Volume 652 Week 6 - Thursday 12 March 2009 
Volume 652 Week 6 - Thursday 12 March 2009 
[Volume:652;Page:1907] 
Thursday 12 March 2009 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Business Statement 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 Next week the House will be in adjournment although select committees will continue their business. When the House resumes on Tuesday 24 March it is the Government’s intention to progress the Taxation (Business Tax Measures) Bill the Criminal Proceeds (Recovery) Bill and other first readings of bills that are to be introduced or that are currently on the Order Paper. That will include the Appropriation (Financial Review) Bill which will be read a first and second time with the financial review debate set down for 7 April. Wednesday 25 March will be a members’ day. However on that day the general debate will be set aside so that the House can debate the Budget Policy Statement. 
Hon Dr MICHAEL CULLEN (Labour) 
: 
 I thank the Minister for that information. Could he indicate given what he told the Business Committee whether it is the Government’s intention to allow the members’ day to occur on the Wednesday or whether the Government is considering taking urgency for the introduction and first readings of any bills; if so which bills? 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 That is a fair inquiry. The Budget Policy Statement debate will take 2 hours as is set down under the Standing Orders. A members’ day in the normal course would follow that. 
Speaker’s Rulings 
Questions for Oral Answer—Ministerial Responsibility 
Mr SPEAKER 
: Yesterday a question to the Minister of Maori Affairs was lodged and accepted. The question related to the review of the Foreshore and Seabed Act. Subsequently the Minister of Maori Affairs advised the Clerk’s Office that he had no responsibility for the review. The question was reworked to ensure that it related to the Minister’s area of responsibility—advice he had received from Te Puni Kokiri about the membership of the review group. In the House supplementary questions were asked that related to reports the Minister had received about the review of the Foreshore and Seabed Act. 
I have reviewed the  
Hansard 
 and on reflection those questions were out of order. Where a question asks about reports received those reports must relate to a matter for which the Minister has responsibility. The Minister had advised the Clerk that he had no responsibility for the review. Had I immediately ruled those questions out of order many of the subsequent points of order could have been dealt with much more expediently and in fact may not have even been necessary. I apologise to the House for not dealing with those supplementary questions at the time. However I intend to follow the practice of previous Speakers in taking a wide view of ministerial responsibility. Unless on the face of it there is no ministerial responsibility I propose to allow supplementary questions; I will not take the initiative in ruling them out. It will be as Speaker Burke ruled in 1987 incumbent on the Minister to challenge the validity of such questions. 
Hon Dr MICHAEL CULLEN (Labour) 
: 
 I raise a point of order Mr Speaker. Speaking to your ruling I want to raise a related matter arising out of it. As you stated the Minister of Maori Affairs informed the Clerk’s Office that he did not have ministerial responsibility for the Foreshore and Seabed Act the review thereof or information contained in any report on the review thereof. I think that raises an interesting issue. Does this mean that it is sufficient for the Minister to inform the Clerk’s Office that he or she has no responsibility for a matter for that to be determinative or in the end is it a matter for you—because the Clerk’s Office is acting on your behalf in accepting or rejecting questions—to consider? Clearly Ministers will otherwise find it very easy to avoid questions by simply saying that it is not their responsibility even though it patently may well be. 
The related issue is particularly the case in terms of the Ministry of Maori Affairs and the other so-called “population ministries”. These ministries have a very wide policy brief. They cover all matters of Government policy relating particularly to the population group with which they deal. So for Maori Affairs Te Puni Kokiri will report to its Minister on matters with any particular relevance to Maori. The Minister will be expected within Cabinet—or in the Cabinet committee in this case—to advance views on behalf of that population group in the general discussion. It seems to me that it will be very hard to consider that the Foreshore and Seabed Act does not in one way or another have particular relevance for Maori. It would be hard to imagine a general piece of legislation that is more closely related to the interests of Maori than that particular Act because it relates to the issue of how to deal with customary rights claims. Despite one portion of the Act the reality is that almost certainly only Maori can make an assertion of customary rights claims in the foreshore and seabed area. It seems to me that we are now in the position where the Minister of Maori Affairs has a very narrow brief in terms of his accountability to Parliament and we will find it almost impossible to hold him to account. He may find this satisfactory but I doubt that the general public will find it satisfactory. 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 The points raised by the shadow Leader of the House are valid inasmuch as the Minister of Maori Affairs does have a very wide brief. However it is not uncommon for different aspects of any particular ministry to be wound up inside some form of Government consideration outside of that particular Minister’s purview. That is quite normal. I note that in the last Parliament questions relating to the foreshore and seabed were not accepted by the Minister of Maori Affairs but rather were referred to the Attorney-General who at the time was Dr Michael Cullen. It is not unusual for Governments to make those choices and given that answers given need to be consistent with the public good and interest it surely is for the Government to decide who the best Minister is to represent the Government’s position on a particular issue. All Ministers receive a lot of general advice about matters in other ministries that may overlap their own portfolio responsibilities yet no one would assume that they have the total responsibility for answering for the Government on those particular issues. 
Mr SPEAKER 
: I do not intend to take more time on this issue today because matters will be dealt with as they arise. All I have done is pay the House the courtesy of explaining why a difficulty arose yesterday so that in the future should that situation arise I do not out of the blue rule out of order a member’s question about reports in an area where a Minister has no responsibility. I simply wanted to pay members the courtesy of alerting them to the fact that where the Minister has no responsibility I should not allow questions relating to reports. In the future I shall not allow those questions. I am purely today extending the House that courtesy. 
I have made it clear that I will take a wide interpretation as has been the practice in the past but I make the point that the Speaker does not allocate ministerial responsibilities; the Government does. The Speaker cannot be the judge during question time of whether a Minister has responsibility in a particular area and that is why it is important that the Speaker does not try to do it. The Speaker cannot determine for every Minister what all his or her responsibilities are and at the end of the day the Ministers in the Government have to advise us if they do not have responsibility in the area. But as was pointed out yesterday where a Minister has advised that he or she has no responsibility then questions are out of order if they seek to ask about reports in an area where the Minister has no responsibility. 
I do not intend to pursue this matter further today. It will obviously come up as the business of the House goes on. I am merely today extending to the House the courtesy of showing how I intend to treat such situations in the future. 
Hon Dr MICHAEL CULLEN (Labour) 
: 
 I raise a point of order Mr Speaker. Can I draw to your attention the important factual matter in relation to this. Mr Brownlee has repeated the statement he made yesterday. In fact— 
Mr SPEAKER 
: Matters that the member considers to be fact are not matters of order and the member knows that. 
Hon Dr MICHAEL CULLEN (Labour) 
: 
 I raise a point of order Mr Speaker. In considering your responsibility as Speaker to determine whether a question on the matter of the foreshore and seabed is in order you might care to take into account for example  
Hansard 
 Volume 616 at pages 11820 and 11870 and at least eight other references in the 2002-05 Parliament where questions on the foreshore and seabed matter were put to and answered by the Minister of Maori Affairs. 
Mr SPEAKER 
: I take the member’s point. 
Questions to Ministers 
Economy—Recent Developments 
1. CRAIG FOSS (National—Tukituki) 
 to the  
Minister of Finance 
: What recent developments have occurred that may boost the New Zealand economy? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 This morning the Reserve Bank reduced the official cash rate by 50 basis points to now 3 percent. Two major banks have already reduced their lending rates by a similar amount. This is the lowest level since the official cash rate was introduced 10 years ago. Along with tax cuts on 1 April this move will provide significant stimulus to the economy and assist in protecting people from the sharpest edge of recession. 
Craig Foss 
: What previous reports on the outlook for the economy has he seen? 
Hon BILL ENGLISH 
: Prior to the Reserve Bank forecasts today which confirm that the economic outlook is consistent with the pessimistic views of Treasury before Christmas I saw one comment from Dr Cullen in September. He was quoted as saying that the worst was over now and he was very confident the economy would start to pick up in December. 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. You may recall your ruling previously that Ministers are not responsible for any comments they made before the election. It is hard to see therefore how they can be responsible for comments that I made before the election—even less so. 
Hon Rodney Hide 
: I am certain it is obvious and I am certain the Minister of Finance would not want to be responsible for those comments. He was not claiming responsibility for the comment. What he was asked was whether there were any reports that he had seen. This is a report that he has seen. It is a particularly nonsensical one but he has seen it none the less. 
Hon Dr Michael Cullen 
: I have a feeling that we must make sure we have very even approaches to some of these matters after your recent ruling. If we were to ask whether the Minister of Finance has seen comments that “New Zealand does not have a debt problem.” made by him and Mr Key before the election; and if so whether he agrees with that comment you would not rule that question out of order? 
Mr SPEAKER 
: I am very happy to rule on this matter because I think the matter is quite clear and I do not want to take more time in the House. The Minister has responsibility in that area there is no question about that and therefore he is able to comment on reports relating to that area. That is the crucial issue: it relates to his area of responsibility. I invite the Minister to continue his reply. 
Hon BILL ENGLISH 
: I am aware that Dr Cullen does not want to take responsibility for comments he made but in September he was quoted as saying in respect of the outlook for the economy: “The worst is over now.” and that he was “very confident” that the economy would start to pick up in the December quarter. Sadly those predictions were premature at best. However Dr Cullen was correct in one important respect: we have had the election since then and in that respect the worst is over. 
Hon David Cunliffe 
: Does he agree with the  
New Zealand Herald  
and the  
Wall Street Journal 
 that his Prime Minister John Key is taking a unique approach to this recession that is “cavalier” and “at odds with the rescue policies being carried out in Washington Tokyo and Canberra.”? 
Hon BILL ENGLISH 
: I think the  
Wall Street Journal 
 has misunderstood the Government’s strategy. In fact I am told its journalists decided what the story was before they got here. The fact is that the Government is following a two-pronged strategy. The first is to provide stimulus to the economy in the short term—to protect people from the sharp edge of recession. The second is to deal with New Zealand’s chronic longer-term economic problems so that we can get this economy in top gear as it comes out of the recession. 
Hon David Cunliffe 
: To that end has the Minister read on page 10 of the Reserve Bank’s report today that the aggregate stimulus in the G20 is around 10 percent of GDP? How does that compare with the Government’s 5 percent of GDP of which 4.5 percent by the Minister’s earlier admission came from the previous Labour Government and 0.5 percent from this National Government just like the  
Wall Street Journal 
 said when 10 percent is the average around the world? 
