand Herald  
that the effect of this bill is to delay the date when New Zealand’s emissions peak and to have a higher peak before they go down. We now know on the record that even the Minister agrees that the effect of this bill is to increase New Zealand’s emissions. So the “Climate Change Response (Increased Emissions) Amendment Bill” might be a more proper name for it. We could give various other names to the bill. The “Permanent Pollution Payments Entrenchment Bill” would be a fair name for this bill. 
Members can choose between those names but the sad effect of this bill is to severely undermine the environmental effectiveness of the scheme. It causes irresponsible fiscal cost to be put on the taxpayer and on future generations who will have to repay that cost. It does nothing to improve New Zealand’s contribution to fixing this problem. Editorials up and down the country commentators Treasury the Ministry of Economic Development and the specialist adviser to the Finance and Expenditure Committee Dr Suzi Kerr all say the same thing. But according to the Government they are all wrong. Dr Smith is wrong. This bill is fatally flawed and it should not have the name that it masquerades under currently. 
Hon Dr NICK SMITH (Minister for Climate Change Issues) 
: 
 The first thing I point out to Labour and Green members is that Labour was entrusted with this issue for 9 years and in every one of those years emissions went up. They did not just go up; they went up by ever-increasing amounts. I will give members some of those areas. The first is with regard to the electricity sector. During the term of the previous Labour Government emissions from the electricity sector increased threefold. We all accept that forests are an important part of the Climate Change Response (Moderated Emissions Trading) Amendment Bill but the last 9 years were the worst since World War II in terms of deforestation. That is the first point I wish to make. 
The second point I make is on whether I accept that business has a right to pollute. No I do not. What is behind the changes to make the emissions trading scheme affordable and workable is a really difficult problem. We want to make progress on climate change in New Zealand—we do—but equally we do not want to implement policy in New Zealand that exports industries jobs and emissions offshore. All the analysis says— 
Charles Chauvel 
: Show us the evidence! 
Hon Dr NICK SMITH 
: I will show members the evidence. The report that was commissioned by the New Zealand Institute of Economic Research made plain that the approach of a production-based method was the best way in which to respond to climate change without simply increasing emissions offshore. I tell members opposite that they might feel good if the cement steel and aluminium industries in New Zealand closed down and those goods were manufactured in China or some other part of Asia but it makes no practical difference to the environment and it costs an awful lot of New Zealanders jobs. That is the dichotomy that we have been working through. 
Mr Parker again used the figure of $110 billion. It is nonsense. I challenge David Cunliffe Labour’s spokesperson on finance on this basis. I tell members what sort of outcome there would be if we took the approach of adding every single year’s cost—and remember it is a loss of revenue not a cost—and then adding the compound interest on the basis that we would have invested that lost revenue. Labour’s policy is to reinstate a research and development tax credit. That would result in a loss of income of $260 million per year. Most of us in the Chamber would say that that policy costs $260 million. But if the members applied the approach that they are taking to their criticisms of this bill it would be correct to say that that research and development policy costs $43 billion—if we add it up each year and apply exactly the same approach. I challenge Phil Goff and David Cunliffe. If they are not going to be in the business of misleading New Zealanders on an issue as important as climate change and they want to adopt that approach to the assessment of numbers then they should be consistent. They should talk about their research and development policy costing $43 billion installing a huge debt of $43 billion on our children and increasing Government debt into the future by $43 billion. That is for a policy that in any one year would cost $260 million. 
The further point I make is on the controversy over the phase-out rate. We campaigned on a policy and we said that we would phase out industry support in line with our major trading partners. Australia has chosen a rate of 1.3 percent; we have set that rate for a period of 5 years through till 2018. A large amount of the argument is about what occurs beyond 2018. This bill will reduce emissions over its first 10 years according to the advice I have received very little—about 10 million tonnes is the reduction in emissions that it will cause over that first 10 years of the scheme. I say to the members opposite that making a big deal about what that phase-out rate will be into the future is pretty slippery ground to stand on. Every member of this House knows that there will be negotiations in Copenhagen that legislation is going through the United States Senate that legislation is going through Australia and most important that this bill will have a review in 2011 which is only 2 years away and another review in 2016. Even if we take the shorter phase-in and start the phase-out period a little earlier it is not until 2021 that there is any key difference in the approach. We all know that things will be reviewed and debated further down the track so for this Committee to be ripping its guts out and for us to have all of these quite personal and derogatory statements around a debate that is as far out as that undermines a pretty broad consensus about the way forward. 
Charles Chauvel 
: Why did you put it in? 
Hon Dr NICK SMITH 
: Mr Chauvel asks why we would put the 1.3 percent rate in. We have said we will put 1.3 percent into the law. We will review it in 2011; we will review it again in 2016. 
Charles Chauvel 
: How are businesses supposed to plan? 
Hon Dr NICK SMITH 
: I say to the member Charles Chauvel that this is a key difference. Let us say where it is at. We are saying to business that the phase-out rate will be in line with our major trading partners. I have to say that I have given notice in many business speeches that if our major trading partners give a stronger phase-out than other countries it is our intention to increase the phase-out rate. Equally I have to say— 
Charles Chauvel 
: Nonsense! 
Hon Dr NICK SMITH 
: Charles says this policy is nonsense. I ask him to ring Senator Penny Wong the Australian Minister in charge of their climate change legislation. Australia has exactly the same provision in its law— 
Hon Darren Hughes 
: They don’t have a law! 
Hon Dr NICK SMITH 
: Well neither do we have a law yet. We will be a few days ahead of them. In my view Mr Chauvel needs to get on the phone and make all the derogatory comments he has made of me to her. He will not and that shows the duplicity. 
Moana Mackey 
: Why? You’re the Minister in our country! 
Hon Dr NICK SMITH 
: I say to Moana Mackey and Charles Chauvel that they may not have noticed but climate change is a global issue so what other countries are doing is relevant. 
I have really enjoyed the Committee stage of this bill because we have been able to pop one after another the fragile balloons that Labour has put up as excuses for opposing this bill. I think those Labour members know in their heart of hearts that we are doing the right thing. I think they secretly admire the Maori Party because it was able to achieve what Labour could not—that is a sensible agreement on the way forward on climate change. 
The last point I make is that all the behaviour I see from Labour members is like that of a spurned bride. They get awfully bitter and twisted and that is because— 
Hon Darren Hughes 
: Have you looked in a mirror lately? 
Hon Dr NICK SMITH 
: I have to say that we wanted to get an agreement with Labour. That was my first preference. Time got tight and—unlike my discussions with the Labour Party which leaked all over the place—our discussions with the Maori Party were totally confidential. The key difference was that Labour assumed there was only one deal and that it was with Labour. 
Moana Mackey 
: No we didn’t! 
Hon Dr NICK SMITH 
: Labour did. After we did the deal with the Maori Party we said that we had introduced the bill only to the select committee. We wanted to build as broad a consensus as possible for this legislation and Labour walked out. This issue deserves better than that and I again say to Mr Cunliffe and Labour members that my door is open any day any week and any month to do what we should always have done—that is build a broader consensus of policy around this important issue for New Zealand and for the world. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I appreciate the opportunity to correct for the record some of the gross—I am trying to find a parliamentary word—untruths that have been contained in the comments of the Minister for Climate Change Issues the Hon Dr Nick Smith from the floor. I begin with the last one he made: that Labour somehow walked out of good-faith negotiations with the Government. Let me remind the public of what actually happened. The negotiations were proceeding well. We were down to three sticking points and the major one was around the use or not of a global emissions cap. We had indicated that we would accept a variant of intensity-based emission charges and that was a major concession for the Labour Opposition. The nature of our offer is set out on the public record in the Finance and Expenditure Committee report. 
But something happened and it was not the deal with the Maori Party; it was the Labour Party conference in Rotorua. That is relevant because a source close to the National Party has told us that the polling indicated that Labour support grew by 5 percent and our leader’s popularity grew by the same amount in that week. The pollsters said to John Key: “Thou shalt not allow a deal with the Labour Party on climate lest they be seen as statesmen.” So the word went out to the Climate Change Iwi Leadership Group and the financial backers few in number though they be of the Maori Party. And Hone Harawira who had opposed the previous bill because it did not go far enough was reined in. It is ironic—it is silly—for the Minister to raise that in the Chamber because today that has come full circle. 
This morning we heard from the media that the Maori Party council would be called together later today in an emergency meeting to discuss the issues and to raise their concerns about the costs on ordinary Maori. Maori Party sources calculate that Maori would have to pay $500 million to $1 billion a year through cutting services increased taxes or the sale of assets. On the other hand under the deal with the Government five iwi would get $2 billion but some in the Maori Party insist it does not offset the money all Maori will have to repay over 40 years which they calculate at between $21 billion and $42 billion. We see full circle today the Maori Party being sacrificed on the altar of Business New Zealand and Fonterra. 
That brings me to Fonterra because word has reached me that Fonterra is none too happy because its deal implied an allocation being made in Australia for agriculture. Although the scheme in Australia is uncertain I understand that agriculture is being left out and there is no free allocation to the competitors of Fonterra across the Tasman. So there has been some late-night work in the Beehive to determine whether late amendments could be submitted or whether the Minister will use his discretionary powers under this bill to cut a subsequent deal for some of our largest industries over and above the shabby tawdry deal that has been brought to this House already. 
That brings me back to process. I do not need to be lectured by Nick Smith on financial rectitude thank you very much when that Minister has refused the public a right by withholding under the Official Information Act critical pieces of the analysis that go to the financial estimates around this bill and when the Minister has officials who have through no fault of their own had to admit to the Finance and Expenditure Committee that they had not done sensitivity testing around the financial costs of this bill. They could not produce for the committee a range of scenarios and tell the committee the assumptions on which they were based. Treasury’s own regulatory impact assessment unit therefore had to conclude that the analytic base of this bill was insufficient for a matter of this importance. So we do not need to be lectured by National members on fiscal prudence. From now until the next election National members will never be able to look New Zealanders in the eye and say that they are the custodians of fiscal responsibility because today they have sold our children and their children down the creek. 
I do not need National members trotting out the old refrain of “You had 9 years; what did you do about it?”. They were 9 years of the longest post-war economic expansion in New Zealand’s history years when we saw an enormous boom in the dairy sector and forestry conversions came into that. But of course we recognised that the matter of putting an overall global cap on emissions was essential. It was because of the difficulty we experienced—and I give due credit to the former Minister responsible for Climate Change Issues David Parker who spoke so eloquently just a few moments ago—that we understand the difficulties of this problem. We have been there before. That is precisely why we know that a global cap is essential. It is precisely why we are very hesitant to embrace any form of intensity-based “control”. It is precisely why we know that industry will take everything that the Minister for Climate Change Issues has so generously given it in this deal and then tomorrow he will wake up and it will want more—it will want more and more. 
That is also why I want to acknowledge a PhD thesis by Dr Rick Boven who is now the director of the New Zealand Institute. He is a very eminent economist. He modelled the political economy of climate change against the Intergovernmental Panel on Climate Change’s projections of global warming. He looked at the political economy of when democracies are likely to adjust. The problem is that 50 years after we limit emissions the planet stops warming as a result of the emissions we let go a generation before. There is a real risk that if the planet warms by more than 2 or 3 degrees Celsius we could set up self-reinforcing processes that mean that it is virtually impossible to stop global warming. The outcome of the econometric modelling by Dr Boven showed essentially that the planet is going to fry and that fundamental disruption to human civilisation is likely because of the 50-year lag time combined with the reluctance of democratic governments to take the steps required to rein in industry. That means that our children face horrific consequences. They will look back on us as David Parker so eloquently said and they will ask us why we looked over the brink. Did we not know? Were we not informed? Did we not understand the problem of the lags? Were we not prepared to have the courage to look at the future and say “Now we must start to turn it round.”? 
I am sad today for our children because I know that they will face tougher decisions than those we have not faced up to in this Chamber today. It will not be just about climate because the Government is making a habit of passing our hard problems on to our children. They will have the burden of superannuation to catch up on because the Government has cancelled pre-funding so there will be fewer than half the taxpayers per retiree paying to catch up. [ 
Interruption 
] I hear a member opposite ask why that is relevant to the bill. I will tell the member why. The Minister for Climate Change Issues has had the gall to say that the fiscal liabilities the $50 billion to $110 billion in this bill are not real money. Well of course they are real money. They are an offset that could have been used in part to cover the costs of superannuation or the costs of adaptation to catastrophic climate change or the costs of educating our children how to live in a future that we would not dare live in or the costs of sending them to some other planet because this one is ruined. So please do not tell us that somehow the $100 billion does not matter because we are not sending all of it to the United Nations. Of course we are not sending all of it to the United Nations. But it is a real liability and it is a real offset that must be met against expenditure or increases in taxes or debt. It is not appropriate to ascribe to one piece of expenditure one item of revenue and square it off. It all goes in the same pot and the write-offs go to the country’s largest polluters the multinationals that own part of our energy sector as well as the Crown—and the Crown ought to be ashamed. Those debits will come back to haunt our children. 
I do not want to export jobs but the Minister for Climate Change Issues has made no evidence available to the Finance and Expenditure Committee that that prospect is substantial; nor has any logic been demonstrated as to why if it was a real issue the bill has been designed as it is. Let me give several examples. If we wanted to stop exporting jobs why would we not impose the carbon liabilities on the actual fishermen burning the fuel or the actual farmers who could change their crops or their herds to a lower-emitting standard? Why would we not have a demonstrable logic related to carbon intensity between sectors? 
METIRIA TUREI (Co-Leader—Green) 
: 
 In this debate today—and I know it is the title debate—I am wondering whether we should call this bill the “Brown Wash Bill”. Although I think the Maori Party has been engaging in “greenwash” I suspect and will accuse the National Government of engaging in a “brown wash” over the Climate Change Response (Moderated Emissions Trading) Amendment Bill. Like my colleagues I have been very disappointed in the Maori Party’s support for this legislation especially given that it is so contrary to the Maori Party’s original view in the Emissions Trading Scheme Review Committee. How it could shift its view so radically from one side to the other is very difficult to understand. 
I am also disappointed in the Maori Party at the way it has allowed the National Government to skew the public debate against Maori against whanau and hapu by its use of this legislation and the deal it has done with National. The justification for supporting this bill is supposedly that Maori have obtained some benefit as a result of the negotiations. Let us have a look at the bundle of supposed gains that Maori have made through the deal done by the Maori Party. None of them are new and none of them are innovative. 
The forestry deal which has been such a major distraction should have happened anyway. In fact the Green Party was working with Ngai Tahu last year on the same issue to try to get some support from the previous Labour Government about dealing with this Treaty settlement question. It is a Treaty settlement issue around forestry; it is not an emissions trading scheme issue. It should have been resolved in any event. At some point this Government like any Government would have been required to deal with the issue whether it was because of the threat of legal action or for whatever reason but it has nothing to do with this business. It is neither new nor innovative. 
The 6 months’ reprieve that Enviroschools have for their funding cut is meaningless. It gives the 210000 schoolchildren who are involved in the Enviroschools programme no security at all. The Minister of Education has confessed that the programme will be reviewed in 6 months’ time anyway. What is the point? Where is the gain for those 210000 children if the programme gets 6 months’ reprieve? How could the Maori Party give over those children’s future and lumber them with a $24000 debt for the rest of their lives in exchange for 6 months of a school programme that should have continued anyway. 
Enviroschools is the one programme in this country that has had major success in teaching children not only numeracy and literacy but also environmental sustainability and the economics of that environmental sustainability. That programme deserves support anyway. The Maori Party should have been supporting Enviroschools and the continued funding for it not giving it a 6 months’ reprieve from the axe. Those children do not want to be lumbered with a $24000 debt in exchange for 6 months of the programme. 
I turn to the little extra that has been provided for home insulation. We know that two-thirds of the people who are already accessing the home insulation fund—the Green Party home insulation fund I must say—are community services card holders. We know that those low-income families are already getting access to the scheme. That $24 million is a good amount of money but in 4 years’ time who knows what will happen. There is no guarantee at the end of the day because 4 years is a very long time in politics. The Maori Party has nothing extra for the people today who need access to the home insulation fund because they are already accessing it. There is no added benefit to the Maori community. 
The Maori Party has promoted a Treaty clause in the legislation. The Greens will support a Treaty clause because we think it is good to have recognition of the Treaty in legislation. But let us be real about what this Treaty clause actually does. It is simply an arrangement between the Government and Maori business. If we look at it in detail it is a very complicated clause. It is very narrow in its approach and essentially provides a means by which—it should happen anyway—Maori leaders of iwi and Maori organisations which are large business organisations can talk to the Government about the things that they are doing. It is a consultation agreement but that is all it is. It does nothing for hapu. The Treaty is about respecting whanau and hapu and the Treaty clause does nothing to do that. I have an objection to even calling it a Treaty clause quite frankly. It is a business agreement between the National Government and some Maori businesses. And as for sending negotiators to the Copenhagen Climate Change Conference I mean please! We knew months ago that National was taking them. Everybody knew that National was taking them. There is nothing new. They have been given nothing. 
Hon Darren Hughes 
: They are constantly being tricked. 
METIRIA TUREI 
: I wonder whether it is a trick or whether there is some other need for maybe the Maori Party to feel that it needs to make some gains. It has been shafted continually by this National Government over the Maori seats. I understand there was something of a gentleman’s agreement by John Key that Maori seats would occur but that was shafted pretty quickly. Nowhere has the Maori Party made any substantive gains into serious political issues that it has been trying to pursue. So maybe that is what is behind it. But none of the gains that it has supposedly made here can justify the wealth transfer from the poorest families many of whom are our own whanau to the richest international corporates from around the globe. 
National has managed to cobble together a whole series of little bits and pieces—nothing new nothing innovative nothing that we did not already know about—to get the Maori Party on board for this legislation. I want to know what Maori get out of it. What do Maori whanau get out of it? They get nothing but the blame supported by the Maori Party. The forestry deal has been a distraction. National has played up the forestry deal in order to distract attention from the wealth transfer from the poorest to the richest. 
In effect National can say that it has given Maori lots and that is what it is saying in the public realm; that it is able to deliver all of this benefit to the Maori community through the Maori Party and that thereby justifies the environmental degradation and wealth transfer under this legislation. The public rightly understand and object to that massive public subsidy to corporates and rightly object to the environmental degradation that this legislation will incentivise and they need somebody to be angry at. National has delivered them the Maori Party and the Maori Party has delivered Maori communities to the public who are angry at the bill and the Maori community. That is what we are seeing outside this Chamber. The public are angry at this legislation. Who are they blaming? They are not blaming National—National has managed to divert it—but they are blaming the Maori Party and Maori whanau. 
Maori will bear the burden of the stink of the wealth transfer of public funds to these international corporations. Maori communities will bear the stink of the environmental degradation inherent in this legislation. 
Hon Darren Hughes 
: They were tricked again. 
METIRIA TUREI 
: Well I ask whether it is a trick or is it just the Maori Party being prepared to put the interests of the few ahead of the interests of the many even its own communities. I suspect that is more likely what the decision is about. 
The legislation is a tragedy for Maori communities. It is a tragedy for Maori whanau. Perhaps if it was just about the business if it was just about the wealth transfer if it was just about supporting Maori business it would not have such an impact. In fact it has turned into a public debate about why Maori are getting heaps of stuff and why everybody else has to pay. That is creating in the minds of the community an anti-Maori sentiment that is promoted by the Maori Party’s support for this bill. That is what is happening outside this Chamber. 
That is the risk the Maori Party has been prepared to take with its own communities and with its own people backed by National because National can avoid all of the distraction and all of the blame. National can just get on with its interest groups that have always been about business and we all know that. National can justify what it is doing because it is supporting the Maori Party and it needs those votes. The Maori Party has allowed itself to be used in this way. 
Debate interrupted. 
Sitting suspended from 1 p.m. to 2 p.m. 
Questions to Ministers 
Health Care—Policy 
1. Dr PAUL HUTCHISON (National—Hunua) 
 to the  
Minister of Health 
: Does he still stand by his policy to deliver better sooner and more convenient health care? 
Hon TONY RYALL (Minister of Health) 
: 
 Despite the fact that the Labour Government left the new Government with around $160 million of unfunded services to fill and quietly stripped $150 million out of Vote Health before the general election yes. 
Hon Rodney Hide 
: I raise a point of order Mr Speaker. I am sorry to interrupt but I am just across from the Minister of Health and I could not hear a word of that answer because of the barracking. It is the very first question of the day. I think it is a courtesy to members that they should be able to hear the question and the answer. 
Mr SPEAKER 
: I concur with the honourable member. He makes a perfectly fair point of order. With the House being in urgency of course we go straight into question time as was agreed by the Business Committee. The House would do well to settle down. In fairness the Minister actually said yes in answer to that question. 
Dr Paul Hutchison 
: What reports has he received in relation to more New Zealanders getting much-needed elective surgery? 
Hon TONY RYALL 
: I have received reports that from the year 2000 to 2007-08 the average increase in elective surgery discharges was 1432 which did not even keep up with population growth. The new Government set the goal of nearly trebling this average increase to 4000 a year—a goal that was well and truly exceeded with record discharges in the past year. Meeting the continuing growth of elective surgery is a real challenge. However even with the effects of the swine flu I can advise the member today that the number of patients getting much-needed elective surgery in New Zealand has reached yet another all-time high: our public health service has delivered elective surgery to an unprecedented 34000 patients in the past quarter. 
Hon Ruth Dyson 
: What does he say to the people who will not figure in the district health boards’ league tables such as the 5000 people in Timaru who have had their access to the emergency department cut so they will not be on the league tables because they will not even get through the door of the hospital? 
Hon TONY RYALL 
: There has been no cutting of access to the emergency department at Timaru. I visited there recently and the doors were still wide open. What I can tell the member is that emergency departments throughout New Zealand are working with their comrades and colleagues in the wards to improve service for New Zealanders and really good progress is being made. 
Hon Ruth Dyson 
: Why did the Minister not include a list of front-line health services and front-line staff in his league tables; was it because we have already seen cuts in both front-line health services and front-line health workers or is it because it shows that the tens of thousands of dollars he has spent on publicity is just wasted health money? 
Hon TONY RYALL 
: I cannot comment on any specific case that the member might have raised in that question because she did not do so. But I can tell the House that the latest information from the Ministry of Health is that there are actually more front-line doctors and front-line nurses working in our public hospitals than at any other time under a Labour Government. 
Dr Russel Norman 
: Would an extra $110 billion in health funding over the next 40 years help the Minister to deliver better sooner and more convenient health care? 
Hon TONY RYALL 
: I can advise the member that I am currently in discussions with the Minister of Finance about the budget we need for the health sector next year and that is not a figure I have yet promoted. 
Dr Paul Hutchison 
: Which particular specialties have contributed to the record number of patients benefiting from elective surgery in this period? 
Hon TONY RYALL 
: Basically everything. 
Hon Members 
: Dodgy-ing the figures! 
Hon TONY RYALL 
: That is from the crowd that cut 30000 patients off waiting lists then stood up and said they had them under control. In the 3 months to the end of September a record number of patients have received ear nose and throat surgery general surgery neurosurgery ophthalmology plastics and burns surgery and vascular surgery. These results really are a tribute to the work of our doctors and nurses in district health boards in responding to the Government’s very clear expectations of better services for New Zealanders. 
Dr Russel Norman 
: With regard to his discussions with the Minister of Finance about funding for health in future years has the Minister of Finance raised any concerns about the level of debt the Government is building up and may build up over the next 40 years and will that have a negative impact on the level of funding for health care? 
Hon TONY RYALL 
: In those discussions with the Minister of Finance our concern really has been very much focused on the inheritance that we received from the previous Government and on the fact that we inherited a health service on a track to financial crisis with significant deficits. We are working very closely to try to fill those unfunded services that we inherited from the previous Government and the $150 million that Labour quietly cut from the health budget only days before the general election. 
Corrections Department—Confidence 
2.  
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
 to the  
Minister of Corrections 
: Does she have confidence in the Department of Corrections? 
Hon JUDITH COLLINS (Minister of Corrections) 
: 
 In spite of the years of neglect inflicted on the department by the previous administration yes. 
Hon Clayton Cosgrove 
: Does she have confidence in all the advice provided by the Department of Corrections about the cost of privately run prisons in comparison with public prisons even though it has been giving her advice since last December that shows that the cost of the privately managed Auckland Central Remand Prison—the only example New Zealand has to draw on—is more expensive than the public equivalents which is advice that is completely contradictory to her claim that private prisons are cheaper to run? 
Hon JUDITH COLLINS 
: Yes. The department also provided advice that included the 70000 hours of rehabilitative treatment that the Auckland Central Remand Prison had to give when it was privately run. The figures that the member is talking about were not actually included. The real figures—the “apples with apples” comparison rather than the “apples with oranges” one—show that private prisons are better value. 
Hon Clayton Cosgrove 
: I seek leave to table a number of documents. The first is the Department of Corrections advice of 18 December 2008 which states: “The costs of the ACRP were higher than those of publicly run prisons.” 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Hon Clayton Cosgrove 
: The second document is departmental advice to the Minister on 10 March 2009 that “the closest scenarios” the department is able to provide show the privately run Auckland Central Remand Prison to be more expensive than the public prison service. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is none. 
Document by leave laid on the Table of the House. 
Hon Clayton Cosgrove 
: The next document is departmental advice to the Law and Order Committee on 20 July 2009 and 25 August 2009 that the per prisoner costs of the Auckland Central Remand Prison were more expensive when privately managed than when the Department of Corrections was in management the following year and more expensive than the per prisoner cost of remand prisoners— 
Mr SPEAKER 
: Can I just clarify whether this is advice to the select committee. 
Hon Clayton Cosgrove 
: Yes and it is now public. 
Mr SPEAKER 
: Parliament already has that. 
Hon Clayton Cosgrove 
: I think it is germane to the question Mr Speaker. It is your call of course. 
Mr SPEAKER 
: Leave is sought to table a document presented to the Law and Order Committee. Is there any objection to that document being tabled? There is objection. 
Hon Clayton Cosgrove 
: Does the Minister have confidence in the advice given to the Law and Order Committee this afternoon by the chief executive of the Department of Corrections that it would not be equitable to compare the costs of the privately managed Auckland Central Remand Prison with the entire public prison system at the same time because the Auckland Central Remand Prison dealt only with remand prisoners? 
Hon JUDITH COLLINS 
: Unless I actually saw the direct quote myself I could not take for granted that rendition of it from the member because of course he has paraphrased it. I can however have confidence in the quote from the department’s chief who told me that in New South Wales private prisons cost 32 percent less per prisoner than public prisons and in Victoria they cost 11 percent less. That is the comparable figure. 
Hon Clayton Cosgrove 
: Given that we are talking about New Zealand and not Australia why did the Minister tell the House on 18 August 2009 that Auckland Central Remand Prison’s “equivalent in the public sector cost $61796 per prisoner.” when that is the cost comparison across the entire public prison system which her chief executive has said is not an equivalent or fair comparison? 
Hon JUDITH COLLINS 
: Because those are the figures given to me by the department. I have said time and time again that it is very difficult to actually compare the remand prison when it was run privately—when there was health treatment and there was all sorts of rehabilitation for 70000 hours a year—with the publicly run prison where there was not. Unfortunately that member does not want to hear the truth but that is what it is. It was a better service. 
Hon Clayton Cosgrove 
: Given that we now have four documents from the Minister’s department that contradict her is she aware that one of the reasons— 
Hon Rodney Hide 
: I raise a point of order Mr Speaker. That cannot be allowed. The member started off without a question and made a highly charged political statement rather than simply standing up and asking a question. 
Mr SPEAKER 
: I accept the point the honourable member makes that although I have not insisted on questions starting with a question word I think it is very unhelpful when members make a provocative statement at the start of a question. I ask the member to not do that and to ask his question without that. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. Could I then get some advice because it is now a fact on the record of the House that there are at least two and I think there was an objection to two other documents— 
Mr SPEAKER 
: This is not a matter that can be litigated by way of point of order. If the member wants I can go back to insisting questions simply be started with question words. I do not want to do that; I like the House to have more freedom. But the member would be wise not to make a provocative statement at the start of his question. I invite him to ask his question. 
Hon Clayton Cosgrove 
: Is she aware that one of the reasons it is so difficult to asses the costs of the privately managed Auckland Central Remand Prison is to quote her departmental advice of 10 March 2009 “the lack of visibility on some of the private operators’ information” and will she therefore support the Supplementary Order Papers introduced by Labour that seek to increase the transparency of private prisons? 
Hon JUDITH COLLINS 
: I think it is important to remember that it was some years ago that the Auckland Central Remand Prison was privately managed. I stick to the advice that we are after a quality service in our prisons not a cheap service. If we were just after cheap nasty services we would put everyone in tents. 
Warm Up New Zealand: Heat Smart—Number of Houses Insulated 
3.  
CHRIS AUCHINVOLE (National—West Coast - Tasman) 
 to the  
Minister of Energy and Resources 
: How many houses were insulated in October through the Government’s Warm Up New Zealand: Heat Smart home insulation scheme? 
Hon GERRY BROWNLEE (Minister of Energy and Resources) 
: 
 Across the country a total of 5720 houses were insulated in October. In only 4 months nearly 20000 homes have been made warmer drier and healthier thanks to the financial assistance provided by the Government. I am also pleased to report that 70 percent of the houses insulated in October were occupied by people on low incomes with community services cards. 
Chris Auchinvole 
: What is the Government doing to cope with a huge demand for the scheme? 
Hon GERRY BROWNLEE 
: The Government is responsive to the extraordinary way in which New Zealanders have decided to embrace the scheme. Accordingly after discussions with the Green Party we have made arrangements for the original appropriation of $323 million over the 4-year period to become a multi-year appropriation. This will allow a better spread of the funding so that people will not miss out and have to wait until the start of the next financial year to get assistance. It also means that we will easily be able to surpass the target for the first year of 27500 homes—something we have almost achieved in 4 months. 
Chris Hipkins 
: Will he admit that a lower standard of underfloor insulation has been specified by this Government so that it can poorly insulate more homes for the same amount of money that it would have cost to do fewer homes properly; if not how does he justify lowering the insulation standards that approved providers are expected to meet? 
Hon GERRY BROWNLEE 
: No. 
Rahui Katene 
: Can the Minister confirm that new money has been allocated to allow low-income households to benefit from the home insulation scheme as a result of the Maori Party’s relationship with National and what impact will that new money have over and above current allocations? 
Hon GERRY BROWNLEE 
: Yes I can confirm that. It has previously been announced that discussions between the Maori Party and the National Government meant that a further $28 million was added to the fund bringing it up to almost $350 million that will be spent over the period of time. An extra 8000 low-income households will be warmer and drier as a result of that arrangement. The Maori Party has expressed its concern about that group of New Zealanders and the Government has recognised that. 
Chris Hipkins 
: How can he continue to claim that standards have not been lowered when the latest Energy Efficiency and Conservation Authority guidelines suggest that homes previously fitted with foil underfloor insulation should have the foil repaired rather than replaced and when previously the authority had recommended against foil underfloor insulation because of “safety risks challenging installation dubious performance and possible lack of durability”; why is he cutting the corners? 
Hon GERRY BROWNLEE 
: Simply because it is not new installation; it is repair of what is already there. 
John Boscawen 
: By how much is the Heat Smart home insulation scheme forecast to reduce the profits of New Zealand power companies and how does it compare with the billions of dollars of windfall profits that these same companies will receive under the emissions trading scheme from particularly low-income New Zealanders including Maori—or does he not know? 
Hon GERRY BROWNLEE 
: One of the things that has become abundantly evident in the last few days is that all sorts of figures can be thrown into the mix when we come to discussing the emissions trading scheme and any figure that does get put into the mix will be widely disputed. The purpose of the home insulation scheme was to improve the health outcomes of New Zealanders. 
Hon Rodney Hide 
: I raise a point of order Mr Speaker. I appreciate the Minister’s answer but I think he was asked what the reduction was and whether he did know what it was. What we got from the Minister was his saying that lots of numbers were being bandied around then restating the goals of the programme. I think the House can take that as his saying that he does not know but it was hardly answering the question. 
Mr SPEAKER 
: I appreciate the point the member has raised but I think that when one considers the specificity of the question asked and the primary question that was laid down the chances of the Minister having that particular information would not be high. I think the Minister was indicating that he did not have that particular information. I cannot expect him to give more precise information on such a question. 
John Boscawen 
: By how much is the Heat Smart home insulation scheme set to reduce greenhouse gas emissions and how does it compare with the Government’s emissions trading scheme; if he does not know why have we been sitting under urgency to pass the emissions trading scheme? 
Hon GERRY BROWNLEE 
: Firstly there were a number of aspects to that question and I think a complication of two very simple issues. I will answer the first one which was by how much the scheme will reduce the cost of home heating effectively. Was that the question? 
John Boscawen 
: No. 
Hon GERRY BROWNLEE 
: Oh by how much will it reduce greenhouse gases? 
John Boscawen 
: I raise a point of order Mr Speaker. The Minister does not seem to have understood my question— 
Mr SPEAKER 
: The easiest way to resolve the issue would be for the member to repeat his question. 
John Boscawen 
: By how much is the Heat Smart home insulation scheme set to reduce greenhouse gas emissions and how does it compare with the Government’s emissions trading scheme; if he does not know then why have we been sitting under urgency to pass the emissions trading scheme? 
Hon GERRY BROWNLEE 
: The first point is that it would depend entirely on what sort of home heating appliance was being replaced under the scheme. When we have collected all the information on that we will be able to provide the member with a best estimate. On the matter of why we have been sitting under urgency to pass the Climate Change Response (Moderated Emissions Trading) Amendment Bill I take it that the ACT Party now wants to be party to our passing the bill and I look forward to it casting its vote accordingly. 
Tertiary Education Minister—Decisions 
4.  
Hon MARYAN STREET (Labour) 
 to the  
Minister for Tertiary Education 
: Does she stand by all the decisions she has made as the Minister for Tertiary Education; if not why not? 
Hon ANNE TOLLEY (Minister for Tertiary Education) 
: 
 Yes. 
Hon Maryan Street 
: Is she aware that the Prime Minister indicated to the Manukau Family Literacy Programme that he may be able to find some money for it after all despite her original funding cut decision but that it has now lost the opportunity to continue its programme for at least term 1 of 2010 while officials negotiate around her misguided criteria in order to meet John Key’s wishes? 
Hon ANNE TOLLEY 
: I totally reject the member’s assertion that the criteria are misguided. What happened was that the request for funding did not fit the criteria so I have instructed the Ministry of Education to work with the City of Manukau Education Trust to find a way to support the continuation of the programme. 
Louise Upston 
: What announcements has the Government made recently to provide more opportunities for younger people in polytechnics? 
Hon ANNE TOLLEY 
: The Government has already announced that 2000 Youth Guarantee places are to be added to the tertiary system next year. That is 2000 young New Zealanders who will have fees-free learning in tertiary institutions next year. Yesterday I announced that an additional $8 million of funding will be allocated across a number of polytechnics next year. It is being made available to polytechs in areas of high unemployment that have demonstrated an ability to provide for younger students. 
Hon Maryan Street 
: Does she consider the removal under her amended legislation of guaranteed representation of students on polytechnic councils to be consistent with previous assurances she has given to students’ associations about the importance of their presence at the top decision-making table in polytechs or is this another fix-it job for the Prime Minister? 
Hon ANNE TOLLEY 
: The bill that went to the select committee provided for eight-person councils. With regard to the councils’ composition a great many submissions expressed a desire for more community representation. The solution that the select committee has proposed is I think quite an elegant one; it retains an efficient governance size and it allows the councils the flexibility to determine whom they have in those four ministerial positions. 
Hon Maryan Street 
: Does she continue to stand by her decision to cut adult and community education funding to high schools now that it is clear that no high school - based adult and community education will be available throughout the whole of Gisborne Hawke’s Bay the Hutt Valley most of the West Coast and large parts of north central east and south Otago or will a visit by the Prime Minister to those areas see her decision overturned? 
Hon ANNE TOLLEY 
: I remind that member that she was part of a Government—in fact she was the Associate Minister for Tertiary Education—that left a funding hole of $520 million; $520 million that had not been funded that we had to start to find and make changes around. That is the first thing. Secondly that member continues to misrepresent— 
Mr SPEAKER 
: It is a very interesting speech that the Minister is making but I heard a question that asked whether the Minister stood by a certain policy. Therefore I think the Minister in answering is expected to talk about her policy not the Opposition’s policy. I was trying to hear some response to the question asked. 
Hon ANNE TOLLEY 
: In response to the member’s continual misrepresentation of adult and community education as being provided only by schools I say that in fact the instructions to the Tertiary Education Commission were to ensure that there was coverage of adult and community education across New Zealand with it being provided by schools in some cases polytechs and private providers right across the country. 
Summer Research Scholarships—Progress 
5.  
ALLAN PEACHEY (National—Tamaki) 
 to the  
Minister for Tertiary Education 
: What progress has been made on the Government’s summer research scholarships? 
Hon ANNE TOLLEY (Minister for Tertiary Education) 
: 
 I am pleased to tell the House that 1600 places for the summer research scholarships that the Government promised and jointly funded with the New Zealand universities have been filled. Many of these students started their scholarships last week and will be beginning their placements in universities so that they can further their studies and gain some income over the summer months. 
Allan Peachey 
: Why did the Government decide to fund the summer research scholarships? 
Hon ANNE TOLLEY 
: The scholarships were first mooted at the Prime Minister’s Job Summit at the beginning of the year and the Government agreed to meet the universities dollar for dollar up to $4 million in Budget 2009. These opportunities are important for the young people who have obtained them and these extra places also help to free up other job opportunities for students over the summer period. 
Hon Maryan Street 
: How do the short-term summer scholarships help the 2000 - plus mainly low-decile students who had their Step Up and bonded merit scholarships scrapped by this Government? 
Hon ANNE TOLLEY 
: Again I say to that member that $521 million was promised by the previous Government in tertiary education and not funded. There were some changes to some of those smaller programmes but they have been well taken care of. I remind the member of the 2000 Youth Guarantee places that will be funded next year and will take many of those students. 
Roading Kapiti—Community Consultation 
6.  
Hon DARREN HUGHES (Labour) 
 to the  
Minister of Transport 
: What weight is being given to the views of the communities affected by the transport proposals through Kapiti? 
Hon NATHAN GUY (Associate Minister of Transport) 
on behalf of the  
Minister of Transport 
: The New Zealand Transport Agency is responsible for making the final decision on the State Highway 1 upgrade through the Kapiti region. I am confident that the views of local people and communities are being listened to closely and that each submission is taken on its merit. The New Zealand Transport Agency’s job is to balance the wider views of the community which are extremely important with the other relevant factors such as the cost the benefits to the economy and the impact on the wider region. 
Hon Darren Hughes 
: How will it be possible to read analyse consider and reflect on the 4100 submissions and then make a decision all in the next 4 weeks and why were submitters not asked whether they wanted to be heard in person? 
Hon NATHAN GUY 
: My understanding is that the New Zealand Transport Agency is working around the clock to process and analyse the submissions. Some people chose on the feedback form to mention that they wanted to present in person to the New Zealand Transport Agency board. 
Hon Darren Hughes 
: How will people in residential areas who are affected if a four-lane expressway is built right next to their properties be compensated if none of their land is required? 
Hon NATHAN GUY 
: That detail probably should be directed to the New Zealand Transport Agency board. My understanding is that there are two pieces of relevant legislation: the Public Works Act and the Resource Management Act. 
Hon Darren Hughes 
: Why did the Government not offer as an option the platform it joined Labour on during the election campaign—that is Transmission Gully rail electrification to Palmerston North the Western Link Road as a local road and improvements to State Highway 1? 
Hon NATHAN GUY 
: This area is one of the fastest growing in New Zealand. It connects through to our capital city. We are well aware of the fact that over the last 5 years there have been 59 serious or fatal accidents on that stretch of road between Paraparaumu and Levin. Most of the feedback from the submissions that I am told the local MP for Otaki has received shows that people want action and progress on the issue—after 10 years of inaction by the previous Labour Government. 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. My point of order is not about the veracity of the last comment but about my question which asked why a certain option had not been offered to the community. The Minister in reply told us about feedback that had been received but I asked him why the Government did not put to the community as part of the consultation programme an option that mirrored the stance that National took at the election. 
Mr SPEAKER 
: I hear the member’s point. When a member asks why the Government did not do something the member is not asking the most precise question. The Minister’s answer talked about the increase in population in the area and although that answer may not be what the member wanted I believe it was an answer to the question. I cannot start assessing the quality of answers; I can only assess whether the Minister has answered the question in some way. I believe that he did answer the question in some way. 
Hon Rodney Hide 
: I raise a point of order Mr Speaker. I seek clarification. When the Minister said that he had received submissions from the MP for Otaki was that Darren Hughes? Because I thought he lost that seat. 
Mr SPEAKER 
: The member will resume his seat right away. Nice try but that is not allowed as a point of order. 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. While we have the leader of the ACT Party with us in the country I wonder whether he should lose a supplementary question for that very unfair reference. 
Mr SPEAKER 
: We will not take this any further. 
Question No. 7 to Minister 
Mr SPEAKER 
: I call Metiria Turei. [ 
Interruption 
] I apologise to the member but I am on my feet; I ask her to resume her seat. I have called a member and I have dealt with the points of order that were raised earlier and I do not think it is very helpful for members to be continuing to interject across the House. I call Metiria Turei. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I raise a point of order Mr Speaker. Although not wishing to challenge your ruling— 
Mr SPEAKER 
: I hope not. 
Hon CLAYTON COSGROVE 
: —could I just seek your advice or ask for your reflection. Yesterday you observed what you termed an abuse of the point of order process by a colleague of mine and I think that last week you docked a supplementary question off my colleague Mr Hodgson. A similar abuse of the point of order process has happened today and the member simply got a slap on the wrist. I invite you to reflect on that. 
Mr SPEAKER 
: I point out to the member that I am the sole judge in these matters and when I got to my feet the member responded by sitting down. If the member abuses the point of order system again I will treat it very severely. When I do treat it more severely is when a member does not respond to my getting to my feet and asking the member to resume his or her seat. That is when I take a very dim view of the matter. I have called Metiria Turei and I would appreciate the House allowing her to ask her question. 
Benefits—Children’s Social Health Monitor Baseline Report 
7.  
METIRIA TUREI (Co-Leader—Green) 
 to the  
Minister for Social Development and Employment 
: Does she agree with the authors of the Children’s Social Health Monitor baseline report launched today that New Zealand’s current benefit provisions are unlikely “to protect a large proportion of our children from severe or significant hardship”? 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 Yes I agree with a lot of what the report says. What I do not agree with is where it states that the number of children in families on benefits is likely to rise. Work and Income is working very hard to help people into jobs so that they can build better futures for themselves and their families. 
Metiria Turei 
: Does she think that $110 billion over the next 40 years will be enough for her department to make sure that no New Zealand child goes without fruit veges raincoats shoes or visits to the doctor which this report shows many are doing today? 
Hon PAULA BENNETT 
: What I will say is that it is not just about the money. Research by the Ministry of Social Development in 2002 showed that for two families on the same low income one on a benefit and one in work the one in work had better outcomes every time. 
Catherine Delahunty 
: Tena koutou. Is she aware that many vulnerable families are not accessing the basic support that Work and Income should be providing now such as the hundreds of people in Rotorua who are asking national beneficiary advocates for help this week because they have not been able to access basic support such as food grants? 
Hon PAULA BENNETT 
: I can tell the member that the number of special-needs grants has gone up considerably this year so more people are accessing them via the department. We certainly encourage anyone who is having problems to go to Work and Income. Emergency payments and supplementary money can be made available to them; it is there. 
Catherine Delahunty 
: Is it acceptable that a solo parent raising five children in Rotorua is able to access only $70 from Work and Income to feed them for a week; and does that not show that the benefit system is failing to meet the needs of vulnerable children? 
Hon PAULA BENNETT 
: It would be too hard to make an assumption based on what the member is saying is the level of support available to them. 
Metiria Turei 
: How will her plans to force single parents out to work when their youngest child turns 6 relieve severe and significant hardship for those children when the number of full-time jobs for women is declining; the market for part-time work is highly competitive; hours of existing jobs are being cut back threatening in-work payments; and rental housing prices for our most vulnerable families continue to rise? 
Hon PAULA BENNETT 
: It would be fair to say that we start from different assumptions. The Green Party assumes that people do not want to work that those on the domestic purposes benefit are happy to stay on it and that is how they want to survive. National believes that a lot of them want to work. If the incentives are right and the jobs are right they will go out and take jobs and that is what we are focused on. 
Hon Annette King 
: If she is serious about helping children in New Zealand why did the National Government recently turn its back on a suggestion by the Every Child Counts organisation to establish a multiparty working group on children’s issues in Parliament? Instead of agreeing to work with other political parties the Government refused stating that Parliament already had enough processes in place to consider issues relating to children. And can she tell the House of the success of one of the processes? 
Hon PAULA BENNETT 
: Because for 9 long years we had a lot of talk and now this Government has decided that it is about action. We have seen already this year a number of initiatives that target the most abused and neglected children. The Never Ever Shake a Baby campaign starts on 6 December and the First Response non-governmental organisation trial will be going out to those businesses with an independent experts forum delivering actual responses on what we can do. This Government is focused on action not on a whole bunch of chit-chat that gets nowhere. 
Hon Annette King 
: Does she believe that her naming and shaming of two solo mothers earlier this year who had the audacity to speak out on the impacts of the cuts she had made to the training incentive allowance which was helping them to get off the benefit has made it harder to assist beneficiaries and their children because of the venom and vitriol her comments generated out there in the public? 
Hon PAULA BENNETT 
: That is another example of recycling old arguments. One of those women did not feel it was naming and shaming; she was quite happy with having the information which was correct put out there. I make no apologies for telling a true story of where our welfare state is. 
Hon Annette King 
: I seek leave to table a letter to me from the Prime Minister dated 3 November in which he turns down the suggestion not from me but from an organisation that does not just do chit-chat asking— 
Mr SPEAKER 
: The member should not make that kind of comment when seeking leave to table a document. Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Metiria Turei 
: I seek leave to table the  
New Zealand Children’s Social Health Monitor 
 released today. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Injury Prevention Rehabilitation and Compensation Amendment Bill—Hearing Aids 
8.  
Hon DAVID PARKER (Labour) 
 to the  
Minister for ACC 
: Does he think it is fair that his Injury Prevention Rehabilitation and Compensation Bill will determine the threshold for entitlements to hearing aids rather than clinical need? 
Hon Dr NICK SMITH (Minister for ACC) 
: 
 Yes because the law in respect of accident compensation is about defining the extent of the scheme. A scheme with no limits is unaffordable. Other schemes like WorkCover in Australia also have a 6 percent threshold for hearing aid entitlement. 
Hon David Parker 
: Is he aware that a man in his 50s with up to 6 percent noise-related hearing loss cannot hear birds sing misses most of what his grandchildren say to him and needs a hearing aid? 
Hon Dr NICK SMITH 
: No I do not accept that. The advice that I have received is that the 6 percent limit is a reasonable limit to the point where a hearing aid actually becomes useful. It is a standard that is used in a number of parts of the world. However the bill is before a select committee and I will wait for the select committee to report back to the House before making final decisions on the bill. 
Hon David Parker 
: How can he deny criticisms that it is cynical to take away people’s right to sue for work-related hearing loss of up to 6 percent but then say they will be included in accident compensation cover so they have no right to sue when they cannot get a hearing aid or any other treatment? 
Hon Dr NICK SMITH 
: I am advised that it is highly unlikely that for industrial hearing loss any case could be pursued in the courts under normal tort. The reasons are firstly that it is normally after a very long period and secondly in terms of the proof of fault that is very unlikely. 
Hon David Parker 
: Why does he continue to say workers in Australia with up to 6 percent work-related hearing loss cannot get a hearing aid when they can because the decision is a clinical one in the likes of Victoria and South Australia? 
Hon Dr NICK SMITH 
: There is some variation from state to state in Australia. In New South Wales it is a 6 percent rate. But the decision will still be left to clinicians in the same way as many other parts of the accident compensation law set out the threshold at which a person gains an entitlement. 
Hon David Parker 
: I seek leave to table a document showing that in Victoria there is no threshold and one can get a hearing aid for work-related hearing loss at 6 percent and similarly for South Australia. 
Mr SPEAKER 
: What is the source of the document? 
Hon David Parker 
: It is information that has been provided to me by audiologists in New Zealand. 
Mr SPEAKER 
: Leave is sought to table a document provided by audiologists in New Zealand on the thresholds for hearing aid entitlement in Australia. Is there any objection to that document being tabled? There is no objection. 
Document by leave laid on the Table of the House. 
Family / Whanau Violence—Preventive Initiatives 
9.  
HEKIA PARATA (National) 
 to the  
Minister for Social Development and Employment 
: What is the Government doing to prevent violence within families and whanau? 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 Today is White Ribbon Day. I am sure that I join with the rest of the House in our stand against family violence particularly against women. This is an opportunity for all New Zealanders to stand up and show that they will not be standing for that sort of family violence. This morning the Minister of Women’s Affairs and members of the Families Commission joined with the police at the Wellington Railway Station to hand out white ribbons. I can say that it was a fantastic response from the New Zealand public. 
Hekia Parata 
: What steps is the Government taking to reduce family violence? 
Hon PAULA BENNETT 
: Much work has been done to raise awareness of family violence over many years. We have to look only at the increased reporting to see that New Zealanders know that it is not OK. But we are past talking about it; now we need to be doing what we can do what the Government can do what the community needs to do and what families can do to stop violence. Minister Turia is focusing her efforts on the doing. 
Sue Moroney 
: Why then has the Minister allowed her Government to increase the trauma of sexual violence by making it harder for victims of sexual abuse to get help through accident compensation with 111 people having dropped out of the system already across New Zealand? 
Hon PAULA BENNETT 
: As the House well knows those matters are complex. Those decisions are made by clinicians not by politicians and that is exactly how it should be. 
Sue Moroney 
: I seek leave of the House to table a document. It is the answer to written question— 
Mr SPEAKER 
: Is this the answer to a recent written question? 
Sue Moroney 
: Yes and it demonstrates— 
Mr SPEAKER 
: The House already has that information. The member will resume her seat immediately. Why did the member continue to make that statement to the House when I was on my feet? In what way was that assisting the order of the House? The member was seeking to abuse the position. I will not tolerate that in the future. 
Hon Dr Nick Smith 
: I seek leave to table the statement by the Royal New Zealand College of General Practitioners welcoming the changes that the Accident Compensation Corporation has made in respect of sensitive claims. 
Mr SPEAKER 
: Is this a press release? 
Hon Dr Nick Smith 
: It is a statement by the Royal New Zealand College of General Practitioners. It is not a document that would otherwise be generally available to members and given the debate there has been on this issue— 
Mr SPEAKER 
: I will take the member’s word for that. Leave is sought to table this document. Is there any objection? There is no objection. 
Document by leave laid on the Table of the House. 
Sue Moroney 
: I raise a point of order Mr Speaker. I am unclear whether leave was sought for my document. 
Mr SPEAKER 
: I am not seeking leave for that because that information is readily available to the House. The House has answers to written questions. 
Education National Standards—Revision 
10.  
Hon TREVOR MALLARD (Labour—Hutt South) 
 to the  
Minister of Education 
: Was she correctly reported this morning as indicating flaws in her proposed national standards are being addressed; if so what is the process she is using to address those flaws? 
Hon ANNE TOLLEY (Minister of Education) 
: 
 The member must be suffering from a bit of jet lag. No. 
Hon Trevor Mallard 
: Mr Speaker are you going to deal with that or not? [ 
Interruption 
] 
Mr SPEAKER 
: I am on my feet. We can see what happens when members are disorderly. I say to the Minister that that response was totally out of order and it led to disorder. That will not be tolerated. 
Hon Trevor Mallard 
: Is there one published expert or academic who agrees with her view on national standards rather than with the views of Thrupp Crooks Flockton and Hattie who have today written an open letter to her; if so who is that academic or expert? 
Hon ANNE TOLLEY 
: Several academics have expressed support at various stages in the process. Several have been involved in their development. 
Colin King 
: What sector involvement was there in the development of the national standards? 
Hon ANNE TOLLEY 
: Over 4000 principals teachers literacy and numeracy advisers and other professionals attended meetings. There were 1176 written responses from the sector of which 490 came from groups representing in total 4557 people. The education sector was also involved in an independent expert panel which helped to develop the standards and in the national standards reference group which provided feedback on the draft standards. 
Hon Trevor Mallard 
: If she disagrees with Thrupp Crooks Flockton and Hattie New Zealand’s four leading assessment academics who have written to her stating inter alia that full implementation of the intended national standards system over the next 3 years is unlikely to be successful will not achieve intended goals and is likely to lead to dangerous side effects why are they wrong? 
Hon ANNE TOLLEY 
: I said this morning that the academics’ concerns are being addressed. For instance the Ministry of Education is working on how schools can report on children’s progress and achievement in relation to the New Zealand curriculum. Professor John Hattie himself is participating in this work. I say to that member that parents want this proposal and they want national standards— 
Mr SPEAKER 
: I always get concerned when Ministers start with “I say to that member” because it invariably means they are no longer answering the question. The Minister answered the question and that is sufficient. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I hate to disagree with the ruling you have just made as to whether the Minister has sufficiently answered the question but I do not think she actually got to the question about the specifics of why she disagrees with those four experts. 
Mr SPEAKER 
: The Minister did point out that she did not disagree totally with the experts and that in fact one of the experts was involved in working on the scheme to address issues that were of concern. I believe that that was a perfectly fair answer to the question. 
Hon Trevor Mallard 
: Was her reading of this picture book to a group of secondary school teachers designed to be evidence of her ability to meet literacy standards and was she describing her position with the line about rats having a better life or was she telling teachers that the final line “You have to be happy with a lot less.” applies to them? 
Hon ANNE TOLLEY 
: I suggest that that member reads the book. It is a great read. [ 
Interruption 
] 
Mr SPEAKER 
: Interjections that are nasty are not helpful at all. I ask the House to just take a deep breath. 
Immigration—Silver Fern Visa 
11.  
Hon TAU HENARE (National) 
 to the  
Minister of Immigration 
: What announcements has the Government made on the introduction of the Silver Fern Visa? 
Hon Dr JONATHAN COLEMAN (Minister of Immigration) 
: 
 Today the Government announced the launch of the Silver Fern Visa. It is designed to attract highly skilled young people to New Zealand. The Silver Fern Visa creates a pathway to residency for young people educated overseas and fulfils the National Party’s manifesto commitment to access higher-level skills for the economy. 
Hon Tau Henare 
: How will the new Silver Fern Visa policy work? 
Hon Dr JONATHAN COLEMAN 
: Applicants with high educational qualifications aged between 20 and 35 will be eligible to apply for one of 300 Silver Fern Jobseeker Visas issued annually. This gives them 9 months to search for a skilled job. Once they have skilled employment they get a further 2-year permit that will allow them to gain points under the skilled migrant category and apply for residence. The Silver Fern Visa is about attracting the right skills and matching them to the employment needs of the economy. 
Aorangi School—Closure 
12.  
Hon LIANNE DALZIEL (Labour—Christchurch East) 
 to the  
Minister of Education 
: Why did she not ensure that the Aorangi School board was given time to inform teachers and parents of the confirmation of her decision to close the school before the announcement was made public? 
Hon ANNE TOLLEY (Minister of Education) 
: 
 Under the Education Act the decision to close a school is made by the Minister of Education. The Ministry of Education communicated my decision to the chairman of Aorangi School yesterday afternoon. I thought it necessary to notify and explain my decision to the community directly and immediately. 
Hon Lianne Dalziel 
: Is she aware that two of the four schools in the 1.5 kilometre radius of Aorangi School have enrolment schemes that exclude almost all Aorangi School students; if so why did she allow a misleading impression to be created that there are more options for these children than there are? 
Hon ANNE TOLLEY 
: Because there will be one fewer school in the area and the enrolment schemes will have to be redone. I informed the board of that quite some time ago. 
Hon Lianne Dalziel 
: Did she follow the ministry’s advice to discuss her final decision with the Hon Dr Pita Sharples an Associate Minister of Education; if so when did she do that and what was his response? 
Hon ANNE TOLLEY 
: I informed Dr Pita Sharples of my decision yesterday afternoon. 
Rahui Katene 
: How does she respond to the statement from Aorangi School principal Stephanie Thompson that closing the school sent a clear message that the National-led Government did not believe that a low socio-economic multicultural part of Christchurch was as important as other groups; and what specific provision will be made for the whanau affected by the closure of the only bilingual unit in the north-east of Christchurch? 
Hon ANNE TOLLEY 
: There are two parts to that question. With regard to the first part I absolutely reject the offensive suggestion that the decision to close Aorangi School was based in any way on the economic and cultural elements of the area. The reasons have always been the cost of the rebuild the roll’s size and the number of schools in close proximity. With regard to the second part of the question I have stated a number of times that I am committed to ensuring that there is an ongoing provision for bilingual education in the area. I have directed the Ministry of Education to work with Ngai Tahu and local boards of trustees on this very important decision. 
Dr Russel Norman 
: I raise a point of order Mr Speaker. The Minister appeared to be reading the answer to that question. I wonder whether she was reading from the official document. 
Mr SPEAKER 
: I ask the Minister whether she is reading from official documents. The Minister indicates that it is not an official document. 
Hon Lianne Dalziel 
: Has she or her ministry advised the principal and board of trustees of Waimairi School and Fendalton Open Air School that their zones will be altered as a result of this decision? 
Hon ANNE TOLLEY 
: The decision to close Aorangi School was made and announced yesterday. A change-manager is being appointed as soon as possible by the Ministry of Education and he or she will be in contact with all the surrounding schools. I say to the member that the children who attend Aorangi School come from quite a wide section of Christchurch so it is impossible to tell at this stage how many children will be going to the surrounding schools. 
Hon Lianne Dalziel 
: I raise a point of order Mr Speaker. My question to her asked whether the two schools that are covered by enrolment zones had been informed that there would be a change to their enrolment zones. That was a very specific question and she has not addressed it at all. 
Mr SPEAKER 
: I accept that that was the absolute thrust of the question. If the Minister has that information I would appreciate it if the House could have it. 
Hon Gerry Brownlee 
: I raise a point of order Mr Speaker. The first point is that the Minister did say that the change-manager would take care of this matter. That has to be an answer. 
Hon David Cunliffe 
: Count the votes Gerry. 
Hon Gerry Brownlee 
: I am don’t you worry. 
Mr SPEAKER 
: I am on my feet. I say to the Hon David Cunliffe and the Hon Gerry Brownlee that when I am on my feet they will de-decease from interjecting. 
Hon Members 
: Decease! 
Mr SPEAKER 
: The Speaker can get tongue-tied too. I say to the member who has raised the point of order that the question asked whether the schools have been advised that the enrolment schemes would be changed. Whether someone is being appointed to change-manage the process is another matter. Whether the schools have advised is a fairly simple matter. The Minister may not have that information and it is perfectly acceptable if she does not. If she does have the information I think it is reasonable that it be provided to the House. 
Hon ANNE TOLLEY 
: The decision was made yesterday afternoon. A change-manager is being appointed. I have no knowledge as to whether that change-manager has informed those schools. But they know that there will be one less school in the area so it is normal that the enrolment schemes would be re-done. 
Points of Order 
Reserves and Other Lands Disposal Bill—Letter to the Speaker 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I raise a point of order Mr Speaker. I waited until the end of question time before raising this matter. As you may know I have written to you regarding the Reserves and Other Lands Disposal Bill. I wonder whether you could give an indication as to when you may be able to respond regarding the order of including the private matter within that bill. I wonder whether you have had a chance to look at it. 
Mr SPEAKER 
: The member has written to me about this matter. The member is perfectly at liberty to come and see me about it but it is not a matter for the order of the House. 
Climate Change Response (Moderated Emissions Trading) Amendment Bill 
In Committee 
Debate resumed. 
Clauses 1 to 3 ( 
continued 
)  
Hon PAREKURA HOROMIA (Labour—Ikaroa-Rawhiti) 
: 
 This legislation is about detail and today is a very very sad day for this nation in the sense of the surety that we tend to espouse. The legislation has simply been about going to Copenhagen; this whole bill is scribed in double Dutch. At the end of the day I plead with the Maori Party leaders not to vote with this Government at the end of this debate because there are some simple fundamentals about this whole issue. The major polluters are being let off free they are running wild and that person from Napier who just passed a comment should have a look at Whirinaki have a look at the creeks in Whakatane and more than certainly have a look at the rivers and the pollution that goes into Poverty Bay. 
Why would this legislation be a negative for Maori? Quite clearly there is a Treaty settlement process but one wonders why this bill was taken outside the process and why iwi were settled with. I can say being half Ngai Tahu that well be it in relation to the settlement. But in relation to the emissions trading scheme proper the Minister for Climate Change Issues has been inventing the figures. He knows full well that he has to find money; we know full well where it has to come from. It has to come from health from education and from all of those areas that are very very relevant to Maori. 
Hon Dr Nick Smith 
: I don’t believe it. 
Hon PAREKURA HOROMIA 
: The Minister can shake his head but some of us have been around as long as he has and we know that that is what will happen to Maori. But he has plumped it up with a little addition on the side—the insulation of about 10000 houses. That is one-fourth or one-fifth of all Maori households. I understand there will be the insulation of State homes which the Government would have done anyway. The omission or the contradiction is quite simply that. 
Dairy farmers this year received an extra $100000 payout. But are they pulled up? Is there any prescription in the sense of making sure that they do not continue to pollute? No—no way! There is a river in Whakatane in the electorate of my colleague Ururoa Flavell that is so black and dark that all the life in it is stagnant or has been removed. There is a great overseas indigenous saying: “When the rivers have darkened and the fish are lost and the mountain tops lose the snow and the trees crumble to dust then the world will understand that it is not just about money.” That is what Paul Quinn understands—moni which translates to money. This is about moni. 
The Maori Party came in here in relation to its mana and Labour members were chastised about the foreshore and seabed. This is the foreshore and seabed situation again but three or four times worse. With the accumulation of accident compensation charges and the 90-day employment legislation Paul Quinn is punishing his people and he knows it. His Government has accumulated negative issues like that 90-day bill and the new accident compensation charges and this legislation on top of that is a shocker. Paul Quinn can sit there and try to abdicate responsibility for what he has done for the Maori people. He knows this bill is a shocker. He is supposed to be one of the bright macro minds in Maoridom; he knows about the corporate front he knows about the top end and he knows about making sure that they are looked after. But this legislation is about our people and it is a disgrace. 
I am saddened because I know that the Maori Party leader Minister Sharples is well revered. He is a sensible person but this process is shambolic. I am stunned that the Maori Party even cares to go with it. This is one of the biggest “brown” pay-offs—buy-offs—that has ever been made in this House. People have said that the foreshore and seabed issue brought in the Maori Party. No the Maori Party brought in the foreshore and seabed issue. 
Let me tell Mr Tremain that up there in Hawke’s Bay the unemployment rate is running at about 12 percent. What did the Prime Minister say? He said that the rate was great because it was 8 percent. That is relevant to this legislation because it will be common language in the years to come when our people 60 percent of whom are under the age of 15 will suffer through it. They will pay for the legislation as taxpayers. People in Maoridom generally always have been taxpayers but do members know that most freezing workers in this country have barely had 3 to 4 weeks’ work over the last 2 months? Do members understand that? [ 
Interruption 
] I say that the deals with the five iwi that that member is talking about are done and that is between that Government and them. But that is not the issue. I tell Paul Quinn that the issue is about what the legislation will do to our people. He knows that. He knows as well that the Maori unemployment rate is all over the place—and he can add to that. You can cry like one of us but you do not know about Maori people. That is why they have stuck you back there and not on the front bench. Do you care? This is the same thing— 
The CHAIRPERSON (Eric Roy) 
: The member is including the Chair in the debate and I could take offence at that especially at the vigour with which he is doing it. The member should be a little more careful about how he chooses his words. 
Hon Annette King 
: I raise a point of order Mr Chairperson. I have been listening very carefully to the use of “you” and to including you in the debate. To your right there has been a constant barrage from Mr Quinn that included you in the debate. I wonder whether you could perhaps hear that breach of the Standing Orders as well. 
The CHAIRPERSON (Eric Roy) 
: I had actually missed that. I apologise to the Committee because I was making a general comment. When members use a great deal of vigour which they are entitled to do it can be quite offensive if the Chair is included. All members should note that. 
Hon David Cunliffe 
: I raise a point of order Mr Chairperson. Further to the point of order by my learned colleague I just point out that Mr Quinn is not sitting in his usual seat and there is a Standing Order that prevents members from moving seats for the purposes of interjection. As my colleague has said he is one of the brightest minds of Maoridom in the National Party and I am sure that he has something valuable to say but it would be better if he chipped in from his own seat. 
The CHAIRPERSON (Eric Roy) 
: In response to the point of order I tell members that Speakers’ rulings are quite clear that members should not move to have an advantage. I do not believe that the member did that but I would caution him that he has a loud voice and he ought to show some decorum around that. 
Hon PAREKURA HOROMIA 
: He has a loud voice because he has a hearing impairment and I excuse him for that. The brightest Maori member there is my cousin Hekia Parata not him. But I apologise for that Mr Chair. 
I tell the Committee that there is no incentive under National’s plan for big polluters to reduce emissions and National knows that that is going on all over the place. This legislation is about kissing or kicking off—as in  
Big Brother 
—in relation to Rio Tinto and all those overseas companies and leaving ourselves alone. That is the reality. As the floods bash homes in England—the land where the colonisers came from—and set to on all those families and as the fires burn in Australia we do not have to be rocket scientists to understand what is going on. 
That big buffoon over there who is bellowing does not care. He talks about energy and the costs that are going up. He is lacking energy at the end of the day and at the end of the day we are running up costs of $110 billion that have to be taken from somewhere. Those people scorn that figure but they talked about the closing of the gaps they got into the “iwi Kiwi” debate they flip-flopped and they said there would never be any single targeting of Maori development—never! 
But what is this about? It is a buy-off; it is a trade-off. Where is the guarantee? Minister Turia has been talking about Whanau Ora. What does that mean? It means “whanau family betterment”. This legislation does not add to family betterment yet the Maori Party came in here with basic fundamentals about kaitiakitanga and all those things like awhitanga. They are all relevant to a good country clean and dear to our soul. But what has that Government done? At the end of the day Mr Brownlee and company have really run off with this bill and rushed it through. 
As a party even though we did not see the detail we have voted for the Treaty amendment; we have supported that. The amendment did not go even to the select committee so a fair bit of this legislation has been run through not by parties who care about it but by people who do not care. But I can stand here and listen to this waffle over the years about how we must not spend money on specific Maori issues. That member from Hastings knows about that because the takutai moana is still there in his area but the Tutaekuri River is just that. It runs out to sea with all the blinking damage of pollution and over at Whirinaki the mill is polluting the air like hang. What is the member doing about it? He goes around kissing the Maoris on the marae to get a few votes because he knows it is all about that but at the end of the day he does not know because people with plenty of money have chastised Maoridom into a lower and deeper phenomenon. I want to let members know about that because that member has done a hue and cry about it but he knows that it is wrong. He knows that overall it is wrong. That member knows that Maoridom is not where it should be. 
The Maori Party has simply traded away critical spending in areas as I have said before such as health and education. We do care about that especially when we listen to a Minister over on the other side of the Chamber who is hell-bent on just closing anything down and not wanting to ensure that Maori education is important. Members can mark my words as the years go along and as our very very young population—one of the youngest in this country—grows up and has to pay tax. Most Maori people from the age of 40 to 65 are from the labouring ilk—excuse the pun. They are people who have worked and paid taxes right from the age of 16. So it is rubbish about Maori not earning and paying taxes. They have paid them and so have some of the working class Pakeha but taxes will be put back on them again. The Government is looking after the top end and saying “Never mind the bottom end.” 
I say shame on the Maori Party; it is adding to the injury of all this. Today is a sad day for Maoridom. There is nothing to crow about and the fact that the Maori Party has held hands with National to do this is amazing. It is a disgrace. 
JOHN BOSCAWEN (ACT) 
: 
 I understand that the Chair will be happy to take a double-call a 10-minute call. We are debating the name of the Climate Change Response (Moderated Emissions Trading) Amendment Bill. Rather than calling it that name why not call it the “Lost Opportunities Bill? Why not the “When is a Subsidy Not a Subsidy and When is a Subsidy a Subsidy Bill”? Why not the “Tax the Poor Bill”? Why not the “Let Us Devalue Maori Fisheries Bill”? There are many names we could give the bill. 
I am deadly serious when I suggest naming it the “Let Us Devalue Maori Fisheries Bill”. The reason I say that—and let me be very clear to National—is that under this emissions trading scheme beyond 2013 there will be no relief available to Maori fisheries whatever. Currently they generate some 600000 emissions units or carbon units and the taxpayer is being given an allowance from the United Nations for those 600000 units. We will continue to get that allowance; as a country we will continue to get that allowance in 2013 in 2014 and for many years after. But will we pass the benefit of that allowance on to Maori fisheries—in fact to all fisheries? No we will not. We will stop it dead on 31 December 2012. And at what cost? Well at $25 a tonne those 600000 units of emissions will cost the fisheries industry in New Zealand $15 million. That industry currently makes $60 million in gross margins. So a tax of this nature represents 25 percent of its profit. It is a trade-exposed sector. It is an emissions-intensive sector. 
The Minister for Climate Change Issues knows it because he said exactly that in his minority report on Labour’s emissions trading scheme just on 12 months ago. And did he take the opportunity to fix it? Did the Maori Party insist upon it being fixed? No they did not. They left the trade-exposed emissions-intensive fishing industry to be hung out to dry in 2013. All I can say to the Minister is that if the Sanford fish processing plant in Nelson should close at some stage in the future it will be on his head and I hope his constituents are aware of it. 
Hon Maryan Street 
: Sealord not Sanford. 
JOHN BOSCAWEN 
: Sorry it is Sealord. I apologise and thank Maryan Street. It is the Sealord plant in Nelson not the Sanford plant. 
This has been a reckless process. We heard that this bill was pushed through the Finance and Expenditure Committee in 6 weeks. I gave credit to Mr Foss the chairman and he deserves credit because he was given a hospital pass. Mr Foss was given instructions to give submitters less than 24 hours’ notice. We had 380 submissions of which 170 said they wanted to be heard orally but Mr Foss’ riding instructions were to hear only 30 submissions and to hear them in 2 days. The Labour Party said the committee was given 1 day; my recollection is that it was given 2 and that is what my minority report says. 
But I also give credit to Rahui Katene who sits alongside me because she had the courage and the wisdom to vote with the Opposition and the ACT Party to allow the people who wanted to submit on this bill to submit. [ 
Interruption 
] Yes she did. And I say to Mr Cunliffe that although the Maori Party may be coming in for some criticism right now I think we need to acknowledge that had it not been for Rahui Katene voting with the Labour Party and the ACT Party we would not have heard 90 of the 125 people who came to the select committee. So I give Rahui Katene full credit for that. And I give Rahui Katene credit for the Maori Party press release that she passed to me as she was walking back from the Prime Minister’s press conference on Monday afternoon. What does it say? It says: “It is estimated that as a result of the Maori Party concessions on petrol power and insulation households will save at least $4 a week.” That is it—$4 a week. 
The ACT Party genuinely believed that the Maori Party had secured some concessions over and above what was in National’s original bill; it had secured some additional concessions. When I questioned the Minister in his office on Tuesday morning he confirmed to me that there were indeed no additional concessions. Electricity will go up by 10 percent on 1 January 2013 and there will be massive windfall profits for electricity companies that generate from water—hydro power—and from geothermal energy. It is estimated that those profits run at about $300 million a year so we are talking about projections to 2050 that some billions of dollars will be paid by ordinary New Zealanders. To whom? To the shareholders of Genesis and Meridian Energy which is us and to the shareholders of Contact Energy and TrustPower. So it is little wonder that there has been speculation today that the ruling council of the Maori Party is meeting because it is very very concerned about the Maori Party’s support for this bill because the poorest New Zealanders will pay the biggest proportion of their incomes for basic staples like electricity. They can go without petrol—they can ride buses—but everyone needs electricity. People need electricity to cook and to light up their homes. Electricity is a major component of living cost certainly for low-income New Zealanders. 
Pete Hodgson said earlier that the ACT Party is not interested in climate change and that it calls it a hoax and a scam. He was extremely critical of Rodney Hide. Well the science is unproven. In the last few days the data processing system—the computers—of the climate science unit at East Anglia University were opened up to hackers and the scientists at that unit have had to acknowledge that some of the leaked emails are indeed true. At the very least that indicates dishonesty on the part of those scientists; at the worst it indicates massive fraud. The ACT Party has said and said consistently that we should not be pushing headlong into doing this. The Minister well knows although he may wish to deny it and the National backbenchers know—the National backbenchers are not dumb—that they will have to go to their constituencies and defend this bill. They will have to defend it next week and they have to defend it at the 2011 general election. We could have postponed the effective introduction date of Labour’s emissions trading scheme. We could have sought a much better compromise. We could have looked to protect the fishing industry in exactly the same way as we are protecting the farming industry beyond 2013. There is so much more that we could have done. 
Earlier this afternoon Rodney Hide took possession of a petition from Neil and Esther Henderson. They were in the gallery earlier this afternoon; they may not be there now. They are farmers from Gisborne. Over the last 6 weeks they have collected over 10000 signatures opposing this emissions trading scheme. Why have they done that? Well it is a well-known fact that some 50 percent of our emissions come from agriculture but at the present time the maximum use of technology will reduce those emissions by only 13 percent—only 13 percent. So if we are to have any realistic chance of a 50 percent reduction in emissions by 2050 essentially we are saying that the other half of our economy has to reduce its emissions by 87 percent. 
Hon Dr Nick Smith 
: 50 years. 
JOHN BOSCAWEN 
: I say to Dr Smith that technology may well develop over the next 40-odd years to allow agriculture to reduce its emissions beyond 13 percent but we do not know that it will. We cannot be certain of it. For this Government to enter into any binding commitment to that sort of reduction by 2050 without knowing how it will be achieved is no more than reckless. If this Government is to make any commitment at all it should be making commitments based on known technology. The select committee heard that we can make improvements. The output of the Kinleith mill has increased by some 50 percent while the absolute level of emissions has reduced. But in terms of agriculture we are talking about changing the digestive system of a cow or a sheep. We are talking about developing grass. We hear the Green Party express concern about genetic modification but those members seem to be very— 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 Thank you Mr Chairperson—[ 
Interruption 
] I am sad to hear such disappointment that I have been called to speak. I have been sitting here thinking that for about 4 hours a week for at least 20 weeks of this year I have sat on two select committees hearing about the emissions trading scheme and it has been a very interesting time. During those hearings we have heard from environmentalists who say that the emissions trading scheme does not go far enough from business interests who say that the emissions trading scheme goes too far from farmers who argue that they should not be part of an emissions trading scheme and from Maori interests who argue that they need to look after the interests of Maori households the environment and the Maori economy. It is very clear that whichever way the Maori Party votes somebody will be unhappy. 
We had to look very carefully at what we were going to do about the emissions trading scheme. We did not enter into our decision at all lightly. I was a little bit concerned about the things that have been said in the Chamber today. Some of the things that have been said today have been very ironic. For example the Greens are very concerned that the Maori Party is about to be shafted. The Greens should know all about being shafted. They were shafted when they got cosy with Labour. Indeed when Labour was passing its emissions trading legislation and conning the Greens Labour came to the Maori Party and implored us to support its scheme. Labour members preferred to work with the Maori Party because they did not want to be working with—and this is a direct quote—“the crazy Greens who are off their tree”. 
Paul Quinn 
: Is that what they said? 
RAHUI KATENE 
: Yes it is what they said. The Greens know about being shafted because their legislation to remove age discrimination from the workplace was renamed as the Minimum Wage (New Entrants) Amendment Bill which was a mini version of the 90-day Mapp bill both Labour and the Greens vigorously opposed. But with the change in the name of their bill they along with Labour ensured that young people would continue to be discriminated against. Sue Bradford the sponsor of the bill recognised the principled stand of the Maori Party which voted against that bill when she said: “I would also particularly acknowledge the Maori Party members who are opposing the Bill in its amended form but who are in fact its fiercest supporters. I am grateful for the Maori Party’s unflinching and uncompromising support for the bill as originally conceived rather than in its watered-down version and I hope that one day their party and ours and others will join in going the whole way in abolishing youth rates altogether. This bill even as it was originally drafted was a compromise all along. Right from the start I was criticised in some quarters—and rightfully so—for putting up a bill that did not do away with age discrimination altogether but maintained it for workers under 16.” 
Hon David Cunliffe 
: I raise a point of order Mr Chairperson. As endearing as it may be for the member to read through the list of other bills that the Maori Party has welshed on I point out that it is not relevant to the bill at hand. I ask that you bring the member back to the bill in the remaining 5 seconds she has. 
The CHAIRPERSON (Eric Roy) 
: By tradition the speeches on the preliminary clauses have come to cover a wider issue and I think the member is only following a pattern that we have had throughout this debate. 
RAHUI KATENE 
: Just to point out— 
Hon David Cunliffe 
: I raise a point of order Mr Chairperson. If you are happy for the member to refer to completely different legislation from the bill that is supposedly the topic of this important debate in the Chamber I ask that the member at least clarify for the Committee which bill she refers to. 
The CHAIRPERSON (Eric Roy) 
: Members do refer to other things in order to support the arguments they are making. I am prepared to hear members and see them draw a conclusion from what they are saying. 
RAHUI KATENE 
: Speaking to the point that the Maori Party supports this bill and will continue to support it until it is enacted I say that we are very interested to hear the points that other parties have to make but we are not persuaded by them. Those arguments are made out of pure self-interest. We will continue to make that point because the existing scheme has nothing at all to do with Maori. There is nothing Maori in the existing scheme. We are very pleased to be working with a party that is able to see beyond its self-interest; to see how Maori contribute to the economy to the environment and to households; and to see that this bill will help them to do that. 
I am very pleased to know that others outside of this Chamber support this bill. We are pleased about that. 
MOANA MACKEY (Labour) 
: 
 I am happy to take a call on the title and commencement clauses of this terrible Climate Change Response (Moderated Emissions Trading) Amendment Bill. 
That was an extraordinary contribution from Rahui Katene. I thought that the contribution from John Boscawen was very fair; indeed she did vote with Labour at the Finance and Expenditure Committee to ensure that all submitters could be heard. I really appreciated that support and I know that the submitters did and I think that comment was only fair. John Boscawen left out the Greens of course who also supported that motion. But suddenly Rahui Katene was pulled into line by the Government which realised that she might also allow us an extension of time so that we could consider the bill properly. She was told that she could not vote with the Labour Party any more. She even said to us that the Maori Party would be voting with National all the way through to the end before the committee had considered the rest of the bill. 
I have been thinking about what other names we could have for this legislation. I think we could call it the “Climate Change Response (Money-Go-Round Rob Peter to Pay Paul) Amendment Bill” because the Minister in the chair—the Minister for Climate Change Issues—and other National members are very fond of going on and on about how they will halve the cost to households of this legislation. What Dr Nick Smith does not say is that the reason they are doing that is to allow companies dealing with liquid fossil fuels—the petrol companies and the power companies—to retire only half the emissions units that they would otherwise have to retire in terms of the emissions that they put out. That means that the taxpayer picks up the rest. On the one hand the Minister is telling us that taxpayers should be grateful for the fact that they may not have to pay I think $165 a year but on the other hand who will have to pay for the difference? It is the taxpayer. Well I think that is what we would call Tory charity—take with one hand and give with the other. That is exactly what is happening. It is a money-go-round. 
Within that there is absolutely no mention of the $110 billion liability that is being put on future taxpayers. National members conveniently leave that bit out. When they talk about the cost to consumers they conveniently leave out the fact that New Zealand taxpayers under this amendment bill—which is supported by the Maori Party—will now have to come up with $110 billion so that our big polluters can keep on polluting. Grassroots Maori who have absolutely no influence on the way that Rio Tinto controls and handles its emissions will have to pay for those emissions and Rahui Katene says that is OK. Grassroots Maori families have absolutely no control over the way that all the big emitters in this country control their emissions—because they cannot make big companies like Rio Tinto reduce their emissions—but they will have to pay for it. The Minister thinks that is fair and Rahui Katene thinks that is fair. 
Labour has always accepted that there would be a transition period and has always accepted that there would be free allocation for many of the same reasons that the Minister has given. But for the Minister to try to claim that what Labour wanted to do and what National wants to do are the same is incredibly misleading. Labour wanted to transition New Zealand to a low-carbon economy and we were looking at complementary measures that would assist that. We wanted to have an emissions trading scheme that would reduce New Zealand’s greenhouse gas emissions as opposed to one that would give incentives to increase greenhouse gas emissions as long as the emission of greenhouse gases per unit of production remains the same. And the Maori Party says that is OK. 
The Minister also likes to go on about alignment with Australia. He gets really angry with my colleague Charles Chauvel whenever he tries to claim that there is no Carbon Pollution Reduction Scheme law in Australia which there is not. There is no Carbon Pollution Reduction Scheme law in Australia. Maybe we could call this legislation the “Climate Change Response (Alignment with Unicorns Leprechauns and Carbon Pollution Reduction Scheme Law) Amendment Bill” given that those three things do not exist. The Minister has been getting very tetchy whenever my colleague raises the possibility that we may be aligning our scheme with a scheme that may never happen. 
I thought this bill was a terrible bill but I did not think that it was so bad that the Hon Nick Smith could almost bring down the leader of the Liberal Party in Australia; it appears that this bill is as bad as that. It appears that Malcolm Turnbull the Liberal Party leader and Leader of the Opposition in Australia may be rolled at some point this week. 
Minister Nick Smith has been getting very upset with my colleague when he has said that there is no Carbon Pollution Reduction Scheme law in Australia but the Minister has not explained why we are aligning our scheme with Australia’s. For example why are we insisting that agriculture face the same kind of regime as industrial processes in Australia? Why are we aligning with a scheme that does not include agriculture when our scheme does? Agriculture contributes 50 percent of our emissions and only 15 percent of Australia’s and agriculture will not be included in the Australian scheme. Why are we aligning our scheme with that scheme when we do not know when it will come in—if indeed it ever does come in? It is changing by the day. 
Hon Dr Nick Smith 
: Because we promised we would. 
MOANA MACKEY 
: A lot has changed since the election I say to the Minister. The Minister has done many things and his Government has done many things since the election and they have claimed that is because things have changed. This week we have already seen the Labor Government in Australia making a lot of concessions and a lot of compromises trying to get cross-party support from the Liberal Party. It has been a changeable feast. Our Government will blindly align our scheme with that scheme when we do not even know what will be in it if it exists at all. I think the Minister would have done very well in the Committee stage of this debate to accept the amendment from my colleague Charles Chauvel that removed that requirement. The Minister still could have been working towards alignment and still could have been doing all the work that I know he is currently doing with the Australian Government over alignment. I ask why we are setting ourselves up like that or is the Government opposing the amendment just because the Labour Party put it forward? 
I will also respond to something else that the Minister said earlier when he spoke before the lunch break and question time. I think we could also call this bill the “Climate Change Response (Hon Dr Nick Smith Walked Away from Negotiating with Labour Because He Did Not Want Phil Goff to Get Any Credit) Amendment Bill”. Let us be quite clear: when we were in negotiations with the Minister he told the Labour members who were in that room that some people on the ninth floor of the Beehive thought that the negotiations with Labour were a mistake because they might give Phil Goff the boost that the section 59 negotiations had given John Key. He told us that. 
Hon Dr Nick Smith 
: Not true. 
MOANA MACKEY 
: The Minister told us that. That was exactly what he told us. The fact is we knew that that was a reality for the National Government and we accepted that but we thought that cross-party agreement was very important in this area. Remember that just about every submitter from the business sector who came to the select committee said that what they wanted was certainty. What they did not want was a scheme that would go backwards and forwards between National and Labour with both parties putting forward their versions while in Government and creating enormous uncertainty. We agreed. 
Hon Dr Nick Smith 
: Well stop playing politics. 
MOANA MACKEY 
: Oh please! The Minister stood up in this House and misrepresented what Labour members said in those negotiations. He asked why we had agreed to things in our negotiations when we do not agree with them now. He does not understand that we were there to reach a compromise with the Government. We were there. We appreciated that we had not won the election that the Government has a mandate to make changes and that we would not be able to get our way on everything. That was why we were prepared to compromise even if it was on things that we would not do if we were in Government. We thought those negotiations were going very well we thought we had a real chance of getting a durable emissions trading scheme and the Hon Dr Nick Smith walked away from it. He walked away from it. He said that we should have just known that he was dealing with the Maori Party. Well that is fine. I ask the Minister to answer me this question: why did he not pick up the phone and tell Charles Chauvel— 
Hon Dr Nick Smith 
: Because he would’ve leaked it. 
MOANA MACKEY 
: —no the Minister should listen—that he was walking into a room now to announce that National had done a deal with the Maori Party? He could have talked on the phone then walked straight into the room and made the announcement. Why did he not do that? 
Hon Dr Nick Smith 
: Because he would’ve leaked it. 
MOANA MACKEY 
: The Minister says that Charles Chauvel would have leaked it in the 5 seconds between the Minister telling the Labour Party and the Minister making the announcement. Labour members believed that they were in a good position with the National Government and that they were making progress. We had had a great meeting the week before. We had sent through a document for the Minister to respond to with a proposed summary of the issues—where we should go from here what information we wanted from officials and what we wanted to see from officials before we were able to commit—and then we found out through the media that the Minister had done a deal with another party. And he says that we acted in bad faith. 
Paul Quinn 
: Yeah that’s what happens when you have a Dutch auction. 
MOANA MACKEY 
: I know that Paul Quinn is the master of absolutely everything but he was not in that room. Mr Quinn was not in that negotiations room. [ 
Interruption 
] No he was not. 
Paul Quinn 
: I didn’t need to be. 
MOANA MACKEY 
: He did not need to be because the facts do not matter to Paul Quinn. But the fact is that we were very very close to getting a durable agreement and the Minister walked away. 
JO GOODHEW (Junior Whip—National) 
: 
 I move  
That the question be now put 
. 
KEVIN HAGUE (Green) 
: 
 Members of this House come to this Chamber today with both a privilege and an awesome responsibility. We do so because the issue of climate change which is before us today is the most important issue that will be dealt with by this Parliament or indeed by any New Zealand Parliament. That imposes a particular standard on us a standard of responsibility that requires us to examine our consciences and to do the right thing. I fear that the reality is that we are about to do absolutely the wrong thing. I ask the members of the Government parties—National United Future and the Maori Party—to examine their consciences and regardless of the instructions that they come to this Chamber with to consider again— 
Hon David Cunliffe 
: I raise a point of order Mr Chairperson. I apologise to the member for interrupting an important contribution. I have twice before raised the issue of Mr Quinn rudely chipping across the Chamber from a seat that is not his own. You have chosen to infer that he did not move for the purposes of chipping and you have asked him to restrain himself. There is nothing particularly substantive in his interjecting—it is just noise—but it is very discourteous to the member speaking who is trying to give a considered contribution to this House and it is inciting disorder amongst my colleagues and that is not helping the public of New Zealand to understand the arguments. I ask— 
Hon Dr Nick Smith 
: I would note that Rahui Katene gave a speech only 15 minutes ago and all the way through that speech there were rude and aggressive comments from members like Mr Cunliffe. Although I am very keen to hear what Mr Kevin Hague from the Green Party wants to say I think there has to be some consistency. If members ask for courtesy it should be applied to members on both sides of the debate and not just to his side. 
Hon David Cunliffe 
: I appreciate the Minister’s point that there has been vigorous debate in the Chamber and that is to be expected on a bill of this nature. But there is a specific case here of a member who is not in his own seat and the Chair has previously warned him and it has had no impact on his behaviour which is now disorderly to this House. 
Paul Quinn 
: Speaking to the point of order— 
The CHAIRPERSON (Eric Roy) 
: No I do not need the member’s assistance. I think we have at times throughout this process had quite vigorous interjections from members who have not been in their seats. The Speakers’ ruling is quite specific about moving to gain an advantage. When the Chamber has fewer people in it people tend to congregate down the front and there is a degree of tolerance of that but I think generally speaking all members of the House should be advised that it is expected that interjections be rare reasonable and if possible humorous. I ask members to have some consideration for other participants in the debate. 
KEVIN HAGUE 
: Thank you to the member for raising that point. I was commenting on the gravity of the issue before us. I have spoken previously in the debates on other parts of the Climate Change Response (Moderating Emissions Trading) Amendment Bill about the inadequacies of this bill. The gravity of the climate change situation facing the Earth requires all Governments all Parliaments and all countries to do everything that is in their power to mitigate the disaster that looms. This is a bill that does not contribute to that purpose but rather weakens the law that already exists. Compared with the law that already exists this bill will result in increased emissions. 
We are debating the title of the bill and the words “Moderating Emissions” seem to me to be completely inappropriate for a bill of this sort. The Green Party will be introducing an amendment in the name of Dr Russel Norman to change the title of the bill to the “Climate Change Response (Polluters Get Paid) Amendment Bill”. He has another amendment to change it to “Climate Change Response (Payday for Polluters) Amendment Bill”. Both of those names would be more suitable names for this bill. 