Hon BILL ENGLISH 
: The use of an aggregate stimulus measure is misleading. New Zealand is not in the position— 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. I seek clarification through you of the Minister. Is he accusing me of misleading the House— 
Mr SPEAKER 
: The member will sit down. The member knows that is not a point of order. 
Hon BILL ENGLISH 
: Yes the use of an aggregate stimulus measure is not appropriate for New Zealand because that includes countries that are spending trillions on rescuing their banks. On a normal measure of stimulus New Zealand is similar to other countries and along with dropping interest rates the tax cuts will put cash in people’s pockets which will help protect this economy from the worst edges of recession. 
Job Support Scheme—Wage Replacement 
2.  
Hon ANNETTE KING (Deputy Leader—Labour) 
 to the  
Minister for Social Development and Employment 
: Does she agree with the Prime Minister’s statement that “It’s more likely that we would fund training than wage replacement”; if so why did the 9-day fortnight package announced yesterday not include a training element and instead included a $60 wage replacement? 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 The member is mistaken. The Job Support Scheme does not include a $60 wage replacement; the Government is providing an allowance of up to $62.50 a fortnight. 
Hon Annette King 
: Has she seen the Prime Minister’s comments that he hopes that firms will top up the difference in wages; if so is she aware that a firm paying employees $20 an hour that wants to lay off 10 workers would have to spend an additional $10000 a fortnight to take up her scheme and provide the top-up? If so why would any employer provide such a top-up? 
Hon PAULA BENNETT 
: I am aware that there is choice in this scheme. It is about employers and employees coming to an agreement to help save jobs in their workplace and this Government is supporting that choice. 
Jo Goodhew 
: What can employees do on the 10th day when they are not in work? 
Hon PAULA BENNETT 
: On the 10th day employees can have an extra day for their own purposes which is a benefit to many people according to Alistair Thompson of the Employers and Manufacturers Association. Training will be a feature of the scheme in some workplaces and we encourage that. The entire scheme is voluntary and it is for businesses and employees to find an arrangement that works for them. Our focus is on keeping people in jobs. 
Hon Annette King 
: Will the flow-through from employers to employees be treated as taxable income for employees; if so could an employee receive as little as $4.57 net an hour for an 8-hour day? 
Hon PAULA BENNETT 
: The scheme is voluntary so businesses and employees will come up with what suits them. The Government will pay a top-up allowance of $12.50 for up to 5 hours per fortnight. What happens for the other 5 hours is up to businesses and their employees. The 5-hour subsidy from the Government is taxed. 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. The first part of that question was extremely simple: will the payment that flows through from the employer to the employee be taxable in the hands of the employee? That is a very simple question and all that fluff about choice has no relevance because tax is not a matter of choice—at least for workers. 
Hon PAULA BENNETT 
: What happened there was the member was so interested in jumping up to raise his point of order that he did not hear the end of it. 
Mr SPEAKER 
: The member may not use that kind of language in a point of order or make any reflection on another member in a point of order. I think there is a public interest issue here about whether certain payments are taxable. As the member making his point of order pointed out tax is not a matter that is voluntary. I invite the Minister to respond and to reply to the question which was whether the payments will be taxable in the hands of the recipient. 
Hon Gerry Brownlee 
: I raise a point of order Mr Speaker. She did respond and— 
Mr SPEAKER 
: The member will resume his seat. Clearly those asking the question did not hear that answer and I have to confess neither did I. I invite the Minister to clarify it. 
Hon PAULA BENNETT 
: Yes. 
Hon Annette King 
: Is the Minister aware that the Tai Rawhiti District Health Board is cutting the number of its employees by 3 percent in response to the effects of the global recession? How does she reconcile that with her comments made on  
Morning Report 
 this morning about the exclusion of the public sector from the Job Support Scheme because the sector was not affected by the global economic situation? 
Hon PAULA BENNETT 
: What is quite clear is that this scheme is for businesses that are having a drop in productivity. That is where this focus is. That is the area where this scheme has been introduced and that is what it will introduce. 
Hon David Cunliffe 
: When the Prime Minister has trumpeted this idea as the most major outcome from the over-hyped Job Summit why is the Minister being hung out to dry for defending a trivial programme of some $20 million that at best will save 2000 jobs when we are facing 80000 extra unemployed this year alone? 
Hon PAULA BENNETT 
: Unlike that side of the House we do not think that saving jobs is trivial; we take it really seriously. I can say that with the $20 million that is possibly being spent on this scheme $30 million is being saved in potential unemployment benefit numbers which is a positive thing as well. 
Hon David Cunliffe 
: Does the Minister agree with what John Key told the  
Wall Street Journal 
 which is that National’s real formula for prosperity is a return to privatisation liberalisation supply-side monetarism and—God forbid—Rogernomics or is that not just so 1980s? 
Hon PAULA BENNETT 
: I think that says more about the member’s own credibility than this Government’s. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. Do you consider that that answer constitutes addressing the question which covers a number of core elements of economic policy? 
Mr SPEAKER 
: Yes I do. 
Hon Bill English 
: I raise a point of order Mr Speaker. The deputy leader of the Labour Party used a term that was unparliamentary. I ask that she withdraw the comment. 
Hon Trevor Mallard 
: The term might have been ironic but it was not unparliamentary. 
Mr SPEAKER 
: Because I did not hear it I invite the Hon Annette King to indicate whether she did say something that was unparliamentary. 
Hon Annette King 
: I don’t think it was unparliamentary. 
Mr SPEAKER 
: If she says that she did not I accept her word. 
David Garrett 
: How does the 9-day fortnight package increase productivity or save one job? 
Hon PAULA BENNETT 
: This package gives those employers who are going through a temporarily tough time because of the global economic situation a bit of breathing space and a reduction in their wage bill so that they can keep more workers on in their jobs. 
Schools—Property Projects 
3.  
NIKKI KAYE (National—Auckland Central) 
 to the  
Minister of Education 
: What steps has the Government taken to fast track school property projects? 
Hon ANNE TOLLEY (Minister of Education) 
: 
 The Government has today announced the names of 81 schools that will be receiving funding to get new or expanded buildings through the first allocation of property funding to schools under the Government’s jobs and growth plan. Many of these schools would normally have waited until the end of the year to receive approval and funding. Because of this announcement they are getting approval to begin work at least 6 months earlier. Seventy-four schools will receive $30 million to extend existing buildings and seven schools will receive $11 million to replace buildings that are no longer economically viable to maintain. 
Nikki Kaye 
: Does today’s announcement deliver on the promises made when the fast tracking of school building projects was announced in February? 
Hon ANNE TOLLEY 
: Yes it does; in fact it more than delivers. In February we promised that the $30 million to have better administration buildings halls and libraries would be distributed to 64 schools. The announcement today will see 74 schools given funding for those purposes. That is 10 more schools and communities than we originally promised to help to upgrade their buildings and keep jobs in the community. 
Su’a William Sio 
: Will the Minister confirm that she has frozen $9 million of funding that would have provided nine preschool facilities for 16000 children under 5 years in Manukau who currently have no access to early childhood education; and how is it that depriving 16000 children of access to preschool education would not be OK for the leafy suburbs but is somehow OK for Manukau City? 
Hon ANNE TOLLEY 
: No I have not frozen it. In fact there was not $9 million there. This Labour Government promised and hoped. There is $2.6 million available and instead of coming down to Wellington and building something and hoping that children would come I have met with the City of Manukau Education Trust with Manukau City Council and with principals and asked them what they think will work for their communities. We do not dictate to communities what is good for them; we ask them for the answers. 
Chris Hipkins 
: How can the Minister claim that her Government is fast tracking school property funding projects when the schools in Upper Hutt have heard nothing from her or her ministry despite her promise some time ago that they were to receive an extra $30 million in funding and despite their repeated inquiries about how much they will each receive and when they will get it—or is she just making it up as she goes along and not doing the hard yards to deliver on her promises? 
Hon ANNE TOLLEY 
: I share that member’s concern about the Upper Hutt schools and the disgraceful way that his Labour colleagues froze the capital for those schools for 6 or 7 years. Three Labour Ministers of Education froze the capital for those buildings and I know that that member is concerned about that because I understand that he was advising those three Ministers at the time. However I am delighted to assure the member that this Government will be delivering to those schools in the very near future. 
Accident Compensation—Claims Liability 
4.  
Hon DAVID PARKER (Labour) 
 to the  
Minister for ACC 
: Does he agree with actuary Jonathan Eriksen that “All this talk of liabilities being blown out is complete nonsense. It’s ill-founded and smacks of scaremongering which given the current economic picture is the last thing people need to be told.”; if not why not? 
Hon Dr NICK SMITH (Minister for ACC) 
: 
 No and nor do other actuaries I have spoken to. I am advised that Mr Eriksen tendered for the actuary work of accident compensation against PricewaterhouseCoopers and was rejected. I stand by the actuary valuations provided by PricewaterhouseCoopers which show that accident compensation liabilities over the last year have increased by $3.9 billion to $22 billion. 
Hon David Parker 
: Does the Minister agree with Brian Fallow that “it is downright irresponsible … to use terms like ‘insolvent’ and ‘going down the gurgler’ … because there are people who depend on [accident compensation] to keep body and soul together and will do for the rest of their days.”; if not why not? 
Hon Dr NICK SMITH 
: Accident compensation has a serious problem because costs have been rising at a very fast rate. Although the discount rate may go up and down—and it did both over the term of the previous Government—the fact is that those liabilities grew by $16 billion under the term of the previous Government and that is why this Government has to make changes to get costs under control. 
Michael Woodhouse 
: What did the MartinJenkins report say about the primary reason for the increase in accident compensation liabilities? 
Hon Dr NICK SMITH 
: The ministerial inquiry showed that although the discount rates had gone up and down during the mid-years of this decade they had masked the very substantial increase in costs. Now that the discount rate has fallen as have returns from investments the underlying problem of cost extension and cover entitlement extensions has been exposed and that problem now leaves accident compensation in a position where change is required. 
Hon David Parker 
: Does the Minister agree with Vernon Small that this is a “manufactured crisis” and “principally caused by the global recession and its impact on lower interest rates … and falling equity prices.”; if not why not? 
Hon Dr NICK SMITH 
: I did not create the situation where before I even got my ministerial warrant Department of Labour officials sought an urgent appointment with me to deal with a $300 million shortfall that we now know was a breach of the Public Finance Act. I did not create that situation; members opposite did. 