Earlier today a brief flame of hope flared when the news hit this House that the national council of the Maori Party was intending to meet today to reconsider its position. It seemed that for that brief window the Maori Party was prepared to listen to the evidence and the arguments and to reconsider. I have to say that it was with great regret that I read the comments of Te Orohi Paul dismissing that rumour as nothing more than rumour and saying that the Maori Party was a party of integrity and a party that considered that its word was its bond. 
In my intervention last evening about Part 1 I referred to a number of comments that the co-leader of the Maori Party Tariana Turia had made in her speech in March last year in relation to emissions trading. All of those comments are totally at odds with the position that the Maori Party is now taking on this bill. I ran out of time before I was able to come to the last comment that I wished to use. It was a comment from Tariana Turia in relation to the Greens’ position on that bill. What she had to say was this: “A billion dollars was the price of the Green Party support for a scheme that achieves almost nothing. We predict that that $1 billion will seem like 30 pieces of silver once the full impacts of climate change start to be felt.” If Te Orohi Paul is correct and the Maori Party is a party of integrity then I call on the Maori Party members to reconsider examine their consciences and actually consider what it is that their party stands for because what they stand for in this debate is at odds with everything they have stood for on the issue of climate change until this debate and it is at odds with everything they have come to this House with and represented their members and their voters on prior to this debate. 
I will quote from OraTaiao one of the submitters on this bill. It is an organisation of senior health figures—doctors nurses and other health professionals—and mirrors in fact the global interest and urgency that the health professions are bringing to the issue of climate change. One of the things that it had to say to the select committee was this: “We submit that if passed the bill would render the current emissions trading scheme completely ineffective resigning it to irrelevancy. An ineffective ETS means falling between two stools for health failing to mitigate the threats to health from climate change while introducing a regressive policy with a high economic burden on those who can least afford it. Such a policy also passes on significant costs to future generations.” What OraTaiao was saying is what health professionals around the world have been saying: that the health consequences of not dealing with climate change effectively are extreme—and this is a bill that proposes to increase emissions. OraTaiao enumerated many of those consequences in its submission. In particular I want to point out that those consequences are most severe for Maori. 
We have heard a lot in the debate from the Government about the need to balance the economy and the environment. It is very clear that it is possible to do both—and the Green Party has given many examples of how—and to actually have a meaningful emissions trading scheme and also a productive economy. It is with great regret that I have to say that National and the Maori Party have chosen instead to favour an economy that is based on the short-term thinking of current business. 
I will conclude by quoting from an editorial by Professor Hugh Montgomery in the  
New Zealand Medical Journal 
 from 9 October. He says this: “There is a real danger that politicians [at Copenhagen] will be indecisive especially in such turbulent economic times at these. Should their response be weak the results for international health could be catastrophic. We must all act now to ensure that there  
is 
 a deal and that it is meaningful rather than fanciful. At present voiced aspirations for large targets for 2050 or small ones for 2020 are nothing more than dangerous hot air. A weak deal will represent not an historic international agreement but a suicide pact. Now is the time for us all to act. If not us who? If not now when?”. That applies equally in this House today as it does in Copenhagen next week. 
CAROL BEAUMONT (Labour) 
: 
 I too rise with great sadness given the response of National and the Maori Party to what has to be the most fundamentally important issue facing the world today. We are seeing this afternoon in this Chamber a bill being passed that weakens the provisions that this country had already put in place to play our part in dealing with the issue of climate change. There is increasing evidence that the changes taking place will change the world as we know it. Many examples have been given of the consequences for human life for human habitat for our animals and for the future of this planet. This is a serious issue yet we are addressing a bill that weakens those provisions. It is environmentally irresponsible economically inefficient and socially inequitable. 
I think as have others that this bill needs to be renamed. I have a couple of suggestions. I thought perhaps the “Climate Change (Responsibility Transfer Costs from Polluters to Taxpayers) Bill” might be a possibility or the “Climate Change Response (Missed Opportunity for Cross-Party Consensus) Amendment Bill” because those titles are more accurate reflections of what we are facing here today. 
Our response as a country should be to put in place a strong scheme to deal with emissions. Instead we are weakening the response of the previous Government. This legislation which modifies Labour’s emissions trading scheme and is being passed under urgency is fundamentally flawed. In fact as others have argued so cogently it may have the perverse effect of increasing emissions and it will undoubtedly load costs on to ordinary New Zealanders. 
The criticisms of this bill come from all quarters. I think it is worth reflecting on some of these criticisms although I know for certain that the Government will arrogantly dismiss them because of course they are right. Brian Fallow stated: “The changes agreed are all about transferring cost from the emitter to the taxpayer and to that extent it defeats the purpose of the exercise.” Greenpeace stated: “We now have on the table a pathetic ETS which won’t actually do anything to reduce emissions … our emissions will just keep climbing and taxpayers rather than polluters will have to pay for them.” Rod Oram stated: “National’s changes would drive up emissions perpetuate old technology necessitate ever-greater subsidies and reduce New Zealand’s international competitiveness and reputation.” The New Zealand Business Council for Sustainable Development stated: “Overall this proposed policy appears to greatly reduce incentives to heavy emitters to reduce emissions increase costs of subsidies to them slows down the timetable for reducing emissions …”. The Institute for Policy Studies stated: “It does not provide a path forward to decarbonise the New Zealand economy in an efficient effective or equitable manner. It will barely reduce emissions. It imposes high costs on the economy for the benefit of a favoured few.” 
I repeat the phrase “for the benefit of a favoured few” because that is what the essence of these changes is all about. It is about transferring the cost from polluters; whether they be Maori or Pakeha polluters they are having their costs transferred on to ordinary taxpayers. 
What about the Parliamentary Commissioner for the Environment the independent Officer of this Parliament with the role of reviewing environmental policies and actions? The commissioner commented: “New Zealand should not align itself with Australia’s proposed scheme. A cap on the number of carbon credits freely allocated is vital to create the right incentives and to reduce fiscal risk to the Government and policy uncertainty for business. The phase-out of free carbon credits is far too slow.” 
Criticisms have come from every quarter yet the Government intends to push this legislation through. National with the support of the Maori Party will today push this legislation through the House. The process has also been flawed. I will not go into detail but I know that my colleagues have raised the fact that this is probably the worst process they have been engaged in in their parliamentary careers. 
NICKY WAGNER (National) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 63 
New Zealand National 58; Maori Party 4; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1. 
Motion agreed to. 
The question was put that the following amendment in the name of the Hon David Parker to clause 1 be agreed to: 
to omit this clause and substitute the following new clause: 
1Title 
This Act is the Climate Change Response (Increased Emissions) Amendment Bill. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment not agreed to. 
The CHAIRPERSON (Eric Roy) 
: I will quote Speakers’ ruling 112/4 because I am going to rule out some of the amendments to clause 1. Speakers’ ruling 112/4 states: “An amendment to the title of a bill must be a serious or objective description of the bill rather than an attempt to criticise its contents.” In that respect I am ruling out the following amendments in the name of the Hon David Parker: to omit clause 1 and substitute “This Act is the Permanent Pollution Payments Entrenchment Bill.” to omit clause 1 and substitute “This Act is the Climate Change Response (Increased Government Debt) Amendment Bill.” and— 
Hon David Cunliffe 
: I raise a point of order Mr Chairperson. I appreciate that you are in the process of ruling and it is with some hesitation that I raise this point. You have referred to a Speakers’ ruling that requires your ruling to be based upon an assessment that the nature of the amendments is first an attempt to be pejorative and second not based in fact. Now taking as an example the one by my colleague the Hon David Parker around permanent pollution payments the Government’s own analysis indicates that there is an infinite stream of subsidies and that the phase-out rate does not reach zero. I would submit to you that in fact the amendment is a perfectly accurate description of the bill. 
The CHAIRPERSON (Eric Roy) 
: I have had plenty of time to give this matter serious consideration and I have looked at other precedents. I am ruling out these amendments specifically because of the ruling’s words “a serious or objective description”. They are ruled out for that reason. Furthermore the amendment in the name of the Hon David Parker to omit clause 1 and substitute “This Act is the Greenhouse Gas Emissions Property Rights Creation Bill.” the amendment in the name of Russel Norman to omit clause 1 and substitute “This Act is the Climate Change Response (Polluters Get Paid) Amendment Bill” and the amendment in the name of Russel Norman to omit clause 1 and substitute “This Act is the Climate Change Response (Payday for Polluters) Amendment Bill.” are also ruled out of order. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 63 
New Zealand National 58; Maori Party 4; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1. 
Clause 1 agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to.  
Ayes 63 
New Zealand National 58; Maori Party 4; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1. 
Clause 2 agreed to. 
A party vote was called for on the question  
That clause 3 be agreed to. 
Ayes 63 
New Zealand National 58; Maori Party 4; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1. 
Clause 3 agreed to. 
Bill reported with amendment. 
Report adopted. 
Third Reading 
Hon Dr NICK SMITH (Minister for Climate Change Issues) 
: 
 I move  
That the Climate Change Response (Moderated Emissions Trading) Amendment Bill be now read a third time 
. This bill is about implementing for New Zealand a workable and affordable scheme that will provide an incentive to reduce emissions and to encourage afforestation. It strikes that right balance that we need to find between protecting our environment and ensuring New Zealanders have jobs. It ensures that we do our fair share on climate change without the pretence the previous Government ran of New Zealand being carbon neutral. 
New Zealand has actually been going round and round in circles for over a decade on trying to get a price on carbon pollution. This bill means that on 1 July next year there will be that important price on carbon as part of our package to respond to the challenge of climate change. This revised emissions trading scheme is consistent with National’s commitments to the electorate. We said we would align our scheme more closely with Australia; the bill does that. We said we would provide incentives for industry to reduce emissions without encouraging an exodus of jobs and investment overseas; the bill does that. We said we would rejig the scheme to be fiscally neutral so households farms and businesses would not be funding multibillion-dollar windfall gains to the Government; the bill does that. 
If this bill was not passed the existing scheme would come into effect on 1 January and it would increase power prices by 10 percent and put $400 million a year in costs on to industry. There are also no allocation plans and there are a number of serious areas in the existing legislation that would cost jobs and do damage to the environment. This Government is not prepared to burden households and businesses with that scale of costs at this time when we are just seeing the fragile signs of an economic recovery after the worst economic downturn since the Great Depression. The scheme would have to had to be delayed until 2011 if it were not for an agreement with the Maori Party for which I must thank them. Frankly mokopuna in the future will thank them also. They have been constructive players and want to move New Zealand forward. 
The Maori Party brings a very balanced perspective to this debate with both a strong commitment to Papatuanuku the environment but also a real concern about jobs and about the impacts on low-income households and an understanding of the importance of primary industry to New Zealand. In the Opposition’s criticism of the Maori Party it has been said in one breath that this does too much for Maori and in the next breath that it does too little. Well both cannot be right and I think that reflects the fact that we have come to a very fair agreement. 
I also acknowledge the role of United Future who have consistently—not just now but also over the last decade—played a very constructive role. I particularly acknowledge the work of Peter Dunne in chairing the Emissions Trading Scheme Review Committee. I also thank the very capable Craig Foss for the work he did in chairing the Finance and Expenditure Committee. I acknowledge the hard work of officials particularly those in the climate change and risk directorate of the Ministry for the Environment led by Stuart Calman; the Ministry of Agriculture and Forestry team led by Julie Collins; and select committee staff. I particularly acknowledge the Parliamentary Counsel Office officials who have worked extraordinarily hard. It is interesting to me that for all the debate on the bill over the last 2 days scrutiny of Supplementary Order Paper 98 which we have moved through the House has found not a single error. 
This bill makes a number of important changes to make our emissions trading scheme workable and affordable. The industrial energy and transport sectors will be entering the scheme on 1 July and agriculture in 2015. There will be a transition phase for the next 3 years with a half obligation and a fixed-price option of $25 a tonne. Those changes will halve the cost increase for electricity and fuel for consumers and businesses. 
The bill also makes changes to support for trade-exposed emissions-intensive industry which I think is the most challenging dimension of climate change and emissions trading scheme policy. First a high-intensity and medium-intensity threshold is specified. Secondly the allocations will be based on an industry average and not on 2005 levels. That will ensure that we do not reward those that have been laggards and have had higher emissions and punish those that have invested early in efficiency. Thirdly the allocations will be production-based. That is as per the economic analysis that was done by the New Zealand Institute of Economic Research and Infometrics showing that that was the most effective way to address the problem of leakage. This Government is not about exporting jobs offshore; it is about incentivising more efficient production here in New Zealand. The fourth change is about slowing the phase-out of support to industry so that it is in line with our major trading competitors. 
There has been a nonsense claim of $110 billion worth of cost to families. Let me go through and challenge that. First it is not a cost; it is a lower level of revenue. 
Hon David Cunliffe 
: The New Zealand Treasury is not a nonsense. 
Hon Dr NICK SMITH 
: The analogy I make for Mr Cunliffe who interjected is that if his research and development tax policy which cost $260 million a year was costed in the same way that he wants to cost this emissions trading scheme bill it would cost $43 billion. That is if we add all the years up and add all the interest we get that sort of ridiculous figure. All the rhetoric about debt etc. is simply a smokescreen for Labour who fundamentally have not been able to find fault with this bill. 
There has been criticism that this bill is too generous. This emissions trading scheme will be the first in place of any country outside of Europe and it will be the most comprehensive by including transport industrial and energy emissions. New Zealand is also the first country in the world to include forestry and under these amendments because of our unique emissions profile it will also include agriculture. There has also been criticism of our production-based approach which was recommended in the analysis in the Finance and Expenditure Committee review. I note that Australia is taking that intensity approach in its Carbon Pollution Reduction Scheme which is expected to be passed in its Senate this week. It is also the approach that has been taken by Europe in the third phase of its emissions trading scheme. This is about incentivising efficiency rather than just exporting emissions-intensive industries to other countries. It is true that we are making a provision in this bill to ensure that it does not snuff out the early recovery of the economy. The passing of this bill means we have an emissions trading scheme that balances environmental and economic outcomes while showing the international community that we are serious about tackling climate change. 
After having achieved the milestone of passing this bill attention will have to turn to the complex intellectual job of implementing the scheme. The Government looks forward to working with industry to ensure a smooth implementation. The passing of this bill will be an important first step for New Zealand towards addressing climate change. It allows us to get on and implement an affordable and pragmatic scheme and to play our part in addressing this global problem. I emphasis that it is a first step and that New Zealand must remain nimble-footed with regard to agreements that may be reached internationally to decisions that our trading partners make and to advancements and updates in the science. Getting the emissions trading scheme up and running will be a major programme for the Government over the next year. Challenges include providing the allocations of emission units to those intensive trade-exposed companies and that will include consultation with industry and other New Zealanders about how we calculate and implement those entitlements. 
This bill will deliver for New Zealand a workable and affordable emissions trading scheme. I am pleased to commend this bill to the House. It is a critical and important first step in our nation’s effort to do our fair share in combating climate change. 
CHARLES CHAUVEL (Labour) 
: 
 We are about to pass a bill into law the Climate Change Response (Moderated Emissions Trading) Amendment Bill that is fundamentally flawed on multiple levels. It is economically irrational socially inequitable environmentally counter-productive and fiscally unsustainable. Its hallmark has been one of poor procedure and hasty consideration. 
The Committee stage of the bill was taken in about 8 hours under urgency. That allowed for no proper chance to remedy the defects associated with the select committee process including the withholding by the Minister for Climate Change Issues of key aspects of the official analysis of the legislation. What is worse is that the 8 hours were completely insufficient to allow Parliament to come to terms with the two sets of amendments tabled only yesterday. One from the Minister was a Supplementary Order Paper of 121 pages with at least five mistakes that I have found already in the explanatory note which we opposed. The other one was from the Maori Party enacting a Treaty clause. We ultimately decided to support that notwithstanding that there was no proper scrutiny allowed for those particular amendments. What is worse National the Maori Party and Peter Dunne voted down every amendment put up by the Opposition designed to improve this bill. Having deprived the people of an adequate select committee process those parties then prevented any real improvement being made in the later stages of the legislative process. 
We proposed an amendment to cap overall levels of free allocation given that the bill as it stands puts in place an uncapped intensity-based allocation model. An uncapped method allows the overall level of allocation and therefore emissions themselves to increase because there is no cap in the “cap and trade” scheme. So it carries with it an extensive fiscal risk if recipients of free allocation choose to increase production. That is why the Parliamentary Commissioner for the Environment told Parliament that it is vital to create the right incentives to reduce fiscal risks and to create policy certainty for business. But National the Maori Party and Peter Dunne did not support this amendment which sought to advance fiscal responsibility and environmental effectiveness. 
Labour also tabled amendments to phase out free allocation to industrial and agricultural activities completely by 2030. We did this because as the bill stands the level and duration of allocation is excessive. Providing free allocation for more than 80 years with a phase-out rate of only 1.3 percent a year defies any common-sense idea of a transition. Even the Minister says that 1.3 percent will not survive future reviews which begs the question of why he wishes to enact it in the first place. At this level of generosity as with any protection or subsidy—as we saw with supplementary minimum prices in the 1980s—future Governments will find it very hard to roll back this level of assistance. Allocation recipients will have a very powerful incentive to maintain the status quo. National the Maori Party and Peter Dunne voted to keep these permanent pollution payments. 
Given the immense costs of the levels of allocation not just fiscally but also economically and environmentally it is crucial that there should be transparency over how allocation takes place. But this bill reduces that transparency so Labour sought to enhance it and put in place safeguards against corruption by requiring the details of all allocation to be published. Allocation involves the transfer of enormous amounts of wealth in the form of carbon credits from the taxpayer to individuals and firms. The taxpayer deserves to know the level of these subsidies and have a clear analytical rationale as to why they are provided. If we do not have that transparency there will be no public trust in this scheme and there will continue to be rightly held suspicions that allocation levels are based more on politics rather than economics. Labour tried also to require any donation to a political party by a recipient of allocation to be disclosed. But National the Maori Party and Peter Dunne do not support the right of the public to know these things. 
We also tabled amendments to remove the half obligation and raise the price cap from $25 to $100 during the 2010-12 period. The half obligation is unnecessary. It shifts costs by more than half from the polluter to the taxpayer and despite the Minister’s claims in the electricity sector it will not reduce the impact on electricity prices. The European experience shows that it will not. What is worse is that the fixed price is set at such a low rate that it does not fulfil the purpose of any transitional price cap to provide certainty against price spikes. Any price cap should be set high enough to act as a safety valve not just another subsidy. 
We also sought to prohibit the banking of non-forest New Zealand units during the transition period. This would have prevented the collection of credits while the price of carbon is low and then the selling of them at a higher price once the cap is removed. Banking and trading free allocated credits taken with price caps will result in increased emissions and windfall gains to polluters. But National the Maori Party and Peter Dunne did not support fixing the bill in these ways. 
We also tried to put back the entry date for agriculture from 2015 to 2013. As the Parliamentary Commissioner for the Environment told Parliament there is no evidence to justify delaying the date of entry of agriculture to 2015. We can measure emissions at processor level from 2013 and emissions-reducing technologies are available particularly in the form of nitrogen inhibitors. Delay merely keeps the full cost of emissions with the taxpayer until 2015 and postpones appropriate levels of emissions-reducing investment and proper behaviour in this sector. National the Maori Party and Peter Dunne did not support these changes either. 
We also sought to establish a fund to reduce greenhouse gas emissions through the promotion of complementary measures. All the evidence internationally is that an emissions trading scheme can do only part of the job. There need to be robust complementary measures in place as well. The amendment that we proposed would have provided for an annual appropriation for revenue accrued from the emissions trading scheme to promote energy efficiency renewable energy and research and development. We put this amendment forward because assistance provided to households beyond 2012 has been axed. This bill gets rid of the household fund in the original legislation. That fund would have provided a billion dollars of energy-efficiency assistance to low-income households over 14 years. The Maori Party traded off its abolition for a one-off $24 million scheme targeted at low-income households. Let us do the maths on that. Low-income households many of which are Maori will receive $976 million less in energy-efficiency assistance than they would if this amendment was not passed. National and Peter Dunne were part of that deal. 
The bill as it stands makes highly undesirable changes to the Act in order to achieve alignment with the Australian Carbon Pollution Reduction Scheme an objective that Treasury the Parliamentary Commissioner for the Environment a leading independent expert and others all tell us is without any clear analytical basis given the unique emissions profiles and industrial profiles of the two countries. The fact that the Carbon Pollution Reduction Scheme is still proposed only but went through a $7 billion revision only this week in order to try to get Liberal Party support only adds to demonstrating the incoherence of the harmonisation proposal. We proposed amendments to remove the harmonisation objective and to take out the criterion as a relevant one that the Minister should take into account when determining allocation plans. Despite this clearly being in the national interest National the Maori Party and Peter Dunne opposed it. 
We also tried to enshrine national emissions targets in law and to require the Minister to ensure that they are actually met. Targets should not simply be a matter of pious intention. The current levels duration and model of allocation are completely incompatible with the Government’s target to reduce 1990 emissions by 50 percent by 2050. If the Government’s “50 by 50” reduction target is anything more than a catchy slogan the Minister should have been prepared to agree to enshrine the target into law. 
Finally we proposed amendments to establish an independent advisory committee on climate change to provide advice to Ministers and promote informed public debate on the public policy response to climate change. The development of climate change policy in New Zealand has been controversial; we all know that. There is no consensus on key issues as there is for example in Europe. There has been insufficient independent analysis of the costs and the benefit of climate change policy initiatives. The select committee process that we have just witnessed aptly demonstrates why such an independent body is so sorely needed in this country. National the Maori Party and Peter Dunne opposed even these measures. 
This bill is fundamentally flawed. As I have said previously it will make New Zealanders poorer our economy weaker and our emissions increase. The amendments Labour tabled over the past day would have addressed some but not all of these significant deficiencies but like our attempts to reach a consensus with National earlier in the year they were spurned. 
HEKIA PARATA (National) 
: 
 Tena koe Mr Assistant Speaker Barker. Tena tatou e te Whare. The Climate Change Response (Moderated Emissions Trading) Amendment Bill was always about fulfilling New Zealand’s international environmental and domestic obligations in a fair and balanced manner and I am glad to speak in the third reading of this bill because that is what it will achieve. From an international perspective this legislation will enable the Government to head to Copenhagen in a few weeks’ time with a substantive framework to curb emissions and to show that New Zealand is prepared and committed to do our fair share in the fight against climate change. Indeed this National-led Government will ensure that New Zealand stands with our international friends and neighbours as progress is made on this most significant of issues. 
I agree that we should be standing with our neighbours but we need not march out ahead on our own. To do so would not make any practical improvements towards the goal of combating climate change. It may allow our Government representatives to attend future conferences with a slight feeling of moral superiority which is a landscape the Opposition was most addicted to when in Government but that feeling would have been built on the back of failing businesses a struggling economy and job losses. That is why we stand side by side with our partners and why we are aligning ourselves more closely with Australia. 
As I have said this bill ensures that we do our fair share for climate change while balancing our international and environmental obligations with our domestic responsibilities. This is what New Zealanders said on 8 November last year that they wanted and this is what the National-led Government will deliver. 
This is very important legislation and the changes that National supports are designed to assist the transition into the scheme for those most affected by the changes. By extending entry dates and increasing allocations this bill is helping to cushion the transition for existing industries and their related consumers so that they can continue to hire workers and contribute to our recovering and strengthening economy. Again from an environmental perspective these industry and worker-friendly amendments will not negatively impact the global issue of climate change at all in practical terms but they will make a big difference to thousands of New Zealanders who represent the backbone of this country’s economy the agriculture fisheries and energy sectors among them. Those in the agriculture sector at least will sleep a little better knowing that when this bill passes its third reading they will now have until 2015 to prepare for their involvement in the scheme. The agricultural sector is to New Zealand what the mining industry is to Australia and we need to ensure more than ever in the current economic conditions that we allow this sector to continue to thrive. 
There has been a tight timetable for the progress of this bill but as the Hon Nick Smith pointed out it was not only the upcoming Copenhagen talks that called for timeliness but also the fact that under the previous administration’s scheme which currently stands consumers and businesses were about to unwrap a $400 million bill for Christmas including a 10 percent rise in power prices due to changes that come into effect on 1 January. That is not what New Zealand’s businesses and families need; in fact it is not what many families can handle right now. There are signs that the worst of the economic crisis is over but the effects are still being felt and will continue to be felt for a long time. The existing legislation is not what New Zealanders want and they said so at our general election after John Key openly proposed a moderated emissions trading scheme that acknowledged the hardships that Kiwi workers families and businesses are facing. 
This issue is all about sustainability. It is a buzzword that has been bandied about liberally and with good reason but it has been overlooked in its wider application to climate change response. Policies need to achieve the goal of creating a sustainable world to live in now and for future generations but these policies themselves need to be implemented in a way that is also politically and economically sustainable. Although the previous Government’s emissions trading scheme put many measures in place towards this goal it was a fundamentally unsustainable response because the balance was wrong. The legislation was out of touch with the people in my communities of Ruatoria and Porirua who are already struggling to pay their escalating power bills. It also placed too many impositions on sectors of the economy that felt they were not being given enough time to come to terms with the new environment and the costs that were being demanded. To make sure that the scheme is achieving its goals in the future there will be 5-yearly reviews to ensure that we really are dealing with a sustainable climate change response. Although we will never please everybody I am confident that this bill will remedy and address many of the inadequacies of the current scheme and take us forward in a sustainable manner to a sustainable future. 
The Treaty was signed by hapu and iwi and it protected their right to manage their lands forests fisheries and other taonga. This bill provides that opportunity. The Treaty created this population of people called Maori and said that they should have the gift of citizenship. The quality of that citizenship has not been all that it should have or could have been but the opportunity to get and keep jobs because we have a strong and growing economy and to have access to warmer drier homes are all elements that contribute to a better-quality citizenship. This bill provides for that. The Treaty provided that there would be a Government that would govern for all and balance interests for the benefit of all. This bill reflects that. 
In the end this comes down to whether one philosophically believes in perpetual dependence on the State or the creation of wealth so that all are better off through the development of their own resources. I choose the latter. I commend the Maori Party for making the same choice for believing in iwi and their rights and aspirations to grow their own resources for understanding and supporting the downstream opportunities for whanau and for seeing the balance that has to be struck between the environmental and economic interests of our country—our nation of Aotearoa New Zealand. I acknowledge and thank the Minister for Climate Change Issues the Hon Nick Smith and our colleagues in the Maori Party. Nga mihi nui ki a koutou. I commend this bill to the House. 
Hon DAVID PARKER (Labour) 
: 
 I can but disagree with the last speaker Hekia Parata. How can extending subsidies for carbon pollution until 2080 if not longer be the road to independence and self-reliance? It is exactly the opposite. The ambition of the emissions trading scheme is to reduce New Zealand’s greenhouse gas emissions. That is stated in the existing legislation. It is meant to do that at the lowest possible cost to the economy by reflecting into the economy the cost that arises from the Kyoto Protocol to the New Zealand economy of increases in emissions. So if one produces emissions one is meant to pay for them; if one reduces emissions one gets rewarded. That is what happens to New Zealand already under the Kyoto Protocol. The Climate Change Response (Moderated Emissions Trading) Amendment Bill undermines the effectiveness of the emissions trading scheme to do that. For those who are major emitters the amendment pays for virtually the whole of the costs of their emissions. 
The existing scheme was already generous in the free allocation to trade-exposed industries and that was for good reason. I think on all sides of the House we are agreed that during a transitional period when some other countries are not properly pricing emissions it would be wrong to force major emitting industries to pay for all of the cost of their emissions because that could make them broke. In the case of industries that could move like the steel aluminium or cement industries they could relocate to a country like China with no environmental benefit but with an economic loss to the country. For that reason the existing Act is already very generous in its allocation. It gives free allocation to those industries of 90 percent of their 2005 emissions—90 percent not 10 percent not 20 percent not 50 percent but 90 percent of their 2005 emissions. So the idea that that was not generous was always nonsense. The free allocation of that 90 percent rate was to go unabated until 2018—a decade from last year when the legislation was passed. Industries had a decade of that 90 percent allocation of 2005 emissions provided to them free—a decade to adjust before it started to abate. Then it would abate at 8 percent per annum but it would all be over by 2030. 
The independent expert advising the select committee Dr Suzi Kerr is a pre-eminent world expert. We are very lucky to have her in New Zealand. She is not just an expert in a New Zealand context; she is so expert that she is currently a visiting professor lecturing in emissions pricing at none other than Stanford University in the United States of America. She told the select committee that the existing scheme which had free emission rights phased out by 2030 was already if anything too generous to major emitters that it was economically wrong for New Zealand to be so generous and that we should be less generous. But this bill does the opposite. 
I will turn to a couple of other things. We heard Hekia Parata say that this bill saves people money on their power bills. Well that is not necessarily true. New Zealand’s power price is heavily influenced by the cost of new generation capacity. That new generation capacity cost is not changed by this short-term gift of free extra emission rights to the heavy emitters in power generation. So I proposed an amendment. I said “Let’s guard against double-dipping here.” All that amendment said was that before major emitters in the power industry got free emissions they had to show to the Commerce Commission that the prices would have gone up but for that extra free allocation. The reason I put that amendment forward was that the experience in Europe which we ought to have learnt from shows that if we do not do it power generators put up their power prices anyway and pocket the extra free allocation that they get at the cost of taxpayers. That is not fair. National and the Maori Party voted against that amendment and it did not proceed. People now face the risk that they will get an increase in the power price when the Government is giving even more free allocation to the electricity sector. 
I will talk a little about Treaty issues. We have agreed to the Treaty clause in this legislation which says that the Treaty principles ought to be honoured in terms of consultation around forms of regulation. I felt somewhat uncomfortable doing that because it did not go through the normal select committee process and it was just dumped in the bill yesterday. We did not have the time to properly examine it but we read it as thoroughly as we could within that time frame and we thought it was fair enough so we voted for it. But we do not support this unprincipled additional free allocation to only some owners of pre-1990 forests or the land on which those forests lie. The principle that National has breached is the principle of full and final settlement in Treaty settlements. Once there is a Treaty settlement and the assets pass from the Crown to iwi those assets—and they are mainly land assets—should be subject to the laws of the land. I am bound by the Income Tax Act; so are Maori iwi. I am bound by the Resource Management Act; so are Maori iwi. I am bound by the emissions trading scheme and so should Maori iwi be. There is one exception to that: if the Government through some duplicitous wrongdoing hides from Maoridom at the time of the settlement some undisclosed liability for future cost that undermines value that is wrong. That would either amount to a misrepresentation by the Crown or the withholding of important information that ought to be transparently made available to the iwi in the settlement. So again I put up an amendment. I said well if there is that yes there should be additional compensation payable. But if they cannot show that there was withholding of information or misrepresentation then the same laws of the land should apply to all. I think it does not bode well for National nor the Maori Party that they have breached that principle. They breached it for the benefit of let us be honest the corporate end of town. Just as they gave money to the corporate end of town for the major emitters they have done the same to Maoridom. They have ensured a profit for a few Maori at the cost of the rest of the community including most Maori. It is wrong and it undermines the effectiveness of the scheme. 
The cost of free allocation in the agricultural sector is plainly unsustainable. We have a scheme that purports to transition to emission pricing but allows emissions to increase in the interim. That would be like going back 20 years in New Zealand’s history; phasing out tariffs but actually increasing tariff protection while we phase them out is as stupid as that. It is as stupid as that. The best comparison I can think of is one I have already made with supplementary minimum prices. Again it was a National Party folly—that time under Mr Muldoon. The rate at which this Government is falling into debt is bad with Government debt already spiralling out of control in New Zealand. This will add to it. Supplementary minimum prices held up land prices by artificially subsidising farm output and profitability of farms. That is what this bill does to farmers. They get more than 80 percent of the additional free allocation. In fact I think they get more of the total free allocation; 90-something percent of the overall free allocation goes to farmers. Eventually that will have to be withdrawn because it is unaffordable for the country. Otherwise Government debt will go up by $110 billion by 2050. Even if we exclude interest the additional cost of free allocation in all sectors—the vast majority of which goes to agriculture—is $50 billion dollars. These are astronomical numbers—$50 billion. It cannot be sustained. When that free allocation is withdrawn farm prices will crash. People who have been farmers throughout will not be any worse off because they have been farmers throughout. The people who buy farms in the next 20 years will do their dough. They will do their dough and they will be poorer. They will suffer as people suffered in the 1980s following the removal of supplementary minimum prices. 
This bill is fundamentally flawed legislation. It undermines the environmental outcome. Our emissions will go up relative to where they would have been under the existing scheme. As Brian Fallow said the point at which New Zealand’s emissions peak will be later and the amount that they peak at will be higher before they decline. That will be at an environmental cost to the planet and at an economic cost to the country. It is not just me saying that: it is Treasury it is the Ministry of Economic Development it is the Parliamentary Commissioner for the Environment and it is the expert advisor to the committee Dr Suzi Kerr—it is virtually everyone. And still the Government proceeds. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 I stand to speak on behalf of the Green Party on the third reading of the Government’s amendments to the existing emissions trading scheme in the Climate Change Response (Moderated Emissions Trading) Amendment Bill. One of the interesting points that I think is often forgotten in this debate is that people think if we muck it up now we can somehow fix things up later. The problem with greenhouse gas emissions and particularly carbon dioxide is that they pretty much last forever. A great proportion of the carbon dioxide that is emitted today will be around in several thousand years’ time. Carbon dioxide does not break down quickly but builds up in the atmosphere. It means that every year we increase our emissions we increase the stock of greenhouse emissions in the atmosphere. It is not that simple to get it out of the atmosphere again. 
If we want to reduce the level of greenhouse gases in the atmosphere below a level that we think is safe say 350 parts per million carbon dioxide equivalent it means the curve to reduce the level in the atmosphere—the emissions curve that we have to go down—gets steeper and steeper every year we increase our emissions into the atmosphere. There is no free lunch here. We cannot say that today we are not going to address our greenhouse emissions because we can deal with them later. Actually we cannot. The emissions that go out today will add to the stock in the atmosphere and increase the problem for everybody on planet Earth for the next couple of thousand years. 
I think it is important that we remember what this is all about. This is supposed to be a bill to reduce greenhouse emissions in order to reduce the risk of out-of-control climate change. That is what the purpose of this bill was supposed to be. My colleague Sue Kedgley described it as Orwellian and in a way she is absolutely right. It is Orwellian in the sense that this is a bill that says it is about reducing emissions but it does not. The result of passing the bill through this Parliament this afternoon will mean that there are more greenhouse emissions coming out of New Zealand than there would have been otherwise. That is just a fundamental truth. 
It is also important to talk about the current emissions trading scheme. The emissions trading scheme that exists now is not a great scheme. The Green Party supported it reluctantly because as David Parker said earlier the scheme already had very very high levels of allocations and subsidies to emitters. It was not what the Green Party wanted. It was not our ideal emissions trading scheme because the level of subsidies was far too high. However we supported it in order to get the beginnings of a price on carbon and because of the complementary measures that came with it in particular the billion-dollar home insulation fund. 
It is also true that the previous Government’s record in reducing greenhouse emissions was terrible. Emissions increased very significantly from 1999 to 2008 so we were pleased that there was some progress towards the end of that Government in terms of addressing greenhouse emissions and climate change but there was still a long way to go. Let us remember that the scheme did not cap emissions. It capped free allocations which was good but it did not cap emissions. It meant that people on the margin were paying the real price but emissions within New Zealand were not capped. It worked within the global Kyoto system. The amended emissions trading scheme by comparison not only does not cap emissions in New Zealand but also does not cap free allocations which is quite extraordinary. 
I was just reading an article by Geoff Keey who works for Greenpeace and has been at a lot of the international negotiations. When he described the new emissions trading scheme to some of the people he has been meeting at international negotiations they said: “But that just means New Zealand’s emissions can keep increasing and increasing.” which of course is exactly what it means. If we reduce the price signal we get more emissions. The fundamental idea of an emissions trading scheme the idea that the whole thing is based on is that price influences behaviour. When this emissions trading scheme reduces the price it will influence behaviour. The result will be more emissions. That is a simple fact about all emissions trading schemes and it is a fact that the Minister for Climate Change Issues tries to deny over and over but in the House the other day we pinned him on it. He does not like to admit the simple fact that emissions trading schemes work on the idea that carbon pricing over time reduces emissions so if we have a lower price we will have higher emissions. 
It is incredible to think that because the rate of abatement of the free allocations is only 1.3 percent per year it means that if an industry increases its output and it is output linked to emissions at more than 1.3 percent per year it will get more free allocations every year. That is an extraordinary thing. The taxpayer will be handing over more free allocations every year if an industry increases its output by more than 1.3 percent. For example DairyNZ tells us that over the previous 10 years the dairy industry increased its output by on average 4.4 percent per year. This means that the taxpayer will be increasing the allocation of free carbon credits which costs money because ultimately the taxpayer has to pay for them to the dairy sector every year. The subsidy from the taxpayers to the dairy sector will increase year on year. It is uncapped. It is most extraordinary that here we are today in a world where we are trying to reduce our greenhouse emissions and this Parliament is about to vote for a bill that will increase the free allocation to the dairy sector and others as they increase their emissions and their output. It is an extraordinarily stupid thing to do. 
The other part of it that I think is a real worry aside from the difficulty of getting carbon dioxide out of the atmosphere once we put it up there and the steepness of the abatement curve we will have to go down in order to get anywhere near reducing our emissions by the amount we need to is the political problem that has been alluded to in this debate. Because this bill sets in place a whole bunch of give-aways to friends of the Government and others in the form of free allocations it will be very hard to roll it back politically. There is a particular problem in Australia. The Australian Greens produced a legal opinion that shows that because these rights to pollute are considered property rights under the Australian Federal constitution it will be even more difficult in Australia. We have the same problem here in terms of trying to roll back these rights to pollute as they will be seen by the recipients once this Government hands them out. 
We have a further complicating problem about the binding nature of this scheme which is the bilateral investment treaties that we are signing left right and centre at the moment. These are otherwise known as free-trade treaties but a big component of them is investment treaties. The bilateral investment treaties mean that foreign companies operating in New Zealand will be able to sue the New Zealand Government for indirect expropriation if we change the rules around emissions trading schemes. In fact if we look at the Cabinet paper that went with this bill we see that when they talk about why it is that forestry credits have to be tradable internationally part of the reason they give is the bilateral investment treaties that bind us currently and the fact that if we were to place restrictions on the international trade of those credits we could be sued under those bilateral investment treaties by overseas-owned forestry companies. We have this problem around the binding nature of what we are about to do and how we are committing future generations to a very expensive process of trying to unravel the bill we are about to pass. 
Part of the idea of an emissions trading scheme is to facilitate the transition to a low-carbon economy. One of the things that has been most extraordinary about the process is that we have not had any time to read all the advice we have been getting. For example Suzi Kerr senior fellow at the Motu Economic and Public Policy Research Trust and visiting professor at Stanford University Economics Department gave us her advice right on the very last day at the select committee and of course absolutely canned the bill as anyone who knows anything about emissions trading has. To quote from her report: “Free allocation redistributes the cost of climate policy away from the owners of protected firms who tend to have higher than average incomes towards all taxpayers.”—Maori and Pakeha I would add. “It also significantly raises the overall cost of the climate policy to the economy. A policy that is fiscally neutral can still have large damaging effects on the parts of the economy and society that do not receive free allocation.” We are passing legislation that is damaging to the New Zealand economy in the long run. Treasury estimates that the cost of putting out all these free allocations including interest and looking at a price of $50 a tonne will cost the New Zealand Government around $110 billion by mid-century and that cost has to be borne. It also results in a misallocation of resources within the New Zealand economy because we are not as efficient as we should be. 
What is missing with all of this is all the complementary measures that should have gone alongside an emissions trading scheme whether it be fuel-efficiency standards; pest control on Department of Conservation land; measures to promote public transport walking and cycling; or a reduction in the spending on motorways. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 When I was speaking in the second reading of this Climate Change Response (Moderated Emissions Trading) Amendment Bill I remarked that it was a joy to work with a party like the National Party. I want to expand on those remarks now. The Maori Party has been very impressed throughout the negotiations over this bill by the clear vision of the Minister for Climate Change Issues and by the good faith shown by both him and the Government in general. It has been a blueprint for a mana-enhancing relationship and I thank the Minister and the Government. 
The Maori Party came to this bill with a clear and comprehensive focus on outcomes for our whanau our whenua the Treaty and the Maori economy. It has been a focus that has sustained our strength despite the bitter opposition of others in this House who prefer to rely on the worn-out rhetoric of tired campaigners. The nation has observed a vitriolic attack against tangata whenua from the surprise new bedfellows the Labour Party and the ACT Party. We have heard Labour leader Phil Goff describe the scheme as benefiting only a handful of iwi. David Cunliffe added insult to injury by describing the arrangements as being about beads and blankets. We have heard Shane Jones talking of deceit and treachery and describing the emissions trading scheme as having sold out low-income Maori families “to protect a narrow privileged southern elite”. As member for Te Tai Tonga I have to tell the House that the latter comment has been interpreted by our iwi throughout Te Wai Pounamu as being particularly offensive. 
I refer any members who have the view that iwi are somehow removed from their people to the vision of Ngai Tahu which is most simply: mo tatou a mo ka uri a muri ake nei for us and our children after us. Ngai Tahu has a proud history of creative endeavour to ensure that our whanui are culturally enriched live long and live well and that Ngai Tahu Whanui lead the future. To suggest that our iwi are a privileged elite when the very definition of iwi is a collective of whanau and hapu is both ridiculous and insulting. 
ACT leader Rodney Hide referred to the emissions trading scheme negotiations as a backroom deal. He said that full and final settlement should not be relitigated and made a huge issue about the final wording of the Treaty clause being in his assessment concluded only 18 minutes before its announcement. Maori have had enough of being told that their capacity to negotiate arrangements is about special privileges or race-based politics that their numbers are too small or too narrow or that they did not follow the time frame that others had set for them. 
In case this House has forgotten the Maori asset base contributes $16.5 billion to our economy. This money stays in New Zealand and will continue to grow over generations to come. Maori are stakeholders. They are taxpayers. They are business people. They are entrepreneurs. The Maori Party has been proud to support their initiative. The Maori economy has unique characteristics. It is rapidly growing in response to being locked into underdevelopment over history. We want to support the growing billions of dollars of contributions per annum to the New Zealand economy and that was one part of the package we successfully negotiated in this bill. 
Under the previous scheme the Maori economy took a hammering from being concentrated in all the areas most affected by the scheme—forestry fishing and farming. What we have achieved in this emissions trading scheme is the commitment that the Government will work with all iwi on indigenous tree planting in addition to the specific agreement with Waikato Tainui Ngai Tahu Te Uri o Hau Ngati Awa and Ngati Tuwharetoa ki Kawerau that has resulted from the Crown’s breach of contract with those iwi. I remind those who have overlooked the record that this is a breach dating back to 1998 when a Government failed to disclose in its negotiations with iwi the fact that a domestic emissions trading scheme was inevitable and the effects it would have on forested land. The ability of iwi to make an informed choice about its purchase of Crown forest lands with settlement monies was therefore impaired. The bill today finally rectifies that wrong. 
It is important that we have indigenous forests grown by New Zealanders and that iwi are part of the carbon market. The Maori Party will never stand in the way of iwi initiative. I note too that the intention of the climate change Iwi Leadership Group was always to lock down a solution for the iwi interests that are represented in this bill and then to work for and advocate a solution for all pre-1990 exotic forests. Those negotiations have already begun with other pre-1990 exotic forest landowners and the New Zealand Forest Owners Association. The fisheries sector does better under this scheme by its ensuring that New Zealand owners of quota instead of vessel owners receive allocation. The agricultural sector will also be supported by a number of research and uptake-work programmes to support the sector to transition into more environmentally sustainable practices. 
But this emissions trading scheme was never about economic drivers on their own. Maori Party policy has always made it clear that our whenua is the most important inheritance that we will leave to our mokopuna. Our commitment to kaitiakitanga is all-enduring and reflects the importance that our people place on the whenua. This emissions trading scheme is only a small part of the environmental efforts we need and we should never expect that any one bill will address the major mind shift we need. We have always said that climate change is our collective responsibility. A trading scheme will never be a complete answer to climate change but we have done what we could to make the difference. 
Our environment has needs and New Zealanders expect our environment to be protected because it is part of our national identity. We have advocated on behalf of the environment for trees to be planted and for biodiversity to be valued. The truth is that as a country we pride ourselves on the pristine state of our whenua but in reality our practices do not meet our reputation. The Maori Party negotiated to get indigenous trees planted and our environment valued as part of our common inheritance as New Zealanders. Native trees will mean more native species in New Zealand owned by Kiwis as well as a reduction in our Kyoto bill. Five iwi will now have the right to plant indigenous trees. The benefit and the ownership will stay in New Zealand and all our mokopuna will be able to enjoy more native forest. It has been disappointing that so little attention has been allocated to the national policy statement on biodiversity which we have known is long overdue. The national policy statement is one way of recognising nationally important ecology and helping district councils to protect it more efficiently and effectively. We are also pleased that the review of the Permanent Forest Sink Initiative will increase the incentives for all landowners to plant trees. 
One of the overarching priorities for us however has always been he tangata he tangata he tangata. We brought to the table the fact that lower-income households would be exposed by the emissions trading scheme and we negotiated a package to protect their interests. We want to see that all whanau in need get home insulation and so we are delighted that there will be $24 million in new money to insulate homes. Home insulation is important because it brings power prices down and improves health outcomes. This fund and the significant reductions in power and petrol prices will achieve immediate and long-term contributions to the health and well-being of vulnerable households and we are proud of that. We have also managed to reinstate the Enviroschools programme. 
Finally we recognise that the Treaty of Waitangi is about doing what is right. It will also deliver greater certainty and stability to the emissions trading scheme. We have negotiated a Treaty clause to give effect to the Treaty so that iwi will continue to be involved in this scheme. Many of the details of the scheme will come through regulations and it is important that our people are part of working through those details. There are many challenges ahead of us all. All of us as members of the public can encourage emitters to decrease emissions. Public pressure can be a formidable force. All of us can commit to collective action against climate change and all of us can make the commitment for an open constructive and respectful relationship with tangata whenua. We are proud to vote in support of this bill. 
JOHN BOSCAWEN (ACT) 
: 
 The ACT Party opposes the Climate Change Response (Moderated Emissions Trading) Amendment Bill and will be voting with the Green Party and the Labour Party against it. One of the privileges of coming to Parliament is that one works with many different people from both sides of the House. Our position is different from that of the Maori Party but I regard it as a privilege to have worked with Rahui Katene over the last 12 months on the Finance and Expenditure Committee both on its deliberations on the emissions trading scheme and on that select committee generally. I am sorry if she takes exception to the comments made by Rodney Hide earlier today but he was simply reiterating what the Minister of Maori Affairs Pita Sharples had told the Wellington Regional Chamber of Commerce at a breakfast just yesterday. It was indeed Pita Sharples who said that the Maori Party was advised that agreement had been reached just 18 minutes before this deal was announced. That was at 12 minutes past 3 on Monday. Those were the words that Pita Sharples said to the people at the Wellington Regional Chamber of Commerce breakfast yesterday. 
This has been a reckless process. We have discussed that at length. It gave me no pleasure whatsoever to vote against the National members on this bill. At the select committee Rahui Katene the Green Party Labour and I voted to allow those submitters who had something substantial to say to have the right to say it. We voted for their right to say it and that vote was won by 7 votes to 5. Five National members were defeated in that vote and I give some advice to those members and to the new backbenchers in particular: losing a vote is an unpleasant experience and they run the real risk following the 2011 election that it will happen a lot more frequently if they are in Opposition. 
I now turn to the issue of the $110 billion. This issue was seized upon by the Labour Opposition to discredit this bill. The bill had to be discredited but to quote the $110 billion was the wrong way to do it because there are many other ways that one can discredit this bill without misrepresenting the facts. The Minister for Climate Change Issues the Hon Dr Smith is quite right. Essentially the way the emissions trading scheme operates is that New Zealand receives an allocation of emissions units based on our historical emissions. We do not know what that allocation will be post-2012 but given that an agreement comes out of Copenhagen or subsequent negotiations we will be given a target to reduce our emissions and we will be given an allocation of units. That allocation of units will be based on what our historical experience has been; it will be some percentage of our historical experience. That allocation will continue for a number of years—well beyond 2050. 
Under the Labour scheme the allocation of those units was to be reduced to zero in respect of all sectors by 2030. So at that stage New Zealand would have had surplus units and would have been able to sell those units to emitters. Essentially it amounted to a huge tax scam and I think Dr Smith talked about the Government receiving a lesser amount of revenue—those were the words that Dr Smith referred to—under the National scheme. Under the Labour scheme it is a fact that the Government was going to earn windfall gains of $2 billion a year from 2030. Accumulating those gains through to 2050 would have resulted in a massive tax windfall of something like $50 billion. The Labour Opposition trying to seize upon that to discredit the scheme used compound interest to take the figure to $110 billion. 
It is interesting that the Labour members focused on the fact that that took the projected deficit from 8 percent of GDP to 15 percent of GDP. They may well have ignored the fact that just 3 or 4 weeks ago Treasury made projections that took New Zealand’s debt out not to 15 percent of GDP but to 220 percent of GDP—10 times the figure that the Labour Opposition has waxed lyrical about over the last 3 or 4 days. The reason that New Zealand’s debt is projected out to 220 percent of GDP is the result of the massive failed policies of 9 years of Labour Government. 
I could not believe it when Hekia Parata talked about her constituents in Gisborne and Porirua. She said they were already struggling to pay their power bills. Well I ask Hekia Parata and all the members of this House what we will achieve by artificially increasing the price of electricity for every New Zealander by 10 percent from 1 January 2013 when it does not cost the companies that sell that electricity in respect of hydroelectricity anything more to produce. We are giving them a windfall gain of some $200 million or $300 million. I have made that claim 3 or 4 times today and it has not been refuted by anyone. Why is that? It is because it is true. It applied under Labour’s scheme; it continues to apply under National’s scheme. 
Rahui Katene talked earlier about the savings in electricity and petrol. She talked about the longer-term contributions they would make. Those contributions expire on 31 December 2012 so if Rahui Katene was talking about the savings in electricity for a period of 3 years I wish her luck but I got the impression that she was talking about the situation longer term and there are no savings there. All of the members in this House have condoned a tax on every New Zealander in respect of one of the most basic commodities: electricity. It is little wonder that the Maori Council is railing against this bill. 
We heard from the Federation of Maori Authorities which said this bill represented the greatest confiscation of Maori wealth since the 1800s. I will explain why that is so. It is because Maori have many thousands of hectares of forest land that could be converted into pasture. Trees could be felled and we could convert that land into pasture and dairy farms and we could create some wealth for New Zealand. And if we created some wealth for New Zealand we would actually set about reducing that projected deficit that Treasury makes of 220 percent of GDP down to something much more manageable. But the Maori foresters who have that land are denied that opportunity under the emissions trading scheme because if they fell the trees and convert that land into pastoral land to create greater wealth for New Zealanders they are faced with a penalty of some $20000 a hectare which makes it inefficient to do so. So in the absence of a change of approach in Copenhagen or subsequent agreements doing that will be inefficient because those foresters will be taxed and there will be a massive devaluation of Maori forest land. It would have happened under the Labour scheme and that has not been fixed under National. 
Rahui Katene talked about how Maori will do by having the free emissions units allocated to quota holders as opposed to fishers. I accept that but I explain to this House to all Maori and to all New Zealanders that that will apply only up until 31 December 2012. Why is that? Because there is no free allocation from 2013 onwards. The farmers get it and we can be thankful that both Maori and non-Maori farmers will continue to get an allocation of free units well into this century. But fishers will not. The fishing industry is trade-exposed and it is energy-intensive. The Minister for Climate Change Issues knows that because when he was in Opposition he wrote about that in his own National Party minority report just on 1 year ago. 
I sat up in the gallery 2 years ago and listened to the debate on the Electoral Finance Bill knowing that the Labour Government was going to vote into law a totally undemocratic change. Nothing can be more frustrating than speaking against this bill highlighting its deficiencies and knowing that in a very short time exactly the same thing will happen but it will be done by the National Government. Thank you. 
CRAIG FOSS (National—Tukituki) 
: 
 First of all I congratulate Minister Smith on getting the Climate Change Response (Moderated Emissions Trading) Amendment Bill to its third reading and on all the work that has been done both in the previous review committee and in the Finance and Expenditure Committee when the previous work came through from I think 2007. We all learnt a lot and there has been a lot of good information for members to rest on. 
I need to pick up a couple of points that the previous speaker John Boscawen made. He missed a key point when he talked about submissions. I tell that member that the only instruction I took about the number of submissions to be heard was an instruction from the committee. Actually the member is right: there was a vote. The member said “substantive submissions” but he is wrong. I tried to get the word “substantive” and the word “material” in there; that was missed by certain members. Thus all those submitters who wanted to be heard were heard. That is absolutely fine but speakers should not try to put heat on me because I could produce lists of submissions that various members wanted to hear and some of the stuff that is coming back is very cute. 
Anyway let us put that aside. The Climate Change Response (Moderated Emissions Trading) Amendment Bill is a very very good response. It is a response to the will of the electorate because the National Party put this issue before the electorate before the 2008 election. We laid out our principles: having intensity without a cap aligning with our partners keeping an eye on our competition balancing a scheme with our economy—you name it. I think most members acknowledge that we cannot look after our environment if we are not looking after our economy. Some parties I think would like to address only one side of that equation but their members get on jet aircraft use the Internet and globalise all sorts of things which seems to be contrary to every other speech they make. But I digress a bit. 
This bill is a response to climate change. It is a balanced response and it is a good legislative response. What seems to be missed is that on probably 80 to 85 percent of the points we and the other major party in this House are in general agreement. Some details about 5 or 7 years out are actually the key points. Some members are making more politics of this than others; I do not know what they will talk about once this bill is passed. This bill is also a good response to the recession that New Zealand finds itself in—not only the economic conditions this new Government inherited but also the recession that the whole globe is in at the moment. It looks as if we are possibly coming out of it so what Government would do anything to put New Zealand back into recession? What Government would do anything to impose higher input costs and a burden on households in a recession when it looks as if we just might be coming out of that recession? But with the fiscal record of the previous administration I am not surprised that they seem to be taking off down that track. 
This bill is a very good response to the New Zealand economy—to our profile and to our trade-exposed economy. We are an exporting economy so we want to be exporting goods and services and getting funds back into the country. We do not want to be exporting jobs factories and our kids’ futures to the rest of the world to pollute somewhere else in the world to the detriment of the future of this country. It is interesting that not one member on the other side when they got up and talked about children etc. raised that point. 
There are a couple of things I cannot let go. I fiscally embarrassed the members on the other side. I ask them just to be consistent. The $110 billion figure keeps coming up. As Minister Smith said earlier we will now apply the logic that seems to have been adopted by members on the other side including their leader. If he wants to earn his stripes he should not go down this path because on every single spending announcement made by Opposition speakers from now until the next election we will price the figure up and compound it at whatever the cost of capital is at the time. Members should just watch the figures blow out—the decade of deficits we inherited is about to blow. 
I will wrap up with one particular point that I found very offensive today. I am so surprised about what some members have said. I am really offended; they could have said much of what they were trying to say in different language. Quite frankly I am disgusted by the term “brownwash” which the Green Party has been using. I am disgusted by the term and by its implications and insinuations of trinkets beads and blankets in exchange for an arrangement National has with one of its coalition partners. Sure members can make their political points but they should not go down that line. If anyone ever said that of them they would be the first to go off to the Race Relations Commissioner so members should not go down that line. That phrase says so much more about their true selves and where they really stand. Now members seem to be backing away from the term but it is on the record. Its use was absolutely disgraceful—absolutely disgraceful. [ 
Interruption 
] This member did not use the terms that those members used during the debate or the term that that member over there used during question time. I think members should just taihoa look in the mirror and look at the rest of their caucus and they may see that many of them are very very offended by some of that language. I respect members’ points of view; I do not respect—and I am totally offended by—some of the language that was used by some members in this House today in and around this bill. I think I have made my point. 
I thank the Minister for Climate Change Issues I thank the officials and I thank the other members of the Finance and Expenditure Committee. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I acknowledge Craig Foss the member who has just resumed his seat who is the chairperson of the Finance and Expenditure Committee which considered this bill. I acknowledge all members who have contributed to this debate on all sides of the House. More than many debates this debate has been a multi-sided debate. I particularly acknowledge Charles Chauvel Labour’s spokesperson on climate change who I think has done a sterling job in bringing forward a range of facts for the public’s consideration and David Parker the previous climate change Minister and the current Minister Nick Smith who has been prepared to debate with other colleagues the pros and cons of this bill and who has made a contribution in this House. 
Having said that it is with both great sadness and I guess a slow-burning kind of anger that I rise to speak in the third reading debate. This debate is the bottom of the third innings—the time to sum up the various arguments if you like—and this is where we try to draw together the threads so that the public can make sense of the debate when they look back in the future. My sadness comes as I have repeated several times because this bill bequeaths to our children a harder problem than we inherited. 
This bill is fundamentally flawed. It will make New Zealanders poorer it will make our economy weaker and it will increase greenhouse gas emissions relative to the law that was on our books before we started the debate. Of course the bill locks in subsidies and condones the proposition that we have created property rights to pollute which is a precedent that this House will come to regret. My anger I think comes because National’s conduct over climate change policy has been I am afraid to say both sneaky and shambolic. 
The Finance and Expenditure Committee process has been the worst I have ever seen. It was nothing short of a travesty which is all the more ironic because the substance of this bill is crucial to the future of our country and our planet. Official information was withheld from the committee process. Only a minority of public submissions were heard and then only after much debate. There was no clause-by-clause departmental analysis. There was a regulatory impact analysis that Treasury described as inadequate. There was no revision-tracked bill because there was not time. There was no supplementary economic analysis no sensitivity testing and no justification of the numbers. 
The result is I am afraid to say a “Nick Smith shambles” of the very worst kind. We are left with a “cap and trade” system with no cap and intensity-based emissions subsidies that are effectively infinite and will cost $110 billion including compounding interest by 2050—in other words an extra 17 percent of Crown debt which effectively doubles the total amount of debt that this Government inherited at the time it took office. 
What is wrong with the bill that has led us to this conclusion? There is almost too much to cover but let me offer a few potted highlights. The essential and obvious flaw is that the bill is so generous to large emitters in industry and agriculture that it shields them from the very incentives they need in order to be able to plan with certainty an adjustment path that would lead New Zealand into a low-carbon future at the least cost. By succumbing to lobbying pressure the Government has neutralised the very point of the exercise from its inception. 
Big industrial emitters already received a generous 90 percent free allocation and a 10-year window before abatement commenced at 8 percent per annum under Labour’s legislation and this Government has made that even more generous. Now big emitters will have a two-for-one lead-in deal for the first 2 years and an artificially low carbon price of $25 a tonne. Carbon is trading at about $40 a tonne at the moment I am told so the taxpayer will wear the risk and cost of the difference. There is no cap in the “cap and trade” system globally; there is instead an open-ended intensity-based system that subsidises the worst polluters the most. 
There are inappropriately placed arbitrary deals that provide windfall gains to people who cannot control the emissions. In fisheries the allocation is to the quota holder not to the fisher who is in the position to make the decision at the margin about how much fuel to use. It does not go to the farmer who is able to decide what feed to use or what strain of animal to run but to the processor who is removed from the decision point. Of course at the end of the day there has been a refusal from the Government to negotiate in good faith either prior to when the bill was introduced in the House or when it was going through the House and not one single constructive amendment from the Opposition has been accepted. 
What is the effect of this sorry tale? Well these are the facts: the Sustainability Council says that actual emission reductions will be only half what they would have been under the existing Labour scheme. Large industry makes up 13 percent of the emissions and now faces only 1 percent of the cost. By contrast the activities of people in small businesses many of whom voted for National at the last election make up 11 percent of the emissions and those people will face 38 percent of the cost because they cannot lobby as much or as well. Agriculture makes up 49 percent of the emissions but it now faces only 3 percent of the cost. Total fiscal cost on agreed carbon price paths which is now bipartisan is between $50 billion and $110 billion by 2050. 
Hon Dr Nick Smith 
: You don’t believe that. 
Hon DAVID CUNLIFFE 
: Yes those are Treasury numbers I tell the Minister. I do believe it and so does he. The only argument that remains is whether to include the compounding effect. That may be arguable but at the end of the day even $50 billion is a big big number and it will affect our children. 
The bottom line is that polluters gain and New Zealanders pay. They pay through their taxes through forgone debt reduction tax relief or alternative expenditure as well as at worst through paying charges through an international carbon system. This is not balanced nor affordable and it is neither environmentally nor fiscally sustainable. 
The Government has put forward some fiscal counterarguments. The first is that it is not really debt. Well yes it is. Provided that one is carrying any debt at all then one faces an opportunity cost of reducing that debt purchasing other essential services or adapting to climate change. In plain English it is like when we have a mortgage and a credit card bill and we have income that we could use either to pay down our credit card or if we are not using our credit card pay our mortgage. This is a carbon credit card that prevents us from reducing our national mortgage by 17 percent of GDP by 2050 and that is huge. 
The Government is prepared to accept Treasury’s advice at face value on the long-term fiscal outlook but it is not prepared to accept the Treasury’s equivalent criticism of this bill because as the Minister of Finance has said: “Good advice is that which we agree with. Bad advice is that which we do not agree with.” That is devoid of integrity and it is no way in which to make good decisions. The second argument is that it does not matter anyway—that is Nick Smith’s favourite. He says that it does not matter whether it is a 1.5 percent abatement or an 8 percent abatement because it will be reviewed every 5 years. 
Business is crying out for certainty. Business people want a bipartisan agreement. They need to plan their affairs. That is why it does not help them for the Minister to artificially have a 1.3 percent abatement now but frighten them by saying that he will change his mind in 5 years’ time. That is a worst-case outcome. 
The final argument is that New Zealand is already out in front. Fifty percent by 2050 will not be out in front at Copenhagen. In any case independent authorities—including the statutory authority on that matter the Parliamentary Commissioner for the Environment—have stated on the record that even if one accepted the target there is no conceivable way that this bill can achieve it. Even if one accepts every other argument that the Government has made the mechanics of this bill fail to deliver even the Government’s own outcome. 
The lessons of this process are that no Treaty settlement is now final. In Rajen Prasad’s day as Race Relations Commissioner he and his team worked hard to get the citizens of New Zealand to accept the Treaty process as final. It is no longer final because Pandora’s box has been opened for $24 million - odd. 
NICKY WAGNER (National) 
: 
 I support the Climate Change Response (Moderated Emissions Trading) Amendment Bill because it is a common-sense response to an enormously difficult problem. After a couple of decades of debate discussion and policy making and after three select committee processes we finally have a practical and workable way to deal with New Zealand’s emissions. 
I thank Rahui Katene for her comments this afternoon. The Maori Party is a valuable and respected part of our Government and we enjoy working with it. I am also pleased that our Government has been able to sort out Ngai Tahu’s Treaty issues. We have come up with an intelligent solution—an intelligent solution culturally an intelligent solution environmentally and an intelligent solution economically. 
Although New Zealanders are very aware of and love our natural environment many of them have little capacity to financially contribute towards managing climate change particularly right now at a time of financial turmoil and recession. So for the first 3 years of this scheme as Kiwis learn better ways in which to deal with carbon emissions the bill will halve the costs for businesses and households. Labour’s scheme put a price on households of approximately $6 per week; National’s scheme will cost households about $3 per week. 
But the long-term motivation is to encourage all New Zealanders to embrace a low-carbon lifestyle and to modify their behaviour accordingly. The carbon charges will be a reminder and a stimulant for lower carbon use. Just as we saw a slow-down in the use of cars when petrol prices went up we expect the carbon charge to help people make better transport choices. To mitigate the increased costs of energy we have introduced the $323 million Warm Up New Zealand: Heat Smart home insulation scheme which has already within its first 6 months insulated over 20000 homes. Adding to that funding the provision for another 8000 low-income homes will mean that nearly 200000 homes will be insulated within the next 4 years. 
We are also making significant changes around industry allocation so that industry allocations are production-based and more closely aligned with the approaches of other countries particularly Australia. We do not want to cripple industries by making them uncompetitive with our trading partners. We need to challenge our businesses and organisations to embrace change and embrace new cleaner technologies but the key to this legislation is to support vulnerable trade-exposed businesses and to ensure that they and the jobs that they provide survive as the world transitions towards a lower-carbon economy. 
I have already discussed in earlier debates the lack of accurate information the partial information and the misinformation around this bill. Sadly we are still hearing it from the Opposition. I am prepared to accept faulty arguments when they are based on ignorance but there is no excuse for deliberately misleading the public. That is not right. 
In conclusion I reiterate five points about this bill. First the bill will ensure that New Zealand does its fair share in tackling the problem of global climate change. Second there is no taxpayer subsidy. Free international carbon credits that are allocated to New Zealand will be passed on to trade-exposed and emission-intensive industries. They will be used as they were designed to be: to support businesses to remain competitive internationally and to continue to provide jobs. The Minister for Climate Change Issues has already assured New Zealanders that the National Government will not be purchasing carbon credits to allocate to industry. Third the scheme will be fiscally neutral. There will be no windfall profits for the Government but also no long-term debt for the New Zealand public. Fourth the legislation is flexible. The first review is scheduled for 2011 and then every 5 years thereafter. In the face of international uncertainty and ongoing change flexible legislation is the key to a good outcome for New Zealand. Fifth this bill is the culmination of decades of discussion debate research and policy making. With the exception of ACT everyone in this House agrees that we need to take action to deal with climate change and that an emissions trading scheme is a reasonable way to go. The debate is only around the details. 
This is a good bill. It is workable and it is an affordable piece of legislation. It is high time that it was passed. 
MOANA MACKEY (Labour) 
: 
 This is a very very sad day for this House and this is a very sad day for a Minister who once used to tout his blue-green credentials but Dr Nick Smith will for ever go down in history as the man who put in place climate change legislation that damaged New Zealand’s economy weakened our position with our trading partners overseas and had no environmental credibility whatsoever. He will go down in history as the man who came into this House as a proud blue-green National Party member and will exit his role as Minister for Climate Change Issues by being known for putting together and passing legislation that makes New Zealand and New Zealanders poorer and I think that is sad. 
The one thing that I will be happy about when we finally pass this Climate Change Response (Moderated Emissions Trading) Amendment Bill is not having to be lectured any more by Nicky Wagner from a high moral ground that she has absolutely no right to inhabit. I noticed that there was an article in the Christchurch  
Press  
today in which Nicky Wagner explained how the Government’s emissions trading scheme will work—but actually she did not. In that article Nicky Wagner explained how the previous Labour Government’s emissions trading scheme works in terms of putting a price on carbon and influencing behaviour in that way. I say to Mrs Wagner that the legislation we are about to pass now does absolutely nothing like what she stated in that article. It will not reduce greenhouse gas emissions it will not put the full price of carbon on the emitters by 2030 rather than on the taxpayer and it will not change behaviour. 
We need to remember why we are here doing this because when we get rants from the National Party that we will be shutting down New Zealand if we try to do anything about climate change I think we forget why we are here. We are here because all the parties in this House with the exception of ACT and I acknowledge that believe that we need to do something about climate change and believe that this issue is so important that New Zealand needs to be seen to be playing its part. We also need to do this because we are an export-driven economy. We are incredibly susceptible to mood changes overseas and smear campaigns against our products so it is even more important that we are seen to be doing our bit even if that bit in percentage terms is not great when we look at the entire world picture. 
I was at a Commonwealth Parliamentary Association conference in Tanzania and the President of Tanzania gave a very powerful speech in which he talked about climate change. He said that the snowcaps of Kilimanjaro are disappearing. 
Nicky Wagner 
: What is their emissions trading scheme like? 
MOANA MACKEY 
: If Nicky Wagner listens to me I will tell her that he said that this is not a problem that Tanzania created. This is not a problem that Africa created but it is living with this problem every single day. The snowcaps of Kilimanjaro are disappearing. That is a water source for millions of people; it is a water source for their irrigation. The safari animals are starving the cattle are starving and the people are starving. The President said that his people do not have the luxury of sitting in a First World country arguing about the science and about which economic model to put in place that will cost their country the least because his people are suffering right now. He also said that we should not try to tell him that our farmers feed his people because they do not and they never will. He said: “You know what? Our farmers want to be able to feed themselves. That is what they want.” He begged the Western countries there to take action on climate change and to show some leadership. 
We also sit in the Pacific region. We need to be able to go to our Pacific neighbours whose islands are disappearing under water as we speak and who are facing salination issues because of the repeated floods and severe weather events in their region and show that New Zealand which has always been a strong advocate for our Pacific neighbours is doing its part. We can no longer do that. 
I think that if the National Government is not worried about what this might do in terms of our trading partners it only needs to look at the  
Guardian 
 article that appeared in the UK. This is another in a long line of campaigns against New Zealand products in Europe and in the UK. The  
Guardian 
 slammed New Zealand’s “clean green” and “100% Pure” branding as a cynical ruse and a shameless two fingers to the global economy. The article went on to state that per capita New Zealand is one of the world’s worst polluters with carbon emissions that are 60 percent higher than those of Britain. It decried our weak revised emissions trading scheme and mocked our reputation as a global leader in tackling climate change. If the Government— 
Hon Dr Nick Smith 
: Who’s been in Government for the last 9 years? 
MOANA MACKEY 
: The Minister should let me read that bit. The article decried our weak revised emissions trading scheme. The emissions trading scheme we have in place already is not that scheme I say to Dr Nick Smith. 
This is not an easy issue for Governments because everyone says that something needs to be done about climate change but no one wants to pay for it and that is what we found out at the select committee. Everyone has a reason why their sector is special or should be excluded. We acknowledge that it is difficult but that is why a Government has to show leadership and not just buckle to the strong lobbying of big corporate business interests as this Government has. 
What we have learnt in this process is that everyone in the world is wrong about climate change except Dr Nick Smith. We only need to look at the editorials. The Christchurch  
Press 
 headline was “Authority lacking” and the  
New Zealand Herald 
 had “Another sorry chapter in emissions farce”. We also had “Key should pull the plug on this dog of a bill” “Compensation deal discredits all involved” “Climate bill $92000 per person” “$50 billion rise in carbon scheme costs ‘shows process too rushed’ ” and “Carbon bill time bomb for taxpayers”. I ask why everyone in the country is wrong except for the Hon Dr Nick Smith. 
I thought it was interesting that when we were talking about Suzi Kerr who is a visiting professor at Stanford University and a well-known expert on emissions pricing Chris Tremain asked how good she could be if she had not managed to get the United States to put agriculture in its scheme. Suzi Kerr is not actually an elected representative of the US House of Representatives I say to Mr Tremain but that raises an interesting point about the United States. Dr Nick Smith is very very keen on aligning New Zealand with Australia and on going with an intensity-based approach because that is what Australia has done— 
Hon Dr Nick Smith 
: As is Europe. 
MOANA MACKEY 
: —and Europe. But what he did not tell people is that this would exclude us from working with the United States which will be one of the biggest markets for purchasing carbon credits. It will be one of the biggest sources of investment for clean technology. Section 728 of the Waxman-Markey Bill on climate change which was passed by the US House of Representatives explicitly bans the United States from linking its emissions trading scheme with any country that moves away from volume caps and goes to intensity-based allocation. That is precisely what we have done in this legislation and it did not have to be that way. It did not have to be that way. 
I will now come to the Maori Party comments. I appreciated the contribution of Rahui Katene at the Finance and Expenditure Committee and I very much appreciated her support for Labour the Greens and the ACT Party in ensuring that all the submitters who wanted to be heard were heard. I genuinely mean that. I also think that she was in a very difficult position at that select committee and I would not have wanted to have had to sit through all those submissions. It was difficult for her and she handled it with grace and I congratulate her on doing that. I am pleased that Rahui Katene has enjoyed working with the National Government so much and I am pleased it has been such a positive and self-affirming experience for her. It kind of misses the point on what I am complaining about in this legislation though. 
I will point out one of the things that I find really offensive. I have sat in this House both up in the public gallery and as a member of Parliament and I have listened to things that the Hon Dr Nick Smith has said. He stood up and peppered his speech today with words like mokopuna and Papatuanuku. I remember sitting in the House and listening to the debate on the local government bill that the previous Labour Government passed and hearing the Hon Dr Nick Smith say that Labour’s provision to allow councils to have Maori seats as we have in the Bay of Plenty was apartheid. He called that apartheid. 
Hon Dr Nick Smith 
: I did not. 
MOANA MACKEY 
: Yes he did. He is smiling now because he knows that he did. I find it incredible that a member whose party had “Iwi/Kiwi” billboards up not that long ago and who had a big ““One law for all the beaches belong to everyone” billboard paid for by the taxpayer called having Maori seats apartheid and is now standing up peppering his words with Maori and acting as though those things did not happen. That is not sustainable. 
I say to Rahui Katene that the fact that ACT and Labour have been such strange bedfellows on this legislation and have both voted against it shows just how bad the bill is and how bad the process has been. We oppose the bill for very very different reasons but we both agree on the process. The process has been one of the worst I have ever seen in my time in Parliament. The bill went through the select committee process in 6 weeks. 
Hon Dr Nick Smith 
: Oh rubbish! What about the 800 amendments on Auckland? 
MOANA MACKEY 
: I ask Dr Smith how other many bills he has seen that have not had a revision-tracked version and have not had a clause by clause analysis. The answer is none; that is exactly how many. 
Rahui Katene commented on fisheries. She praised the move from vessel operators to quota holders and I think that really sums it up. That means that the Maori Party is favouring big corporate interests over the small-business people who run those fishing boats. I think that is—let us be honest—where we got on this because the average cost to Maori households will increase dramatically. Power prices will not go down. The Government cannot force companies to drop power prices. It will not do that. It did not happen in Europe; it will not happen here. It is simply another handout that will not result in any lowering of costs for the New Zealand taxpayer. Power prices will not go down or be halved as a result of this bill. 
AMY ADAMS (National—Selwyn) 
: 
 It falls to me to take the last call on this third reading debate on the Climate Change Response (Moderated Emissions Trading) Amendment Bill. I am very pleased to say that this bill gives us a good balance between environmental objectives and economic realities. That is what it does; it takes the two most important issues facing the world and facing New Zealand—the environment and the economy—and says that we need to come up with a solution that is responsible that does our part environmentally but that also protects our economy and our jobs. It is a balancing game; there is no question about that. We have deeply ingrained zealots on both sides of the debate who will not see any other position but their own. But the answer has to lie in the middle between balancing those two positions. I think the Minister and the officials as I said in my earlier contributions have done an excellent job of that. 
We are doing our part as a country in this debate. We should remember that New Zealand produces 0.2 percent of the world’s emissions; that is what we are talking about here. When we talk about the seas rising over Pacific Island countries 99.8 percent of that we cannot influence so let us get real about it. Do we really want to throw our businesses under the train so that they can beat the drums about what they are doing? The reality is that New Zealand can only play its part—and this bill does play its part. 
I find it really interesting that when we look at this bill in actual fact members across the House agree on more about the structure of this system than we disagree about. Labour wanted an emissions trading scheme; we are proposing an emissions trading scheme. Labour was going to give free allocation to business; we are giving free allocation to business. Labour was going to give 90 percent of its top level of free allocation; so are we. So when Labour members talk about subsiding business let us remember that Labour was going to give 90 percent allocation to industry. 
Interestingly enough it has come out in subsequent discussions that even Labour members conceded that there were problems with their bill and the 8 percent phase-out was not going to work—it was going to be too tough. They knew that. They were prepared to compromise on it. I tell members that they were even prepared to agree that industry should get an increased allocation. We were getting very close. 
Do members know why we do not have broad bipartisan support on this? Do members know why? I will tell members exactly why. It is because Labour hates farmers. It has a visceral deep abiding hatred for farmers. I cannot wait for 2011. I cannot wait to get up on the hustings versus a Labour candidate who will tell rural New Zealand that Labour will unwind the National bill and increase their costs from $3000 a year to $30000 a year. That is what the bill for the average farmer would be if Labour had its way. It would not be the $3000 a year that we are talking about—it would be $30000. And to any Labour candidate who wants to campaign in rural New Zealand on a platform of Labour putting farmers out of business because that is ideologically right I say good luck. If Labour candidates think they will go to rural New Zealand and tell people there that they will put up their costs tenfold and give them a $30000 bill and that Labour is prepared to give intensity allocations to industrial sectors but not to farmers I say good luck with that. 
This Government realises that farmers are the backbone of this economy. They are getting 80 percent of the $50 billion allocation that members talk about. When Labour talks about that money going to big industry I point out that it is not going to big industry; 80 percent is ensuring our farming sector can continue to survive and can continue to put food on the shelves to feed the world. I say “Come on 2011.” If Labour is going to honestly campaign on a platform of putting up the costs to farmers to $30000—a tenfold increase—good luck! 
This is an excellent bill. It is a very good balance between economic and environmental responsibilities. I am pleased to see that this Government is taking steps to halve the cost for Kiwi households. It is a good bill and I support it. 
A party vote was called for on the question  
That the Climate Change Response (Moderated Emissions Trading) Amendment Bill be now read a third time. 
Ayes 63 
New Zealand National 58; Maori Party 4; United Future 1. 
Noes 58 
New Zealand Labour 43; Green Party 9; ACT New Zealand 5; Progressive 1. 
Bill read a third time. 
Policing (Constable’s Oaths Validation) Amendment Bill 
Procedure 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 I seek leave for there to be one debate of 12 10-minute speeches on the motion that the Policing (Constable’s Oaths Validation) Amendment Bill be now read a second time. 
Mr DEPUTY SPEAKER 
: Is there any objection to that course of action? There is no objection. 
First Reading 
Hon JUDITH COLLINS (Minister of Police) 
: 
 I move  
That the Policing (Constable’s Oaths Validation) Amendment Bill be now read a first time 
. 
Bill read a first time.  
Second Reading 
Hon JUDITH COLLINS (Minister of Police) 
: 
 I move  
That the Policing (Constable’s Oaths Validation) Amendment Bill be now read a second time 
. I take the opportunity to thank the parties represented in Parliament for their support of this legislation. The Policing (Constable’s Oaths Validation) Amendment Bill is validating legislation. It will deem oaths of office taken by police employees between 1 October 2008 and 12 October 2009 to have been administered as though the persons administering those oaths had been authorised by the Commissioner of Police. It is a straightforward amendment involving the insertion of one new section into the Policing Act 2008. It is to come into force the day after it receives the Royal assent. 
The background to the bill is as follows. On 1 October 2008 the Policing Act came into force. Prior to this the constable’s oath was taken before a justice or commissioned officer; in other words an inspector or above. A justice or commissioned officer was not required to be specifically authorised to administer the constable’s oath. Section 22 of the Policing Act instituted a new procedure for administering that oath. 
Under the new Act the oath can be administered only by the commissioner or a person authorised by the commissioner. As well the new Policing Act requires a person administering the constable’s oath to be satisfied that each police employee taking the oath has been adequately trained to exercise the powers of a constable and is capable of exercising the powers of a constable. 
Between 1 October 2008 and 12 October 2009 the constable’s oath was administered to police employees graduating from the Royal New Zealand Police College by senior police employees based at the college. Persons who were able to administer the oath under the Policing Act 1958 assumed that that ability continued under section 22. Since 12 October 2009 one recruit wing has graduated from the Police College. The constables’ oaths were administered to that wing by persons authorised under section 22 of the Act—that is the commissioner or a person authorised by the commissioner. 
So police employees graduating from the college on and from 13 October 2009 have unquestionably had constabulary powers conferred upon them. However uncertainty about conferral of those constabulary powers continues for those police employees who purportedly took the constable’s oath between 1 October 2008 and 13 October 2009. It is important that people have confidence that officials are properly invested with statutory powers and taxpayers should not be obliged to meet the significant expenses that would be incurred if all exercise of statutory powers taken by the affected employees were subject to challenge. 
The bill will deem the oaths taken by affected constables to have been administered as if the persons administering the oaths had been approved by the commissioner. It will remove any doubt about the validity of the actions of the affected police employees and thereby promote certainty and confidence in the acts carried out by them. 
The bill is consistent with the New Zealand Bill of Rights Act. The bill does not retrospectively validate any actions that could be seen as inconsistent with the New Zealand Bill of Rights Act. The bill does not legitimise unlawful actions by the police in the event that a person’s rights have been infringed by any of the affected police employees. A claim under the New Zealand Bill of Rights Act would still lie. I commend this bill to the House. 
Hon ANNETTE KING (Deputy Leader—Labour) 
: 
 I rise to support the Minister of Police in passing through all stages the Policing (Constable’s Oaths Validation) Amendment Bill 2009 today. The Minister has clearly set out the reasons for this bill and I am pleased that members are supporting the Minister in ensuring that it passes smoothly through the House. 
The Policing Act 2008 replaced 50-year-old legislation. It was legislation that went through a very long process. There was a 2-year process of consultation consensus agreement and finally the passage of the bill. A positioning paper put out for consultation was followed up with something like eight scoping papers that addressed many parts of the old Police Act then a consultation document and finally a draft bill. Throughout that process there was close collaboration and work between all parties in the House and I think it was one of those bills where there was buy-in by all parties to ensure that we got legislation for the police of New Zealand that had the broad support of this Parliament. As the former Minister of Police that was really important to me. 
At the time of the passage of the bill I thanked the parties that had been involved and worked so constructively to ensure we had good legislation. We thought everything was right in the bill but we now find that there could be a technical error in it. Therefore we ought to correct it as quickly as possible. As the Minister pointed out in the past at the swearing in of a new police officer the oath was taken before a justice or commissioned officer of police. The new Act changed that process. A new process was put in place one that I think was definitely an oversight so the police carried on with the old requirements under the old Act. This legislation will ensure that it will validate any of those oaths that were taken in the period that the Minister has already set out. 
I say to the Minister that we support her in this measure. We do not wish to delay it longer than is necessary and I hope that the House can see the bill passed speedily. It was suggested to me that there could be some people out there who would be cheering if they thought their arrest for a particular issue during the stated period now no longer stands. We can assure them that that is not the case. The officers who were sworn in under the amended regime will be just as well sworn in after the passage of this bill. I commend this bill to the House. 
Bill read a second time. 
Instruction to Committee 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 I seek leave for the Committee stage on this bill the Policing (Constable’s Oaths Validation) Amendment Bill to be taken as one debate with six questions at the end. 
Mr DEPUTY SPEAKER 
: Is there any objection to that course of action? There is no objection. 
In Committee 
Clauses 1 to 4 
Hon ANNETTE KING (Deputy Leader—Labour) 
: 
 There are four clauses in this bill: clause 1 specifies the title clause 2 specifies the commencement date clause 3 specifies the principal Act the bill is amending and clause 4 validates the constables’ oaths taken by police employees from and including 1 October 2008 through to the close of 12 October 2009 which had not been administered in accordance with section 22 of the principal Act. There are no issues to raise other than that. 
Clauses 1 to 4 agreed to. 
Bill reported without amendment. 
Report adopted. 
Third Reading 
Hon JUDITH COLLINS (Minister of Police) 
: 
 I move  
That the Policing (Constable’s Oaths Validation) Amendment Bill be now read a third time 
. I take another opportunity to thank all members of the House for the extremely constructive way in which they have dealt with this amendment bill. 
It is validating legislation. It will deem oaths of office taken by Police employees between 1 October 2008 and 12 October 2009 to have been administered as though the persons administering those oaths had been authorised by the Commissioner of Police. It removes any uncertainty about conferral of constabulary powers for those Police employees. It is a very simple administrative provision. It fixes the matter. I commend this bill to the House. 
Sitting suspended from 6 p.m. to 7 p.m. 
Hon ANNETTE KING (Deputy Leader—Labour) 
: 
 The Labour Opposition supports the Government in the passage of the Policing (Constable’s Oaths Validation) Amendment Bill . 
Bill read a third time. 
Corrections (Contract Management of Prisons) Amendment Bill 
In Committee 
Part 1 Amendments to allow contract management of prisons 
Hon RICK BARKER (Labour) 
: 
 Seldom does this House get bills before it that are completely ideologically driven. The Corrections (Contract Management of Prisons) Amendment Bill is one of those rare bills. It is completely ideologically driven. There are no good reasons for supporting this bill; in fact all of the evidence is to the contrary. 
The right wing has as its philosophy cutting taxes privatising contracting out and deregulation. This Government is displaying all of the characteristics of an extreme right-wing view. This bill is one of those displays as it is about contracting out. The Law and Order Committee heard in submissions on the bill that the annual cost per prisoner to the public of operating the Auckland Central Remand Prison as a private prison was $33900 but the cost when the State ran it was $32000. As privately running it meant an increase in cost the committee was left wondering over and over again why we would do so. We heard no good reason other than simply ideology. When we look around the world at experiences in the United States Canada and Britain we see that all of the evidence shows that private prisons do not work. 
The second very important point is that we are considering contracting out one of the most powerful and fundamental rights that this Parliament takes upon itself which is to incarcerate its citizens. The executive arm of Government does not do that. The judiciary does not do it as of right. This Parliament sets the laws this Parliament gives the judiciary the power to put people in prison and deprive them of their liberty and this Parliament elects an executive to administer the prisons that undertake that work. It is not the executive that delegates power from the Minister of Corrections to the Chief Executive of the Department of Corrections; it is this Parliament. 
This matter brings us to several of the amendments that the Labour Opposition is moving. We have put forward three Supplementary Order Papers that would ensure that Parliament has direct scrutiny of the operation of prisons. The Government has put forward this bill on a “trust us we know what we’re doing” basis. It is saying that the chief executive of the Department of Corrections under the observation of the department’s own auditors will supply us with sufficient good information. Well I do not accept that at all. This Parliament has an Officer of Parliament in the form of the Controller and Auditor-General because it does not have complete faith in the audits that executives may choose to take. Some people think that once there has been an audit that is it all is done. But several names show the failures of auditors: Enron WorldCom and Arthur Andersen LLP. All of those firms were thoroughly audited yet collapsed and crashed spectacularly. The paperwork was perfect. That shows that independent scrutiny is important. 
One of the amendments we are moving Supplementary Order Paper 88 will give the Office of the Controller and Auditor-General the authority to go into prisons and ask directly for information. The select committee considered this matter and received advice that the existing powers are sufficient for the Office of the Controller and Auditor-General but Labour’s view is that the powers still leave the office at arms length with no direct ability to investigate for itself. One has to ask why this is. The answer is simple: the Department of Corrections driven by the ideology of the current Government wants to contract out prisons. If it does so it will inevitably contract them out to foreign companies from Australia the United States Britain—you name it. How this export of New Zealand dollars will be good for New Zealand I do not know. The Government has not explained this yet but no doubt the Minister of Corrections Judith Collins will tell us how the export of profits from our prisons is good for New Zealand. I can see no logical argument that would demonstrate that. 
The second thing is that these will be privately run institutions. Companies that run them under contract will not be subject to the scrutiny of the select committee and will not be subject to the direct scrutiny of this Parliament. We will give them the power to hold people in prison and deprive them of their liberty and we are expected to believe that we can trust them to do everything well. Well I do not believe that because the committee heard from submitters that figures had been massaged. Staff who were on the job in private prisons testified to the committee that they massaged figures to suit their employers—that is what they wanted—and to suit the administration of the day. I simply do not trust this Government with these matters. I believe very strongly that the Opposition and Parliament should have the ability to scrutinise these activities. That is why Labour is moving an amendment to ensure that the Office of the Controller and Auditor-General can on its own initiative if it so chooses go into private prisons interview staff and go through all the details itself rather than relying on the advice of the Department of Corrections or its auditors. 
We also believe as shown by our Supplementary Order Paper 87 that this amendment should apply to the Ombudsman as well. The argument has been put that the Ombudsman can get access to this information but again it can do so only indirectly; it cannot get it directly on its own motion. We believe that that is a weakness. 
The third amendment put forward by the Labour Opposition Supplementary Order Paper 86 will restrict the length of contracts. We are very mindful that we are dealing with public money. This is not the money of the Department of Corrections and it is not the money of the Minister; it is taxpayers’ money. The Opposition is very concerned to ensure that the money put into these contracts is well spent. We do not want to bind future Parliaments by having prison contracts that run for 12 20 or 25 years. We believe that the next Government that comes in in 3 years’ time must be able to examine such contracts to see whether they suit that particular Government. The contracts are hardly likely to suit it because the department’s own figures show that on every measure contracted prisons are more expensive to run than publicly run prisons. The American experience shows that they are more expensive and run worse than those run directly by the State. The Canadians experienced this and got rid of private prisons because they were poor performers. The British got rid of them also because they were poor performers. They do not work. 
If this Parliament gives power to the judiciary to deprive people of their liberty and gives power to the executive to hold people in our prisons then as a fundamental principle it should have the right to inspect and scrutinise that work directly. If a prison is run by a private company we will not have that power. The power will be held by the private company and we will not have the ability to haul the company before the select committee to interrogate it. We can talk to the Department of Corrections but of course the department and the Minister will have a vested interest in ensuring that the figures look good. They will work with staff to massage the figures as we have already been told by people who have worked in privately run prisons. They made sure that those prisons looked good—that is exactly what they did. 