David Garrett 
: Does the Minister think it is fair that hard-working New Zealanders have to pay higher levies in order for the accident compensation scheme to subsidise criminals who injure themselves while breaking the law? 
Hon Dr NICK SMITH 
: The member raises a legitimate question about how far accident compensation entitlements should go. ACC has raised with me concerns about the issues the member has raised. In the process of reviewing accident compensation entitlements that is one of the issues I wish to look at. In my view we need to get right the balance between ensuring accident victims get proper care and taking into account the costs on levy payers. 
Hon David Parker 
: Why for the first time in memory did neither the chair of the ACC board the former chair—and still a current board member—Mr Wilson the deputy chair nor any other member of the board of ACC appear at the select committee’s financial review of ACC this morning? 
Hon Dr NICK SMITH 
: I advised the chairman of the select committee on Tuesday that there had been a change in the board chair which I had announced on Monday and that the new board chair Mr John Judge was unavailable this week. Given the change that I am making to the board the chairman of the select committee agreed that I should come along to the meeting. I have said to— 
Hon Member 
: How ridiculous! 
Hon Dr NICK SMITH 
: Usually members are upset because Ministers will not come along to select committee meetings. Mr John Judge the chair of the ACC board is more than happy to come along to the select committee and I understand that that is the chair’s intent. 
Hon David Parker 
: I raise a point of order Mr Speaker. The member puts me in a difficult position in that he says that the chair of the select committee wants the current chair of the ACC board to come along yet I am prevented from commenting— 
Mr SPEAKER 
: The member knows that is not a point of order. 
Hon David Parker 
: Why after gagging the board over recent months then gatecrashing the financial review himself— 
Hon Dr NICK SMITH 
: I raise a point of order Mr Speaker. The accusation that I have gagged the board or done anything different is quite inappropriate. That is not the way that Standing Orders require members to ask questions. 
Mr SPEAKER 
: I thank the honourable member. He is quite right with his point of order. Members cannot make such allegations in supplementary questions. I invite the member to reword his question. 
Hon Clayton Cosgrove 
: I raise a point of order Mr Speaker. I might be in the difficult position of incriminating myself here but I have said on many many occasions—and you have never ruled it out Mr Speaker—that the Minister of Corrections had gagged her chief executive officer. I have said it in this House and you have never ruled it out so how can you rule out that member saying it? 
Hon Gerry Brownlee 
: In his case no one was listening. 
Hon Dr Michael Cullen 
: A further point of order Mr Speaker. 
Mr SPEAKER 
: No I will not take any more points of order on this matter. That was not a point of order; I accept that absolutely and I did not need that kind of assistance from the Hon Clayton Cosgrove. I have ruled on the matter in respect of the Hon David Parker. He is not losing a question. I have invited him— 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: I happen to be on my feet Dr Cullen. I have invited the member to reword his question. He is not losing a question. I believe that is perfectly fair. If I have missed noticing that members have done this in the past I apologise for that but when a Minister takes objection a member cannot make allegations in a supplementary question. The Standing Orders are absolutely clear on that point. 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. You did not give a chance for anybody to comment on the first point of order from Dr Smith. Dr Smith of course did not deny that he had told the board not to make public comment last year. It is a matter of public record— 
Mr SPEAKER 
: I have indicated my considerable respect for the member’s knowledge of the Standing Orders on a number of occasions but what he is demonstrating here is that he is trying to step beyond the Standing Orders. The Standing Orders are not about debating matters that are considered to be fact; the issue is that the Standing Orders are very clear on what can be included in a supplementary question. Supplementary questions cannot contain allegations; that is totally out of order. There is no discretion about it whatsoever. I have not cost the member who made the allegation a supplementary question; I have invited him just to reword it. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. What we are getting to now is what is an allegation as opposed to what is a fact. 
Mr SPEAKER 
: I am on my feet and I invite the member to sit down. The Speaker is the sole judge of these matters. Objection was taken and the Standing Orders are absolutely clear. I have no discretion on the matter. I invite the member to ask his— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: I am on my feet. 
Hon Trevor Mallard 
: You dip sometimes. 
Mr SPEAKER 
: I have not dipped one little bit and if the member is not careful he may be dipping himself. 
Hon Trevor Mallard 
: Point of order Mr Speaker. 
Mr SPEAKER 
: I am on my feet. And that member will resume his seat. The House has been quite noisy today and that is fine. It has been quite robust today but members will comply with the Standing Orders. I have ruled on this matter and I will not tolerate—because the Standing Orders do not allow—any discretion in this matter. I invite the member to be careful. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. Without challenging your ruling I invite your reflection on certain matters in  
Hansard 
. If my memory serves me correctly when I was the Minister of Immigration I faced extended questioning from another member who made extensive use of supplementary questions that contained allegations against another member of this House Taito Phillip Field. 
Mr SPEAKER 
: I perceive the member to be questioning my ruling. I have made it very clear: an allegation of gagging was made objection was taken and I have no discretion in that matter. The Standing Orders are absolutely clear on it. 
Hon Clayton Cosgrove 
: Point of order. 
Mr SPEAKER 
: I am on my feet Mr Cosgrove. I warn the member that I have ruled on this matter. 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. To be clear so that we can frame our questions incredibly precisely and carefully are you saying that if the member were to ask: “Did the Minister tell the board that it was not to make public comment on certain matters?” you would not object to that? In common language it would be the word “gagging” but am I to assume that it would not be an allegation? I think we have a real problem here. 
Mr SPEAKER 
: I have ruled on this matter. Offence was taken and the Standing Orders make it very clear that members cannot inject into supplementary questions those kinds of things. I have ruled on the matter and there has been no penalty to the member who made the allegation. I have invited him simply to reword his supplementary question. I believe that that is totally fair. 
Hon David Parker 
: Why at the select committee this morning did the Minister stop the chief executive from answering some of the questions posed by members of the Opposition and pass notes to the chief executive to intervene in her answers to other questions? 
Hon Dr NICK SMITH 
: Firstly I did not pass a single note to the chief executive. There were questions from members that related to policy. For instance there were questions about the setting of the motor vehicle levy. That is done by the Government not by the chief executive. I say to the member opposite that during the period of questioning at the select committee I think 90 percent of the answers were given by the chief executive and I think it was a helpful interchange. 
Water Quality—Dairying and Clean Streams Accord 
5.  
KEVIN HAGUE (Green) 
 to the  
Minister of Agriculture 
:Has the Dairying and Clean Streams Accord achieved its aim of “clean healthy water including streams rivers lakes ground water and wetlands in dairying areas.”; or does he agree with the Hon Dr Nick Smith’s statement of October 2008 that there has been a “deterioration in water quality”? 
Hon DAVID CARTER (Minister of Agriculture) 
: 
 The Dairying and Clean Streams Accord is well down the track of achieving its key aims and it is ahead of schedule in many areas although more work is clearly needed. The member needs to understand that the accord is not expected to achieve its full aims until 2012. I agree with the statement from the Hon Dr Nick Smith. In many parts of New Zealand water quality has deteriorated under 9 years of a Labour-Green Government and that is why National is intent on achieving better outcomes.  
Kevin Hague 
: How can the Minister expect Kiwis to believe that the Dairying and Clean Streams Accord is working when the highest priority target—and the only target with any teeth—which is for all farms to immediately comply with resource consents is nowhere near being met with more than one in 10 dairy farms significantly in breach of cowshed effluent disposal rules? 
Hon DAVID CARTER 
: As I mentioned today at the launch of the  
Dairying and Clean Streams Accord: Snapshot of Progress—2007/08 
 some farmers are not playing the game and it is the intention of the Government in conjunction with local government and Fonterra to deal with those farmers. The Green member ought to acknowledge what the snapshot clearly shows: the great majority of farmers have done a very credible job. It is time the Green Party acknowledged the work done by the great majority of New Zealand farmers instead of bagging farmers on every occasion. 
Amy Adams 
: What initiatives are under way in the primary sector to improve water quality? 
Hon DAVID CARTER 
: There are many aside from the Dairying and Clean Streams Accord. Local councils farmers industry-good organisations and Government are actively cooperating on a range of initiatives aimed at lifting the performance of the sector. Some of these initiatives include the Primary Sector Water Partnership the dairy sustainability assurance scheme and the Dairy Industry Strategy for Sustainable Environmental Management. There is much work under way and the vast majority of the sector is demonstrating a clear commitment to being effective guardians of our vital waterways. 
Kevin Hague 
: Does the Minister accept that even based on the report’s own numbers at least 750 dairy farms are seriously breaking the law; if so does he really expect Kiwis to agree that these are small numbers? 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I apologise to my colleague but that is the first example of an allegation since your recent ruling. That supplementary question contains an allegation. It is also a fact as reported in a particular report. But it is an allegation of people breaching the law and I ask you consistent with your previous rulings about allegations not being allowed in supplementary questions whether this is an appropriate supplementary question to continue with. 
Hon Rodney Hide 
: This picks up on the point that was made in response to the Hon Clayton Cosgrove. The difference is that it is the Minister’s taking objection that alerts your interest. If no one is particularly offended by it then I think the position is that we carry on. We do that quite often for the smooth running of Parliament. As you pointed out in your ruling it was actually once a Minister had taken objection to the question that your hands were tied. 
Mr SPEAKER 
: I thank the honourable members. I ask the Minister whether he recollects the question and is able to answer it. 
Jeanette Fitzsimons 
: Speaking to the general point made in the Hon Trevor Mallard’s point of order if statements of fact taken directly from a Government report are not to be allowed in supplementary questions if a Minister should take exception to them I think we are getting into quite dangerous territory. 
Mr SPEAKER 
: The member does not need to be concerned. I was about to call the Minister to answer the question. I do not consider there is a problem with the question. I invite the honourable Minister to answer the question. 
Hon DAVID CARTER 
: Thank you Mr Speaker. The report certainly identifies some farmers who are not complying. Some of the non-compliance is of a technical nature; some is quite serious non-compliance. If the member had been at the launch today he would have heard both the Minister of Agriculture and the Minister for the Environment being critical of that small number of farmers who continually fail to comply and who wilfully pollute. Those farmers risk bringing the whole of the New Zealand industry into disrepute. 