Nothing we have heard so far justifies this legislation other than ideology. It is ideologically driven because all of the facts stand in opposition to it. It is ideologically driven because National believes in contracting out. There is no justification for it at all. 
If members look at the legislation that has been put forward they will see that it states in new section 199 to be inserted by clause 5 that in the contracted prison standards are to be “no lower” than in public prisons. The Minister in the chair says that the privately run prisons will all be better than public prisons. Well why would one not state in the legislation that contracted prisons must always perform better than publicly run prisons? Of course National will not write legislation to that effect because it cannot deliver on it. The only restriction on our prisons from doing better is a lack of resources. The people who run our prisons are very able very capable and very innovative and they will do better if we give them resources in every particular regard in terms of holding people in prison. The restriction on them has always been by way of resources. 
This legislation not only is ideologically driven but also lacks ambition. It lacks ambition because National wants to see privately run prisons do only no worse than those in the public sector. This lack of ambition will be at a cost to the taxpayer. Every figure that the Law and Order Committee received shows that privately run prisons were more expensive than State prisons. There is no question about that. National members of the committee tried to get figures to show that privately run prisons were better but they could get none—not one example of how they were better. The world experience shows that contract prisons are worse and inferior to those run by the State. 
Hon JUDITH COLLINS (Minister of Corrections) 
: 
 It is a pleasure to follow that member Rick Barker. It was particularly good to hear him talk about the wonderful work of the Department of Corrections. I am sorry to say that in the Law and Order Committee today during the review of the Department of Corrections Rick Barker did not show any confidence in the department at all. In fact he quoted extensively some terrible recidivism rates and he talked about how the department should be ashamed of itself. Then the member realised as one of our members pointed out that he had in fact been referring to the 2007-08 annual report all of which was under the previous Labour Government. So when that member now wants to praise the Department of Corrections I say good on him for doing so because there has been a massive turn-round this year under this Government and it is good to hear that we finally have a good Government helping and working with the department and great performance. 
That member also raised issues about cost. I did not realise that the Labour Party was such a low-cost option but obviously that is what it wants. Prisons are not just about incarcerating prisoners; they are actually about keeping the public and our staff safe and they are also about rehabilitation and that is why this Government is committed to the rehabilitation of prisoners. We know that when we have a prison being run efficiently along the lines so that we get the best value for money we have more money to spend on rehabilitation. We know from the Auckland Central Remand Prison experience that the member talked about that the prison was the only remand-only prison in New Zealand at the time it was running. Therefore comparisons with others are somewhat wonky. Frankly the Auckland Central Remand Prison contracted for 70000 hours of rehabilitation a year for prisoners and the last year the prison was in operation it actually produced about 120000 hours of rehabilitation—well above its contracted level. Yet at the same time remand wings in our prisons were not doing that. When we are looking at numbers it is important to be realistic about what we are talking about. 
The people who privately ran the Auckland Central Remand Prison brought iwi into prison management. They did a fantastic job. I went to see that prison when it was running—and as a lawyer I had been into other prisons before—and I knew that that prison was the best prison I had ever visited. The reason is that the whole attitude was about respect. When I went to the prison the staff said that they ran a culture of respect. Earlier this year I went to see four prisons in Australia. The member who has just resumed his seat Rick Barker says that this is all ideologically driven. Well the prisons I went to see in Australia were all in Labour-run states in Australia so I am not sure about the ideology there. In fact they have been Labour-run states pretty much since Adam was a cowboy. We went to see two in Victoria and two in Queensland. What I saw there were maximum security prisons where I could walk around with other visitors in amongst the prisoners in a situation where I actually felt safe. That is not something we could say about all of our maximum security prisons in New Zealand. I also saw rehabilitation and I saw rehabilitation working. 
Hon Lianne Dalziel 
: You’re talking about a remand prison. 
Hon JUDITH COLLINS 
: They were not remand prisons. These were actually maximum security prisons. 
Hon Lianne Dalziel 
: A remand prison is slightly different. 
Hon JUDITH COLLINS 
: No they were not actually. There was one that was; all the others were maximum security prisons. 
Grant Robertson 
: Oh one was—so all the others weren’t? 
Hon JUDITH COLLINS 
: Three were not of the ones I went to. I saw some rehabilitation and I saw some efforts being made towards securing the best outcomes for prisoners. We already do what we can in the corrections area. The Department of Corrections has really improved in its performance this year and it is great to be able to say that. But we can do better. One of the ways of doing better is to be able to benchmark ourselves against international standards and look at what we can do. 
The member who has just resumed his seat talked about cost cost and cost again. But private prisons in New South Wales cost 32 percent less per prisoner than public prisons. The member did not want to talk about that. In Victoria they cost 11 percent less than public prisons. So when we are talking about cost we should look across the ditch and see what has been happening in states where there have been privately run prisons for years. The member also talked about the State needing to take over this role because of a constitutional issue. Well actually we also have privately run and contracted transporting of prisoners. In fact that happened under the previous Labour Government. I did not hear Labour members talking then about it being ideologically impure and I did not hear them talking then about the need to have the State doing every single thing because otherwise it would not be right. 
One of the great things about having privately run prisons apart from benchmarking is the fact that we can actually have fines and incentives for programmes and for performance. That is not something we can really have in the State-run system. What we would like to be able to do is look at how we can make rehabilitation and a lessening in the rate of recidivism part of our contract management. Members also talked about the need to have the Auditor-General roaming through our prisons. I do not think that is necessary when we have it quite clearly stated in the legislation that there will be prison monitors appointed by the Department of Corrections who will be responsible to the chief executive. One of the other good things about that clause if the member wants to look at it is that it means those monitors have to be changed on a routine basis so that we do not get people who get captured by the environment in which they are working. I think that is incredibly important. 
Over the past few months people have said that we have been talking to people who have been running privately run prisons. Yes we have. A lot of people who have come to see us have talked about privately run prisons and we have been to look at them in Australia. I can say that every single one of the people who have talked to me has made it very clear that we want strong iwi involvement in prisons in this country. Fifty-one percent of our prison population is Maori. That is a shocking statistic and it is certainly not getting any better. I expect that we will have a great input of iwi in particular into rehabilitation. We think that is absolutely crucially important and that is why I would love to be able to see the Labour Opposition come out and support the work of my Associate Minister of Corrections Dr Pita Sharples—in particular in relation to the rehabilitation unit that he is putting together. Yet all we heard from the Labour Opposition—actually from Mr Cosgrove to be fair to the rest of its members—was about a race-based justice system. Actually that is the sort of nonsense we have heard from that party in Opposition over prisons. What we should be doing is looking at what works. 
Hon Lianne Dalziel 
: Do you want me to go and get the  
Hansard  
of every time you said that? 
Hon JUDITH COLLINS 
: No—well I tell the member to find one. In fact I think it is extremely important that people look at what works. That is why we are putting through this bill with the support of the ACT Party United Future and the Maori Party and I would like to thank those parties for their support. That is what we are doing. It is about good outcomes for people and good outcomes for all New Zealanders. 
Chris Hipkins 
: Tell us the evidence; there is no evidence. 
Hon JUDITH COLLINS 
: I know that Mr Hipkins does not think there is any evidence at all in relation to the Maori units that Dr Sharples is looking at but I say to Mr Hipkins that I think it is really important to give things a go and go for the best outcomes. We have 20-odd prisons in this country. We will have at least two that will be privately run. That is what we are looking at—not wholesale privatisation but a reasonable benchmarking against which we can benchmark ourselves. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 Article 3 of the Universal Declaration of Human Rights states: “Everyone has the right to life liberty and security of person.” and that is what this debate is about. The reason we are debating this matter from a human rights perspective is that the implementation of the Universal Declaration of Human Rights is something we have responsibility for. That responsibility for the deprivation of liberty lies with the Crown and it simply cannot be contracted out to just anyone the Government of the day considers might be appropriate. 
I think that the Minister in the chair the Hon Judith Collins needs to think seriously about the consequences of a Supreme Court of Israel decision that came out late last week on Thursday 19 November. It is a very interesting case and I believe that it has relevance to this particular debate because essentially the Supreme Court of Israel has overturned the privatisation of prisons in Israel. It has done so on constitutional grounds because of the fundamental breach of human rights that the process recommends. I do not have the actual decision in front of me but I do have a report of the decision. It reports the President of the Supreme Court of Israel as saying: “Israel’s basic legal principles hold that the right to use force in general and the right to enforce criminal law by putting people behind bars in particular is one of the most fundamental and one of the most invasive powers in the state’s jurisdiction. Thus when the power to incarcerate is transferred to a private corporation whose purpose is making money the act of depriving a person of his liberty loses much of its legitimacy. Because of this loss of legitimacy the violation of the prisoner’s right to liberty goes beyond the violation entailed in the incarceration itself.” The president also argued that “in a prison run by a private company prisoners’ rights are undermined by the fact that the inmates are transformed into a means of extracting profit.” 
Sandra Goudie 
: Rubbish! 
Hon LIANNE DALZIEL 
: “Efficiency” the president wrote “is not a supreme value when the most basic and important human rights for which the state is responsible are at stake.” 
Sandra Goudie 
: What a load of rubbish! 
Hon LIANNE DALZIEL 
: I know that members opposite do not care about human rights. I understand that and the interjections coming from the chair of the Law and Order Committee I expect from her because she does not have the same background as her colleague next door to her who at least has picked up a law book and read it which could be surprising. But maybe the Minister of Education could read a book to her—maybe that would be a good idea; if it had enough pictures we would probably be away laughing. 
But the point that I want to make is serious and the serious point I want to make is that this decision is the beginning of the end of the international privatisation of prisons. It is the beginning of the end because I believe that this case will become the foundation stone for cases that will be taken to the International Court of Justice which will overturn what has been a fundamental breach of the Universal Declaration of Human Rights by the privatisation—for profit—of the deprivation of liberty. I am not arguing that any of the individuals concerned are not entitled to have their liberty deprived; they have committed crimes for which they will be held accountable. But this case says and puts it very well that the loss of legitimacy when profit is being made out of their incarceration is beyond that for what would otherwise be a violation of a basic human right. So I believe that the Minister does need to respond to this very recent decision. It is the beginning I believe of a series of cases around the world where the fundamental tenets that support our justice system in this country will be challenged in international jurisdictions and where those of us who have gone down this track will be held to account. 
The second thing that I will say is not so much in relation to that decision but to what happens when there is a change of Government because we have made it absolutely clear that this will end in the same way that it ended after Labour became the Government in 1999 and inherited the Auckland Central Remand Prison under private management. I would like the Minister to respond to the content of the report. I know that she has probably not read this part of the report back from the Law and Order Committee because it comes under the heading “New Zealand Labour Party minority view”. But I am assured and the footnote states that the source of the information—and it is reprinted exactly—is from the “Department of Corrections … request for further information from the Law and Order Committee”. So this information comes from the Minister’s department and I just want her to respond to these per prisoner costs as tabled in the report. 
When the Auckland Central Remand Prison was under private management from 1 July 2004 to 30 June 2005 the cost per prisoner was $35700 for operating costs only and $57280 inclusive of property-related overheads to look after a single prisoner. Remand prisoners held in other public prisons in that same period were only $32000 and $50208 by way of comparison. There are those who would say that the Auckland Central Remand Prison had particular additional costs so that in the year after it went back into public management it would of course have cost more because costs would have risen. But in fact no the costs went down. The comparable figures per prisoner were $33900 and $55853. 
I am really confused about the Minister’s comments that the private system is more cost-effective. Why then did it cost more when the Auckland Central Remand Prison was under private management from 2004 to 2005 than it cost from 2005 to 2006 under public management? Obviously at that time when other costs had gone up the system under public management still cost less than it had cost the year before under private management. That to me is the second element of the argument against the privatisation of the prison function. Although there are statements as to privatisation being more cost-effective in fact I cannot find examples anywhere of where it is. And the figures that the Minister has used to compare public with private of course do not mention that prison officers get paid less in a private prison and that the ratio of officers to prisoners is substantially lower as well. I do not think that it is reasonable to say that we are comparing apples with apples. I think we heard the comparisons from someone today about “apples and apples” “oranges and oranges” and “apples and oranges”. But the point is that no comparison can be made unless we actually have a clear statement as to the nature of the terms of engagement for officers. 
Officers do this important work on our behalf. This is not work that anyone would choose particularly to do and the fact that we have loyal prison officers within our corrections system willing to undertake that role on our behalf and on behalf of the State is something that we should value and not contract out to the lowest bidder. 
That brings me to my third point which is the ability to have genuine supervision over what occurs in our prisons. I totally support the Supplementary Order Papers that have been tabled by my colleague the Hon Rick Barker. The first is in relation to the Ombudsman; the second is in relation to the Auditor-General. I do not think it is good enough to have a prison reporting through a department. There is nothing better than to have the direct oversight of those who have the standing and the independence of both our Ombudsman and our Auditor-General in respect of ensuring both that the processes being conducted within the corrections system are being conducted in a proper manner and that there is accountability and transparency back to this House. That is where the accountability and transparency must lie. If it does not lie here then I really do think that the Government has lost the plot as far as our obligations go. 
The third Supplementary Order Paper that my colleague has tabled is to ensure that no contract is let for more than 3 years. That is a very good Supplementary Order Paper because it makes it very clear to anyone who is possibly even thinking about taking advantage of contracting for one of our prison managements that they will have that contract overturned after a change of Government. 
SANDRA GOUDIE (National—Coromandel) 
: 
 After listening to the Opposition one would think that the end was nigh. I just cannot believe how overblown it is making this whole issue. I want to make a few comments and I will quote from a report around contestability. There are three things I want to talk about. One is the Australian study comparing two new-generation public sector prisons where the operating arrangements in the industrial award have been negotiated by the state Government under an explicit threat of market testing with two old-style prisons. 
Grant Robertson 
: Take it slowly Sandra. 
SANDRA GOUDIE 
: Well there are three quotes here so it could take a while. I would be surprised if the Opposition members are listening actually even though they need to learn a bit. 
Hon Member 
: They don’t understand Sandra. 
SANDRA GOUDIE 
: Well that is the problem and I guess this issue is mostly around union protectionism really. The bottom line is that competition actually does work. 
The Australian report states: “The authors of the study compared overtime and sick leave which were regarded as major sources of inefficiency in the traditional prison estate and found significant improvements. To our knowledge this is the only study that has explicitly explored the efficiency gains from threatened competition.” Well that is what Labour members do not like. They cannot stand competition—the idea that somebody might make one dollar more than somebody else. They cannot stand that. They would rather have inefficiency because they cannot stand competition. They cannot stand the fact that competition generates innovation and new ideas and a new way of exploring how to do things. 
The report goes on to state: “One of the most significant impacts of introducing competition into custodial services has been to force prison managers to explore new service designs and management regimes. … A national survey of 65 private correctional institutions across the United States … found that on average staffing levels were … lower … Moreover where public prison operators were exposed to competition this was one of the most common ways in which they strove to reduce their costs.” Then it goes on to say—and this is the final quote I will use—“Competition has played an important role in the adoption of innovative new approaches to prison management”. Is the Opposition listening to this? 
Hon Darren Hughes 
: No. 
SANDRA GOUDIE 
: Well the Opposition members should listen because time and time again they miss the point. 
Jonathan Young 
: It’s all about ideology. 
SANDRA GOUDIE 
: That is right—it is all about ideology. It is not about the reality of the situation. The Opposition is driven solely by its ideology and its love of unions. The Opposition wants to protect union members’ jobs and make sure they are secure. Competition does bring in new ideas and new approaches to prison management and brings the dissemination of best practice across both the public and private sectors. The two sectors actually benefit each other. 
The last argument put forward by Ms Dalziel was about the lack of monitoring and accountability. Well the fact is that there is a tonne of it in the bill as the Opposition members will see if they look at it. Some of that monitoring and accountability was generated through good discussion from the members of the Law and Order Committee. There were times when we had reached consensus on some of the ways forward but there were other times of course when we could not possibly do so because the ideology was a bit of a roadblock. There is plenty of monitoring and accountability. A monitor is to be appointed for each contract prison and the chief executive can appoint further monitors for different and particular purposes. There are also assistant monitors. So there are primary monitors monitors for particular purposes and we also have assistant monitors. We actually have three levels of monitoring. 
Hon Darren Hughes 
: It’s a land of opportunity this country. 
SANDRA GOUDIE 
: Just how much oversight does this Opposition—this Labour Opposition; the nanny State party—need? The Labour members just cannot get away from the fact that they are not happy unless they have a whole heap of monitors. [ 
Interruption 
] That is absolutely right; they do not trust anyone. 
What is the next Opposition argument? The next argument is that it is wrong that the running of prisons should offer the potential to make a profit. Well for goodness’ sake! If it were not for a bit of profit we would not survive in the economic world today. The Opposition members just do not understand business. They do not understand how to make a buck and we can understand why that is the case. 
DAVID GARRETT (ACT) 
: 
 It is rather surreal sitting here and listening to this debate about ideology from the other side of House. Let me get this right. I will go slowly. Your ideology is like this: State control good— 
The CHAIRPERSON (Eric Roy) 
: Order! 
DAVID GARRETT 
: I am sorry Mr Chairperson. I meant Labour—and the Greens even more so but I will come to them in a moment. Labour’s ideology is: State control good private enterprise bad. So to say that this measure is driven by some sort of mad right-wing privatising market ideology is really quite amusing. I expected far better from the Hon Rick Barker whom I happen to respect considerably as a man of integrity and experience. But my incredulity was increased even more when the Hon Lianne Dalziel got to her feet. She is a graduate of the same law school I went to. 
Hon Darren Hughes 
: She got better marks. 
DAVID GARRETT 
: I doubt that actually I say to Mr Hughes. We can compare academic records any time the member likes. When I was at law school our court hierarchy went like this: the District Court the High Court the Court of Appeal and the Privy Council. Now thanks to a—thankfully departed—politician who is now on the far side of the world our hierarchy of courts is like this: the District Court the High Court the Court of Appeal and the Supreme Court—that monstrosity over the road. 
Ms Dalziel was at law school before me and at no time to my knowledge—and I have done a wee bit of legal history—has the Supreme Court of Israel been part of our court hierarchy. I find it very amusing that Ms Dalziel stands there brandishing a judgment from the Supreme Court of Israel and cites it with approval. If I am not much mistaken I have heard that party over there Labour and certainly that one down there the Greens bagging the country of Israel at great length and on many occasions. Those parties say they are Zionists and have oppressed the Palestinians. Well I happen to agree with them. Israel did not come into an uninhabited desert as they would have us believe and make orange groves out of nothing. They came in and drove the Palestinians out. So for Ms Dalziel to be quoting the Supreme Court of Israel is as her colleague Mr Cosgrove says frequently a bit rich. So that is point No. 1. 
Now talking of ideology the more ideological party here is the Greens. Former Green member Mr Tanczos has admitted in this House that although the Auckland Central Remand Prison had better indicators on suicide suicide attempts violence to guards and violence by prisoners against each other—he admitted that all that was true—the Greens were against it. He admitted that even if that result were repeated in spades the Greens would be against it. That is ideology is it not? Let me ask the Green Party a question. Let us say for example that a private prison run in conjunction with an iwi reduces Maori recidivism from 70 or 80 percent as it is now to 25 percent in 5 years. I ask Mr Clendon whether the Green Party would still be opposed to private prisons. The answer is yes because of ideology. It does not matter what works. It does not matter what the indicators are. The Greens would be opposed to it. What about Mr Hipkins? If we establish a private prison—and it will happen as the member knows—and if in 5 years the recidivism rate is 25 percent less than it is now will you still be opposed to it? 
Chris Hipkins 
: There is no evidence. 
DAVID GARRETT 
: No just answer the question—it is quite simple. Would you still be opposed to it? 
Chris Hipkins 
: It’s completely hypothetical. 
DAVID GARRETT 
: You obviously have not read the Standing Orders. You are allowed to ask hypothetical questions in here even in question time. 
Hon Darren Hughes 
: I raise a point of order Mr Chairperson. When the member starts lecturing other members about reading the Standing Orders 
 
 and his entire speech consists of references to “you you you”—“you” being the Chair—I think that is sailing pretty close to the wind. He should come back to Part 1 of the bill. These references to “you” are just unbecoming. 
The CHAIRPERSON (Eric Roy) 
: I did actually call order there before but I had in my excitement muted myself. So I take responsibility for not being able to impart that. But the member must mind his pronouns. Any member gets a 5-minute call. If members seek another call and I think they have not made best use of their time it is my judgment as to whether they will get an additional call. That is my methodology—I probably should not be giving away secret information but members in the best interests of the Parliament ought to be making the best use of their time. 
DAVID GARRETT 
: I stand corrected Mr Chairman. Thank you very much. I simply make the point that on the limited experience we have private prison operation works. We will give it a go. We will see. ACT is supposed to be the ideological party but on this occasion we in ACT say “Let us see what works.” 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 Part 1 of the Corrections (Contract Management of Prisons) Amendment Bill is fundamentally wrong in principle and fundamentally wrong in practice. Mr Garrett wants evidence and I will come back to that shortly. 
We need to be absolutely clear that what takes place in our correctional system and the taking away of liberties are fundamental responsibilities of Government. If we want to go down the path of privatising the taking away of individuals’ liberty we are on a very slippery slope in terms of the kind of society we will live in. It is a core function of Government to take that liberty away—a core function. 
Jonathan Young 
: The courts do that. 
GRANT ROBERTSON 
: No I say to Mr Young that it is a core function of this Parliament to make laws. When we make a law like this we go down a very dangerous path. We have to accept that when we pass laws in this Parliament there is accountability and responsibility. I want to return in this call or perhaps in another one to the Supplementary Order Papers that Mr Barker has put forward on the matter of accountability. If the driver of our prison system is profit the safety of our communities and the safety of the people who work in our correctional system will be compromised. If the driver is profit the driver is not the safety of our communities. That is the evidence from around the world. It is fundamentally wrong in principle to go down this path. 
I do not think members opposite should dismiss the decision of the Israeli Supreme Court quite so quickly because it is quite clear that those people who have driven the opposition to private prisons in Israel know that this is an issue that will be taken up globally. This is a major legal challenge to the rights of private prisons to actually exist and it will be picked up. Whether or not members opposite agree with that legal challenge or think that Israel should not be considered in this debate the challenge will be picked up by the opponents of private prisons. The opponents of private prisons in New Zealand do not come just from the Labour Party and they do not come just from the Green Party; they come from right across the sectors of society. The Catholic Church in New Zealand opposed it. The Howard League for Penal Reform— 
David Garrett 
: There must be another lawyer over there somewhere who knows something about the law surely. 
GRANT ROBERTSON 
: I say to Mr Garrett that this bill is actually about a fundamental responsibility of this Parliament. Lawyers are not the only people who have an opinion about this. It is a vitally important law and it will be taken seriously on this side of the House. 
The Israeli Supreme Court said quite clearly that the right to enforce— 
David Garrett 
: Who cares? 
GRANT ROBERTSON 
: I say to Mr Garrett that people will take this case up and the Government needs to have a response. I want to know whether the Minister of Corrections knows about this decision. Has she been briefed about it? Can she take a call and let us know whether this Government is ready for the legal challenge that will come in relation to the right to have private prisons? That legal challenge will be coming in New Zealand and around the rest of the world and the Government needs to know how it will respond to it. 
This bill is also fundamentally wrong in practice. Sweeping statements have been made throughout this debate about how private prisons will be more efficient and more effective yet the evidence right around the world is that that is not true. In the United States we know that from a report in 2001 describing what happened when prisons were privatised. It makes absolutely clear that the quality of services and safety was compromised. Abuses found in privately run prisons included low wages for staff poorly trained staff bad food and overcrowding. That is from Project Censored of the Sonoma State University in California. It describes a destructive pattern of extensive inmate idleness a lack of correctional experience on the behalf of almost all staff and a search procedure that could fairly be described as a reign of humiliation directed indiscriminately at the entire prison population. That is the evidence from the United States of America. 
We could go to the United Kingdom where in 2008 10 of the 11 private prisons in the United Kingdom were in the bottom quarter of prisons. The United States National Council on Crime and Delinquency said—and here is the evidence; this is its quote—there was “no data to support the contention that privately operated facilities offer cost savings over publicly managed facilities.” The privatisation of prisons is wrong in principle it is wrong in practice and it does not save any money. 
We can go to Australia. In fact the Minister has told us already that she went to Australia to look into this. Firstly the briefing the Minister herself got for her trip to Australia from the Department of Corrections advised that there was no compelling evidence to demonstrate privately managed prisons provide higher-quality services better outcomes or significant cost savings in the correctional system. That is what the Minister was told by her own department. But when she went to Australia she could have perhaps looked into the Metropolitan Women’s Correctional Centre in Victoria. It was privatised. After an inquiry in 2000 found widespread drug use deaths in custody poor training and cover-ups the Victorian Government was forced to take that facility back into public control. In Canada in 2006 the Government returned the country’s one private prison to the public sector because there had been no appreciable benefit to the country and to the correctional system. That is the problem with this bill: it is wrong in principle but it is also wrong in practice. 
When we come back to the situation in New Zealand we know what we have experienced. We had that time with the Auckland Central Remand Prison. My colleagues have already spoken about the fact that from a financial point of view it provided no benefit whatsoever. It also did nothing in terms of the wages or safety of staff. None of that was improved by going down this path. In fact as Mr Barker has said already the bar is set so low in Part 1 of this bill that the prison does not even have to be better or provide a better service in terms of New Zealanders’ safety. This is a mistaken piece of legislation. It is driven by ideology; it is certainly not driven by evidence. It is certainly not driven by evidence globally or evidence within New Zealand. 
I will refer to the Supplementary Order Papers because I think one of the critical elements about why incarceration is a State responsibility comes down to transparency and accountability. In the bill we can see that the Law and Order Committee realised this because it did include a provision for the Public Records Act to apply to the contracts that are entered into under the bill. That material about prisoners will now be treated as if it were produced by the Department of Corrections. The natural corollary to that is to allow Parliament to have some scrutiny via the Ombudsman and the Auditor-General so that we can see what is going on and look at how resources are being used. I simply cannot see why if the Government is prepared to accept that the Public Records Act should apply the Ombudsman and Auditor-General should not be given the same ability to come forward and look into and analyse those things. 
The Supplementary Order Papers from the Hon Rick Barker will do just that. They will allow the Office of the Auditor-General to have complete and unrestricted access to all aspects of any contractor prison as if it were a prison run by the Department of Corrections. The Minister needs to tell us what is wrong with that. What is wrong with Parliament having the ability to have some scrutiny over these things? The same applies with the Ombudsman. Although the Ombudsman may have some indirect ability Parliament needs some reassurance if we are going to go down this mad path of privatisation in prisons that we can look into what is happening in those prisons. Supplementary Order Paper 87 “authorises the Ombudsman to have complete and unrestricted access to any contracted prison prisoner prison records and prison staff to carry out the duties and responsibilities of the Ombudsman’s Office …”. They are two very sensible Supplementary Order Papers that attempt to make some kind of transparency and accountability available to the people of New Zealand. The Minister must tell us why she is not—I presume she is not—supporting those Supplementary Order Papers. Could we get some indication from the Minister? 
Chris Hipkins 
: She obviously thinks they are quite funny. 
GRANT ROBERTSON 
: She does seem to find it quite funny. In fact National members seem to find the whole debate quite funny. I would like to hear her take a call on those Supplementary Order Papers and let us know what she wants to do with them. The third Supplementary Order Paper that Mr Barker has put forward amends section 198 to make sure that no contract for running a prison under this Act will be more than 3 years. This is a very sensible amendment because it will not bind a future Government; this bill will be repealed under a future Labour Government. 
This bill and this Part 1 are fundamentally flawed in principle and in practice and they simply do not stand up to the scrutiny of international evidence. If we really want to enter into this brave new world as Sandra Goudie said to give it a go and give it a whirl I say that it is too important for that. The safety and security of New Zealanders will be compromised. The safety and security of staff will be compromised. It simply is not good enough to say that we are just going to give it a go. It has not worked elsewhere; it will not work here. 
CARMEL SEPULONI (Labour) 
: 
 I am on the Law and Order Committee with a few other members who are in the House tonight. For the whole time the Government has pushed the idea that private prisons are safer better and cheaper. But I know like every other member on that select committee knows that the vast majority of the submissions that came through on the Corrections (Contract Management of Prisons) Amendment Bill were opposed to private prisons. 
One submission that was not opposed—that was in support of private prisons—was from the GEO Group. We all know that that group has a vested interest in making sure that we privatise prisons because it wants to make profits out of our prisoners. John Key is reported as saying that private prisons produce very good results and he was talking with regard to the GEO Group and the private prisons that exist in Australia. The GEO Group is part of the Wackenhut Corporation—the owner of 13 correctional facilities 11 of which are operated by GEO Group. The group has immigration detention centres youth facilities and adult prisons. GEO Group’s value now apparently exceeds $1 billion. 
If it is really as good as that why did it recently settle a case where staff had placed a woman in a cell block with male inmates by whom she was raped and beaten and she later took her own life? If it is really as good as that why were 125 inmates removed from a prison by state authorities because of inadequate staff training and inadequate health care? GEO Group’s facilities have been reported as serving rotten food. They have knowingly made false and misleading statements to state officials they have failed to complete criminal record checks on at least 100 guards and they have violated domestic and international laws on due process and humane treatment. Mr Key says that private prisons have shown good results but I ask members whether they think those are good results. We do not think so on this side of the House. 
Prison officers who worked for the Auckland Central Remand Prison when it was under private management made a submission to our select committee. They said that serious dubious things had gone on with regard to cover-ups the way in which they were paid and working conditions. They pointed out that in order to get bonuses it was important that they made sure that they reported in a way that did not show up anything untoward; otherwise they would not collect the money. Those concerns were raised with the select committee yet the Government is still pushing for us to privatise our prisons. 
The Minister in the chair the Minister of Corrections was earlier talking about the fact that privatisation is not all about cost but unfortunately not long ago the Minister was the one saying that private prisons would be cheaper and it was all about the fact that they would be safer better and cheaper. We already know when we look at the evidence that I just discussed that private prisons are not safer. Cost has been discussed by some of the members on this side of the House and when we compare it with the cost of State prisons we see that private prisons are not cheaper. We know that they are not safer not cheaper and not better. So there is absolutely no reason for this Government to go ahead and privatise our prisons. 
Among the Supplementary Order Papers that have been discussed is Supplementary Order Paper 86 which was put forward by the Hon Rick Barker. It states that the contract for the running of a prison shall last for no more than 3 years. The problem at the moment with this bill is that the length of the contract is unlimited. The Minister will decide the length of the contract. Our concern on this side of the House is that if the management of the prison goes wrong New Zealanders will have to fork out money to pay to get out of that contract. We cannot determine for how long the Minister will decide that the contracts run. For Mr Rick Barker to put forward an amendment that would limit the contracts to 3 years is completely reasonable. At the end of the day whoever is in Government can decide whether private prisons are working and decide whether those contracts are to be extended. There is absolutely no reason why the term of the contract should be at the discretion of the Minister and there is no reason why we cannot legislate for a certain term so that on behalf of New Zealanders we can check on how privatisation is going and can make sure that they do not have to pay out when things go wrong and we desperately need to get out of a contract. 
With regard to the evidence that I discussed earlier it is obvious that things go wrong with private prisons. They have done in other countries; they have done in New Zealand in the past. It is a real issue. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I want to do several things in the next few minutes. First I would like to agree with some of the comments my colleagues have made in respect of their disagreement in principle with the idea of the privatisation of prisons. Then I would like to talk a little about what it might mean in practice and about the evidential base that we might draw upon when making that decision. 
In principle I absolutely disagree with the idea that any private firm should make a profit out of the incarceration of people. I think it is a morally repugnant that somebody should make a profit out of incarcerating a prisoner. It is simply in my view— 
David Garrett 
: Ideology. 
CHRIS HIPKINS 
: It is ideology; it is ideological. I find the idea that someone would make a profit out of somebody else’s suffering—whatever the cause of that suffering—simply wrong. I do not agree with it. But let us look at the evidence. 
I have been sitting and listening to this debate. I am opposed to this bill—and that is my ideological view but I am willing to listen to a good argument based on evidence. I have not seen any evidence from the Government from the ACT Party or from anybody else who is in favour of the private operation of prisons that actually suggests it will be better and that it will work. 
The Minister in the chair Judith Collins used two main justifications for it: that it would be cheaper and that it would have an impact on prisoner rehabilitation. If we measure the effect on prisoner rehabilitation by the rate of recidivism it is worthwhile looking at the very limited amount of peer-reviewed academic research that has been done overseas. 
My colleague David Parker during the first reading of this bill referred to two peer-reviewed studies that were done in the United States. Very few peer-reviewed studies have been done on the private operation of prisons. I will quote from the first one which is called  
The Effectiveness of Juvenile Correctional Facilities: Public versus Private Management 
. The authors are Patrick Bayer from Yale University and David Pozen from Oxford University. Their study concluded: “for-profit management has a statistically significant impact on recidivism …”. 
The unfortunate fact for the Government is that the statistics go the wrong way. The 1-year recidivism rates are 5 to 8 percent higher for those juveniles who were in a privately run prison facility. That is some of the limited international evidence about the effectiveness of private prisons. It suggests that recidivism rates are higher in for-profit private prison facilities. So we can discount what the Minister has said about that on that ground. 
The other study is called the Bales report. Again it was a peer-reviewed study and it was about the experimentation of private prisons in Florida. That study found no empirical justification for the policy argument that private prisons reduce recidivism any more than public prisons do. So we can discount the idea that a private prison will be any better for prisoner rehabilitation. In fact when we look at the motivations behind how a private prison will operate and the motivations for why someone would go into running a private prison we see that there will not be the right incentives for effective prisoner rehabilitation. 
The second argument the Minister Judith Collins put forward was one on cost and it was simply wrong. The limited experience we have in New Zealand shows that in fact private prisons are not cheaper. We can compare public and private management figures in relation to the Auckland Central Remand Prison. The rate for a public prison is $50208 which is $7000 less than the New Zealand experience in the private prison sector when we had a private prison. So we can discount that as well. The New Zealand experience shows that cost simply is not a factor. So the two justifications that the Minister put forward for wanting to push this bill through Parliament have already been discounted. 
I have a couple of technical questions that I hope the Minister will address. I refer her to new section 198 in clause 5 “Management of prisons under contract”. Rick Barker has put forward an amendment limiting any contracts to 3 years and I support that but what this bill does not do is establish any criteria under which a decision may be made as to why a prison may be contracted out to private management. 
Hon JUDITH COLLINS (Minister of Corrections) 
: 
 I think it is only fair that I answer some of the questions raised by the Opposition members. I am happy to do so. 
In relation to Mr Barker’s Supplementary Order Papers I say that Mr Barker has never once referred those matters to me or to our caucus and I am afraid we will not be supporting them. 
Mr Hipkins has been talking tonight about several issues. I hope I have this right. I think one of the things he has raised is that effectively no one should make a profit out of someone else’s unfortunate circumstances. Is that a reasonable rendition of what the member said? 
Chris Hipkins 
: In the case of prisons. 
Hon JUDITH COLLINS 
: On that basis we would not have private hospitals. We would not have dentists outside of the hospitals. We certainly would not have grocery shops because basically food is all privatised in this country. We certainly would not have insurance and we definitely would not have schools that were private or privately owned. The fact is that the State provides the funding and as long as it is monitored and the chief executives are in charge it is another matter who runs it. I have not yet heard Labour members refer to the fact that under their watch it was quite all right for prisoners who were sent from the court to prison to be transported in privately run prison vans. How does that work with the Opposition’s theory that only the State should be in charge of that area? Why should that be? 
The fact is that Opposition members are ideologically driven as long as it works for them. But unfortunately we have found that sometimes the State is not always the best performer on every single measure. I heard a lot from Miss Sepuloni tonight about the terrible things that have happened in private prisons. I have news for that member: really terrible things have happened in State-run prisons too—quite a few of them when Labour was in Government. In fact some of the things we have had to fix happened when it was in Government. 
One of the good things with a privately run prison from our point of view is that we can put performance measures on it. We can have accountability that means something. When Auckland Central Remand Prison was privately run a clause in its contract said that if there was an escape it would pay a fine of $50000. This was at a time when there was a very high escape rate in New Zealand prisons. There was one escape from Auckland Central Remand Prison and it was fined $50000. One of the great things was that it never happened again. 
Simon Bridges 
: Simple but effective. 
Hon JUDITH COLLINS 
: It is very effective. Miss Sepuloni has also said that there have been cover-ups. Well let us see the evidence of that. She has talked about wholesale privatisation. Well we indicated that we are looking at one-tenth of our prisons being privately run which is hardly wholesale privatisation. 
I heard tonight from the Hon Lianne Dalziel about the Supreme Court of Israel. The member quite truthfully said she had not read the case but someone had told her about it. I am sorry but I will need a bit more evidence than that. I have never been to the State of Israel but I am confident that our record on human rights would stack up pretty favourably against that of the State of Israel—or against most other States frankly. 
When we look at the cost—the Labour Party goes on and on about cost—we see that it is a fact that rehabilitation costs money. Auckland Central Remand Prison was contracted to perform 70000 hours of rehabilitation when no other remand wing in this country at that stage was doing it and yes it did cost. In fact it did not just produce 70000 hours; it produced 120000-odd hours. It over performed and did not get paid extra for that either. 
She talked also about the loyal prison officers. It is nice to hear a member of the Opposition saying something nice about prison officers. When I became the Minister of Corrections I was the first Minister of Corrections to ever turn up to a graduation ceremony for our loyal prison officers. Corrections Ministers under Labour which was in Government for 9 long years never once did so—not once. So it is nice to hear that now Labour likes the prison officers. 
Grant Robertson MP spoke about liberties being taken away by private prisons. Well I have news for him; I know he is not a lawyer. It is actually the courts that remove people’s liberty; the Department of Corrections does not. We just receive them. I think most of the issues have been dealt with. 
METIRIA TUREI (Co-Leader—Green) 
: 
 How funny it is to listen to this Minister Judith Collins talk about iwi involvement in prisons. How terrible it is to listen to her talk about how great that would be. Do we remember that when this Minister was a new MP she went to a powhiri—a Department of Corrections powhiri if I remember correctly—and she had a big “waa” because she had to sit in the second row of the powhiri instead of in the front row. She stormed out of the powhiri and made a huge big row about it all through the country. She walked out in a huff possibly with tears streaming down her face because she had to sit in the second row and not in the front. And here she is now supposedly crowing about how private prisons—international corporations—will be able to make a wonderful profit from the imprisonment of those Maori whose powhiri she might have been part of. She is really pleased that international corporations will make money out of the imprisonment of Maori. Her own behaviour has clearly demonstrated her absolute failure to respect Maori and Maori process yet she stands here and tries to say contract management is a good thing for Maori people. It is a terrible day to hear the Minister talk about that in this context. 
My colleague Nandor Tanczos and I went to visit a number of prisons including the Auckland Central Remand Prison when it was being run by GEO Group—by Wackenhut—and he and I talked with Dom Karauria who was there at the time and with the iwi involved with the management and running of that prison. It was very innovative. The prison was a wonderful building built with public money and designed for that purpose and the management was very engaged with trying to find ways to involve Maori. But that came down to the fact that Dom Karauria was in charge. It had nothing to do with the ownership of the prison. It was about this one guy who had had experience in Australia of working for other prison organisations that did not have respect for indigenous people and he himself had made a commitment to do so. Nandor and I were both very pleased to have worked with him and to have talked with him about his commitment and we celebrated that. But that was the commitment of just one person. It had nothing to do with whether the prison was privately run or publicly run. It was because of the commitment of individuals: the people that Dom Karauria built around him to support Maori. 
It surprises me a great deal that the Maori Party in particular supports the Corrections (Contract Management of Prisons) Amendment Bill and does not recognise that that was the case—that it does not recognise the special skills of Dom Karauria and instead buys into the misleading information and misleading rhetoric about private prisons being essentially good for indigenous people. We know that is not the case. We can look at the experience of the private prisons in Australia and at the significant abuse and damage that is done to indigenous Australians to Aboriginal people in those prisons. 
Carmel Sepuloni 
: Absolutely. 
METIRIA TUREI 
: That is right. We can look at the example of the prisons that GEO/Wackenhut has operated in America and my colleague Carmel Sepuloni has described some of those things. Again a huge proportion of the prison population are black people Mexicans Hispanics and the indigenous people of that country as well. In those countries we can see that there has been an ongoing exploitation of indigenous communities by these companies which make a profit from the systemic racism inherent in their legal systems. That systemic bias that systemic racism exists in this country as well and the Maori Party knows that. The Maori Party knows that that is the case. 
I hope that Tariana Turia is doing all right. She was reported a few months ago in the  
Wanganui Chronicle 
—it should be Whanganui with an “h” I have to say—talking about this issue. She stated: “Our people continue to go to prison and many of them have spent a long time not functioning well in society. They need the opportunity to have their mauri ora and mana restored. No one is going to do that in a public prison.” She stated: “Absolutely we are not in this to make money. I am a firm believer in redemption.” She went on to state: “Our people have been deeply affected by the inequalities of the system and the current system does not address the reasons that people go to prison.” She said the Maori Party support was about not just rehabilitation but also habilitation and Maori could be part of their own solutions to these issues. 
I agree with Tariana Turia about that; Maori can be part of the solutions to imprisonment issues. The fact that more than 50 percent of the prison population is Maori is a disgrace and more needs to be done about that. But there is nothing to prove that privately owned prisons will make any difference to that situation. In fact if we look at the overseas evidence we see there is ample evidence to prove that privately owned prisons will do more damage to indigenous communities. They will do significantly more damage than public prisons do to the Maori population because of the use of that population as a cash cow with which to make money. That is the basis behind the thinking around privately owned prisons. There is money in it. 
The prison staff who came to talk to the Law and Order Committee talked about that. They showed us that in great detail putting themselves at risk by doing so because one or two of these guys had worked in the private prison and they will not get a job there now even though they knew this legislation would be passed. They came and talked to us about the financial incentives for the managers the owners of the private prison to avoid their obligations in order to protect their financial bottom line. They talked about incentives not to find drugs about staff being not disciplined but encouraged to resign in order to avoid the reporting of those problems and about inadequate drug-testing. The only way to describe it is I guess as the company actively hiding information in order to appear to be complying with its contract so it will retain the performance bonus. Those are the kinds of things that the Minister in the chair the Hon Judith Collins was talking about when she said privately run prisons were a good thing. The Minister said those things were good about private prisons because they would have financial incentives to behave better. 
Privately run prisons have financial incentives to hide information. That is one reason why the Green Party will be supporting the amendment to provide for the Auditor-General to have a great deal more oversight over private prisons. There needs to be a means by which the public can investigate the financial incentives the financial issues behind these companies and their operations. If we do not do that there is no means by which that can happen through the contact. The owners and managers of the private prison can hide their financial information by using commercial sensitivity as a barrier. The only way to find out whether they are incentivised to hide information and whether they are actively preventing their staff from doing drug testing from finding drugs and from being involved in all of the issues that those staff brought to us will be by making the Auditor-General able to investigate those matters. That will provide the best possible level of scrutiny over those issues. 
It still remains a mystery to me as to why the Maori Party supports this bill and why the Associate Minister of Corrections Dr Pita Sharples instead of supporting private prisons was not able to negotiate with the National Government for Maori to be able to be involved in the running of public prisons. That could be done just as easily. In fact if private prisons will comprise only 10 percent of the prison management in this country then 90 percent of the Maori prison population will still be in the public sector. If there is no reform of the public sector then how can we possibly expect that anything will be made better or that anything will be done to resolve the issues around the Maori prison population? There has been no effort to deal with the public sector. What the Maori Party has done and what the Minister has allowed to be done is the diversion of attention again from the issues around the Maori prison population. The real need that should be met in the public sector is to be diverted to the private sector as some kind of panacea or some kind of magic bullet solution because that is what it is meant to be in the end. 
Contract management is meant to be a magic bullet solution to the issues around dealing with the Maori prison population. It will not work for the vast majority of those Maori who are in jails. We know that jails increase recidivism and that jails cause enormous costs to whanau to family and to children. None of that will be resolved through the private prisons. None of that will be resolved by the Maori Party’s support for this legislation. Private prisons cost more than those in the public sector. That argument is based on evidence not on the fallacies put out by the National Government. The private sector will profit from the systemic racism in the system. 
JACINDA ARDERN (Labour) 
: 
 Anyone watching this debate from afar might be somewhat baffled I think by some of the arguments that have been put forward—in particular by the Government members. People would certainly be baffled by the fact that the Minister in the chair the Hon Judith Collins somehow thinks that dentistry and grocery stores have some relevance and are a point of comparison for some of the arguments that we have been putting forward. 