Kevin Hague 
: Does the Minister agree with Bryce Johnson the chief executive of the Fish and Game Council that “The Accord has always been a stop-gap programme and fundamentally incomplete is voluntary not mandatory … has no riparian buffer zone requirements doesn’t deal to small streams only includes Fonterra suppliers and never focused on measurable improvements in water quality.”; if not why not? 
Hon DAVID CARTER 
: I agree with Mr Bryce Johnson to the extent that the accord is voluntary. I note that three press releases have been put out today criticising the progress: one by the Royal Forest and Bird Protection Society one by the Fish and Game Council and one by the Green Party. It looks to me as though all three press releases were written by one and the same person. 
Kevin Hague 
: Is the Minister aware— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. Again I apologise for interrupting but I think a very serious allegation has been inferred in that reply— 
Mr SPEAKER 
: I have heard enough from the member. The member will resume his seat. Thank you. 
Metiria Turei 
: Point of order. 
Mr SPEAKER 
: Metiria— 
Hon Darren Hughes 
: Point of order. 
Mr SPEAKER 
: Darren Hughes. 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. The Opposition notes that earlier when the Hon Dr Nick Smith took a point of order and when the Leader of the House took a point of order— 
Metiria Turei 
: Point of order Mr Speaker! 
Mr SPEAKER 
: Metiria Turei. 
Hon Darren Hughes 
: I am on a point of order. 
Metiria Turei 
: Sorry; I was called. 
Mr SPEAKER 
: I apologise. It appears that Metiria Turei called a point of order first and I did not hear it. I apologise to the honourable member. Out of courtesy I should take the member who called first. 
Metiria Turei 
: I raise a point of order Mr Speaker. I raise the issue that an allegation like that being made in a reply to a question is none the less still an allegation that would according to your ruling be out of order under the Standing Orders. The rules in the Standing Orders— 
Mr SPEAKER 
: The member will sit down. I am on my feet. I think that this issue is getting quite ridiculous because what the Minister said in his reply was hardly an offensive allegation whatsoever. I invite the House to come back to the business. I believe that Kevin Hague was asking a supplementary question. 
Hon DAVID CARTER 
: I raise a point of order Mr Speaker. If my comment upset some people in the House then I am only too happy to withdraw it. 
Metiria Turei 
: I raise a point of order Mr Speaker. I take exception to the Minister’s comment and I ask that the Minister be required to withdraw and apologise for it. 
Mr SPEAKER 
: Would the Minister please withdraw and apologise. 
Hon DAVID CARTER 
: I withdraw and apologise. 
Mr SPEAKER 
: I thank the Minister. 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. The point I was going to raise was that it seems that when Government members have taken points of order this afternoon they have been allowed to complete their point of order before you comment or rule on it but on several occasions when Opposition members have taken points of order before they have been able to get to the point they are trying to make you have stood up and shut them down. In the case of the Hon Trevor Mallard you did not even comment on the point he was making; you just said that you had heard enough and then proceeded to the next item of business. We want to be able to make our points of order and take them to a complete end before you then give your ruling to us and— 
Mr SPEAKER 
: The member will resume his seat. I hear what he is saying; I hear his point of order. It is the Speaker’s judgment as to how he deals with points of order. Where I assess that the point of order is not genuine I will tend to sit members down because otherwise the House would get into endless disorder. I have taken on board the point the member made and if I have created that impression then I apologise because I do not want to create that impression. 
But the business of the House is important and where points of order become trifling it is not in the interests of the business of this Parliament and it is not in the public interest. I think that we should just think today about the issues. It all stemmed from an allegation in a question that was objected to and was found offensive by the Minister being asked it. I think that it was reasonable to require the question to be reframed so that it did not cause offence and where offence was taken from the Minister’s answer again the Minister withdrew and apologised for that. I think the House should move on with its business. But I note the point the member made and I certainly do not want to create that impression. 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: I just alert the member to the fact that I have not even sat down yet. 
Hon Dr Michael Cullen 
: I am sorry Mr Speaker. You have a tendency to stop and look as though you are sitting down which is why people then rise to a point of order. We are not trying to be discourteous; we are actually just trying to keep things flowing along. 
I want to pause for a second if we possibly can. I think we are getting into trouble here and I do not like being in the situation where there are endless points of order. I remind you of a conversation we had. I offered the advice that playing the advantage rule is the best move for a Speaker rather than continued involvement in rulings. When a Minister takes objection then in general terms the appropriate thing is for you to seek a withdrawal and apology or ask the member to rephrase the question as you did. It is not an absolute requirement upon you. Sometimes people take objection when there are no particular grounds for that objection. We cannot rule everything out just because we take objection to it. But when you proceed with a statement that any allegation is out of order you are inviting us to be very very pernickety from there on about every question and every answer because I am afraid the same comments apply to answers. Either we are to have a reasonably free-flowing question time or we will revert to the worst period of my parliamentary career in terms of question time—from 1985 to 1987—when on one famous occasion we ended up at the end of question time with only one supplementary question having been in order. I do not think that that contributes to the good flow of parliamentary business. 
Hon Gerry Brownlee 
: I support the comments made by Dr Cullen. I think they are very very useful. If you look at the clocks Mr Speaker you will see that we are only on question No. 5 after 55 minutes. For many people watching this process and for those who—God love them—may even read the  
Hansard 
 of this process it will look as though we have wasted an enormous amount of time on relatively pedantic points. I think that as we progressively put ourselves in a straitjacket the tendency is to try to break out of it. That is largely what I think has happened with some of the frustration expressed by the Hon David Parker and similarly responded to by the Hon Nick Smith and various others. So perhaps we should take on board the comments of Dr Cullen and look to that advantage rule which by and large serves this House reasonably well. 
Mr SPEAKER 
: I take on board the honourable members’ points. It is worth viewing the replay of question time. I do so every day to try to ensure fairness. 
Kevin Hague 
: Is the Minister aware that one cow defecating in a river is equivalent to 14 humans defecating in a river and that therefore—as in this picture I am holding—nine cattle in the Manawatu River is equivalent to all the members of this House going down to the local stream and defecating simultaneously; and would that be acceptable to the Minister? 
Hon DAVID CARTER 
: I was not aware of that amazing statistic. I thank the member for that information today but I say to the member that when I read his press release when I read the press release from the Royal Forest and Bird Protection Society and when I read the press release from Fish and Game New Zealand I see that too much time is spent criticising the farmers who are not complying. The great majority of farmers are doing a very good job and instead of criticising our primary industries and our image that member would do a lot better to appreciate the good work that is occurring in this regard. 
Kevin Hague 
: Will the Minister’s Government commit to cleaning up our rivers and lakes so that they are safe for our kids to swim in; if so by when? 
Hon DAVID CARTER 
: This Government is committed to cleaning up our waterways. I note for the member that the previous Government the Labour-Green Government had a programme of action that became known by the bureaucrats as the programme of inaction. This Government is intent on doing something not ignoring the issue as was the case for the last 9 years. 
Jeanette Fitzsimons 
: I raise a point of order Mr Speaker. I take offence at the previous Government being called a Labour-Green Government. The Greens have never been a part of the Government. 
Mr SPEAKER 
: Is the member asking for that comment to be withdrawn and apologised for? 
Jeanette Fitzsimons 
: Yes. 
Mr SPEAKER 
: The member has taken offence. 
Hon DAVID CARTER 
: I withdraw and apologise to the Greens. 
Mr SPEAKER 
: I thank the Minister. 
Hon DAVID CARTER 
: I also withdraw and apologise to the Labour Party. 
Kevin Hague 
: Is it not blindingly obvious to the Minister that this completely hopeless voluntary and industry-controlled accord was only ever an excuse to avoid regulation; and given its complete failure to date will he commit to setting quality standards for clean water? 
Hon DAVID CARTER 
: I do not accept that the accord has been a complete failure. We are ahead of the great majority of targets which were set some time ago in 2003. We are on track to achieve those targets by 2012. 
Kevin Hague 
: I seek leave to table a document. It is a photograph from March 2008 of cattle in the Manawatu River. 
Mr SPEAKER 
: Leave is sought to table the photograph. Is there any objection? There is objection. 
Dr Kennedy Graham 
: I seek leave to table a document displaying a photograph from a book published in 1999 showing the Mayor of Stockholm Sweden drinking a glass of water from Lake Malaren just outside the city hall—a goal that the Mayor of Rotorua could strive to emulate. 
Mr SPEAKER 
: Leave is sought to table a photograph I believe. Is there any objection? There is objection. 
Job Support Scheme—Reports 
6.  
KATRINA SHANKS (National) 
 to the  
Minister for Social Development and Employment 
: What reports has she seen that support the introduction of the Government’s Job Support Scheme? 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 There has been broad support for the first stage of the Government’s Job Support Scheme. Gareth Morgan economist said: “I think it’s quite well-thought-out.” Peter Townsend Canterbury Employers Chamber of Commerce chief executive said it is a step in the right direction. Vernon Small in the  
Dominion Post  
this morning called it a “win-win when most of the economic news is lose lose lose.” We promised action from the Job Summit and we have delivered it. 
Katrina Shanks 
: How is work progressing on developing the new scheme for smaller companies that are having trouble keeping staff? 
Hon PAULA BENNETT 
: Just today I have come from a meeting with Workstream 1 from the Job Summit which is meeting to design a completely new programme for small to medium sized employers recognising that their needs are far more diverse than those of big employers and it is more complicated to design a programme to suit them. We will be announcing something in weeks not months. 
Katrina Shanks 
: What initiatives did the previous Labour Government put in place to support small companies? 
Hon PAULA BENNETT 
: That is a good question. I have been unable to find anything that the previous Government put in place to help to prevent any redundancies and to save those jobs. The previous Government was not able to put together a Job Summit. In fact when the Hon Lianne Dalziel was Minister for Small Business she received a report from the Small Business Advisory Group saying the best thing the Government could do to help business would be to introduce a 90-day trial period. I am incredibly proud that this Government delivered on that. 
Hon Annette King 
: Has she also seen reports from the country’s biggest private sector union describing the Government’s 9-day fortnight as a miserable subsidy that will be rejected by workers? 
Hon PAULA BENNETT 
: I have seen reports from the current Labour Party president complaining about the scheme. But I have also seen a report from Peter Conway Secretary of the Council of Trade Unions who says it benefits the workers the company and the country as a whole. 
Hon Annette King 
: Has she noted the conflict between finance Minister Bill English who said that some people are expecting wage subsidies but that is probably unreal and the Prime Minister’s comments that he wants employers to provide such a subsidy; if so whose side is she on? 