Government members have continued to claim that the fact that some part of Labour’s arguments are based on a principle and on a principle that we hold very strongly is somehow repugnant. I find that quite bizarre. I make no apology for the fact that we are applying a principle in this case. I make no apology for it whatsoever. The difference between the way that we have presented our argument and the way that Government members have presented theirs is that we are willing to explore our view. We are willing to talk about where our principle comes from. We have quite clearly stated that we do not believe that the removal of someone’s liberty—a fundamental part of our justice system—should be carried out by a private citizen. We do not believe that the removal of someone’s liberty—an action that is either enacted by a court or carried out on a day-to-day basis by a prison service—should be put into the hands of a private citizen who enacts that action on behalf of shareholders. We do not believe that. We are fundamentally opposed to the State being directly removed from that responsibility. 
I have not yet heard from the Government members a willingness to stand up and directly articulate their ideology on this bill. I have not heard from any Government member who has been willing to stand up and plainly state that he or she believes that private citizens should be able to make profit from our prison service and from this fundamental role of the State. I would be very interested as to whether any of those Government members have the same courage of conviction to stand up and directly state that. 
It is not just principle that we have been talking about. In this case we are backing up our principled argument with evidence. Over and above the question of whether private companies should be operating in this role the evidence demonstrates that in the past when we have allowed that to happen it has not led to an improved service. In fact it was far from it. We need only go back to a very very basic question. It is the same kind of question that we could apply to accident compensation for instance. Why would a private company seek a contract from the State to administer a prison unless profit was involved? We do not hold objection to the notion of profit but we do hold objection when it comes at the cost of a fundamental service. 
Let me break it down. Where will the profit come from? Where is the incentive for private companies to enter into this? We have seen it before. One way to make a profit is to lower staff-to-inmate ratios. That has a natural implication: often prisons end up making lockdowns longer. There is less time out of the cells participating in things like education that will reintegrate a prisoner into society. Auckland Central Remand Prison was one of those that lowered its staff-to-inmate ratio so we have the evidence already. Having fewer rehabilitative services is another way that prisons could enact a few cut-backs; a reduced range of services is another. Again we saw the Auckland Central Remand Prison take part in that. In fact there are reports that the Auckland Central Remand Prison refused to take prisoners after 6.30 p.m. because the majority of its staff were off shift at that point. Cuts in staff pay and conditions are also a possibility. 
In a nutshell profits in this case have often compromised service delivery and this is an area where we cannot afford cut-backs in service delivery. Some of those reports came directly from prison officers who had worked at the Auckland Central Remand Prison both when privately and when publicly managed and they submitted that when it was privately run decisions were made on a day-to-day basis that were intended to protect the reputation of GEO Group and to ensure that performance bonuses provided under the contract were obtained by GEO Group. 
MELISSA LEE (National) 
: 
 I move  
That the question be now put 
. 
Hon RICK BARKER (Labour) 
: 
 I will pick up on a number of points. Firstly I will come back to the point made by David Garrett as to why private profit is not always the best thing to have in situations like this. I will do that by picking up on the points made by Sandra Goudie and the Minister the Hon Judith Collins which basically seem to say we should do this just to have a try at it—we should give it a go and see what happens. It seems to me to be a cavalier approach to making public policy. Give it a go! This a laudable Kiwi attitude. It has done us well in the bush on the sports field and in those sorts of things but I would suggest that it is not a good principle for developing public policy. 
Public policy has for a long time understood the importance of separating the powers. This Parliament does not make decisions about individual court cases for very good reason. There are a whole range of things where we separate the powers. Parliament has separated its power from the executive for very good reasons. Parliament should not try to run things. We separate the powers of the Minister and the chief executive for very good reasons. There are accountability reasons. 
One of the important points about this is that in having the State itself run the prisons there is no opportunity whatsoever for private interests to get into play with the operations of a prison. I will give a very good example and that was in the United States where recently a judge had thousands of decisions overturned because the judge was making decisions about where prisoners were being sent and for how long and they were going to a prison in which he had private interests. His private interests overlapped with his public policy duty. If we have private prisons we put that principle at risk. 
David Garrett 
: How many corrupt judges are there? 
Hon RICK BARKER 
: The member can interject as much as he likes but by ensuring— 
Chris Hipkins 
: And he will. 
Hon RICK BARKER 
: —which my good colleague here Chris Hipkins has said—that the incarceration of prisoners is done by the State there can be no private interests and there can be no profit motive in it. When we have contracted out we have allowed people who have private interests whilst carrying out public duties to have an overlap of interests and these are not always good things. 
Secondly— 
David Garrett 
: Chubb does that doesn’t it? 
Hon RICK BARKER 
: Well let me just deal with Chubb. Chubb runs a few buses and trucks around the place. It does not carry all the prisoners. It was there long before the Labour Government was in place and it is not responsible for the prisoners. Chubb is effectively a specialist taxi service. A prison has control of the prisoners 24 hours per day 7 days per week. It has absolute control of them. It picks a person up and takes him or her to another place where he or she is then placed in the control of the police who have absolute control of them. 
The point I will come back to is about the role of Parliament and the Auditor-General in ensuring that these things are done properly. This is a fundamental weakness. What the Minister is saying to us is that the chief executive and the monitors and auditors whom the chief executive appoints should offer this Parliament sufficient assurance. I say to the Minister that the interests of the chief executive can overlap with the interests of the particular prison. No chief executive will allow a contract to be arranged where one will say after a short period of time that this is a failure this is wrong and it has gone terribly bad because it reflects badly on him or her. The chief executive will be very tolerant of any private contractors because their success will reflect on him or her personally—a contractor’s failure will reflect on the chief executive badly. 
As we heard in evidence before the select committee the private prison that we have tried in New Zealand was massaging its figures. There is no doubt that it was massaging its figures with the— 
David Garrett 
: There were allegations. We did not hear evidence. Get one of the lawyers to explain the difference between allegations and evidence. 
Hon RICK BARKER 
: We heard directly from the people who turned up at a risk to themselves and they told the select committee. I have no reason to disbelieve them. There were a number of them and they said that they were massaging the figures. They massaged the figures because that was in the interests of their profit-driven employer. The interests of the chief executive and the contractor do overlap. The interests overlap in that they do both have a commitment to ensuring that they can show a success on paper. That is why this Parliament should have an independent oversight of that through its auditor our Parliament’s auditor the Office of the Controller and Auditor-General. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I move  
That the question be now put 
. 
CARMEL SEPULONI (Labour) 
: 
 It has come up over and over again but we cannot say it enough: one of the main reasons that Labour members oppose the Corrections (Contract Management of Prisons) Amendment Bill is that we believe that prisons are a core function of the State. 
Hon Member 
: Oh God. 
CARMEL SEPULONI 
: They groan whenever we say that. Do members know why the Government members groan? They groan because they do not understand what we mean when we say that prisons are a core responsibility or core function of the State. The reason they do not understand what we mean is they would quite happily privatise anything. They would quite happily privatise all the functions of the State—education prisons health accident compensation and perhaps even our welfare system. Who knows? They are quite happy to privatise. They do not understand what a function of the State is. That is one of the reasons why Labour members oppose this bill. 
We understand given some of the things that have happened in the last year since this Government came in why the Minister of Corrections and the National Government would want to shift the responsibility for this function. We understand given what has gone on under their watch. Let us look at what happened over the last year that might explain why the Minister and the Government want to shift responsibility for our prisons to hand over the accountability to private managers. Let us look at what happened. Under the Minister of Corrections’ watch over the last year two prisoners broke out of a police van at Palmerston North District Court on 15 January. Three remand prisoners broke out of a prison van in Hamilton on 19 January. Ărai Hema fled from an outside work party at Auckland’s Paremoremo prison on 21 January. 
Sandra Goudie 
: Hello? We’re doing Corrections not the Police. 
CARMEL SEPULONI 
: I say to that member that she should hang on—there is a lot more to go. I might have to take two calls on this one. Storm Hughes fled from a work party outside the Spring Hill Corrections Facility in North Waikato on 11 February. Robert John Wikaere escaped from Te Awamutu’s Waikeria Prison on 17 March. Ollies Siaea walked out of the Manukau District Court after he claimed to be another prisoner on bail on 20 March. Three prisoners were caught on a roof at Mount Crawford prison on 13 September trying to jump over a prison wall. A fourth who had already managed to successfully escape that way was caught by police less than an hour later. William Katipa aged 43 escaped from a medium-security unit at Waikeria Prison after scaling a security fence on 29 September 2009. On 23 October police were seeking help in locating Ernie O’Neal Paul a high-risk offender who was wanted for breach of bail. Christopher Watkins 46 escaped from Tongariro/Rangipo Prison on 22 October. 
These things happen and they are happening more so—the research shows this. All of the submissions that came through the selection process except for the one made by GEO Group supported what Labour members are saying. These things happen more in private prisons but the point of difference is that when prisons are privatised the Government no longer has to be accountable for them. The Government can put the blame entirely on the private company that is managing the prison. We can see why the Minister would like to shift the responsibility. The Government does not want to take responsibility for this. It would rather see the private companies cop the flak so that it is not the Government that is held to account by New Zealanders. That is the issue. 
I will go back to the proposition that private prisons are safer better and cheaper. Everything that has come up tonight from this side of the Chamber and from my Green colleagues demonstrates that they are not safer better and cheaper. As my Green colleague Metiria Turei said earlier in respect of prisons all of a sudden the Minister of Corrections is concerned about iwi. This issue was discussed in the submissions as well. We saw a submission from prison officers who had worked in both State-run prisons and the Auckland Central Remand Prison when it was under private management. They said that cultural factors were not taken into account when that prison was privately run. They brought up the fact that at one point Australian prison officers were brought over to New Zealand to work in the prison. There were issues with regard to how much they were being paid compared with our local prison officers. There were issues with regard to the ability of the Australian prison officers to understand the cultural background of some prisoners. They gave examples in respect of Pacific Island prisoners. 
SIMON BRIDGES (National—Tauranga) 
: 
 I move  
That the question be now put 
. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I will come back to some of the technical provisions of the Corrections (Contract Management of Prisons) Amendment Bill. I have a number of points that I am hoping the Minister in the chair Judith Collins will address. I turn to new section 198 “Management of prisons under contract” set out in clause 5. The point I was beginning to raise when I so unfortunately ran out of time concerned the criteria the Minister will use when determining whether a prison should be put out to private contract and what process there would be around public consultation in doing so. 
The Minister mentioned in her speech that she envisaged that 10 percent of current prisons if I understood her correctly would be put out to contract management. I think that a number of New Zealanders who live in areas where there are existing prisons will be interested to know how the Minister will determine which prisons will be put out to contract and which ones will not be. The bill is completely silent on that point. The only thing that new section 198 does is allow the chief executive of the Department of Corrections to put any prison out to contract management with the Minister’s prior written consent. It does not give any criteria or establish any grounds upon which the Minister will give that consent. I think probably the Minister in the chair will be the Minister who would make those determinations so I will be very interested to hear exactly how she will do that. 
I represent the Rimutaka electorate which shares its name with the country’s largest prison Rimutaka Prison. The vast majority of constituents—78 percent I think—who completed the constituency survey that I put out were opposed to having a contract manager for Rimutaka Prison. Interestingly enough though there was some support amongst the local population for expanding Rimutaka Prison which surprised me. It is not that Rimutaka constituents are anti-prison—we appreciate that we need a prison—it is that the vast majority of residents are opposed to the idea that it should be run by a contractor. 
Hon Judith Collins 
: Not going to. 
CHRIS HIPKINS 
: The Minister is not going to do that. I wonder whether for the sake of the residents of my electorate the Minister may stand up to take a brief call and put that on the record of the House. The Minister has at least indicated to me before all these witnesses that she is not going to put out Rimutaka Prison to private contract. I am very heartened by that and I thank her. But I imagine that every other area in the country that has a prison will want to know whether their prison could be put out to private contract. New section 198 is very silent on that point. I am pleased that the Minister has obviously thought about whether Rimutaka Prison would be put out to private contract but I would quite like to hear about the other prisons in the country. 
I turn to new section 199(1)(c)(ii) set out in clause 5. It talks about “sufficient suitable staff members to enable the contractor to carry out the contractor’s statutory and contractual obligations in relation to the prison;”. Obviously the Minister will be involved in determining what goes into these contracts when she is dealing with the chief executive who will have the primary responsibility. One of the questions that I have is whether she would envisage for example minimum staffing levels being in a contract. If hypothetically Rimutaka Prison were to be contracted out—and I accept the Minister’s word that she will not do that—the people in my electorate would want to know that any private contractor of Rimutaka Prison had some specified minimum staffing levels that it had to meet. Obviously the safety of the people who work in the prison and the safety of the people in the community around the prison is very much dependent on the number of staff who work in the prison. I would like to know a little more from the Minister as to how she envisages the requirement under the provisions of that new section being put into practice. 
I turn to new section 199(3) set out in clause 5 which is basically a catch-all provision for any other provisions that the chief executive and the contractor see fit. The bill provides a fairly comprehensive range of criteria that any contractor will have to cover. I wonder whether this section is necessary and if necessary what types of clauses and provisions the Minister envisages being captured by it. 
The final point I raise concerns new section 199B set out in clause 5 which limits the liability of the Crown in relation to the contractor. In particular this section provides that the Crown is entitled to be indemnified by the contractor. 
METIRIA TUREI (Co-Leader—Green) 
: 
 I know that I have Labour Party colleagues who have not yet had the opportunity to make a contribution to the debate on the Corrections (Contract Management of Prisons) Amendment Bill so I appreciate the opportunity to do so. 
I refer to a comment that the Minister in the chair Judith Collins made. She compared a prison to a grocery store or the local dairy down the road. I do not know what a Minister of Corrections—a Minister who is responsible for one of the most serious parts of the Public Service and responsible for the policy that deals with some of the most serious issues of safety and the rehabilitation of those who are involved in criminal offending—could possibly have in her mind such that she could compare a prison to a grocery store. I guess that is just what we have to live with with a National Government that puts a person who would think like that in a position of such responsibility. There has been some discussion—[ 
Interruption 
] The Minister herself said it. If the public are to have any sense of security about who is running the policy behind one of the most important parts of the Public Service and the machinery of Government it is important that they know. If the Minister is prepared to stand up in this Chamber and compare prisons to grocery stores be it on her own head if other members in this Chamber then make it obvious— 
Carmel Sepuloni 
: Talking about apples and apples and apples and oranges. 
METIRIA TUREI 
: Yes she was talking about apples and apples and apples and oranges. It is her own fault if other MPs make sure that that is highlighted for the information of the public. It is after all their community. It is after all their machinery of the State that is being messed around with by this Government. 
There has been a lot of discussion about the economics of private prisons. We know for a fact that private prisons are more expensive in this country. We know from research overseas that there has been a failure of private prisons either to be cheaper or to both return quality services and be cheaper. The United States Department of Justice report that I have referred to in other contexts  
Emerging Issues on Privatized Prisons 
 clearly showed that the privatisation models simply mimicked the public sector in practically every way essentially saying that there was no innovation at all in the private sector. All of the new innovation and all of the new ideas were coming out of the public sector and they were simply mimicked by the private provision. 
The report also said that promises that were made by private companies in the US of 20 percent savings did not happen. Those savings were not provided despite all of the promises. Although there were some modest savings of less than 20 percent they were made by reducing staff conditions and other labour-related costs. The Minister said earlier that one of her priorities was keeping staff safe but we know that the policy of the Minister and the Government includes double-bunking for example. She is now engaging with private prisons where staff will find it more difficult to work in an environment where their conditions and their pay are the priority. They will not be the priority for the private company; the bottom line will be the priority for the private company. The way the company gets access to a bigger bottom line to more profit will be hidden from the public. One of the things that will be hidden from the public is the staffing conditions and wages. 
We can see that that is the case not only in the evidence from the United States Department of Justice but also in reports from Australia. The “Privatisation and New South Wales Prisons: Value for Money and Neo-liberal Regulation” report showed that privatisation in New South Wales did not result in value for money or a significant reduction in cost. So even closer to home just in Australia we know that the economic arguments do not pan out. 
David Garrett was yelling out earlier about how staff of the GEO Group - run Auckland Central Remand Prison brought to the select committee views and information that there was hiding of their contractual requirements in order to avoid getting fines and penalties for failing to meet those requirements. He said there was no evidence. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 I move  
That the question be now put 
. 
The CHAIRPERSON (Lindsay Tisch) 
: The question is that the question be now put. 
Hon DARREN HUGHES (Senior Whip—Labour) 
: 
 I raise a point of order Mr Chairperson. I was out in the lobby when I heard the closure motion being moved by the Government. It is standard practice for the Government to begin to move closure motions but the House is in urgency on this matter. We have completed Part 1 in Committee faster than we would have done under ordinary time for a bill where the main policy decisions are in Part 1. Under urgency normally there is a longer period for the Committee to consider that part of a bill. This is faster than normal. 
The CHAIRPERSON (Lindsay Tisch) 
: I certainly thank the member for his comments and I have taken them into account. We have gone for an hour and 43 minutes on this. I have a list of who has spoken. There has been a lot of repetition; there has not been any new material that has come out in the last 40 minutes. I decided to accept the closure and I have put the motion. 
Hon DARREN HUGHES (Senior Whip—Labour) 
: 
 I raise a point of order Mr Chairperson. I realise that you have to take into account a number of factors. 
The CHAIRPERSON (Lindsay Tisch) 
: I have ruled. 
Hon DARREN HUGHES 
: There are members who have been calling who have not had the chance to contribute to the debate. 
The CHAIRPERSON (Lindsay Tisch) 
: I understand but I have ruled. We have Part 2 coming up and then we have the other—[ 
Interruption 
] I have ruled! We have Part 2 we have the commencement and the other debates are still to continue. 
Hon DARREN HUGHES (Senior Whip—Labour) 
: 
 I raise a point of order Mr Chairperson. 
The CHAIRPERSON (Lindsay Tisch) 
: I hope you are not going to litigate the decision I have made. 
Hon DARREN HUGHES 
: I am reluctant to do it but we are in urgency. I think you have truncated this bill; all of the policy decisions are in Part 1. I move  
That the Speaker be recalled. 
Motion agreed to. 
House resumed. 
Speaker Recalled 
The CHAIRPERSON (Lindsay Tisch) 
: The Speaker has been recalled because Opposition members and the senior Labour Whip the Hon Darren Hughes believe they had other members who wished to speak and that I did not give adequate time for Opposition members to be part of the debate. My reasoning for accepting the closure motion was that this debate had been going for an hour and 43 minutes. Twelve Labour members three Green members and two Government members had spoken and the Minister had spoken three times. There was a lot of repetition; no new material was being debated. It was my view that the debate had run its course. I accepted the closure motion. 
Hon DARREN HUGHES (Senior Whip—Labour) 
: 
 Mr Speaker you have been recalled on the motion of the Opposition which is not something that we have at all made a practice of. The reason is that in the normal course of parliamentary business there is an unspoken tariff for how long a Committee stage should take and how long the debate on parts should take. The formula is set down in both  
Speakers’ Rulings 
 and the Standing Orders. There is also an understanding between the Government and the Opposition about how long the debate on different parts should take. In urgency it has always been accepted that a longer period will be given for the fact that normally Parliament would be moving through on a much slower process. Urgency brings that into a much tighter focus. A longer period of time is normally allowed for that. 
What makes it so critical on this particular bill is that the bulk of the bill sits in Part 1. The bill makes enormous changes to an important part of the State’s responsibility putting aside the different political differences. Everyone agrees that this is important legislation. We believed that there were members on this side who had not been given a chance to make a contribution. The presiding officer is under no obligation to call every single member but there were members who had been called ahead of those who had not yet made a contribution. 
The Opposition has put up amendments to this part—not a ridiculous number in order to slow things but a serious number for a bill on which there are sharp differences across the House. Government members began taking the closure motion quite early and it is well within their rights to use their call in that respect. But we would assert that the Chairman accepted the closure motion far too early given the importance of the bill the fact that the House is in urgency the fact that members of the Opposition had not spoken and the fact that we have put up amendments that we wish to speak to. 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 I have been watching proceedings this evening from my office in the Beehive. I think the difficulty we have here is that the presiding officer has made a determination about the value of the debate continuing. I think it would be very unfortunate if that were to be in any way discussed or should I say overturned as a decision. There may be a way through this matter though because I do appreciate that members have pretty strong views on this issue. It is probably one of the strongest ideological divides that we have had in the House almost all year. I think it is important that all views are canvassed. 
I suggest Mr Speaker that you make your decision based on the pleadings that are in front of you. I suggest that if the whips were to confer we may well be able to make the debate on the next two parts quite wide ranging with the questions taken at the end of that. That would facilitate people being able to express their views without impugning the integrity of the officer in the Chair who has made in his opinion a proper decision that the Committee should accept with regard to the debate so far. If the Committee grants leave for the debate to be wide ranging then that is another matter. I do not know what the shadow Leader of the House thinks but we may confer and be able to come to some arrangement around that. 
The ASSISTANT SPEAKER (Eric Roy) 
: I thank members for their contribution. Let me address these matters in no particular order of importance starting with the last point. Of course the Speaker cannot make an assumption based on an interaction between whips or anything else but I think the House is appreciative of the comments made by the Leader of the House the Hon Gerry Brownlee. 
With regard to the expectation about how much of an urgency motion will be devoted to a debate that is the sole prerogative of the presiding officer. Irrespective of the stage a bill is at it has always been tradition that members who would like to continue to debate have to by their actions persuade the presiding officer that the debate will be relevant not repetitious and a whole range of other things. It is solely the presiding officer who determines whether to accept a closure motion at a particular time. Ultimately the test is when the House has to vote on that motion. There have been times when closure motions have been defeated. When the House has seven parties as it does now that is more likely to occur. 
I will acquaint the House with a couple of Speakers’ rulings that I think are quite pertinent on this occasion. Speakers’ ruling 77/1 states: “The chairperson is judge of all matters arising in committee and the Speaker will not interfere …”. The ruling goes on with some points about that. There is particular reference to closure in Speakers’ rulings 65/3 and 65/4. Speakers’ ruling 65/3 states: “The [chairperson] is the sole judge as to whether or not he ought to sanction the putting of the closure motion and it must be left entirely in his hands. The [chairperson] who has been presiding and has listened to the debate in committee must be the best judge whether the closure ought to be put.” There is a bit of a rider: “I can only express the hope that it will not be applied too harshly.” The Leader of the House has given some indication that there is some flexibility to address the desire of the House going forward. In that case I report to the House that I will not interfere with any decision made by the Chairperson in determining whether the closure motion should be put. 
In Committee 
Debate resumed. 
Part 1 Amendments to allow contract management of prisons ( 
continued 
)  
A party vote was called for on the question  
That the question be now put. 
Ayes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Motion agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 86 in the name of the Hon Rick Barker to clause 5 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to.  
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 87 in the name of the Hon Rick Barker to clause 5 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 88 in the name of the Hon Rick Barker to clause 5 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Noes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Amendment not agreed to. 
A party vote was called for on the question  
That Part 1 be agreed to. 
Ayes 68 
New Zealand National 58; ACT New Zealand 5; Maori Party 4; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Part 1 agreed to. 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 I seek leave for Part 2 and clauses 1 2 and 3 to be taken as one debate with all the arrangements that previously existed for speaking times; for the debate from this point to be a wide-ranging debate across the full scope of the bill; and for two questions to be posed upon closure of the debate so that we vote on the provisions consecutively. In the meantime let us debate freely the matters covered in this bill. 
The CHAIRPERSON (Lindsay Tisch) 
: Leave is sought for that purpose. Is there any objection? There is no objection. I remind members what this means. We will debate Part 2 which comprises clauses 7 and 8 and the schedule and clauses 1 2 and 3. This will be a wide-ranging debate. As agreed earlier today members may take two consecutive calls of 5 minutes each in order to make a 10-minute call—that is what we have agreed to. Are we all comfortable with that? Very good. 
Part 2 schedule and clauses 1 to 3 
MOANA MACKEY (Labour) 
: 
 I thank the Chair and the Leader of the House for allowing us to continue this very important debate. I am very pleased to take a call. I was not able to take a call in the debate on Part 1 but I am very happy to be able to do so now because I have a number of concerns and questions for the Minister in the chair Judith Collins that I hope she will take the time to address. 
I endorse the comments made by my colleagues thus far— 
Simon Bridges 
: She knows about everything. 
MOANA MACKEY 
: I say to Mr Bridges that I just care about everything. 
Simon Bridges 
: That’s a beautiful thing. 
MOANA MACKEY 
: Well that is what the Labour Party is about; we think about people other than ourselves. That is where I am going with this. I want to comment on one of the things Sandra Goudie said when she got up. She went on about how important competition is in innovation in the prison sector and how important innovation is within our prison system for getting great new ideas. Evidence from around the world has shown that although private companies are very very keen on showing how great they are when they are trying to get a contract there is no competition when it comes to follow-on contracts. In fact the bill as far as I am aware does not even stipulate a length of contract time. So on the one hand we have a situation that my colleagues have outlined where a private prison management company could get a contract for 50 years then it all goes pear-shaped the Government needs to get out of the contract and it will have to pay out for a very very long contract. 
Carmel Sepuloni 
: New Zealanders. 
MOANA MACKEY 
: That is right; it is taxpayers who will pay for that. 
The flip side of that argument is that when there are short-term contracts the contracts are not given to other companies. There is no competition overseas when it comes to follow-on contracts. There are arguments about how great it is that sustained competition throughout the sector will create these wondrous results but that does not actually happen. It only occurs at the point when companies are trying to grab contracts and then it all falls by the wayside and follow-on contracts often do not follow. That is what evidence from overseas has shown and I would like to know what protections have been put in this legislation to make sure that the claimed benefits of this law will eventuate. 
There are also concerns that the quality of these services may be reduced in an effort to maximise profits. I know that National members have rubbished this argument but it is an incredibly important point. I point out that private companies are fundamentally responsible to their shareholders. More than that they would be acting against their fiduciary duties if they engaged in projects that they knew would disadvantage their shareholders. To me that seems very much to run against the public interest in prisons being run properly. I would like the Minister’s comments on that as well. If these private companies are required to maximise profits for their shareholders how does that sit well with the public need for safety and the levels that the public may be expecting. 
I also know that the ACT member David Garret rubbished Labour members for saying that private prisons are bad by saying we are just ideologically opposed. I am and I am quite open about that. I think that it should be the State that incarcerates people not private companies. I think it is particularly repugnant to be making money off imprisoning people and the evidence backs that up as well. I am one of those people who think we should have an evidence-based approach to these things and in the area of law and order under this Government we absolutely have the opposite. I believe the evidence does not back that up. I want to say to the ACT member in particular that even if he does not believe in that moral argument—and of course ACT does not—how does he feel about a situation where the privatising of a prison may jeopardise public safety if there is a major emergency a riot a breakout or a strike? 
Hon Gerry Brownlee 
: Come on put the notes down. Say something you think yourself! 
MOANA MACKEY 
: I say to Mr Brownlee that I want to get it right because he is here and I really respect him and want to impress him. Government-run institutions are able to more effectively coordinate safety measures and emergency procedures than private companies. This is an important point and I would like the Minister in the chair Judith Collins to explain what she is doing to ensure that the private companies will have the same contact and the same ability to respond to an emergency as the State system because that has been a concern overseas. 
I notice that clause 199H of the bill “Control of contract prison in emergency” raises another issue: where there are concerns about public safety or other matters or emergencies the chief executive of the Department of Corrections can step in and take over. That raises the question that when things are going great the private prison gets to keep the profit but when things go pear-shaped the State has to step in pay the money and clean up the mess. How is that a good deal for the taxpayers of New Zealand? We saw this in the United Kingdom where a private prison company got into significant trouble within months of opening. It made all these claims about all the wonderful things it could do and all the targets it could meet. Within months the company had practically fallen over and it was the UK taxpayer and the UK prison system that had to step in to clean up the mess and pay for it. 
We have another case here of privatising the profits and socialising the losses. I would really appreciate the Minister’s comments on that as well because it is an important point. There is also the issue which members have rubbished but it has happened in the United States that it creates opportunities for corruption such as bribes kickbacks and political promises. We have seen political parties get a lot of money from these private prison organisations. They come up with “tough on law and order” policies because the more people there are in prison the more money those organisations get. 
If we look at Pennsylvania in the United States we see an absolutely terrible case that happened in 2007. Judges were being paid to put children into correctional facilities because the correctional facilities were privately run and the more children they had the more money they got. One kid threw a sandal at her mother I think and ended up being put into a correctional facility because the judge was getting a kickback. I ask the Minister what there is in this legislation to make sure— 
Hon Dr Jonathan Coleman 
: Where was this? 
MOANA MACKEY 
: —it was in the United States in Pennsylvania in 2007—it does not happen here. 
Before I finish I want to read a submission. We have heard a lot about New South Wales and a lot about Australia and I thought this submission was particularly good. Do members know who the submission is from? It is from the Police Association of New South Wales and this is what it had to say this year in its submission on the privatisation of prisons: “Private companies fundamentally are responsible to their shareholders to generate a profit on funds invested. Indeed company directors would be acting contrary to their fiduciary duties if they were engaged in projects they knew would be likely to not be profitable. It cannot be said that the interests of the shareholders and the public interest may always coincide—indeed all too often we know that this is not the case. The current world economic crisis is as a direct result of the clash of interests of private organizations and the general public.” 
That raises a number of questions that I would also like to ask the Minister. What will suffer as a result of the need to make a profit? How can there be a guarantee that corners will not be cut to meet the economic demands of making a profit for shareholders? If contracted services are remunerated on the basis of the size of the prison population what incentives would there be for the provider to rehabilitate offenders? Will the financial imperatives of filling prisons lead to overcrowding? How does the provider become accountable beyond the terms of the contracts and contract law? Private contractors are insulated from public scrutiny; they are not subject to the same controls and oversights that apply to the Government and public sector employees. 
Is there a real possibility that the safety of both inmates and the public will be jeopardised through inadequate staffing training and resources in order to increase profit margins? Will there be a higher staff turnover with private contractors meaning less experienced staff with less preparedness to respond to riots fires and escapes and what is the increased risk of opportunities for corruption within private companies that are not subjected to the very rigorous oversight and training of government prison officials? And what is the risk and potential impact if the private company goes bankrupt? Those were the questions put by the Police Association of New South Wales and I think they are questions that deserve to be answered before any member of this Chamber supports this legislation. 
David Garrett and the Minister in the chair said we should just give it a go and see how it goes. We are not talking about changing one’s hair colour or about getting a new haircut. We are talking about a significant shift in the way we run corrections facilities in this country. We are talking about a system that overseas has seen increased violence and prison deaths and lower reporting. If something is not reported the private company does not get pinged with the penalties and we have seen lower reporting in the private sector. Ten out of the 11 worst prisons in the UK were private prisons. I visited Her Majesty’s Inspectorate of Prisons for England and Wales when I was over there and I was told that the private prisons were diabolically bad and they cut corners at any cost. When MPs go through them the red carpet is rolled out and they are shown everything they want to see. It is like when we get that Microsoft Windows demonstration software that is nothing like the real thing. When we finally purchase the real thing it is very very different. We were told “Don’t go there.” 
JONATHAN YOUNG (National—New Plymouth) 
: 
 The private management of prisons is a forward step to improve our prisons to encourage innovation in ways in which we can ensure a better result for all New Zealanders which is why we are in Government and others are not. Private prison management provides an opportunity for innovation and service delivery which will support better outcomes for Maori and Pasifika and the public. Provisions will also be included in contracts for each prison to respond to the unique needs of people. Other significant nations have taken this step some time ago and I mention a comment made by Mr Mel Smith a former Ombudsman: “I can say categorically that the ACRP was very well managed and certainly lost nothing in comparison with overseas examples in Australia the USA and Great Britain.” 
I want to speak about what has been presented to us by members of the Opposition regarding the core function of State. They have said it is their philosophy that the incarceration of prisoners is a core responsibility of the State and should not be contracted out. That view is obviously not supported in Victoria New South Wales Queensland the United Kingdom and the USA. Those states and nations are very similar to us here in New Zealand. One could equally say that health and education services should be the core function of State because these are human rights yet we see and accept private providers. What about one of the most important of all needs: feeding the population. Should that not be a core function of State? Well Labour Governments have told us what we can eat and what we cannot eat; that is about as close as we allowed them to get. What about housing New Zealanders? Should that not be a core function of State? Where does it stop? That is the question. The truth of the matter is that in the modern world all these essential provisions come as a mix of private and public provisions. What makes a prisoner any more important than a law-abiding citizen to attract such support from the Labour Party? Is it the fact that prisoners have lost their freedom? What about the loss of freedom felt by the victims of their crime? We need to understand that a private manager has only delegated authority to act on behalf of the State. To say that a private manager is incarcerating a prisoner is a mistruth. The fact is that Parliament in its laws and the courts in the enactment of those laws incarcerate a crime-breaker. What the Minister of Corrections has said in presenting this legislation is that in order to deliver the best corrections system for New Zealand this Government believes that we should not limit our choices. By changing the legislation to allow private management of prisons we are giving ourselves a choice. 
This legislation is not about the Government offering profits to private enterprise. This legislation is about seeking best outcomes for the New Zealand taxpayer which may or may not be about costs. Let us talk about quality. A reported comment from Te Warena Taua who chaired a group that represented six iwi in a formal relationship discussion with Australasian Correctional Management said that under a contract with a private provider “we have seen more progress and innovation in a prison than we have seen in decades from the public prison service. The private management of prisons does lead to innovation in management. This is a good example of that particular case. 
Let me just read out a quote from a Labour MP from Great Britain Gerry Sutcliffe. He said: “The first private prison opened in 1992 and there are now 11 such prisons operating in England and Wales holding about 10 per cent of the prison population.” Listen to what he says: “The companies that provide those services have developed a strong track record of delivery and are driving forward the decency agenda as well as introducing innovation and increasing value for money in public sector prisons.” Members opposite do not want to hear that. “Martin Narey the former director general of the Prison Service has said that if it had not been for the private sector the decency agenda would not have moved at the pace that it has.” To say that private management of prison is all about profits is obviously and totally incorrect. Labour says that profit motives will compromise service quality. The evidence is to the contrary. In fact Gerry Sutcliffe from the UK went on to say that there were “barriers to the best provider being selected.” This legislation will remove the barriers so that merit can be the determining factor instead of monopoly. Prison staff also have the comfort that this bill ensures that their superannuation entitlements will be protected if they move to work for a private manager of a prison. 
I think that Labour members have somehow become lost in the fog of their ideology. I respect that they have that view but I just disagree with it. They have lost perspective on what really counts. It is not about who provides; it is about what is provided and also for what cost. It is not about the cheapest; it is about the best outcomes for New Zealanders. 
Carmel Sepuloni 
: It’s about transparency and being accountable. That should be the test. 
JONATHAN YOUNG 
: Let me tell members opposite what their leader Phil Goff said. He agrees with us. He said: “The point I am making is that it does not matter a damn whether one has private or public prisons in that sense. What really matters is the way in which those prisons are operated.” That sounds sensible. I do not think that members opposite have an open mind to consider the opportunities that this bill will present. The concerns that they have are answered in the proposed legislation. The requirements of prison management contracts are covered in new section 199 in clause 5. Subclause (1) states: “Every prison management contract must provide for—(a) objectives and performance standards for the contractor in relation to the management of the prison that are no lower than the standards applicable to prisons managed by the department; and (b) objectives and performance standards for the contractor in relation to the management and care of prisoners in the prison that are no lower than the standards applicable to prisoners in prisons managed by the department;”. I believe that this is solid legislation. I believe that this legislation opens up opportunities for innovation to come through. We know that improvement always comes when contestability is able to be entered into and we also understand that a monopoly closes that down. 
There is accountability in this legislation. The commentary notes the amendment to clause 5 where it replaces section 199E(1): “This amendment would require the chief executive to appoint at least one monitor to each privately-managed prison and allow the appointment of one or more additional monitors to assist that monitor.” As the Minister has said those monitors are moved around from prison to prison so they do not become captured. I remember that when I was a teacher many many years ago these monitors whom we would call “inspectors” would come to look at what we were doing and there certainly was a very strong degree of independence in their work. Labour members are concerned about what they state is a lack of accountability and transparency. They state that the Auditor-General’s office and the Office of the Ombudsmen will not be able to hold a private manager to account. Let me just explain once again that these people are “acting” as delegated authority under the chief executive that they have contracts with provisions that there are very strict criteria and that there are ample opportunities for wide scope for accountability in this bill. The Auditor-General’s office stated to the Law and Order Committee that additional power to access information was not necessary for the office to obtain information from a privately managed prison as it already had the power to do so. We do not hear that point from the Opposition—that the Auditor-General’s office is already satisfied that it has ample provision to be able to get the information that it requires to hold privately managed prisons to account. Other significant nations have taken this step some time ago. It is time for us as well. Thank you. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I am very grateful to the Leader of the House and our chief whip for negotiating the opportunity to have a debate such as this. Everyone has said it and it is true: there is a huge philosophical divide between the two sides of the House on this matter. The National Government seems to have it fixed in its mind that if it is public it is bad; if it is private it is good. The Labour Party on the other hand takes a different view. We say that if it is public it is good; and if it is private it is good in its place. 
Sandra Goudie 
: You don’t like privatisation. 
Hon LIANNE DALZIEL 
: I actually do not think that anyone on the other side heard what I said. I said that on this side of the House we tend to believe that when it is public it is good; when it is private it is good in its place. We are not debating the efficiency of business generally. That is not what this debate is about from the philosophical point of view. Those who claim that members on this side of the House do not understand business are not picking up on the essential point that we are making. We are challenging the very use of private business to undertake the nature of this work. That is what we are challenging and that is a fundamental difference. 
But I will get on to the efficiency of this business anyway because it does not stack up even on that ground. In terms of dealing with the philosophical divide we have here we have heard members opposite absolutely mock the concept of the State. We have heard the ACT Party come to the fore as usual and say that the State really has no core function at all and that anything the State does can be contracted out. Government members simply do not accept that there are certain core functions that should never be contracted out from the State. They are absolutely clear-cut about their view. We had a lecture from David Garrett. It was interesting to be lectured by someone who touted the fact that he completed his law degree some time after I did at Canterbury University. He mocked the landmark ruling of the Supreme Court of Israel by pointing out that it does not appear in our hierarchy of courts. Well hello! He obviously was at law school because to know that takes exceptional intellect. 
The point I was trying to make—and I think the one he deliberately ignored—was the potential impact of that decision across jurisprudence internationally. I think that it has an incredible capacity for making a significant change. In fact the article I was quoting from said that the ruling would be studied not only in Israel but that it will also doubtless generate a conceptual revolution worldwide. I think that is absolutely true. I think it is unfortunate that we have not had any debate about this in the House in the context of what we are talking about here. 
The petition that started this particular case argued two things. It argued that transferring prison powers to private hands would violate the prisoners’ fundamental human rights to liberty and dignity and second that a private organisation would always aim to maximise profit—and yes that is what private organisations are designed to do—and would therefore seek to cut costs by for instance skimping on prison facilities and paying its guards poorly thus further undermining the prisoners’ rights. I think these are serious issues that the court was required to address. 
When considering this particular matter the president of the court stated that normally the court would not intervene in economic policies decided upon by Cabinet and the Parliament in Israel in that particular case and that is certainly the case here. But in this case the president wrote that the legislation harms basic constitutional rights thus the amendment’s economic aspect was not a decisive factor that the court must weigh in exercising its power of judicial review. I think that the fundamental issue that the court has raised in this particular case is that by transferring the power to incarcerate to a private corporation whose purpose is making money the act of depriving a person of his or her liberty loses much of its legitimacy. I think that will be the basis of the many cases that I believe will be taken around the world. It is not just in New Zealand that this is an ongoing debate. This is being challenged all around the world and indeed at the heart of prison privatisation the United States of America we are seeing these things being challenged all the time. 
We have listened to National Party MPs talking about feeding people and housing people. We have heard all sorts of different things as being fundamental so therefore why does the State not do all of those? Again the Government completely misses the point which is that some things are the core functions of the State and they cannot be contracted out. Maybe National members think a private police force would be a good idea Actually the Minister in the chair Judith Collins is also the Minister of Police. I ask the Minister whether that is a line across which we would go. Is that thin blue line going to get a little thinner as the price of those who provide protection for our communities is dropped by the private sector? This is never mentioned. 
The courts could be privatised completely. The military—the defence forces—could all be completely privatised and of course we could get that for much better value. A few mercenaries could take up that role in defence of the realm. That I think is what we are not having a debate about. We are ignoring the fact that there are some fundamental issues in respect of human rights where we cannot ignore the obligation of the State and the fact that these things should not be contracted out. 
Jonathan Young brought to the House the example of the United Kingdom. He quoted the number of private prisons that had been developed in the UK. I do not think he mentioned the fact that 10 of the 11 private prisons in the UK rank in the bottom quarter of all the prisons in the UK. So the UK example is not a very smart argument to be raising because in fact private prisons do exponentially worse than most others. In fact 75 percent of the prisons do better. The members opposite love league tables. I tell members that that is a league table that the private sector does not look very good on at all. 
The Minister also failed to respond to the point that I have raised in this House more than once now and that is the cost differential in the provision of per prisoner management of the Auckland Central Remand Prison which was under private management from 1 July 2004 to 30 June 2005. We had the comparative cost which was $35700 per prisoner when it was under private management. The comparable figure for remand prisoners in public prisons at that time was $32000 per prison. The comparable price with the remand prison when it came back under public management—a year later so the price should have gone up—was lower than the private management cost of $33900 per prisoner. 
Why is nobody stating the obvious? Is the emperor genuinely wearing some clothes here? It seems to me that what has been overlooked is that the one actual example that we have of private sector prison management in New Zealand shows that it is more costly to run prisons within the private sector than it is within the public sector. All the international evidence points to detriment to those who are being imprisoned and detriment for the prison officers who are usually paid less and are at greater risk of attacks and other things happening to them. Of course there is the whole question of the cost to the taxpayer. In actual fact a lot of that is hidden additional costs. It blatantly cost more for the private sector to run the Auckland Central Remand Prison in the one instance of private management that we had. That is why as a Government coming in we had no problems overturning that contract and saying that we were not going back there. It simply was not even cost-effective. On every level this fails. 
MELISSA LEE (National) 
: 
 It is a pleasure to rise in this debate to take a short call to talk about some of these things. It is interesting that we actually agree on both sides of the Chamber that there is a huge divide in our ideological differences—the things we believe in. That is a given and we agree and that is fantastic. But I would like to talk about perspective. The members opposite lack perspective. It was very very interesting to listen to some of the members opposite talk about numbers. Do they not even understand the numbers when they quote numbers from the history of the Auckland Central Remand Prison? It was in fact the former Labour Government that came into power and decided to get rid of it because it did not agree with it. There was an ideological difference. But the prison worked better. It had better outcomes. The prisoners had better outcomes. They were getting a better rehabilitation process yet the previous Labour Government got rid of it because it simply did not agree with the idea. 
Let me just answer the Hon Lianne Dalziel who has just resumed her seat. What she said about privatising different things—the police the military—was very interesting. I think the only person in this House who has ever agreed or talked about privatising the military sits on the other side of the Chamber and belongs to the Labour Party. His name is David Shearer. Goodness me! 
I will bring up some of the things that some members have talked about. Talk about propaganda! Apples versus apples apples versus oranges! There have been no other remand centres that they could compare the Auckland Central Remand Prison with but they keep continuing to bring up the costs. They keep continuing to compare the numbers. Do they not understand even basic numbers—maths? I am so glad the Hon Anne Tolley is introducing maths and numeracy properly in our schools. Perhaps Labour members should all go back to school. 
I will talk about what Mr Barker said earlier during the debate. Mr Barker said that the Minister of Corrections and the Department of Corrections have vested interests and hence could massage the figures. But I say that perhaps that is what happened when Labour was in Government. Perhaps that is the reason he is suggesting it. Massaging the numbers—my goodness! There are no numbers with which to compare Auckland Remand—I cannot even speak now; I am so excited—Auckland Central Remand Prison. 
Carmel Sepuloni came up with all those numbers of people who are escaping from prison—so many of them—yet she opposes this bill. That is unbelievable. She cannot come to grips with the fact that perhaps we have a really really—as Mr Barker would say—woeful performance by the Department of Corrections under the previous Labour Government. Let me say that escape numbers have halved since this Government the National Government has taken over. Yet Labour members are opposed to the idea that perhaps there would be a better choice and a better option for the public and for safety and better outcomes for prisoners’ rehabilitation. I cannot understand why Labour members would oppose that. 