Hon PAULA BENNETT 
: There is no conflict. What this Government has done over the last 3 months while it has been here has been to discuss the best way forward in terms of saving jobs. Many ideas have been thrown out there. This Government is proud to say some of the good ideas have come from outside Wellington and we will back the good ones. 
Police—Public Safety 
7.  
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
 to the  
Minister of Police 
: Does she agree with the Prime Minister’s statement that “National believes protection of the public should be the most important consideration” and is that her most important consideration as police Minister? 
Hon SIMON POWER (Minister of Justice) 
 on behalf of the  
Minister of Police 
: Yes. 
Hon Clayton Cosgrove 
: What actions will she be taking to assure the public that when an alleged rapist applies for bail the police do their job properly in that they check whether the proposed address is appropriate that it is not close to schools and criminals and most important that it is acceptable to the alleged victim—in this case a 15-year-old—and further that this critical information is conveyed to the judge by the police prosecutor given that these things were not done in the alleged rape case reported in this morning’s  
Dominion Post 
? 
Hon SIMON POWER 
: Police prosecutions accept that they did not follow correct procedure because they did not carry out adequate inquiries prior to the hearing and therefore did not alert the court to the proximity of the alleged offender in that case to the victim. The incident is unacceptable. I have been informed that this morning the police and the alleged offender’s counsel have been working to find an alternative address for the offender to be bailed to by tomorrow. This is when the change in bail conditions would have taken effect from. How and why this occurred will be the subject of a review. 
Sandra Goudie 
: What actions has the Government taken to make protection of the public the most important consideration within its first 100 days? 
Hon SIMON POWER 
: In the first 92 days of the new Government we passed legislation to make it harder to get bail and make crimes against children an aggravating factor in sentencing and introduced bills to further protect victims of family violence target gangs expand the collection and use of DNA samples impose a victim’s levy on offenders and remove parole for the worst repeat offenders. I think that stacks up pretty well against the first 100 days of Clayton Cosgrove’s tenure as Associate Minister of Justice which our records indicate resulted in one press release. 
Hon Clayton Cosgrove 
: Does the Minister also agree with the comments of justice Minister Simon Power with regard to the Government’s Bail Amendment Bill that: “The overriding principle in taking these swift actions is the need to put public safety first.” and does she think this incident is a good example of the Government’s swift actions in achieving public safety? 
Hon SIMON POWER 
: Yes on behalf of the Minister of Police I agree with the Minister of Justice. I am advised that the problem in this case was not with the law but that the police failed to follow the correct procedure laid down in the law on operational guidelines. I would also like to note that the member’s party voted for the changes in the bail law prior to Christmas—and the Government is grateful for that. 
Hon Clayton Cosgrove 
: Is the Minister not aware that under the watch of the Minister of Police there has been a litany of failures: the stabbing of a teacher at Avondale College two escapes from police custody large-scale gang confrontations in Gisborne the killing of a young man after a tangi at Murupara a police officer putting public safety at risk by allegedly driving drunk and now—of course—this latest incident and I could go on. When is she going to stop simply making excuses wringing her hands and start doing her job to ensure that public safety is her first priority? 
Hon SIMON POWER 
: Action has been taken in respect of those sorts of matters. A lengthy list of legislation that has been passed through this House through the first 100 days shapes up pretty well compared with the one press release that the member put out about party pills in his first 100 days as Associate Minister of Justice. 
Accident Compensation—Cost Increases and Inflation Rate 
8.  
MELISSA LEE (National) 
 to the  
Minister for ACC 
: What has been the rate of cost increases at ACC and how does this compare with the rate of inflation? 
Hon Dr NICK SMITH (Minister for ACC) 
: 
 Claim and administration costs are this year projected to increase by $451 million on last year—an increase of 15.6 percent. The increase for the 3 preceding years was 12.3 percent 13.6 percent and 10.4 percent. The average rate of inflation over that period has been 2.5 percent. 
Melissa Lee 
: Has the cost in administration of accident compensation exceeded the cost paid out in claims? 
Hon Dr NICK SMITH 
: Yes administration costs have increased by 148 percent as compared with claim cost increases of 32 percent and inflation of 33 percent over the same period. This Government wants the focus to be on services to the public at the front line and addressing the issue of the very large increase in administrative costs will be one of the priorities for the new board. 
Hon David Parker 
: Does the Minister accept that labour cost increases in recent years caused by better pay for doctors nurses and care workers were a significant part of the accident compensation scheme’s overall cost increases and that the low inflation environment that we are now in will see those pressures ease? 
Hon Dr NICK SMITH 
: The advice I have received about the projections of future cost increases is that they will be still very high and considerably above the rate of inflation. I say to this House quite honestly that anybody who thinks that ongoing cost increases in accident compensation of 15 percent per year in a recession are appropriate are I really think on the wrong side of the debate. 
Melissa Lee 
: What advice has the Minister received on the impact of reduced rehabilitation rates and an increasing pool of long-term claims on accident compensation costs? 
Hon Dr NICK SMITH 
: Rehabilitation rates have as measured at the 3-month 6-month and 12-month rate all declined over the last 3 years and this is adding significantly to accident compensation costs. The latest 3-month rate of rehabilitation is the lowest that has ever been recorded. The long-term weekly compensation claims have also been increasing since 2005 and these too are having an adverse impact on the scheme’s finances. 
Hon David Parker 
: How can the Minister complain that the accident compensation scheme is unaffordable when it is so much cheaper than the Australian equivalent and to quote Brian Fallow of the  
New Zealand Herald  
again it is a “civilised and cost-effective approach to dealing with the injured. Why undermine confidence in the scheme unless you plan to undermine the scheme itself?”. 
Hon Dr NICK SMITH 
: I have made it absolutely plain that I am committed to the Woodhouse principles of accident compensation. When the member makes comparisons with Australia for instance in relation to the work account he needs to note that motor vehicle costs are not included in New Zealand’s work account but are in Australia’s. Those significant differences need to be noted when making comparisons but the member can be reassured that this Government is about securing the future of the accident compensation scheme and managing costs better. 
Resource Management Act Reforms—Consultation with Maori Party 
9.  
Hon STEVE CHADWICK (Labour) 
 to the  
Minister of Conservation 
: Did he discuss the proposed removal of the Minister of Conservation’s powers to make the final decision on applications for restricted coastal activities under section 119 with the Maori Party before agreeing to remove this power from the Resource Management Act? 
Hon Dr NICK SMITH (Minister for the Environment) 
 on behalf of the  
Minister of Conservation 
: No the Minister did not have any direct discussions with the Maori Party but he was advised by the Minister for the Environment that there were extensive discussions with the Maori Party on all aspects of the resource management reform bill. 
Hon Steve Chadwick 
: Did the Minister raise with the Minister for the Environment any of the concerns raised in the Department of Conservation’s submission to him on the Resource Management (Simplifying and Streamlining) Amendment Bill; if not why not? 
Hon Dr NICK SMITH 
: The Minister of Conservation had an extensive discussion with the Minister for the Environment about the veto on restricted coastal activities that was provided by the Minister. It is my view that the veto used by the previous Government completely discredited the process and I think most New Zealanders welcome the fact that future decisions will be made by the Environment Court and not by Ministers of the Crown on individual consents. 
Hon Steve Chadwick 
: Does that confirm that the Minister made no effort to protect his statutory responsibilities as the final decision-maker on restricted coastal activities which enable him to fulfil his role as an advocate for the preservation and protection of New Zealand’s natural and historical resources because discussion between Ministers went in a different direction? 
Hon Dr NICK SMITH 
: I note that the member who is the previous Minister of Conservation did not change one single decision on restricted coastal activities. 
Hon Ruth Dyson 
: What’s that got to do with the answer? 
Hon Dr NICK SMITH 
: Well it is very important. Let me tell members why it is important. Why would we want to hold up consents for months and months when the court has decided that the powers that the Minister holds which the member is making such a big deal of are very very narrow and it would be only in extreme circumstances that a Minister could overturn a decision of the Environment Court? 
Hon Steve Chadwick 
: I seek leave to table a paper to the Cabinet economic growth and infrastructure committee on 16 February on the Resource Management (Simplifying and Streamlining) Amendment Bill with the comment “Discussion amongst Ministers went in a different direction.” 
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. 
Water Supply—Funding 
10.  
TE URUROA FLAVELL (Maori Party—Waiariki) 
 to the  
Minister of Local Government 
: What funding is available from central government for small communities to upgrade their water supply? 
Hon RODNEY HIDE (Minister of Local Government) 
: 
 I am advised by my department that the Ministry of Health runs a Drinking-water Assistance Programme which was started in 2006 with approximately $136 million available over 10 years. The programme provides technical and capital assistance for communities of fewer than 5000 people to enable them to get safe drinking-water. I am advised that factors that affect the level of the subsidy provided are the size of the community and its assessed level of deprivation. 
Te Ururoa Flavell 
: Is the Minister aware that some residents of Bridge Pa have been out of water since December 2008— 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. I have an interesting question here given our previous discussions about the responsibilities of the Minister of Maori Affairs. We learnt from the Minister that a funding programme is available through the Ministry of Health and that it was put in place by the previous Labour Government. If that is so then consistent with your previous rulings this question can scarcely be answered by the Minister of Local Government. He is dealing with it because it is a general policy matter relating to local government you have ruled that general policy matters relating to Maori cannot be dealt with by the Minister of Maori Affairs and it seems to me these are now on all fours. Are we to assume that there is one rule for the Pakeha Minister of Local Government and another rule for the Maori Minister of Maori Affairs? 
Mr SPEAKER 
: No there is not. I invite the member to continue his question. [ 
Interruption 
] If members want me to get trifling and pedantic I can but it will not be in the Opposition’s interests. I consider that the point made by the Hon Dr Michael Cullen was not a well-made point because the Minister of Local Government has responsibility for matters to do with local government and that is the determining factor. I invite the member to carry on with his question. 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. Do we take it from that ruling that the Minister of Maori Affairs does not have responsibility for matters to do with Maori? 
Mr SPEAKER 
: I invite the senior member—the shadow Leader of the House—to be careful. He knows that the Minister of Maori Affairs has responsibility for Maori affairs—that portfolio. It is not my role as Speaker to judge what should fall within it. Te Ururoa Flavell is asking a supplementary question. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. I do not wish to detain the House but we all share an interest in ensuring that our questions are within the Standing Orders and within your rulings. I believe that the point of order made by the Hon Dr Michael Cullen was a fair and serious point of order. No I am not challenging your ruling but I am seeking your guidance on how we should deal with the issue of Ministers who have direct portfolio responsibilities for programmes—and both the Minister of Maori Affairs and the Minister of Local Government do; that is all agreed—and also have statutory responsibilities for general issues that fall within their bailiwick. The problem is that you have ruled out a question to the Minister of Maori Affairs that fell within one but not the other and you have ruled in a question to the Minister of Local Government that specifically related to a programme funded by the Ministry of Health. 
Mr SPEAKER 
: I have heard the member’s point sufficiently. I invite members to have a look at the statement I made at the commencement of today’s sitting. In fact I was acknowledging in that statement that the points made by Dr Michael Cullen yesterday were actually very valid points and that when I reflected on my rulings on them and looked at them very carefully I was troubled by some of them. That was why I apologised to the House. And I pointed out that it was not Dr Cullen’s supplementary questions that I should have ruled out; in fact in my view—when I listened to the tape and looked at  
Hansard 
—the questions of Te Ururoa Flavell and the Hon Chris Finlayson were out of order yesterday. I invite the member to read the statement I made because in many ways it was consistent with the points that Dr Michael Cullen was making. For the good order of the House I invite Te Ururoa Flavell to continue with his supplementary question. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. I appreciate very much your clarification of your earlier ruling and we will give it careful consideration to ensure that we comply with it. But can we take that your point as confirmed now that the questions from several Government members and Ministers were out of order implies that you wish to be consistent about the narrow construction—which is perfectly in order it would seem—that only those matters within the direct portfolio responsibility are relevant. If that is true then I am afraid we come back to the question to the Minister of Local Government; it was about a Ministry of Health programme and that Minister sought to answer it as Minister of Local Government. How does that fit within your considered ruling? 
Mr SPEAKER 
: The issue I clarified today was the issue relating to the situation where a Minister has made it clear that he or she does not have responsibility. In that case supplementary questions should not ask about reports in relation to that area. That was in my view where I erred yesterday. So I am acknowledging to the House that in my view I erred yesterday. We should not be petty about this. I have also made it clear today that I will take a wide view of ministerial responsibilities as has been the practice and that the approach I plan to take is similar to that taken by Speaker Burke in the 1980s. I think he handled this area very well. It has got rather more difficult since then because of the great number of parties in the House. It is more difficult but I still think we can deal with it sensibly. I put it to the member that we need to deal with this matter sensibly. I was not happy with some of the rulings yesterday and that was why I sought to clarify them this morning. I pointed out that it was not the Opposition’s questions that I was most concerned about on reviewing the tapes and  
Hansard 
; it was some other supplementary questions that I think actually complicated the situation very significantly. The Minister of Local Government is being questioned on local government matters. I will listen very carefully to the question to make sure he is being questioned on local government matters. 
Te Ururoa Flavell 
: Is the Minister aware that some residents of Bridge Pa have been out of water since December 2008 and could he give assistance by way of advice or otherwise to the local bodies so that a reticulated water system can be installed to support the Bridge Pa community? 
Hon RODNEY HIDE 
: I thank the member for raising this question with the Minister of Local Government. I note that the future supply of water to this community is the responsibility of the community and indeed the local council. I am aware that like many New Zealand communities the residents of Bridge Pa rely on individual household bores for their water supply. I understand that during the very dry conditions experienced in the area some bores have run dry. Decisions about the future water supply of this community rest with the community and with the local council. I understand that on 8 March 2009 three proposals to address the issue were presented to the community. These were two proposals to connect Bridge Pa to the Hastings town supply and one proposal to put in a stand-alone supply. I also understand that the Bridge Pa community is considering seeking funding for the local marae trust to operate a reticulated supply. Ministry of Health officials will be presenting information on the Drinking-water Assistance Programme to an inter-agency hui of representatives from all interested parties tomorrow. I understand that the Hon Tariana Turia is also going to Bridge Pa tomorrow to discuss this matter. 
Te Ururoa Flavell 
: Is the Minister aware that a recent Hastings District Council door-to-door survey revealed that 35 houses in the village are without water and that some have been without it for as long as 6 weeks; and how can such a dire water shortage exist when just down the road plans are being made to install a 50000 cubic metre lake? 
Mr SPEAKER 
: The Hon Rodney Hide—rather more briefly. 
Hon RODNEY HIDE 
: I am advised that the Hastings District Council first found out about the problem only on 11 February 2009. 
Hon Lianne Dalziel 
: You’re remarkably well briefed for a question you didn’t write. 
Hon RODNEY HIDE 
: It is great to be criticised by the Opposition for being well briefed. Those members are not used to Ministers who know how to do their job are they. I understand that the Hastings District Council has been providing emergency relief to the community. As I have previously advised decisions about the future water supply of this community are for the council or the community to make and I am very pleased that our colleague Tariana Turia will be at Bridge Pa tomorrow. 
Hon Shane Jones 
: When will the Minister share with the Maori Party that his agenda is to privatise the delivery of water to residents as he is currently doing by secretly trying to privatise the port of Northland aided and abetted by Mr John Carter? 
Hon RODNEY HIDE 
: Interestingly the residents of Bridge Pa— 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. Again I am very reluctant to do this when it is one of my own team asking the question but how can it be possible that “gagged” is ruled out but “aided and abetted” is allowed? 
Mr SPEAKER 
: The Minister does not appear to have taken any objection to it. I invite the Minister to answer the question. 
Hon RODNEY HIDE 
: Interestingly the water supply for Bridge Pa is currently privatised. That was the point and if the member had listened to the supplementary question he would have realised that the people of Bridge Pa had their own bores. This Minister of Local Government is working with the Maori Party to assist Bridge Pa to get water. I would have thought that was something the Labour Opposition would be interested in doing. 
Brendon Burns 
: Can the Minister advise what the impact on improving the quality of the water of communities like Bridge Pa would be if the advice from the Job Summit to impose a moratorium on meeting water-quality standards was taken? 
Hon RODNEY HIDE 
: None whatsoever. The advice I have received is that the drinking-water standards put in place by the previous Government would put tens of millions of dollars on some communities to meet standards that those communities do not want or need. 
Copyright Act—Section 92A 
11.  
CLARE CURRAN (Labour—Dunedin South) 
 to the  
Minister of Commerce 
: Will the Government support the policy of amending section 92A of the Copyright Act 1994 as set out in my Copyright (Internet Service Provider Account Termination Policy) Bill; if not why not? 
Hon SIMON POWER (Minister of Commerce) 
: 
 No not as set out in the member’s bill. The Government’s policy is to give Internet providers and right-holders 1 month to come up with a code of practice. That time frame has yet to expire and although there are some challenges I am not prepared to prejudge the outcome. 
Clare Curran 
: How does the Government expect section 92A of the Copyright Act to be able to come into force given that TelstraClear has vetoed the code of practice being developed by the significant stakeholders? 
Hon SIMON POWER 
: I am advised that the rest of the Telecommunications Carriers Forum the Recording Industry Association of New Zealand and other right-holders are making real progress on the code of practice. If TelstraClear wants to be excluded from the arrangement that is its choice. I met with right-holders as recently as 7 o’clock this morning and according to the member’s press release yesterday her bill requires ministerial approval of any code before section 92A comes into force meaning that it still relies on the parties coming to an agreement first. 
Clare Curran 
: Will the Government establish an independent adjudicator to resolve copyright disputes; if so who; and if not why not? 
Hon SIMON POWER 
: I am not prepared to prejudge the outcome of the negotiations that are continuing at the moment. I find the Labour Party’s position on this issue rather confusing. The member wants to keep section 92A but amend it; the former Minister Judith Tizard said that it should come into force as it is explaining that it was left deliberately vague as “at no stage did I think … I had the answer to the process”; and the Labour candidate for Hunua Mr Jordan Carter is the contact for yesterday’s press release from InternetNZ that said that section 92A should be dumped. Maybe Labour needs its own code of practice. 
Foreshore and Seabed Act—Review 
12.  
PAUL QUINN (National) 
 to the  
Attorney-General 
: Why is the Government reviewing the Foreshore and Seabed Act 2004? 
Hon CHRISTOPHER FINLAYSON (Attorney-General) 
: 
 It is doing that for a number of reasons. First it fulfils a term of the supply and confidence agreement between the National Party and the Maori Party; it is an example of the constructive engagement that characterises our relationship. The Act has been controversial since it was passed in 2004 and that leads on to the second reason—the review will consider among other things whether the Act effectively recognises and provides for customary and public interests in the coastal marine area and allows for the enhancement of mana whenua. 
Paul Quinn 
: How does this Government’s approach differ from that of the previous Government? 
Hon CHRISTOPHER FINLAYSON 
: The Government will engage constructively and in good faith with interested parties. The review panel will hold a series of hui and meetings for all New Zealanders Maori and non-Maori throughout the country. 
Hon Darren Hughes 
: Before they get sacked. 
Hon CHRISTOPHER FINLAYSON 
: If I may say this to Mr Hughes that stands in contrast to the previous Government which ignored a 40000-strong delegation of New Zealanders who marched on Parliament preferring instead to meet with a sheep and which described Dr Pita Sharples a man who has dedicated his life to empowering Maori through education as a “hater” and a “wrecker”. 
Paul Quinn 
: What support has the Minister seen for constructive engagements in the review of the Foreshore and Seabed Act? 
Hon CHRISTOPHER FINLAYSON 
: I have seen a press release from the Hon David Parker saying that “Labour will constructively engage with the Government over the review of the Foreshore and Seabed Act.” and that “The last thing New Zealanders need is for this issue to be used to incite disharmony again and we won’t go there.” This contrasts with the disappointing comments of the Leader of the Opposition who called the review “extremely divisive” and publicly called for the review not to proceed—echoes of Winston Peters. 
Hon Dr Michael Cullen 
: Does the Minister in the light of that last answer recall seeing billboards in relation to the foreshore and seabed that said “Iwi/Kiwi”; and which side is he on now? 
Hon CHRISTOPHER FINLAYSON 
: The member does recall seeing those signs; times have moved on. We are attempting to deal with an issue for the benefit of all New Zealanders. I must say that I am increasingly disappointed in that member’s petty and catty comments because I think he is better than that. What we are trying to do is constructively deal with this issue for the benefit of all New Zealanders. 