Somebody else over on the other side talked about transparency. When they try to say that the Auditor-General and the chief executive cannot control a privately managed prison do they actually know what they are saying? That is just utterly ridiculous. The chief executive of the Department of Corrections this morning in the Law and Order Committee said that he is the boss of the Department of Corrections and that yes he will be able to monitor the private management of a prison—as I said private management. We are not lumping up all the prisons and selling them. It is not the privatisation of all prisons. We are actually saying that best international practice could be adopted to improve the situation in this country where the Department of Corrections has failed in its duties—which is woeful as Mr Barker has said. You know perhaps we might have a better benchmark against what has happened in the last 9 years of the previous Labour Government. It is improving since the current Minister of Corrections took over. 
There is also something else that somebody on the other side of the Chamber said. Lianne Dalziel also said that business in the private sector could be bad but in the public sector it is good. We all work in the public sector. We are all members of Parliament. We are here to do good for the public. We have never actually said that public is bad. 
Hon RICK BARKER (Labour) 
: 
 I come back to the contribution made by Melissa Lee and I will talk about numbers. Let us come back to the numbers that the Hon Lianne Dalziel put forward. I just repeat them for Ms Lee because she heard them when they were given to the Law and Order Committee by the Department of Corrections which is responsible to the Minister of Corrections. These are the numbers that are given by the department. The department says that the Auckland Central Remand Prison under private management had operating costs of $35700 which inclusive of other costs were $57280 which was higher than for remand prisoners held in public prisons. The cost was $35700 compared with $32000 in public prisons and $57000 was the cost inclusive of related property costs in the private sector whereas it was $50000 for the public sector. So the public sector was cheaper. These are figures from advisers to the Government; those people can count. These are audited figures. This is solid evidence. This is not rhetoric. The member says she can count and she supports numbers but they are the same sort. 
This is the same attitude from National that it had when Treasury said that the emissions trading scheme was going to cost New Zealand $110 billion. Nick Smith said no it will not. Well who are we to believe: Nick Smith who counts on his fingers and his toes or Treasury filled with highly skilled highly trained people who can count and can do numbers. The Department of Corrections’ own numbers show that the Auckland Central Remand Prison run under the private sector was dearer than it was under the public sector. Every piece of evidence whether we look at it from Australia from Canada or from Britain shows that privately run prisons are poorer. 
There is another part—members should trust me and I will come to Part 2 here which will surprise the Minister—that shows some concerns. If members have a look at clause 7(2) they will read: “the contractor and the chief executive in the name and on behalf of the Crown may make any arrangements that they consider necessary or desirable to determine the respective liabilities of the Crown and the contractor in relation to any matter …”. A private cosy deal will be done between the chief executive and the contractor. 
Then we can go to section 199B of the Corrections Act substituted by clause 5 of the bill: “(1) The Crown is entitled to be indemnified by a contractor—”. It does not say “shall” or “must be”; it says “entitled to be”. That is permissive. So we can have a cosy deal by the chief executive and the contractor. Who will carry the cost of that? It will be the taxpayer. The point about that is that we have to rely—according to the Minister and the Government’s legislation—on the chief executive’s responsibility and integrity about that. I have no doubt about the responsibility and integrity of the chief executive. But I want to have oversight by an external audit carried out by an external agency and that is why I want the Office of the Controller and Auditor-General to be in the legislation. I want it to be compulsory that those things are done. This is by trust. 
When the member Melissa Lee says that Labour members are talking about ideology I say to her that we are not talking about ideology from our perspective; we are talking about ideology from the National Party’s perspective. This provision is simply an article of faith: National members believe that private contractors will do better when all of the evidence points in the opposite direction. Even when the Minister’s own department says that it is more expensive for a prison to be run by private enterprise than it is to be run by the department she is still going to go ahead and proceed with this legislation. When Treasury says it is going to cost $110 billion for the emissions trading scheme and Nick Smith says “That is not correct. We have got other figures.” whom do we believe Treasury or Nick Smith? In this particular case whom do we believe the Department of Corrections or the Minister of Corrections? I say that the department is correct. A private contract was more expensive before so there is no justification for it. 
The next point I come back to in this debate is that the Minister got up earlier and said how wonderful the Auckland Central Remand Prison was before because it introduced programmes for Maori. It was innovative—the first prison in the country to do that. Well I tell the Minister that that is not correct. That is simply not correct. The programme was started in Hawke’s Bay in Mangaroa Prison and all of the other prisons followed that. So we have now a fallacious argument being put forward to justify an innovation of a private sector prison. It was not a private sector prison that introduced that innovation; the facts show that to be the case. 
Hon JUDITH COLLINS (Minister of Corrections) 
: 
 I need to answer a few of the questions that have been raised. The member the Hon Rick Barker has just resumed his seat. He said I had said the programmes for Maori were first introduced in the Auckland Central Remand Prison. But I said that was the first programme for remand prisoners. He should listen. 
The member also made some points there about costs. All through the debate tonight we have heard from Labour members but not one of them has talked about the need for rehabilitation or the fact that rehabilitation costs money. Unfortunately they continue to ignore the fact that the Auckland Central Remand Prison as a remand centre—the only one that was fully a remand centre at that stage—actually provided rehabilitation. It was contracted for 70000 hours. That was not something that was prevalent in the remand wings of our public prisons at that stage; that prison was in fact a leader on that. Those members ignore the fact that that contract cost money. Well this party is not going to ignore rehabilitation which is why we have doubled the number of rehabilitation places for our prisoners in our first term. 
Some questions have been asked about ideology. What is our ideology? It is pretty simple really; it is whatever works. Whatever works in corrections is what we are going to do. We will not do what the Labour Party does which is to say it has an ideology of being against the private sector. But here is a little question for the Labour members to answer; Mr Barker may like to answer it. If Labour members are so against the private management of prisons why was Chubb which Mr Barker called a glorified taxi service the company that under Labour responded to all the home detention call-outs? I ask Mr Barker why that was the case. It was because of course it is OK for Labour to call on the private sector when it feels like it but Labour will not have the private sector anywhere where Labour can make a point out of it. It was quite safe to do that when National was Opposition because the Labour members knew that National actually— 
Hon Lianne Dalziel 
: That is because it was home detention not incarceration in a prison. 
Hon JUDITH COLLINS 
: Oh Lianne Dalziel says it is not incarceration. Well she should tell that to the courts. I think it is extremely important to ask those questions. 
There have been some questions from Moana Mackey. She asked why the terms of the contracts are not in the bill. It is a good point except that the terms of contracts are in those contracts. That is a sort of basic fact. If she had looked at that she would understand it. 
Moana Mackey also said there would be corruption. She talked about judges being corrupt and sending prisoners off to jails. 
Hon Lianne Dalziel 
: In America. 
Hon JUDITH COLLINS 
: That was in America. Let us just look at this. Moana Mackey is saying judges in New Zealand could be corrupt. Well I actually do not have one instance of knowing of a judge in New Zealand who could be corrupt. 
Grant Robertson 
: She never said that. 
Hon JUDITH COLLINS 
: If she did not want to raise it why did she bring it into this debate? The other thing she said was that judges could collude with private prison managers. She said that happened in America so it is obviously applicable here! Well in New Zealand— 
Hon Member 
: So the Minister admits it happened. 
Hon JUDITH COLLINS 
: No no. If the member wants to know about it she should answer this question: who decides to which prison a prisoner goes? It is actually the Department of Corrections. Is she now going to say the Department of Corrections is corrupt as well? Is that what she is going to say? When it comes to incarceration this is a completely different system than that which operates in any of the states of America. We do not have politically elected judges; we have appointed judges who are appointed until their retirement age. The vast majority of our prison population will be in the State-managed prisons. 
Chris Hipkins has asked about Rimutaka Prison and about how many prisons would be under private management. I wish he had listened because I have said time and time again all year—and I have put out a number of press releases on this—that we are looking at two: the new prison being built at Mount Eden and a new prison possibly being built at Wiri which is in Auckland. So we are not talking about wholesale privatisation. 
Metiria Turei 
: Who pays for the buildings? 
Hon JUDITH COLLINS 
: The member from the Greens likes to pipe up and make her voice heard now. She said she went to the Auckland Central Remand Prison. What did she say? She loved the innovation. She said it was all because of Dom Karauria who was the manager. She then went on to allege corruption in that prison. She said the people were fudging the statistics. That is what she said about the manager of that prison and she should be ashamed of herself for making that allegation. That man is a very impressive manager of prisons and she would be very lucky if he came back here. 
What are some of the other things? Oh yes—Lianne Dalziel. She talked about the core functions of the State. I am actually with Phil Goff on this one: when it comes to prisons it does not matter who owns them and it does not matter who manages them; what matters are the outcomes. The outcomes from privately managed prisons and our State-run prisons should be all about rehabilitation: preventing people from being re-victimised out in society and making sure that we do not simply lock people up and leave them there. When Labour came into Government— 
Metiria Turei 
: You’re wasting time and money on private prisons when you should be dealing with the public sector. 
Hon JUDITH COLLINS 
: If Miss Turei would listen she would learn something. 
Simon Bridges 
: She doesn’t listen. 
Hon JUDITH COLLINS 
: I know she does not listen. She could listen to this: when Labour came into Government there were— 
Hon Steve Chadwick 
: I raise a point of order Mr Chairperson. Is it not the usual format for the Minister in the chair to actually answer questions raised by previous speakers rather than give a political diatribe from the chair? 
The CHAIRPERSON (Eric Roy) 
: Leave was sought for a wide-ranging debate on the remaining parts and I think the Minister is having a wide-ranging debate on the remaining parts. 
Hon JUDITH COLLINS 
: Thank you very much Mr Chair. It shows that those members do not like the answers do they? They really do not. Miss Turei has made all sorts of comments about the integrity of the people who worked at Auckland Central Remand Prison. She has said from hearsay evidence given to her in a select committee that the place was corrupt yet she has at the same time said the manager there was one of the most impressive people whom she had met. She also said that prison was innovative. That is what she said. So that member is extraordinarily confused. However in amongst her ideology against privately run prisons she has now said we should have a partnership with iwi in the public sector. I am glad to hear that the Greens have come round to public-private partnerships. I look forward to their support when we build the new prison at Wiri because I think that will be very very interesting. 
Generally I ask the Opposition members to please stop ignoring the 70000 hours of rehabilitation that Auckland Central Remand Prison put in and to please stop denigrating the people who did good work at that prison. They were good people they did good work and they should not be denigrated just because the Opposition has an ideological problem. The only ideology that we are bringing to this issue is whatever works and I am very proud to see that. 
JACINDA ARDERN (Labour) 
: 
 I am pleased to take a call. I have to say though that I am somewhat disappointed to follow what can only be described as an absolute trivialisation of some really significant points that had been made not only by the Labour Opposition but also by my colleague Metiria Turei. I will touch on a couple of points that the Minister in the chair raised. In particular she tried to defend private prisons by stating that rehabilitation programmes had taken place under private contractors in remand prison. Remand prisons are for prisoners on remand! Fifty percent of those on remand are subsequently found not guilty; they are under the presumption of innocence. And we are operating rehabilitation programmes on some of these prisoners? No wonder we have inefficiency problems with the private sector! 
I would also like some clarification perhaps if Jonathan Young would like to take another call on what exactly is meant by the decency agenda that private prisons are operating. I was confused by this term and perhaps he could shed some light on the decency agenda. 
The UK is an interesting example to bring up—the UK and its large number of private prisons. I am not sure whether Mr Young heard the Labour Opposition point out that 10 of the 11 worst-performing prisons in the UK are private prisons. In fact that might be the very reason why in the UK they established something called independent prison monitoring boards. 
I would like to spend a little bit of time talking about the independent prison monitoring boards because it is a point raised by my colleague Moana Mackey. I guess parallels could be drawn between what was established in the UK and the monitors that the Minister has raised in Part 1. But I will go through some of the technical differences because I think the monitors that are set out in this bill are actually inadequate in comparison with what the UK has set up; I want us to keep in mind that the UK set them up because of the dire circumstances under which some of these private prisons were operating. 
I want to go back to new section 199E and the monitors. New subsection (1) of that section sets out the number of monitors that could be appointed at any one time and I ask the Minister whether she has any expectations over what is an adequate number of monitors for any given prison. The responsibilities for these monitors as set out in this bill are significant. In fact in the UK the independent prison monitoring boards have multiple members on them in light of the fact that they deal with such weighty issues and they are frequently called to report to the Home Office on the operations of the prisons so I would like to hear whether the Minister has any expectations in that regard. 
I would also like to refer to section 199E(1A) in clause 5 which sets out that the chief executive may appoint one or more monitors under the State Sector Act. New section 199D(2) in clause 5 then states that the monitor is responsible to the chief executive for the assessment and review of the management of that prison and must report to the chief executive “at any intervals”. I want to draw out the question of independence at this point and it is something that has been raised by my colleagues. Again there is a significant difference between the independent boards that we see operating in the UK and those we see here. The chief executive appoints the board and it reports to the chief executive. New section 199E(4) states that “The office of the monitor may be combined with any other office appointment or position if the chief executive is satisfied that the duties of that other office appointment or position are not incompatible with the duties of a monitor.” 
That is a huge amount of discretion placed upon the shoulders of one individual person. The fact that the chief executive can appoint however many monitors he or she chooses and makes a decision over whether there is any conflict of interest with that individual and can call the monitor to make reports at any time is a high concentration of power in one individual and potentially for the one or two individuals whom he or she may appoint. 
One of the reasons I have such an interest in independent prison monitoring boards is that when I was resident in the UK I made an application to become a member of one. I had an interest in the way those boards operated and the fact that they drew on lay people—members of the community—who had no conflict of interest in the way for instance Brixton prison was managed. I was one of those individuals. I had no vested interest in any regard. The chief executive would not have been the one making my appointment to that board. I would have been entirely separate to the process. My only interest therefore would have been the transparent and correct operation of that prison as set out in legislation. I think that is in stark contrast to the way these monitors are set out in this legislation. I would be interested to know whether the Minister took into account any comparisons such as the way the UK for instance operated which is an area I have some interest in. 
I would like to go on to a couple more provisions as they relate specifically to the monitors. New section 199F(2) states “Every contractor must ensure that any monitor has free and unfettered access at all times”. That actually confers on the monitors greater powers than the Auditor-General has. The Auditor-General has an independent responsibility—a responsibility not invested in the Auditor-General by the chief executive—yet the monitors have greater powers than the Auditor-General. I think that is an oversight and therefore I am disappointed that we have not adopted today what I think are very reasonable Supplementary Order Papers put forward by my colleague Rick Barker. Those Supplementary Order Papers would have rectified and clarified that situation. 
I come to new section 199G(2A) which within that context states that a monitor is also able to “investigate any matter relating to that prison or any prisoner in that prison”. I think that raises an interesting point over the subject matter of the reports that will come from the monitor. For instance the independent prison monitoring board actually spends a lot of time taking complaints from prisoners about the abuse of very very basic rights. I do not want to get into a debate over whether we are granting too many rights to prisoners but the independent prison monitoring board did have a role in ensuring that there were basic standards in those prisons. Often those were kept in check only by complaints made by prisoners themselves. Will a monitor be able to accept complaints and investigate matters raised by prisoners directly? I accept that I may have missed that detail in the bill but I would be happy for the Minister of Corrections to clarify that for me. I do note that the Minister is quite busy but I suspect that the Hon Nathan Guy is not raising with her matters related to the bill; perhaps he is discussing designs for the next passport because that is obviously a weighty issue that the House has spent significant time on today. 
I would like to get to another important issue and that is what happens to the reports—the very important reports—being produced by the only one with access and apparent transparent access to the private prisons. What happens to the reports generated by the monitors? There are lots of provisions relating to what they can do how they can get the information and how they can be tasked by the chief executive but I did not feel that there was enough consideration of what then happens to those reports. The Opposition has already requested that access is granted under the Official Information Act. I do not feel there is quite enough clarity at this point that they will be covered by the Official Information Act and that we will be able to gain access to the reports produced by monitors. Again that is perhaps something the Minister could clarify for us. I think that would be a great service to us. 
There is a provision under section 199I that says that prison management contracts are to be presented to the House of Representatives. We will then in comparison have greater transparency around the content of contracts than we will around whether the contracts have been abided by and fulfilled and I think that is an inconsistency. It is one thing to know what is included in a contract but it is another thing to know whether we have the powers and tools to ensure that those contracts are being abided by. It would be only right to have consistency between those two provisions. I request that the Minister draw out her reasons why she believes that the reports produced by monitors should not be subject to section 199. 
Hon Dr PITA SHARPLES (Associate Minister of Corrections) 
: 
 Tena koe Mr Chairperson. I will take a call on the Corrections (Contract Management of Prisons) Amendment Bill. To make it very clear I say that I am the Associate Minister of Corrections. I asked for the portfolio because I have spent a lot of my time since the 1970s working in prisons in New Zealand and Australia and I thought that maybe I could offer something to the prison service by being involved in that capacity as a Minister. There are good prisons and bad prisons in terms of their administration and treatment and of the duties they perform. I have found good prisons in a private capacity and also in a public capacity and poor prisons in both as well. 
I favour the introduction of private prisons in the sense that it can give Maori an opportunity to be more involved in looking after their own and perhaps rehabilitating them. The role of a prison in the first place is really to incarcerate people and to make the public safe. I believe that the role can be extended to rehabilitation but it needs a particular programme and culture within it in order to perform those tasks. 
A variety of Maori programmes have been introduced in prisons for ages. Mention has been made of the Maori focus units. The first one was in Hastings; I was one of the three people who designed that prison. It did not perform how we wanted it to and that is what I want to talk about. In New Zealand we have more prisons and more people in prison than we should have for our population. As a result the prisons are finding it difficult to cope so they are putting conditions on each other. There is a lot of interaction between prisons which stops the units from running in their own rights as single prisons. In the Maori focus units for example suddenly there may be no more beds left in the matua prison—the senior prison—so they put people into the Maori focus unit who do not want to be there sometimes who are not Maori and who do not fit into that programme. It erodes the value of the programme that is operating. There are other factors too but unless a programme is set up and is protected so that it can run in accord with why it has been set up then it is very difficult to carry on. 
My own preference is that we build more rehabilitation centres. We have designed some that we are hoping to launch next year. The value of the rehabilitation centres is that they will bring the recidivism rate down which doubles the amount of beds available. If there is a rehabilitation centre with 60 beds and we manage to keep most of those people out of prison that means that 60 beds are available in the main prison as well as in the rehabilitation centre because those people are not coming back. It is good to try. We have tried quite a few things in prison but it has been very difficult to maintain them. 
Hon Lianne Dalziel 
: But they’re not-for-profit aren’t they? The ones that work are not-for-profit. 
Hon Dr PITA SHARPLES 
: I cannot answer that because I have seen rehabilitation centres run both in private prisons and in public prisons and I do not think that the profit thing needs to come into the equation myself. I think it is up to the manager. 
The member is right about Dom Karauria and the good job that he did at the Auckland Central Remand Prison but that came down to the manager and the freedom that he had to operate. He saw our P programme and he saw that P was a problem in his prison. He gave $13000 towards our P programme and he asked us to come into his prison and present to all of his staff. He made his entire staff except those few who were holding the keys at that moment observe the programme. At the end of it he stood up in front of them and said that he did not want to see any of them involved in P trafficking or helping to get P. He mentioned a guy who had left the week before who was sacked because he was involved in P and he said that he did not want to see it happening there. So I was pretty impressed with the prison that he ran. He also had a cultural arm at the prison which Peter White ran. He had elders in there by the dozen and those elders were able to interact. I am not saying that this cannot happen in a general prison but it is harder in New Zealand because of all the layers of culture that have happened in our prisons. 
During my first 3 years in Parliament sitting on that bench over there I noticed that quite a few Ministers of Corrections passed through. Corrections was regarded as the portfolio from hell. That was the korero. But you see it need not be like that if we are able to effect some change and some difference. Most of the people working in prisons are well motivated and I mean that having worked in that area since 1972. Also most of the inmates start on little offences like sleeping in a truck bay in town smashing a bus seat or something like that. It builds up to a welfare home then a low-security prison then a medium-security prison and then a maximum-security prison. 
I visited some private prisons in Australia. I thought they were pretty good because they had a case management system where every inmate had a personal case manager and every staff member had a number of inmates for whom he or she was responsible. That case management gave people an opportunity to aspire to privileges. They had a privilege system. The inmates would get more visits more leave and stuff like that depending on their behaviour and how they operated in the prison. I think that those sorts of things can come in more easily in a private prison than they can in the mainstream prison because our mainstream prisons are connected to each other. We might have to move people. We have a programme of trying to relocate inmates near to the town where they come from and that causes all sorts of complications as well. 
There is a case for private prisons. I think though that if we do that then we have to have a public debate. I think we have to look at things like security escape and so on and we have to make sure that people have had the chance to have that debate. We have to look at the human rights—the rights of inmates to appeal and to have their appeal heard properly. All of these things have to happen if we are to extend into the private capacity. At the end of the day I think we should try it because the way we are doing it now is not working despite really good attempts being made in the Department of Corrections. 
Hon Sir ROGER DOUGLAS (ACT) 
: 
 I came down to the Chamber and I was not inclined to say anything on this Corrections (Contract Management of Prisons) Amendment Bill but in a way I could not help myself when I listened to the Labour members. When we listen to Labour members these days whether the issue is prisons education health or accident compensation it does not really matter because what they are about is means. They are about public delivery irrespective of whether the outcome is any good. Those members do not start with objectives and goals and then ask what the best way to deliver them is. Where they start is with the means and it has to be the public delivery. It would not matter whether private prisons rehabilitated 50 percent of prisoners and public prisons rehabilitated only 10 percent because the members opposite would still favour public prisons. That is a tragedy; that is a real tragedy. 
I suggest to Labour members that they are going nowhere until they focus on objectives and goals and not on means. They are in favour of a public system in accident compensation that will lose $4 billion this year. They are not actually interested in delivery. They are interested in a public education system where 30 percent of our young kids come out unable to read or write properly. They are not interested in the kids but they are interested in public delivery. At the end of the day that is what this is all about. It is a question of whether we can introduce a measure of competition. Without doubt competition is vital. It is just as vital within the public sector as it is within the private sector. 
It would be fair to say that competition amongst Government enterprises and between Government enterprises and private organisations helps to ensure that the Government is the servant of the people and not the other way round. Whether or not the Labour Opposition likes it the fact is that competition is a disciplinary force. It provides consumers with a protection against poor quality services. I suggest that some private sector competition in the field that we are talking about—prisons—would do exactly that. The difficulty for the Labour Party I think is that those members have locked themselves so much into the means that they have lost sight of the people whom they are trying to help. Until they get back to focusing on people rather than on means they are going nowhere. 
A recent publication on education by their former Prime Minister which she sent to a lot of parents mentioned public education in that letter 12 times and never mentioned a child once. That is where Labour has got to which is a great tragedy. 
GRANT ROBERTSON (Labour—Wellington Central) 
: 
 I will talk about some aspects of the Corrections (Contract Management of Prisons) Amendment Bill where I think the Minister in the chair the Minister of Corrections would agree that we are basically on the same page. What she has been trying to achieve particularly in the new section 199 which is in clause 5 is about safety and accountability. I ask the Minister whether it would be fair to say that what we are talking about within this bill is an attempt to establish some parameters for safety and accountability in this process. Yes I think we have some nodding from the Minister. 
The question I then have is to do with for instance new section 199(1)(c)(ii) which states that one of the requirements of the contract is that there be “sufficient suitable staff members to enable the contractor to carry out the contractor’s statutory and contractual obligations in relation to the prison;”. What we know from private prisons internationally is that they drive down the ratio of staff to prisoners. We know that. The statistics from America tell us that. A report from the US National Council on Crime and Delinquency said that privatisation led to a 15 percent lower ratio of staff to inmates. That is supposed to make us safer. That is supposed to make communities safer. That is supposed to make our prisons safer. That clause is in this bill. I am sure that the intent of it from the Minister of Corrections’ point of view was to support some kind notion of safety within our prisons and safety for our community but we know from overseas evidence that it goes the other way and that we will end up with fewer staff and more problems within our prisons as a result. 
The Minister stood up earlier and said that the problem with Labour was that we did not understand and we were interested only in ideology but that National was after what works. The problem is that privatisation has not worked in the United States of America. It has not worked in Australia. It has not worked in Canada. It has not worked in the United Kingdom. I have great respect for Dr Sharples and I think given his experience that he should be the Minister in the chair right now. I think we would be a lot further advanced if he was. But we know that empirically privatisation does not work. The Minister simply stands up and says that the Labour Party does not understand what works. We have not heard from the Minister what measures that have actually worked have driven her to do this. We have not heard that. The only evidence presented about the performance of private prisons has come from this side of the House. I think that these particular parts of this bill try to establish a framework that will be safe but we know that that framework has not worked internationally. 
The other aspect that I think the Minister is trying to establish is some sort of accountability of private prisons. The problem we have is that this bill decreases the transparency and accountability of the prison system. Earlier on tonight we discussed the fact that the Law and Order Committee obviously had some inclination towards the importance of accountability and transparency because it had included within the bill that the requirements of the Public Records Act be met in terms of the prisons and the prisoners. That means that the Chief Archivist can get in there and find out what is going on in the prisons. Why then would we not let private prisons be exposed to the Ombudsman or to the Auditor-General? Why would we not want those agencies which are closely related to Parliament and to ensuring transparency and accountability to be involved? 
In the end what we are reduced to here in terms of accountability is monitors appointed by the chief executive. We are in fact reducing the ability to hold private prisons to account. We know that we can question the Minister and the Department of Corrections through the select committee process through oral and written questions and through inquiries. We cannot do that with a private company. So the clauses within this bill that are trying to create some kind of regime of accountability are simply lacking. We heard earlier tonight from the Minister that the reason she was not supporting the Supplementary Order Papers that would have done that that would have brought this legislation into line was because they had not been considered by her caucus. That is simply not on. Ms Goudie will tell us that these matters were raised—and I have checked with Labour members—at the Law and Order Committee. 
Sandra Goudie 
: What matters? 
GRANT ROBERTSON 
: Having better accountability arrangements and better transparency and involving the Ombudsman and the Auditor-General. These things could have been dealt with but the Minister airily dismissed them saying that they were not discussed at her caucus so she was not prepared to consider them. That is unacceptable. What we have here are accountability and transparency arrangements that will make it less possible for New Zealanders to know what is happening in their prison system. 
The Ombudsman’s role is critical within the prison system. Anyone who has dealt with complaints at all at any time in his or her role as an MP or outside this House will know the important role that the Ombudsman can play in the prison system. To not have that fully available as we go down this unknown path of private prisons is very very dangerous. Then we come to the Auditor-General. The Law and Order Committee was told that the Office of the Auditor-General would not have the ability to scrutinise this new arrangement in the way that it normally would. The Office of the Auditor-General reported to the committee that under this bill it would not have the power to audit a private company and provide an opinion on the performance of that company. Once again we see this bill reducing accountability and reducing transparency. What I am trying to say here is that Part 1 is the accountability section. Section 199 is the new accountability section. We have the Chief Archivist involved. That is fantastic! The Chief Archivist can be there. But what we do not have is the ability for the Ombudsman the Auditor-General and ultimately Parliament to have the kind of oversight that is required. 
This bill is flawed in principle and it is flawed in practice. But from the Government members tonight we have simply not heard any justification or evidence. We have seen that there will be reductions in accountability and reductions in safety. This bill has gone through tonight without National members standing up and doing anything more than indulging in broad ideological statements. Members on this side of the Chamber have made sure that we have defended our principled position our ideological position and we have gone on to debate the practical implications of this bill. We have not heard that from the other side of the Chamber. That means we are passing a law under urgency that will decrease safety that will decrease accountability and that will decrease transparency and the National members cannot even get up to justify it. 
SIMON BRIDGES (National—Tauranga) 
: 
 I have to say that I have been frustrated while I have been sitting here throughout this debate by the misinformation that I have heard from the Labour members. I do not think it is wilful misinformation. Members opposite are not setting out to be duplicitous and to say things that are dishonest; I do not think that at all. A fog or a mist has come over those members’ eyes though through their ideology and dogma. When I think of their ideology I think of old men who died probably about 150 years ago and who were caught up in arguments about profit the proletariat and so on. When all that debate is boiled down that is what it comes to from those members’ perspective. It comes down to ideology. 
We have heard from Grant Robertson. I am simplifying it but I think he said that profit equals bad. Profit equals bad. That is what I heard. I admit that he fancied it up and he titified it but he made the argument that profit is bad— 
Hon Member 
: “Tit-ify” Harawira? 
Chris Hipkins 
: The National Party would know all about that! 
SIMON BRIDGES 
: I tell Chris Hipkins to look that one up. There are more meanings than he thinks and he should get his mind out of the gutter. Grant Robertson said that profit is bad. He said that if an organisation has a business imperative in the prisons and is making a profit then through those members’ leap of logic that compromises what those who are running the prison are doing. How ridiculous I say to Grant Robertson. That argument goes something like this if we apply it in other sectors. Toyota makes a profit from manufacturing motor vehicles and because it makes a profit that somehow compromises their safety record. 
Hon Members 
: No. 
SIMON BRIDGES 
: Well that is what the member said. He was making the argument that profit is bad. The members opposite do not like it. They say that when businesses make a profit that somehow compromises them. How ridiculous! 
We heard the same sort of ideological bunk from Lianne Dalziel who I admit dressed it up in a kind of human rights language of liberty and talked about the Israeli Supreme Court and so on. But again if we boil it all down it is ideology. 
We heard the same from Jacinda Ardern. She said that making a profit was somehow bad and that the reason it was bad was that prisons are a core Government function and service. Again I say that is absolutely ridiculous. How absolutely ridiculous! Firstly the Department of Corrections will be overseeing all these prisons. Secondly I do not think anyone in this House would argue that health and education are not core Government functions. Those members argue that having private schools and private hospitals corrupts the whole system when what they actually do is to add to the system. They free up public resources and enhance the system. That shows the ideology of members opposite. 
The Minister of Corrections Judith Collins is exactly right. What we have from this Government and from the Maori Party is a philosophy that says to do what works. Let us be pragmatic about it let us look at the evidence and we will do what works. We are beginning to see that under National and I think that is a very good thing. 
Another point that has come out in the debate concerns price. Those members argue that the evidence that the price is more expensive stacks up and that we would be paying more under a private prison contract. How ridiculous again! We are not comparing apples with apples for starters. We could get into the figures. I do not want to have a sterile debate on the figures but the reality is that when the Auckland Central Remand Prison was privatised it cost I think $57000 per prisoner as opposed to $61000 in the wider system. We have seen cost advantages in Australia and England. If we are talking price then the arguments go both ways. We could argue about the numbers but what is more important than that? This measure is not about the numbers; it is about having effective and safe prisons rather than having cheap ones. 
METIRIA TUREI (Co-Leader—Green) 
: 
 The first thing I say given the contribution we have just heard is that I make no apology for believing that profiteering from systemic racism is a bad thing. Making a profit is not necessarily a bad thing but making a profit from systemic racism is bad and this Committee should not be supporting any kind of legislation that does that. 
I will address some of the issues raised by the Associate Minister of Corrections because I thought he made a really important contribution given the argument that this legislation is supposed to be good for Maori and given the fact that the Maori Party is supporting it. The process of colonisation that has impacted on the Maori communities in this country is felt nowhere more obviously than in the oldest construction of the colonial Government which is the criminal legal system and penal policy. They are the oldest constructions of the colonial State. The results of the colonisation process and the systemic racism that has arisen out of that process are clear. More than 50 percent of the prison population is Maori and more than 50 percent of the female prison population is Maori. Wahine Maori are in jail in appalling numbers. The systemic bias in the system leads to Maori being more likely to be stopped searched arrested convicted and jailed than their Pakeha counterparts. Even those involved with the Youth Court have said that rangatahi Maori—young Maori—are more likely to face the Youth Court. 
Hon Member 
: The chair of the Law and Order Committee is shaking her head at what you’re saying. 
METIRIA TUREI 
: It is unbelievable that National cannot face the facts of the matter. Rangatahi Maori are more likely to face the Youth Court even though their offences are generally of less seriousness than the offences committed by their Pakeha counterparts. We see the evidence in the legal system everywhere and this is the system in which our whanau exist. 
I agreed with the Associate Minister of Corrections when he talked about the different kinds of options for dealing with Maori imprisonment and Maori rehabilitation. Habilitation centres are absolutely the way to go; not the continual building of prisons—habilitation centres that are whanau focused and deal with systemic issues as well as taking a whole whanau approach. The Maori focus units where they have been successful have done really well. The systemic problems within the Department of Corrections have made that more difficult but the example that the Maori units provide is fantastic. 
We absolutely agree with Maori involvement in the management of prisons. The only way to deal with the Maori prison population and to ensure that there is real rehabilitation from a tikanga point of view is by having Maori involved in the management of prisons and having kaumatua in the prisons. We agree with that completely. I do not agree with how we then get to the totally relaxed view that somehow the market will be able to provide those things where the Public Service has failed. On what basis can we say that the evidence is there that the market will provide that when the public system has failed? Jane Kelsey has a really good quote in her submission. She said that in the assumption that both market forces and our system of justice are colour-blind Maori are invisible. That is the implication of assuming with no evidence—not a skerrick of evidence—that the private sector and market forces will be able to provide these kinds of services for Maori and for the Maori management of prisons. 
Certainly nothing—not a thing—in the Corrections (Contract Management of Prisons) Amendment Bill will enable what the Associate Minister of Corrections was talking about to happen. There is no requirement for any kind of joint venture with any kind of iwi organisation. There is no Treaty clause in the legislation. There is no requirement for Maori to be part of the staffing of those prisons even though we know that more than 50 percent of the inmates will be Maori. There is no requirement for cultural training of the staff who will be in that prison. We heard evidence from the staff of the Auckland Central Remand Prison that they bring over from Australia staff who have no concept of how to deal with Maori prisoners or of the tikanga issues involved. But the bill does not say anything about requiring cultural training. There is no requirement in the legislation for tikanga Maori programmes to be managed within the prison. The Minister has talked in the past about that being part of the contract but where is the guarantee? 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 Firstly I agree with many of the comments that Metiria Turei has just raised. I totally agree with her that it is really important that Maori are involved in the management of prisons and have a meaningful say in that. I totally disagree with the position put forward by the Associate Minister of Corrections Dr Pita Sharples that the best way to do that is to privatise prisons and put them over to the private sector. I think the public sector is perfectly capable of managing prisons. If we extended the Minister’s argument to its logical conclusion we would then start to ask why the public sector would for example have any role in schools in hospitals or in the provision of any other services. If we take that to its logical conclusion it simply does not make sense. 
I will respond to some of the comments that Simon Bridges made. He said that the notion that the incarceration of prisoners—the deprivation of people’s liberty—is a core role for Government was ridiculous. If it is not a core role for Government for whom is it a core role? It certainly should not be a core role of the private sector to deprive somebody of his or her liberty. Where do we stop if we start handing over the power to do that to the private sector? Do we stop at the police? Do we stop at the army? Where do we stop when we are dealing with issues around fundamental human rights? There are very few human rights that are more fundamental than the right to freedom and the right to liberty. So I think that Simon Bridges has completely missed the point. 
The member talked about the fact that he did not want to make this a sterile debate by quoting figures; that is because there are no figures to support the position that he put forward. The figures show that it is not cheaper for the private sector to run prisons. In fact in the case of the Auckland Central Remand Prison it was more expensive for the private sector to operate it which shows that private prisons are not more effective in reducing recidivism. From the few studies that are available from overseas—and we do not have any from New Zealand because of the very short period of time that we had a privately run prison—it becomes very apparent that the privatisation of prisons and the handing of their management over to private prison managers does not reduce recidivism at all. This is absolutely a very clear example of the stark differences between the Labour Opposition and the new National Government. As my colleagues have pointed out the National Government is fundamentally committed to a model that privatises profits and socialises losses. 
Finally I will talk about one technical point; I wanted to raise it earlier but this is the first opportunity I have had to do so. It is covered in Part 1 and concerns the liability of the contractor but it extends to the wider issues that we have been debating. Under the contract provisions in the bill the contract must ensure that “Every prison management contract must impose on the contractor in relation to the management of the prison a duty to comply with—” among other things “the New Zealand Bill of Rights Act”. Members will find that provision in new section 199(2)(b) in clause 5. Hopefully the Minister in the chair the Hon Judith Collins will talk about this matter in her final reading speech. But I ask in respect of new section 199B which is about the liability of the contractor what would happen if a private prison operator were to breach the human rights of a prisoner for example or were to cease to exist for whatever reason. Where would the liability fall for that? 
We have seen some examples in recent years of significant sums of money going from the Crown to prisoners when it has been determined that their human rights have been breached. So I am keen to know from the Minister where the liability for any breaches of that would fall particularly in light of section 199B in the bill—and I did not get a chance to raise that earlier in the debate. I will keep my comments very short because I am aware that the time for this debate has nearly expired. 
This is clearly a decision by the National Government that is driven solely by ideology. It cannot be driven by evidence because there is no evidence. I have sat through the entire debate this evening waiting for any member from National the ACT Party or the Maori Party to actually produce a single shred of evidence that a private prison will be more effective than a public prison in any way but all members opposite have been able to do is talk in very general terms. There is no proof. 
CHRIS TREMAIN (Senior Whip—National) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 69 
New Zealand National 58; ACT New Zealand 5; Maori Party 5; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Motion agreed to. 
A party vote was called for on the question  
That Part 2 be agreed to. 
Ayes 69 
New Zealand National 58; ACT New Zealand 5; Maori Party 5; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Part 2 agreed to. 
A party vote was called for on the question  
That the schedule be agreed to. 
Ayes 69 
New Zealand National 58; ACT New Zealand 5; Maori Party 5; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Schedule agreed to. 
A party vote was called for on the question  
That clause 1 be agreed to.  
Ayes 69 
New Zealand National 58; ACT New Zealand 5; Maori Party 5; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Clause 1 agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to.  
Ayes 69 
New Zealand National 58; ACT New Zealand 5; Maori Party 5; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Clause 2 agreed to. 
A party vote was called for on the question  
That clause 3 be agreed to.  
Ayes 69 
New Zealand National 58; ACT New Zealand 5; Maori Party 5; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Clause 3 agreed to. 
House resumed. 
Bill reported without amendment. 
The CHAIRPERSON (Eric Roy) 
: I move  
That the report be adopted 
. 
A party vote was called for on the question  
That the report be adopted. 
Ayes 69 
New Zealand National 58; ACT New Zealand 5; Maori Party 5; United Future 1. 
Noes 53 
New Zealand Labour 43; Green Party 9; Progressive 1. 
Report adopted. 
Third Reading 
Hon JUDITH COLLINS (Minister of Corrections) 
: 
 I move  
That the Corrections (Contract Management of Prisons) Amendment Bill be now read a third time 
. This bill puts in place the Government’s policy to allow competitive tendering for contract management of prisons on a case by case basis. The Government wants New Zealand to have a world-class corrections system. We believe that allowing for contract management of prisons will create much-needed opportunities for the entire system to benefit from outside-sector initiative and expertise. We want a contract manager to support and enhance the Department of Corrections’ overall performance in providing for safer communities and reducing reoffending. Contract management will allow learning to be gained and shared throughout the prison system so that all prisons become more effective and efficient as a result. We will ensure that real gains are made in providing opportunities to improve outcomes for Maori who encounter the prison system. 
The previous experience that New Zealand had with contracting out prison management at the Auckland Central Remand Prison earlier this decade was generally positive. In particular the Department of Corrections was able to retain many of the innovations introduced by the contract manager. This bill strikes a good balance between a flexible contracting framework that will encourage innovation and the protections needed to ensure public accountability. While providing for a number of different safeguards the bill also gives scope to contracting parties to negotiate the specific terms and conditions of their contracts with relative flexibility. This is important because the management of each of New Zealand’s prisons will differ depending on the unique characteristics of the prisoners at that prison its geographical locality and the interventions to reduce reoffending operating within that prison. Very few of our prisons are exactly the same and the bill provides room for contractors and the chief executive of the department to agree on how the needs of any one or more of our prisons can best be met. 
Much of the debate on this bill has focused on the safeguards needed to ensure that the contract manager is held accountable. It is worth canvassing the most significant of those again. Because the changes reflected in the bill will sit under the umbrella of the Corrections Act 2004 they must be carried out in a way that is consistent with the principles of that Act. Those principles guide the operation of all of the corrections system including contract-managed prisons. The principles include the maintenance of public safety as the paramount consideration and also involve the fair treatment of prisoners their rehabilitation and their reintegration. As with public prisons contract prisons will have to comply with all relevant New Zealand legislation. This includes contractual obligations to comply with the Corrections Act and the New Zealand Bill of Rights Act as well as all relevant international obligations and standards. Another key feature of the Corrections Act is the accountability that it sheets home to the chief executive of the Department of Corrections. Prisoners remain in the legal custody of the chief executive at all times. That will not change when a prisoner is held in a prison managed under contract. The performance management regime is set out in the bill. The contract must specify objectives and performance standards for the management of the prison and for the care of the prisoners in that prison. The bill states explicitly that they may not be any lower than the objectives or standards already required of prisons managed by the department. 
One of the primary features of the bill is the way in which it supports the chief executive’s accountability by establishing the role of prison monitors. That is one of the areas that received the most scrutiny when the bill was at the Law and Order Committee and the monitors regime now in the bill is comprehensive. The bill establishes three different types of prison monitor: primary monitors who are located at the prison and monitor its compliance with the terms of its management contract and with the law on a day-to-day basis; those who assist the primary monitors to undertake their role as and when required which means that there will always be sufficient staff resource available to properly oversee the activities of contractors; and specialist monitors with particular expertise in different areas who are appointed from time to time to investigate certain matters if and when they come to light. Examples of the sorts of monitors who might be appointed in this context include the department’s anti-corruption team; its national intelligence unit; specialist health care staff who could be appointed to review health services that might be run by the contract prison; or experts in the provision of services for Maori who could review the suitability of the contractor’s Maori-focused initiatives. 
All of these different types of monitors have significant powers of access to staff prisoners prison records and all parts of the prison itself at any time of the day or night. They are all appointed by and report directly to the chief executive effectively acting as his or her eyes and ears in the prison at all times. In addition contractors will be required to provide reports on all serious incidents within the prison involving escapes escape attempts or prisoner deaths to provide regular reports on the use of disciplinary powers within the prison and the outcome of all disciplinary proceedings taken against prisoners and/or staff and to provide reports providing the details and results of all random drug testing that has been carried out within the prison. 
During the select committee deliberations on the bill and subsequently during the bill’s second reading debate a number of concerns were raised about the issues of public accountability and parliamentary scrutiny. I would like to point out that prisons managed under contract will be subject to the terms of the Official Information Act 1982 in exactly the same way as the department currently is. Contract prisons will also be subject to the Ombudsmen Act in exactly the same way as prisons managed by the department. That means that prisoners will continue to have the right to complain to the Ombudsman about any aspect of their management or treatment and the Ombudsman will continue to have the power to conduct independent investigations into the management and treatment of prisoners where it is appropriate to do so. Furthermore the Auditor-General is able at any time to investigate the way in which the department is managing any and all of its prison management contracts and for that purpose has access to all relevant documentation held by the contracted prison managers. The bill also requires every prison management contract or variation to it to be tabled in Parliament within 12 sitting days which will ensure that all the detail of that contract or any variation of that contract is publicly available. 
The bill protects the interests of staff working for a contract manager. The bill requires contract prison managers to comply with the requirements of those parts of the State Sector Act that invoke the requirement to be a good employer. Under the provisions of the bill it will be a contractual requirement for each contract prison manager to appoint and train sufficient suitable staff to enable the contractor to carry out its statutory and contractual obligations. This is a very important qualifier. Not only must sufficient staff be appointed to enable the contractor to carry out its various obligations properly but also they must also be suitable staff. They must also be appropriately trained on an ongoing basis. The contractor must regularly report on appointments and training so that the prison monitor and chief executive can monitor their performance. 
The bill also makes a specific point of protecting the interests of staff who are members of the Government Superannuation Fund. It ensures that existing staff who transfer their employment to contract prison managers are still deemed to be in Government employment for the purposes of their Government superannuation fund entitlements. 
The treatment of prisoners is also well covered. The chief executive of the department will remain responsible for all prisoners in New Zealand and accountable for what happens to them. That includes prisoners held in prisons managed under contract. Contract prison managers must comply with the same obligations and standards as public prison managers. If they do not they will be in breach of their contract. Prisoners will also have the right of redress directly against the chief executive who remains answerable for what happens to them while they are in the custody of the private provider. The continuing role of the Office of the Ombudsmen also provides further protection for prisoners. 
The bill has been further enhanced during the select committee’s consideration by the committee’s recognition of the importance of providing prisoners with employment and skills development. Employment and skills development are essential activities that help prisoners with their eventual reintegration back into the community and the committee agreed that those things should be recognised in their own right. The bill now requires contractors to provide specific reports on the provision of employment and skills development to prisoners alongside the pre-existing requirement to report on rehabilitative and reintegration programmes. 