Paul Quinn 
: How has the Government engaged with its support parties in undertaking the review? 
Hon CHRISTOPHER FINLAYSON 
: Very constructively. As the Minister responsible for the review I am very pleased to report to the House that there has been a great deal of constructive engagement and consultation with the co-leaders of the Maori Party and the new member for Te Tai Tonga Rahui Katene. The Maori Party has made an important and valuable contribution— 
Hon Shane Jones 
: Hey—Harawira doesn’t agree. 
Hon CHRISTOPHER FINLAYSON 
: —to the review and I for one am very much looking forward I tell Mr Jones to receiving the report of the review and then moving forward in the interests of all New Zealanders. 
Hon Dr Michael Cullen 
: Has the Minister seen a press statement from the Minister of Maori Affairs Dr Pita Sharples yesterday saying that the Foreshore and Seabed Act “confiscated” the foreshore and seabed from Maori; and does he accept the implication that Maori own all the foreshore and seabed? 
Hon CHRISTOPHER FINLAYSON 
: I must confess I have not seen that comment; I have seen a number of comments from the Minister. I simply say to the member that we are awaiting the outcome of the review. Let us await the outcome of the review and then deal with the issue in the light of the very statesmanlike qualities of Mr Parker—who stands head and shoulders above other lawyers in his caucus—for the benefit of all New Zealanders. 
Taxation (Business Tax Measures) Bill 
Second Reading 
Hon SIMON POWER (Associate Minister of Finance) 
 on behalf of the  
Minister of Revenue 
: I move  
That the Taxation (Business Tax Measures) Bill be now read a second time 
. The main purpose of the bill is to ease the burden of taxes on firms’ cash flows and to make paying tax easier by reducing tax compliance costs for businesses. It is a clear fact that in the current climate many businesses are experiencing pressure on their cash flows—none more so than the smaller businesses that make up more than 96 percent of New Zealand’s business community. 
The Government recognises the impact that the current economic climate is having on these businesses and has responded with a $480 million suite of compliance-free measures. Many of these measures are contained in this bill. Others such as reducing the rates of use-of-money interest for underpayments and overpayments of tax have already been progressed by Orders in Council. 
Hon Darren Hughes 
: I raise a point of order Mr Speaker. I know the Minister is taking the Bill Birch imitation the whole way but there is a lot of noise in the House at the moment while he is trying to deliver his speech and it is just impossible to hear him. The Leader of the Opposition has his back to you Mr Deputy Speaker and is conducting a meeting with the Maori Party. There is a lot of disorder in the House and we cannot hear this fine Minister’s contributions. 
Mr DEPUTY SPEAKER 
: I thank the member for that. I would ask members please who are not participating in the debate and who wish to have discussions to have them out in the lobbies and not within the House. Thank you for that point of order. 
Hon SIMON POWER 
: I am grateful for the intervention of the senior Opposition whip and I know that he is always watching my back. 
The proposals in this bill cover a range of provisions to allow businesses to hold tax moneys longer and to lower the cost of doing business by reducing the amount of form-filling they have to do and the calculations and payments they have to make. 
The first of these changes is the removal of the 5 percent uplift in the calculation and payment of provisional tax. Currently payers of provisional tax who use this method must use the previous year’s income tax and add 5 percent to the total in order to calculate the amount of provisional tax they must pay in the coming year. That extra 5 percent or uplift factor is based on the assumption that income will grow over the new income year. In today’s economic climate that assumption is no longer clear-cut. The bill therefore allows the uplift of the provisional tax calculation to be reduced for the current and next income years. This should help relieve some of the pressure that small businesses are facing by reducing the amount of provisional tax payments that businesses must make and in turn this will free up much-needed cash-flow for those businesses. A further proposal makes it possible for a greater number of individual taxpayers to reduce their exposure to use-of-money interest. This change was previously part of the omnibus taxation bill introduced last July but has been included in this bill to ensure its speedy enactment. 
Other changes in the previous tax bill have been significantly enhanced in this bill which also introduces some important new measures. These measures are designed to lower costs for many businesses by reducing the number of returns they have to complete the number of calculations they have to make and ultimately the number of tax payments they have to make. For example the GST payments threshold will be raised from $1.3 million to $2 million. This will give more businesses the cash-flow advantages of accounting for GST when payment from an invoice is actually received rather than when the invoice is issued. In addition the income threshold over which the GST registration is mandatory will be raised from $40000 to $60000. This will allow businesses that earn less than $60000 to opt out of the GST system should they wish so they no longer have to bear the compliance costs associated with accounting for GST. 
The turnover threshold under which businesses can make GST returns 6-monthly instead of 2-monthly will also rise from $250000 to $500000. This move will be especially welcomed by businesses with seasonally based income such as the horticulture industry. The PAYE once-a-month filing threshold will be raised from $100000 to $500000 to allow more employers to file PAYE returns and pay PAYE once rather than twice a month. The threshold under which businesses may file fringe benefit returns annually is also being raised from $100000 to $500000. Similarly the value of minor fringe benefits that employers can give their employees without attracting fringe benefit tax will rise from $15000 to $22500 a year per employer and rise from $200 to $300 per quarter per employee. This means fewer employers will have to account for fringe benefit tax in relation to minor benefits they may provide to their employees. 
Finally the bill introduces a new $10000 threshold for business-related legal expenditure. This means that if a business’ total bill for business-related legal fees in a given income year is $10000 or below the entire amount will be tax deductible without having to identify which amounts relate to non-deductible capital expenditure and which amounts are deductible revenue expenditure. Together these provisions present a package of assistance to smaller businesses that will help them to save time and money and to weather the current economic climate. 
In bringing the bill to its second reading the Finance and Expenditure Committee has recommended a small number of minor drafting changes of a technical nature. On behalf of the Minister of Revenue I wish to express my sincere thanks to the members of the committee for the cooperative and constructive way in which they have progressed this bill which I now have great pleasure in commending to the House. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 The Opposition notes with some regret that on the very day that the Taxation (Business Tax Measures) Bill reaches its second reading the Performance of Manufacturing Index has reached its lowest point ever. Today is also the day when the Reserve Bank has dropped the official cash rate to 3 percent—one of its lowest levels for many many years—in view of the deepening and worsening recession that will hit small business hard. I know that out there beyond the confines of Parliament many small-business people are worrying about meeting their payroll each week and people are fearing the loss of their jobs. It might be said that people are taking very little comfort in their small businesses because they are not covered by the 9-day fortnight idea. 
Against that background we are here to discuss a tax bill that is good as far as it goes and that we will be supporting. But this bill was largely written by the previous Government in about August last year—before the global recession was really felt and before we had the opportunity to take stock and drive the bill further. I echo the comments made by the Associate Minister of Finance Simon Power on behalf of the Minister of Revenue in thanking all members of the Finance and Expenditure Committee and acknowledging its chair Craig Foss and his colleagues. Members of small businesses would be encouraged by the level of cooperation around the House on getting this bill through. We have worked together to identify measures where the bill could be extended and they are written in the committee’s report. 
I give notice today on behalf of the Opposition that in the Committee stage of the bill the Opposition will introduce a series of amendments. All of these amendments are taxpayer-friendly and will take the bill further as we would have done if confronted by this situation in Government. Further we formally indicate to the Government that we would be happy to cooperate with the Government in a bipartisan way and see those amendments introduced in a Supplementary Order Paper rather than through an Opposition amendment should the Government wish to cooperate in the interests of giving small business an even greater tax remission in this way. 
In many respects therefore this is a good bill and it largely implements ideas that we worked on earlier. But it is also a missed opportunity. National has come to office and simply lifted ideas that were around or in process or in Labour’s manifesto. Of the 13 substantive elements of the bill nine of them fall into the category of matters previously legislated or for which work streams were already under way. National has no broad-based plan to give New Zealand’s public confidence that this Government has taken the action necessary to tackle the gravity of this recession and to protect the most vulnerable or to prepare New Zealand for the opportunity of taking advantage of the inevitable upturn. 
As many international commentators have started to work out—and as I think New Zealanders are starting to recognise—this Government is becoming isolated in international terms. It is one of the very few that is committed to a conservative approach although the global recession demands robust action. Even in the best spirit one could hardly call this small bill robust. Where is the plan? Where is the stimulus? New Zealanders have watched an American President take office and take action passing a NZ$1.5 trillion stimulus bill. They look across the Tasman and they see a Government prepared to move heaven and earth with a NZ$67 billion stimulus package. 
This is the greatest financial crisis the world has faced since the Great Depression. It is the first time that the whole world economy has gone backwards since World War II. The International Monetary Fund chief economist has advised world Governments to commit whatever it takes to avoid a depression and above all to adopt clear policies and act decisively. It is better to do too much than too little—so says the International Monetary Fund. The US Secretary of the Treasury in the Obama administration Tim Geithner has warned that given the scale of this economic crisis “the policy response has to be comprehensive and forceful. There is more risk and greater cost in gradualism than in aggressive action”. Not two days ago the World Bank—no less—revealed that the global economy will shrink this year for the first time since World War II. Only today President Obama called for other nations to enact similar stimulus packages to that of the US. So where is New Zealand’s National Government? According to the  
Wall Street Journal 
 looking from the United States it is a global outlier taking a fiscally conservative deregulatory approach to a recession that was caused in the first place by a lack of adequate regulation and supervision over financial markets. 
Up to now the National Party has got by through copying and pasting measures that the outgoing Labour Government already had in the works. That is exactly what this bill represents. 
Nathan Guy 
: You’re voting for it so you agree with it. 
Hon DAVID CUNLIFFE 
: I am voting for it because we wrote it—surprise surprise for the senior Government whip. We are voting for it because we wrote most of it. The question is what the Government has done in the 6 months since the bill was written. Where is the Government’s insight? Where is the Government’s robust approach to tax legislation? Why does it take the Labour Opposition to drive further to introduce amendments appropriate to the scale of the recession in order to make our tax law even more business-friendly? 