Finally the bill makes an important provision for the department’s ongoing relationships with other State agencies to continue unaffected by the fact that some of its prisons will be managed by private sector providers in the future. A number of other Government agencies such as the New Zealand Police the Ministry of Social Development and the Department of Labour rely on information about offenders provided by the Department of Corrections in order to perform their own statutory functions and duties. The bill ensures that that information will continue to flow as it needs to between staff at prisons managed under contract to the Department of Corrections and relevant Government agencies. 
Opening up prison management to tender will enable the Government to reap the benefits of innovation in the prison system as a whole. In keeping with the principles of the Corrections Act this bill will improve public safety and contribute to the maintenance of a just society by contributing to the safe secure humane and effective containment of prisoners. This bill will provide an effective statutory framework for the regulation and control of prisons managed under contract in New Zealand. I am committed to its successful implementation. I now commend this bill to the House for its third reading. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 The quality of the debate justifying the passage of this Corrections (Contract Management of Prisons) Amendment Bill has been very poor. Essentially Government members have taken every mention of the failure of the private sector internationally as a reflection being cast on the quality of our own judiciary and our own Public Prisons Service when in fact the opposite is true. Our position on this side of the House supports the integrity of our prison service and the independence and integrity of our judiciary. We have argued a philosophical view and it is quite clear that there is an ideological divide across the House. Our view is that the deprivation of liberty is one of those core State functions that should not be contracted out. 
I believe that international jurisprudence is coming in behind to support the view that we would present. I know that it is not popular with members of the Government because essentially they do not believe that any human rights arguments are available to be debated on this subject but that is not the case internationally. I have warned the Government of the implications of the Supreme Court of Israel’s decision to overturn the privatisation measures that had been undertaken there. But these warnings have been ignored by the Government. I want to remind members of what they say because I think it is worth writing it into the record. 
Essentially the argument was that the Supreme Court of Israel would not normally intervene in economic policies but in this case the President of the Supreme Court held that the legislation harmed basic constitutional rights. Israel’s basic legal principles hold that the right to use force in general and the right to enforce criminal law by putting people behind bars in particular is one of the most fundamental and most invasive powers in the State’s jurisdiction. Thus when the power to incarcerate is transferred to a private corporation whose purpose is making money the act of depriving a person of his liberty loses much of its legitimacy. Because of this loss of legitimacy the violation of the prisoner’s right to liberty goes beyond the violation entailed in the incarceration itself. Efficiency she wrote is not a supreme value when the most basic and important human rights for which the State is responsible are at stake. I know that members opposite do not like listening to the learned words of a Supreme Court judge but the point I was making was simply to warn the Government that this is a movement that is happening internationally and we cannot be impervious to those views that are being expressed because they will matter to New Zealand as well. 
The Government has said there is no core function of the State; it has said there is no such thing. There is nowhere that it would draw the line; anything is up for privatisation or competitive management. We were told by the Minister of Corrections that the only question we need to ask is “What works?”. That is the only question. Anything goes but it has to work. I make no apology for holding the views that I do but it would be a mistake for anyone in this House to argue that they conflict with the mantra “What works?”. I am actually a great believer in what works. It has been the driver behind the Opposition’s offer to the Government to work collaboratively on early intervention so that we can reduce our prison population. 
I was invited to a meeting with the Minister of Justice and the Minister of Maori Affairs on early intervention and I was really impressed with the quality of that meeting. I went back to the Labour caucus and told it that we had to offer up something that we had to work with the Government on that issue. Early intervention is where we all agree the most good can be done if we are genuinely to do something about our prison population. What has the Government’s response been to that general offer? Nothing. We are still waiting. I have had a letter asking that we work together on Sale of Liquor Act issues knowing full well that it is a conscience issue but there we go. A genuine offer was put on the table to work with the Government collaboratively on something that really would work. 
The Prime Minister of New Zealand has hired a scientist to sit at his right hand to guide the Government on an evidence-based pathway. Yet the approach that the Government is adopting here is not evidence-based at all. I really support the hiring of a scientist to sit at the right-hand side of the Government’s highest decision-maker; I just think it is really important that he is listened to. He is saying that an evidence-based pathway is the way forward. We have heard the Government tout the UK system when the league table shows that 10 of the 11 private prisons in the UK fit within the bottom 25 percent of all the prisons in the UK. The facts speak for themselves. This is not a seriously good argument that National members are proposing. 
The ACT Party blew the cobwebs off arguments that I thought had been buried in the crypt alongside its founding member but even he could not help himself. He had to get to his feet to argue that competition and profit were the only way that we could get value for money the only way we could get results. Competition is great for consumers. It is fantastic for consumers. As a former Minister of Commerce I am well aware of the anti-competitive measures that many in the private sector take particularly in order to take public sector contracts and milk them for all they are worth as we have seen in the newspapers in the last few days. They want the benefits to accrue to themselves because they are profit-making businesses and they would rather not see the benefit go to the consumers. That is what competition was designed to preserve—benefit for the consumers. 
It is a question of whether the profit motive is the driver we want in a service that benefits from keeping its business full of people. It is absolutely counter-intuitive that we would want the profit motive driving our prison service of all things. That has been the problem overseas. The incentives have been utterly and completely perverse: keeping people in for longer punishing them for minor infractions while they are in jail keeping them there for longer and longer ensuring that the prisons have their fodder that the prisoners keep coming back because of the revolving-door syndrome. Private prisons need to keep seeing them return because that is where the profit lies. 
I do not feel that way about the not-for-profit sector. There is an enormous difference and I disagree entirely with the Minister of Maori Affairs on this issue. I see the real role for the so-called non-public in the not-for-profit sector where a lot of Maori organisations work where a lot of Pasifika agencies work and where agencies like the Salisbury Street Foundation have made a huge difference in terms of really turning round the lives of people and ensuring that habilitation and rehabilitation take place. I think this is where the Maori Party tragically was sold a pup by National. It offered it a slice of the action when in fact Maori could have a much more important role in reducing the prison population and reducing reoffending rates. The Salisbury Street Foundation as I have mentioned stands testament to the value that the not-for-profit sector adds to the justice system. 
This bill is not about that. It is actually about carving off a profit centre in the shape of people who have offended against the laws of the State and allowing not only the cost of their incarceration to be passed on to the taxpayer but the provision of profit to the private sector to be passed on to the taxpayer as well. That is what I object to. The Minister did not once answer the question on cost. We know that the private prison experiment that we had in this country once before was more costly than the public sector alternative. It was more costly and there is no question about that. Overseas the costs have been higher the rates of suicide have been higher the rates of escape have been higher and the damage done to prison guards has been higher. The price we pay those prison guards has been lower and the price the taxpayer pays has been higher. This bill is on a hiding to nothing. It is not something that we stand for and the Labour Party will be opposing it vigorously. 
SANDRA GOUDIE (National—Coromandel) 
: 
 I am delighted to be speaking on the third reading of the Corrections (Contract Management of Prisons) Amendment Bill. That is exactly what the bill is about: contracting out just the management of prisons. It is about innovation new ideas and great leadership that provides great outcomes. That is the sort of leadership that National is providing and that is the sort of leadership that we are getting under a new Minister of Corrections who is actually making a difference in corrections which is long overdue. 
I commend my Law and Order Committee colleagues the select committee staff and also the officials who did an outstanding job in meeting the many demands placed upon them during the progress of the bill. I am delighted that we are supporting this bill that it is coming to the end of its duration in Parliament and that it will very soon be an Act. 
Hon RICK BARKER (Labour) 
: 
 We have listened now to two National Party speakers and we are still waiting to hear cogent reasons for the contracting out of prison management and for the purpose of the Corrections (Contract Management of Prisons) Amendment Bill. We heard the previous speaker Sandra Goudie say this bill is about innovation. Well where is the innovation? One of the items that was raised by the Minister of Corrections in the Committee stage concerned an initiative to bring Maori issues within the prison. But that was not brought in by private prisons; that was brought in by a public sector prison in Hawke’s Bay. That was where the initiative started. It was not a private sector initiative at all. The Minister learnt a second thing when she got advice from her own Department of Corrections about going to Australia to look at private prisons. The department said there was nothing good nothing new or nothing worthwhile there when looking at this issue. 
The previous speaker also said we had seen innovations by this National Government and I say that is probably closer to the truth than anything else. The National Government came to power with a sort of pragmatic view and said to New Zealanders that everything they had been given under the previous administration they would get from National plus more. People were told they would also get tax cuts and all sorts of other wonderful things. In fact piece by piece we are seeing the true face of National. It is a classic right-wing agenda. The right believes in minimum Government. It believes in tax cuts. We have seen tax cuts under the National Government but people who do not earn over $40000 a year did not receive anything. The tax cuts that the Government brought in saw over a third of them go to the top 3 percent of income earners. 
Hon Tau Henare 
: That’s worn-out scaremongering. 
Hon RICK BARKER 
: It might be worn out but the Hon Tau Henare knows that it is absolutely true. The other aspect of the right-wing agenda is deregulation and we have seen that happen in amendments to the Resource Management Act. Another aspect of that agenda is contracting out. These are ideological positions whether or not they make good sense. 
The point about this decision is that if it is not ideological and there is evidence for it then let us examine the evidence. I say to the House and to the National Government that there is no evidence to suggest that privately managed prisons are better safer cheaper or more innovative than State-run prisons. There is no evidence of that whatsoever. In fact the evidence is entirely in the other direction. In the absence of any concrete evidence we are able to conclude without doubt that this decision is driven purely by ideology. It is part of National’s programme of privatisation over time. National has said it is not going to privatise some things in this term of Parliament but it has not said to the public that it is not going to privatise at all. 
In fact when we look around the world and we look at the advice from the United States we find there is a terrible legacy from privately run prisons. The list goes on and on. A country that is much closer than the United States to New Zealand in its structure its history and its background is Canada. Just 3 years ago Canada ended the privatisation experiment and returned all of its prisons to the public sector saying after 5 years the Government could find no appreciable benefit from privatisation. Canada is very similar to New Zealand and after 5 years it could find no appreciable benefit of privatisation. That is the Canadian experience. The United Kingdom another country with which we share a lot of similarities had a similar experience. The report of the National Audit Office of 2003 some 6 years ago stated that the performance of the prisons was mixed but it said almost all of the bottom-ranked prisons were privately managed. It stated that the worst-performing prisons in the United Kingdom were in the private sector. That is the evidence. Canada and Britain have shown that the privately run prisons were amongst the worst-performing prisons. 
In New Zealand we have our own experience of privately run prisons. What did we have with the Auckland Central Remand Prison? Well the first thing we have been told by the Government is that private prisons are more efficient. But being “more efficient” would mean that they are more cost-effective. Well the facts from the Minister’s own department show that the Auckland Central Remand Prison was more expensive than the public prisons. On every measure it was more expensive. So we will have higher costs to the taxpayer. The Minister said privately run prisons would do better with rehabilitation. Well if the basic costs are higher then obviously rehabilitation costs will be on top of that. And we all know there will have to be a profit on top of that again. 
But there is worse to come. The Law and Order Committee heard directly from people who were employed in the Auckland Central Remand Prison—they were staff who turned up to the hearings—who said that by talking to the select committee they had put their future employment at risk. This was evidence that they knew could put their future employment at risk. They were people— 
David Bennett 
: Rubbish! 
Hon RICK BARKER 
: The member says “Rubbish!” but that is what they said. Everybody agreed that this was the case and that going on record was putting their future employment at risk. There was no doubt about that. Despite the fact that they were putting their future employment at risk they made it very clear to the committee that statistics within the privately run prison were massaged. They did not want to get bad statistics and they were encouraged by their management not to have them because that would put the contract at risk. 
And here comes the rub: if we have a privately managed prison and the determination that it will be privately managed is by the say-so of the Chief Executive of the Department of Corrections then the chief executive has a vested interest in ensuring that the statistics for the prison are good. The management of that prison has a vested interest in ensuring the statistics for that prison are good. What the Government is happy for us to rely on is the belief that the accounting systems run by the privately run prison and the accounting systems run by the chief executive are correct and will tell us with absolutely deathly accurately what went on in that prison. Well I say that is not good enough. I say that is not good enough because they both have a vested interest in ensuring that the outcomes look good on paper. 
A lot of people put a great worth and store on auditors. I happen to be someone who thinks that audits have a limited use. People want to think audits are great should look at two fabulous world companies: WorldCom and Enron both of which had fantastic audit reports. Those companies sucked in billions of dollars into them only to crash overnight and disappear with not a scrap left. They both had fantastic audits. One of their auditors was Arthur Andersen a company that did extensive business here in New Zealand but which disappeared completely. Let us be clear that audits are no guarantee whatsoever that things are right particularly when the auditors are chosen by the organisations themselves. 
Now Parliament has its own auditor the Auditor-General because over time Parliament understood that departments that chose their own auditors gave Parliament figures that it could not entirely rely upon. So Parliament made the decision to get its own auditor: the Office of the Controller and Auditor-General. This House has asked for and been denied by the National Government the right of the Office of the Controller and Auditor-General to have complete and unfettered access to all of the information on this issue. Well we have been turned down by the Government. I ask the Government members what they have to hide. 
The Minister of Corrections says the Office of the Controller and Auditor-General will have full access to all the information. Well yes it will have; it will have sheets of paper and information supplied by the contractor and by the department. She says the Office of the Controller and Auditor-General will have access to the department’s staff. Yes it will have but that does not mean that the Office of the Controller and Auditor-General will have access to the staff of the privately run prison. It will not necessarily have that because those staff will be employees of a private company. The Office of the Controller and Auditor-General does not have automatic right of access to the employees of a private company. Labour wanted to change the law so that the Office of the Auditor-General would have direct access to those employees just as it has access to the staff of every Government department in New Zealand. If it wants to go through and audit for example Work and Income the Ministry of Social Development or Treasury not only can it look at the figures and interrogate the books but it can talk to the staff and get a feel for what is happening on the ground. The Government’s decision not to give the Office of the Controller and Auditor-General direct contact with the staff I think puts a veil between that office—Parliament’s auditor—and the contract prison. 
This brings me back to the point made by the Hon Lianne Dalziel. Parliament passes laws to give judges the power to incarcerate people and to deprive them of their liberty. The incarceration of those people is handled by the executive arm of Government via the department. If we as parliamentarians want to ensure that the powers that we have delegated to judges and to the Department of Corrections are handled correctly then the Office of the Controller and Auditor-General must have unfettered right of access to these institutions but the Government has denied Parliament that right. I think the Government is wrong. The Government has decided to push this legislation through for ideological reasons. 
DAVID CLENDON (Green) 
: 
 The Greens spoke very strongly in opposition to the Corrections (Contract Management of Prisons) Amendment Bill when it was first introduced. Our opposition to it has become if anything more adamant as we have observed and analysed the information the debate has revealed to date. 
We have heard much about innovation; the word has popped up regularly in a number of speeches. Indeed the commentary on the bill includes the statement: “Opening up prison management to contractors provides an opportunity for innovation and change in the way in which prisons in New Zealand are operated.” The word “innovation” caught my eye. We most often associate that word with ideas that are new and generally positive. It is often associated with some idea or proposal that is forward-thinking or even visionary. Sadly this bill reflects a mind-set that is as far from being truly innovative or visionary as one could reasonably imagine. 
There is most certainly an urgent need for change in our whole approach to prisons and imprisonment. Successive Governments have tried and it must be said failed to find solutions. The failure of those efforts is indicated by the reality that as a country we continue to have one of the highest rates of imprisonment per capita in the world and that rate continues to grow. The very dated mind-set behind this bill reflects the assumption that did so much harm in the 1980s and the 1990s which is that public sector delivery of services is wasteful and ineffective and that private provision is more effective more efficient and generally cheaper. The privatisation of the Public Service during that time left a very costly legacy that has still not been repaired and hard evidence for this case is simply not there as we have heard a lot tonight. 
Comments made earlier today to the Law and Order Committee painted a very graphic picture of a Department of Corrections that is under enormous stress and indeed stretched almost to breaking point. Despite spending millions of dollars each year locking up offenders our rate of recidivism remains untenably high with a strong correlation between rates of imprisonment and reoffending. The annual report of the Department of Corrections informed us that the number of serious assaults on one prisoner by another has risen by some 45 percent in the year 2008-09 compared with the previous year and that serious assaults on staff have risen by something close to 80 percent in the same time period. The introduction of this bill adds to the enormous stress that already exists within corrections and not least to the stress felt by prison officers. 
One thing on which I think we can all agree is that our prison system is broken. But passing the responsibility for the management of prisons to private contractors is not the mechanism that can or will fix it. A number of speakers have reflected on the fact that one of the most potent powers that may be exercised by the State in a liberal democracy is the power to deprive an individual of his or her liberty and freedom of movement and association. This power should be exercised exclusively by the State with a direct line of accountability to the public. Introducing private enterprise management for profit of people incarcerated makes no more sense than would the private provision of other elements of the justice system—the courts or the police—or indeed of the defence forces. 
The idea of private prisons might be marginally more palatable if there could be some reasonable expectation of economic or social benefit arising from such a radical departure from historical and indeed contemporary norms. Again the evidence is simply not there. The Corrections Association of New Zealand which represents something like 3000 prison guards made the following comment in its submission to the bill: “Contracting prison operation will only be cheaper if the terms and conditions of employment for employees are reduced. This will lead to considerable difficulties with recruitment and retention of staff. This will expose the Corrections Officers and the prisoners to considerable risk. Potentially these risks will fall back on the Department.” The association made the point that “small rural communities will be disadvantaged by less attractive terms and conditions and the provision of profits to what are likely to be overseas based contractors.” The association went on and expressed the very well-informed view that the bill if passed would inevitably lead to more dangerous prisons for staff and inmates alike. It voiced the very real concern that it is very inappropriate for anyone but an officer of the State to exercise extensive powers over prisoners including the use of force in certain situations and the right of search and seizure. 
There is a very legitimate role for the private sector generally to open up new markets expand business and generate profit and having recently come from the business sector I am very supportive of those activities. In this instance however the success of the business model of a private prison would be assured if more people were locked up for longer. So where is the incentive for a private operator to reduce inmate numbers to reduce recidivism and to pursue rehabilitation and the much more complex goals of a functioning corrections service? 
It is all too well known that Maori are disproportionately represented in prison musters. My colleague Metiria Turei in her first reading speech on this bill pointed to the 2007 report entitled  
Over-representation of Maori in the criminal justice system 
 in which analysing the data from apprehension through to prosecution conviction and finally sentencing confirmed that Maori are much more likely to be apprehended and more severely punished than non-Maori. The Maori focus units in prisons have begun to gain some traction. There have been some positive outcomes from that initiative. This bill however offers no mechanisms to improve the sorry state of the statistics for Maori. Grossly disproportionate numbers of young Maori are in jail but the bill does nothing to address this. There is no provision for access to kaumatua and no requirement to liaise with tangata whenua nor is there any obligation for the monitor to report on such matters. 
The prisons would operate through corporate structures that limit the liability and that distance the parent company from that liability. This would leave joint venture partners such as iwi carrying liability. A very useful and important submission was made by Professor Jane Kelsey from the school of law at Auckland University. She made the point already made tonight that the Auckland Central Remand Prison experience of privatisation delivered distorted figures and outcomes to the extent that it was a loss-leader for the Corrections Corporation of Australia to gain a foothold in the New Zealand prison service. It is clear that private contracts will focus on new prisons being built. They will have no interest in taking on a Victorian pile like Mount Eden Prison. They will leave the public sector to manage the older run-down prisons which will make comparisons between the two sectors wholly invalid. There is a distinct disconnect where contractors have access to official information but reports on performance indicators and monitors’ reports do not have to be released under the Official Information Act because of commercial confidentiality. Too much of what could occur in a private prison could be concealed under that guise. 
We know that the global recession means that it is harder for private prison companies like others to get finance and there are intense pressures to maximise short-term profit. If profits fail to meet expectations then there is pressure to renegotiate with the State which may have to carry the risk of private failure. What would be the Government’s position if a privately operated prison appeared to be getting into serious financial trouble? Could the State step aside and allow it to go broke? It is much more likely—in fact inevitable—that the public purse would once again be called upon to bail out private enterprise that has failed. 
We know that private prisons cut costs by reducing labour costs—as labour costs typically represent about 80 percent of overall running costs—through lower staffing levels and more electronic surveillance. Effectively our prisons would become electronic zoos with brutalising dehumanising effects on the inmates. The likelihood of their returning to those unfortunate places would be much increased. 
I think one thing we can all share is a common aspiration to— 
The CHAIRPERSON (Lindsay Tisch) 
: I am sorry to interrupt the member but his time has expired. 
DAVID GARRETT (ACT) 
: 
 I am very pleased to rise in support of the Corrections (Contract Management of Prisons) Amendment Bill. The main reason I am so pleased is that we support anything that will benefit the justice system. I have listened very carefully to the debate both here in the House and on television and I have to say that I have heard nothing credible from members on the other side of the House or to my immediate right that would suggest that private prisons will not be an improvement. 
Data from the UK shows that privately run prisons are cheaper and more important that they deliver better outcomes. Closer to home there is plenty of evidence—it has almost become boring repeating it—from the time when Auckland Central Remand Prison was under private management to suggest that there are plenty of positives in such a system. Labour in its 9 years in power showed a great aversion to the private sector bordering on the paranoid. Its decision to re-annex Auckland Central Remand Prison was based not on results which were very encouraging but rather on its own ideology. I applaud Mr Hipkins for finally admitting that his stance at least was based on ideology. 
The decision to re-annex the Auckland Central Remand Prison cost $3 million in transition costs but the social cost was even bigger. The Auckland Central Remand Prison was run in a formal partnership with Iwi Whanui o Tamaki-makau-rau an advisory board representing six northern iwi. For the first time Maori were directly involved with the operation and management of the prison system or at least a part of it. We have heard ad infinitum today and tonight that over half of New Zealand’s prisoners are Maori. That is from a population of about 16 percent of New Zealanders. Many in Maoridom wanted and still want to take ownership of that problem and resolve it. Old intractable problems require new solutions. 
I applaud the Maori Party for having the courage to put up with the insults from members opposite for its decision to support a new direction. As I said during the second reading debate—and it has almost become a cliché—on all measures including suicides assaults on guards and prisoners and escapes Auckland Central Remand Prison fared much better when it was privately run. Those are not my words; they are those of the former Green MP Mr Nandor Tanczos. Yet he along with the Greens and Labour opposed it anyway. 
Let me be clear on this: Labour and the Greens opposed fewer suicides. They opposed fewer assaults they opposed fewer prison escapes— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I find the words that the member used about me just then offensive. I have never nor has any member here opposed fewer suicides which is what he just said. 
Mr DEPUTY SPEAKER 
: I thank the member. I accept that point of order. Making comments like that can bring the House into disorder. I ask the member to withdraw that comment and apologise. 
DAVID GARRETT 
: I withdraw and apologise. Since the last election and since this Parliament began the Greens have opposed every single initiative by this Government to get tough on crime and the causes of crime. Private prisons will be a reality by the end of this evening. For the record I ask the Greens again whether in 2 years’ time if the results in terms of recidivism or any other measure are 25 percent better than they are today they will still oppose private prisons. 
Kevin Hague 
: Are you seeking leave for another call for us? 
DAVID GARRETT 
: Oh no no. There was no answer; just a bit of smartness. That is to be expected. If one is a member of the Labour Party or the Greens blind ideology and looking after one’s union backers in Labour’s case is more important than results. It is more important even than people’s lives. 
Privatisation is not a right-wing conspiracy. Around the world it has become the norm. The World Bank noted recently: “Privatization is now so widespread that it is hard to find countries not using the approach. North Korea Cuba and perhaps Myanmar make up the shrunken universe of the resistant.” We can add the members opposite and the Corrections Association of New Zealand to that list. They think that the sky will fall in if the Government delegates to those who can do a better job. 
It has been very interesting to hear in numerous speeches from members tonight—dozens I think it would be fair to say—that they see it as an article of faith that the operation of prisons is and must be a function of the State. But no one has actually said where that comes from. I ask which volume of Marx that comes from. Where does it come from? No one has explained to me or to this House why that is an axiom. The simple answer is that it is not. There is no tablet in stone and there is nothing written by and handed down from the gods that says that the incarceration of prisoners convicted by the courts must be a function of the State. We heard Mr Barker I think talk about the army as another example of something that must be administered by the State. But the new member Mr Shearer is on record as saying that mercenary armies are in fact a good idea. So I wonder just where those members get that axiom from. 
I suppose that in 6 or 9 years’ time if Labour manages to get into power we will not have Kiwibank and KiwiRail in the election of 2021; we will have “KiwiJail” as a campaign by members opposite. They are suffering from a phobia and they need help. I have heard no good reasons from members on the other side to change my mind. 
Since being here I have visited Rimutaka Prison and Paremoremo prison which is now known as Auckland Prison. The staff there in my observation are doing their best. They are professionals; most of them would have nothing to fear if prisons were privately run. If people like Mr Hanlon and his union mates continue spouting the kind of allegations they made in the Law and Order Committee they would indeed have plenty to worry about. I will give members on the other side another lesson in law. Unsubstantiated allegations made with the protection of Parliament are not in fact evidence. I do not think that any lawyers are left over on that side of the Chamber; they have all gone home. But that is the case— 
Chris Hipkins 
: I raise a point of order Mr Chairperson. As you will be aware the member cannot make reference to the absence of other members from the Chamber. 
The CHAIRPERSON (Lindsay Tisch) 
: It was a generic point and this is just an interruption to the debate. The point the member makes is well made but the member speaking was not referring to individual members. 
DAVID GARRETT 
: This bill will shake things up and that is not before time. I think that probably the one thing that everyone across the Chamber can agree on is that the present system is not working. It is not working for white people and it certainly is not working for Maori. The Maori Party has expressed a strong interest in helping to revive the iwi - private sector partnership once again and again I applaud its courage for doing that. I hope it works; I really do. This Government unlike the previous one will focus on what works. 
The amusing irony for me is that our party according to members on the other side is supposed to be all about ideology. But in this case we are at one with National and the Maori Party in pursuing what works. I say again in conclusion that no one would try to argue that what we have now—75 or 80 percent recidivism after 5 years—is working so this measure has to be an improvement. Thank you. 
Hon Dr PITA SHARPLES (Associate Minister of Corrections) 
: 
 I will take just a short call in the third reading of the Corrections (Contract Management of Prisons) Amendment Bill; I want to clear up a couple of issues from my earlier speech. Many of us have spoken about innovation and the possibility of privatisation allowing for innovation. I made this point before. Mr Barker has spoken about the Maori focus units starting in Mangaroa Prison in Hastings. As I said earlier I had a role in that. In fact Peter Grant and I ended up in there making the final decisions about the form of that prison. It actually turned out to be not how we wanted it because the restrictions in being tied to the mainstream prison did not allow it to be free or to operate freely with its own rules custom and culture inside it. For example inmates were placed in the unit without even wanting to be there but just to fill it up because the main part of the prison was short of beds. Others were taken out of that focus unit after they had reformed and were put back into mainstream which was devastating for them in terms of what they had learnt and where they were travelling. The other one was case management. The whole idea of the focus unit was to put each inmate on a case management programme so that he could have an end goal leave with whanau out there to look after him and not return. Also the transfers that happened between prisons affected the unit. At the end of the day the recidivism rate was down only 7 percent; that drop should have been much more. 
That is why we are building this new Whare Oranga Ake. This is a State arm of the system but could quite clearly be a private prison as well. Maori who are talking about possibly taking over the contract of a full prison cannot do so at the moment under the State but they might be able to do it if privatisation was allowed. I have no problem with Maori doing that because at the moment things are getting worse. Over 50 percent of our prison population are Maori so why not give Maori a chance to see whether they can actually do a better job of reforming those in prison just as we are looking for them to do so in education and other areas? In health Whanau Ora is now coming up with Maori working amongst our own people. I think it is really good because nothing will change unless the Maori people themselves feel like someone is leading them and there is an opportunity for them to actually get out of the situation that they are in. 
It is all about positiveness and that is why I believe privatisation will bring innovation. One example arose when I went to Fulham Correctional Centre in Australia. I did not know that it had an Aboriginal group and a Maori group who did a welcome for us—a kind of powhiri. We learnt afterwards that those two groups were at war with each other in that prison. There was conflict between the Aboriginal group and the Maori group and the prison tried that welcome to bring them together. At the end of the powhiri they were shaking hands and giving hugs. I checked up and they have quite a bond going now. They were able to do that; the private situation that I am talking about allows innovation. I have noticed flexibility with Maori in Dom Karauria’s prison here in Auckland City. He allowed different elders to come in and do things whereas in some prisons we have taken elders in they have had to go through the machine which is quite humiliating because they are the crème de la crème of Maori society. They have been stopped in the middle of a speech not allowed to have the food that consummates the occasion and things like that whereas in Dom’s prison he was able to say to the whole prison that tea would be late that day because of such and such. So they have that kind of flexibility. 
New Zealand prisons are so interrelated that what happens in one carries over into another and so on. In prisons any little change of practice can cause a riot. For example one day prisoners may be able to have beards and then the next day they are not allowed beards and there is trouble; it is really important that the prisoners know where they are at. I believe that the flexibility allowed in private prisons is worth a go and also that the opportunity for Maori to get in there and have a go at running them themselves is also worth trying. Thank you. 
JONATHAN YOUNG (National—New Plymouth) 
: 
 I very much appreciated the sentiments of the Hon Dr Pita Sharples in his speech. I believe his speech highlighted one of the great advantages that the private management of prisons enables in terms of development and true great results. 
I want to talk about the decency agenda that one of the previous speakers from Labour asked me to speak more on. I read a quote from a Labour MP who spoke during the parliamentary debate on offender management in the UK. I will quote the UK director of prisons from Her Majesty’s Prison Service Phil Wheatley. He was asked: “What does decency in prisons mean to you?”. Phil Wheatley replied: “Fair and consistent treatment of prisoners—doing time is hard and it is not our job to make it any harder. Prisoners have to rely on staff intervention and cooperation so it is vital they are never unfairly treated or refused what they are entitled. Telling a prisoner you can’t help because you’re busy when actually you’re talking to your colleague about your holiday plans is not decent behaviour. Human treatment and delivering promised standards for providing prisoners with a reasonable quality of life are also part of the decency agenda as is treating prisoners within the law—no one should be punished outside the rules. Finally it means getting the basics right—providing clean properly equipped and maintained facilities and protecting prisoners from others and themselves.” 
He was asked further: “How has the decency agenda helped with suicide prevention which still remains high on the agenda?”. He said: “The Service has been doing a lot of work with Cambridge University and research has shown that if prisoners—many with mental health problems serious drug problems and many facing the possibility of long sentences—arrive at a good safe orderly prison with good regimes and good staff prisoner relationships it can reduce the distress experienced by prisoners which can lead to suicide or self-harm.” Finally he said: “There is a lot of work to be done but we are well placed to implement improvements.” He is acknowledging that there is room for improvement. 
I come back to the quote from Gerry Sutcliffe. He said that the first private prison opened in 1992 and there are now 11 such prisons operating in England and Wales holding about 10 percent of the prison population. The companies that provide those services have developed a strong track record of delivery and are driving forward the decency agenda as well as introducing innovation and increasing value for money in public sector prisons. So we see a combination of private and public working together to improve conditions for prisoners as well as introducing innovation which increases value for money in the public sector prisons—exactly what the Hon Pita Sharples was talking about. 
I have visited a number of prisons and every week a number of years ago I visited inmates in Block B of Paremoremo prison which is now Auckland prison. I have seen the quality of care that New Zealand prison staff offer. I was privileged last Friday to give awards to our prison staff in New Plymouth. They are doing a good job. This bill is about creating opportunity for private management to work together with the public to bring innovation and improvement in our prison service. I believe that this bill has great quality in it and has enabled us to move forward. I commend this bill to the House. Thank you. 
CARMEL SEPULONI (Labour) 
: 
 I need to point out a few ironies before I get started on the main part of my speech. The first irony that I really have to point out goes back to what the Associate Minister of Corrections Dr Pita Sharples was saying earlier with regard to some of his aspirations for Maori. I have to ask Dr Pita Sharples how those aspirations can possibly occur under the watch of the Minister of Corrections Judith Collins who in the past could not respect even the simple protocols that went with a simple powhiri. How therefore can she share in the aspirations that he has for Maori with regard to rehabilitation? She could not sit in a powhiri because she was told she needed to sit in the second row yet she has now had some sort of renaissance in her thinking and she can now share the aspirations that Dr Pita Sharples has for Maoridom? I find that very very difficult to believe. At some stage the fact that she truly does not share those aspirations will become uncovered and at that point in time it will be an ugly ugly sight. 
The second irony I have to mention is in regard to something that was raised in the debate on this bill. The irony is that at an earlier time Mr Young a member opposite discussed the fact that when Labour was in Government it had incarcerated such a high number of people. The argument prior to that was that Labour was not tough enough and it had not incarcerated enough people yet that member said in this Chamber that we incarcerated too many. We have heard on numerous occasions across this debate that the levels of incarceration have increased. 
Jonathan Young 
: I never said that. 
CARMEL SEPULONI 
: I ask that Mr Young checks the  
Hansard 
 for this debate; he will find that he did say that. 
The third irony—for there are so many—is in relation to the next bill we will be discussing which is the Corrections (Use of Court Cells) Amendment Bill. The Government is saying that private prisons will solve all problems have better rehabilitation make safer prisons and be less costly for New Zealand taxpayers yet the next bill we will be dealing with the Corrections (Use of Court Cells) Amendment Bill is basically legislating in anticipation of overcrowding in prisons. The Government is anticipating that prisons will not be able to cope with the sheer numbers who will be incarcerated therefore it needs to legislate with regard to the use of court cells for the overflow in numbers. I have to point out that there is an irony in that and it is something we cannot help but look at and think “Well what are they going on about?”. 
The fourth irony I wish to discuss before I get on to my main points is the irony that comes with some of the things the chief executive has said. How can we think that this legislation is a good idea when the chief executive of the Department of Corrections wrote to his workers in an email dated 8 June 2009 and said that at a time when the Government was struggling to cope with a global economic crisis and finances were tight his budget therefore did not allow extra money for wage increases. He then stressed the importance of an agreement on reasonable terms: “Failing this I will have no alternative but to recommend to the Government other approaches which will include the option of private management of some established prisons.” That sounds like a man who fundamentally does not support private prisons because they are better or safer; in fact by his making a threat like that in relation to private prisons he is reinforcing the fact that it is widely felt amongst corrections staff including himself that they are an undesirable option. Those are the things I wanted to point out before I got on to the main part of my speech. 
Labour members do not support the Corrections (Contract Management of Prisons) Amendment Bill. Labour members are of the view that the incarceration of citizens is a core Crown responsibility and as such should be under the direct control of the Crown through the Department of Corrections. 
David Garrett 
: Where does that come from? 
CARMEL SEPULONI 
: If Mr Garrett would listen I will tell him. Public prisons are morally and fiscally accountable to taxpayers whereas private prisons are accountable to their shareholders with a binding obligation to maximise profit. There is a risk that the pressure for a private company to show profit may lead to compromised service quality such as lower staff to inmate ratios fewer rehabilitative services a reduced range of services cuts in staff pay and conditions cuts in staff quality or all of the above. Those were things that were discussed by the corrections union and also by the prison officers who had worked in both the State-run prison and the privately run prison when Auckland Central Remand Prison was under private management. 
There is also the potential for abuse. When a profit-making company has the authority to restrict basic civil liberties profit motives may supersede the safety of the public staff and inmates. We have heard of a number of examples of that happening in private prisons in Australia America and the UK and we have also heard about some of the things that went on when the Auckland Central Remand Prison was under private management with regard to reporting and the fact that things were hidden to ensure that the management could still make the profit it was trying to get out of our Government at the time. 
We are also concerned that the passage of this bill will weaken the ability of members of Parliament the media and the general public to hold the private contractor to account in respect of corrections outcomes. At the present time members of Parliament can directly question the department and hold it accountable through the use of select committee inquiries the Official Information Act and the use of parliamentary written and oral questions. These avenues are not available in respect of a private company. The Auditor-General at present has unfettered access to Government departments and agencies and can inquire into any matter he or she feels is appropriate. It is our belief that under this legislation the Auditor-General’s power and ability to inquire directly into matters pertaining to the private sector contractor will be limited. The Office of the Controller and Auditor-General reported to the Law and Order Committee that under this bill it would not have the power to audit a private company and provide an opinion on the performance of that company. 
The lack of independence of the people employed to monitor privately managed prisons is also a concern. Those prison monitors will be employees of the Department of Corrections rather than have an independent status. We also note with concern that there is no compulsory provision to require 24 hour 7-day-a-week monitoring and the Labour members on the select committee expressed the concern that while there would be someone there from 9 to 5 who would be there to monitor what went on for the remainder of the day? 
We do not believe that a good explanation has been given for why there is a need for private management of prisons. In relation to costs and efficiency there is no evidence to suggest that the privatisation of prisons would be more cost-effective and efficient than the current Department of Corrections model. 
Finally we Labour members had serious concerns about the Government members using their majority on the select committee during the select committee process to block our access to Ministry of Justice officials. The ministry had input into the departmental report and we believed that the committee would have benefited from hearing the views and the insights of the ministry. We questioned the motive for not allowing the committee access to those officials and we were disappointed that this opportunity was denied when we were considering such a significant shift in our justice system. And more important constitutional issues are involved. The Government members used their majority vote to block Opposition members from making legitimate inquiries of a Government ministry that had specialist knowledge of the matters being considered. Just as members have a right to free speech we believe that members as select committee members must have the right of access to officials and information. We oppose this bill. 
MELISSA LEE (National) 
: 
 It is a pleasure to rise to speak to the third reading of the Corrections (Contract Management of Prisons) Amendment Bill. Before I get going on that I point out that it is ironic that the speaker who has just resumed her seat Carmel Sepuloni complained about constitutional rights; she was outnumbered on the select committee so she was voted down. I take this opportunity to apologise to the officials. The member who just spoke basically insulted the officials who actually helped us tremendously. I would like to thank them for their time and their tremendous help. 
I take a little moment to quote my taxi driver who dropped me off at the airport very early on Tuesday morning. When I told her that we would be debating this bill she said “It’s about”—I do not think I am allowed to say the next word—“[bleep] time.” I have to agree with her sentiments. 
Apart from the obvious ideologically driven objections from members opposite one of the main concerns raised during the deliberations of the Law and Order Committee was the issue of whether the privately managed prisons will be as accountable as the publicly managed prisons. Well the answer that we had the advice that we had and the discussions we had said yes. It was just that members opposite refused to listen to that. The Office of the Auditor-General can still audit the Department of Corrections. The cost and performance of the privately run prisons will still come under the jurisdiction of the department. Members of the Law and Order Committee were told that this morning by the chief executive. 
I have mentioned in debate on earlier stages of this bill that we are not selling the corrections system; we want only to look at options for the private management of our prisons. If I can quote my wise taxi driver again we cannot do any worse than we have done before. The Department of Corrections has had a terrible report card from the Audit Office. Mr Barker has referred in debate on previous stages of the bill to the woeful performance of the department. This bill provides an alternative a choice in how we manage our prison population. Members opposite may not like choice but to members on this side of the House choice is essential. It is wonderful. New ideas are being injected into a public entity that lacks innovation not only in management but also in inmate rehabilitation. It can only be a good thing to provide better options for all concerned. Prisoners will hopefully have a better rehabilitation rate prison management will have better outcomes and the public will feel safer for it. 
One of the reasons why I feel quite strongly that that will happen with this bill is that it sets standards in all aspects including care of prisoners performance standards training for staff etc. These standards are to be no lower than those of the publicly run publicly managed prisons. That means that they will definitely be better than what we already have. Standards across the board will have to be better in privately managed prisons. 
In my humble opinion we should all aspire to achieve better outcomes for all New Zealanders. I have heard many members opposite speaking passionately about wanting better outcomes for prisoners but if we simply continue on the same path in the area of corrections we will not improve. The Department of Corrections has struggled to produce better outcomes for our prisoners and the repeat offending rate is bloated. That the Opposition keeps opposing this bill is simply hypocritical as the previous Government did not improve the lot of inmates and the public did not feel safer for the 9 years that Labour was in Government. We need to improve we need to innovate and we need to change for the better. This bill will provide that opportunity for the Department of Corrections. Hence I commend this bill to the House. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 That was another speech from a National member attacking the Opposition. Those members attack the people rather than the arguments because the arguments on our side of the House are quite defensible. But Government members can produce no evidence and no facts or figures. All they can do is to attack the people on this side of the House who are raising arguments that those members do not agree with. 
Melissa Lee said that privatisation is a new idea. It is a new idea to Melissa Lee. Well it dates back many centuries in fact. Let us go back to the 19th century practice of prison labour leasing. I am referring to a document put forward by the Howard League for Penal Reform. It is very useful. Basically it talks about the prison labour leasing that began in America in the 19th century. For a state fee prisoners were housed clothed and fed by private contractors in return for their labour. A history of injustice neglect brutality and high morbidity rates for the mainly black prison population was recorded and by the early 20th century those leases were gradually phased out as the privately contracted work was returned to the control of the state. The idea is hardly new. It is not new. This debate goes back centuries yet National members are saying that somehow they have had a grand new idea. Well if winding back the clock a couple of hundred years is a grand new idea for National I would hate to think what is coming next. 
I will talk about who may end up running these private prisons and what some of the risks involved in privatisation are because significant risks are involved. Private prison operators are encouraged to cut costs endanger the safety of their staff and endanger the safety of the public. There is no incentive for them to reduce recidivism. I will talk particularly about the GEO Group. For example my colleague Carmel Sepuloni raised earlier in the debate a case where the GEO Group placed a woman in a cell block with male inmates who raped her and beat her and she later took her own life. State authorities removed 125 inmates from a prison run by GEO Group—the people whom National wants to run New Zealand’s prisons—because of inadequate staff training and inadequate health care. Those running the prison were found to have served rotten food. They knowingly made false and misleading statements to state officials. They failed to complete criminal record checks on at least 100 prison guards. I repeat: they failed to do criminal record checks for 100 prison guards. They violated domestic and international laws on due process and humane treatment. These are the people whom the National Government holds up as the bright hope for improving our prison service. Well with a track record like that members on this side of the House do not want a bar of it. If that is what the Government thinks the future of our prison service in New Zealand is I think that is disgraceful. 
This is the wrong debate for us to be having in this House. I have sat here all night since we began this debate and not once have I heard anybody from any party on the other side of the House talk about anything that would reduce the number of people who end up in prison in the first place. Surely with New Zealand having the second-highest incarceration rate in the developed world that is something that the Government would want to talk about. Rather than talking about how it can make a profit from locking up more and more people perhaps it should talk about how to reduce the number of people who end up in prison in the first place. We have had nothing not a jot from the ACT Party or National on any of that. 
Fundamentally this matter is an ideological debate for those members. It is all about how they can make a profit out of the activities of the State. National is absolutely ideologically wedded to the idea of privatisation. The ACT Party the “Self-help Help Yourself Party” is completely and utterly off the planet when it comes to this type of thing. If those members can make a dollar out of it they are into it. If they can make a buck out of it then they are absolutely into it. But there is no evidence to suggest that privatisation will work. All the evidence goes the other way. All the academic research goes the other way. That is why we have heard none of it from Government members tonight. They simply cannot find any evidence. 
I am sure that one of the reasons they blocked the Law and Order Committee from having access to the Ministry of Justice officials is that those officials probably would have told the committee that there is no evidence to support what the Government wants to do. We know that the officials told the Minister of Corrections that there is no evidence to support what she was trying to do and that the evidence suggested in fact that it would probably have the opposite impact to what she was hoping. The select committee was not given the opportunity to hear that evidence. Melissa Lee boldly told us that that is called having a majority. She said that having a majority means that one blocks free speech and blocks the ability to look at the evidence to consider what may or may not work. That is what is being in Government is all about for National. It is all about ignoring the evidence. It is all about doing whatever the bumper sticker slogan says and doing whatever National’s private corporate mates want it to do without fronting up and producing a single shred of evidence that it will work. 
The Labour Party’s opposition to this bill is based primarily on two grounds. The first is philosophical: we do not believe that it is the role of the private sector to incarcerate people and to take away their liberty. We believe that if that is to happen then it is the role of the State. The second objection is simply based on the operation of this measure—how it will work. It will not work. It will not reduce recidivism. It will not save any money because we know that private prisons are more expensive than public prisons. The one example that we have had in New Zealand of a private prison was more expensive to run than a public prison. The National Government has produced no evidence to suggest that privatisation will work. Our objection to this bill is not based simply on principle; it is based on principle but that is not the only objection. 
Debate interrupted. 
Sitting suspended from 12 midnight to 9 a.m. (Thursday)