Labour supports this bill so far as it goes but it does not go far enough. As a tangible demonstration of good faith with the struggling small and medium sized businesses of New Zealand—the 99.5 percent of all businesses that employ fewer than 100 people; the 99.5 percent of all businesses that are excluded from participation in Government funding of the 9-day fortnight; and the 99.5 percent of businesses that will be vitally interested in the contents of this bill—we urge the Government to retarget its tax cut programme. It makes no equity sense and no economic sense to shift the bulk of tax cuts from people who need them who will spend them and who have below-average incomes to people on above-average incomes. It is not needed there and it will have no substantial effect on our economy. The Government is nickel-and-diming small business: the measures in this bill are worth only a few hundred million dollars—far less than the cancellation of the research and development tax credits and far less than the income tax cut to upper-income earners. There will be precious few upper-income earners amongst small businesses which this bill was originally designed to help. 
I say again that this is not a bad bill; we will be voting for it. We wrote most of it. But members opposite can bet their bottom dollars that if Labour had been in Government since last August when these ideas were mooted we would be seeing a whole lot more content and substance in this bill than we are seeing today. That is why the Labour Opposition will introduce substantive amendments—unless the Government wishes to adopt them—at the Committee stage. We welcome the Government taking up the amendments as Supplementary Order Papers and working on them. 
Chris Tremain 
: That would be more unfunded amendments. Or are these ones allegedly unfunded? 
Hon DAVID CUNLIFFE 
: I call on Mr Tremain who is seeking to interject to rise above politics and to help the small businesses of the Hawke’s Bay a province he loves. I call on him to help small businesses to rise above politics and to introduce the amendments by way of Supplementary Order Papers. Labour does not need to own the amendments just like it does not need to own the rest of this bill. We wrote most of it; we are happy to vote for it. Those members opposite can bet their bottom dollars that the bill would have been a lot more substantive if we had known that the global recession would be as big and bad as it is. We would have spent the last 6 months putting more taxpayer-friendly measures in this bill. 
In conclusion this bill is good as far as it goes. Labour appreciates members’ cooperation on it. We will be voting for it. We will be introducing amendments to take it further and we would welcome cooperation from the Government to introduce those amendments by way of Supplementary Order Papers so that the struggling small businesses—the people who are feeling unprecedented pain and the people who are represented by today’s historic low in the Performance of Manufacturing Index—will get the help they need. 
CRAIG FOSS (National—Tukituki) 
: 
 Good grief what a difference an election defeat makes! Suddenly we have members on the other side of the House in favour of tax cuts. The cuts are maybe not big enough wide enough or deep enough at the moment but those members are in favour of giving back—or at least not taking in the first place—the excess revenue that while they were in charge they did not need to take in the first place. But now that we are in a recession they are actually trying to expand the measures. So I do welcome that road to Damascus experience. 
I would also just like to note that the previous speaker David Cunliffe talked about some mythical place called “the Hawke’s Bay”. It is “Hawke’s Bay”—full stop. It is “Hawke’s Bay” not “the Hawke’s Bay”. 
Hon David Cunliffe 
: That’s pedantic even for this House. 
CRAIG FOSS 
: It is pedantic I know and I will come to other pedantic matters in a minute. But I note that we are on the second reading of the Taxation (Business Tax Measures) Bill and I will refer to what I said in my first reading speech. I noted that there had been cross-party support indicated for this bill and I am very pleased to acknowledge that that was followed through on. The Minister the Hon Simon Power also alluded to that. I freely and totally acknowledge the full cooperation of the members of the parties involved on the Finance and Expenditure Committee not only for facilitating the process of getting the bill quickly back into the House for its second reading but also for the way in which all members enabled the committee to work through the process. We all across the parties recognised the urgency of getting some cash flow back into the economy and I am more than happy to be on record as saying that. I thank members again for following through on their early indication of support for the bill. 
The bill has been reported back without any substantial amendments. There had been robust discussion about the bill and various parts in it but most debate and discussion was about whether particular rates should be higher or thresholds lower etc. Again I acknowledge that there was good and fulsome cooperation and very good advice from officials on the way through to get the bill to the stage we have now. 
But there was some discussion in the committee that I am sure the previous member who spoke David Cunliffe will be very interested in. He just talked about being pedantic and there is a clause in the bill that gave rise to strong robust debate—clause 21 in Part 1 under which section RZ5 is replaced. There was very strong discussion—and it was an interesting point—around the words “instead of” in new section RZ5(3)(a). The use of the words “instead of” was quite controversial—and I tell members I am looking at the track-changes version of the bill. There were various discussions about the words “instead of” and members were quite interested in the knowledge of some on the committee about those words. It was originally alleged that the words had never been seen in any other bill or other legislation but the committee did in fact discover or become aware of another bill in 1959 and numerous bills since containing those words. I do not mean to be facetious but the word pedantic was talked about a minute ago. However I will stop there and allude again to the good intent of everyone on the committee. 
I note that the previous speaker talked about some other measures Opposition members perhaps will want to discuss at the Committee stage. We will wait with interest to see what they might be. I suggest that if members go through the commentary they will probably get a good clue as to the direction that other members might be suggesting for different improvements. Members made the point that one thing talked about in the commentary—and I will talk to this—is that many of the measures here formed part of the larger Taxation (International Taxation Life Insurance and Remedial Matters) Bill which was introduced in July last year. But in the commentary we note that yes it is acknowledged that a number of initiatives in this bill reflect proposed changes in previous legislation or in Inland Revenue work streams or discussion documents—and as we know the previous administration was very very good at those. That is the key difference between the previous administration and this new Government; we are focused on action not words on implementing not discussing and on not having another review. 
Actually this particular bill did not form part of our 100-day plan but it may well have. Again I appreciate the fact that members opposite are voting for it but it took their getting into Opposition to expedite the bill and to try to make the tax-friendly parts of it even more so and it took them 9 years to even get around to thinking about it. A National Government that had gone through the period of economic commodity-driven growth the Labour Government had gone through would have brought these measures in probably as a matter of fact. In fact if these measures had been in place sometime in the last 9 years at the height of the commodity-driven surpluses businesses in New Zealand right now would be in a much better position to work their way through the current recession which unfortunately we did go into a year or so ago. 
Other members have talked about the recession. Even since the introduction of this bill a month or so ago global and domestic conditions have deteriorated—unfortunately. But this example and a suite of other measures are part of the programmes the National Government is bringing in to help us through the recession and they are but small steps to a greater whole. I just want to touch base on some of those other measures because this bill particularly targets small to medium sized enterprises at the smaller end. But personal tax cuts were announced and put in legislation prior to Christmas and a programme was announced yesterday to particularly help larger enterprises with 100-plus employees. Personal tax cuts which formed part of our plan have been implemented. Infrastructure spending on housing schools and roads has formed part of our plan and is being implemented. The Minister of Education has announced about $41 million I think of new spending or sped-up spending in the education sector today—there is action and activity not just more discussion papers. A part of this plan also has been the introduction of amendments to improve the Resource Management Act which are mostly just to reduce compliance costs and speed up the process. There is the ReStart package which was announced prior to Christmas to help people through redundancy. We have also had the plans announced in the last few days by the Hon Paula Bennett about the 9-day fortnight and the issues around that. These things must all be looked at as a whole; they are but part of our solution and our measures to be put in place to help New Zealand weather its way through the sharpest edges of the recession. We do not just want to discuss to have discussion papers and to have proposals as the previous Government did. The 100-day plan also had many many actions that will assist small businesses to get through this recession. 
It was very interesting to hear Dr Bollard today speak on the Monetary Policy Statement and to hear his comments around the official cash rate reduction. He acknowledged as many other forecasters and commentators have now acknowledged the seriousness of the current state of the books of New Zealand—of what this Government inherited. Putting aside for the moment the debacles in and around the accident compensation scheme housing—and the list goes on and on—the bottom line is that the underlying costs and liabilities are up across the board and the tax revenue is down. But Dr Bollard noted today that the fiscal impulse the stimulus measures coming from the lower interest rates the fiscal actions and stimulus that this Government has put in place—not just talked about putting in place—plus the official cash rate announcements today and a lower currency mean that he is very hopeful that New Zealand will start to lift its way out of this recession in early to mid-2010. That is fantastic news because this Taxation (Business Tax Measures) Bill brings in measures that will assist New Zealand to come out of recession quicker sooner and better than many many other countries around the world. I congratulate my colleagues and the Minister of Revenue on bringing in this bill. I am looking forward to voting for this bill. Thank you. 
Hon CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 The previous speaker Craig Foss made an interesting point. He tried to illustrate the difference between the National Party in Government and the Labour Party when it was in Government but the truth about that is simply this: there was a huge difference. The difference is that when we were in Government we had a plan as my colleague David Cunliffe has said. 
For instance unlike the National crew we had announced had costed and—had the election had a different result—would have provided New Zealanders who were made redundant with 12 months’ funding. That was to have been given regardless of their collective household income circumstances or those of their spouse to enable them to retrain and therefore redeploy into the workforce perhaps in a different sector within 12 months. The biggest idea that has come from the National crew over there is that those people might get what is it $62 a fortnight— 
Hon David Cunliffe 
: $4.27 an hour. 
Hon CLAYTON COSGROVE 
: —$4.27 an hour which might go towards some form of training. That is a nice sneaky way of gutting 10 percent of the pay of workers in New Zealand. 
We had a plan you see and we had budgeted for it despite what members opposite might say. We had a plan to invest $1 billion in respect of home insulation. We had a plan and we would not have gone to lie on the beach for 3 months. We would have had a mini-Budget before Christmas last year and it would have identified a whole series of projects. Those would not have been the infrastructure projects that have been brought forward by 3 months—one has been brought forward I think by a year. No; we would have had a proper mini-Budget— 
Hon John Carter 
: Was it popular? 
Hon CLAYTON COSGROVE 
: The Minister John Carter asks whether it would have been popular. Here is the deal with leadership: some of the things one has to do in Government are not very popular but that is the essence of real leadership. One has to make some tough decisions in order to look after and protect people and often those decisions are not popular. Often they are not popular I say for Mr Carter’s edification but that is the essence of real political leadership. It is very nice and easy for a leader to go around as John Key does like a sort of smiling assassin grinning and laughing. Maybe he is being accepted as a nice bloke but he does not actually have a plan and is not effectively protecting people’s jobs. 
We were told in this House by Mr Joyce that the entire infrastructure package—putting aside the political argument over whether it is new money; we know that it is not—would generate and save in the order of 2000 jobs. Before Ms Bennett says that Labour members do not care about saving jobs I will note that 2000 jobs would be saved. That is a good thing; I am sure all colleagues would agree with that. But it is a pebble on the beach or a drop in the ocean when we know from Treasury advice that we have already lost over 10000 jobs and we are losing a thousand jobs a week— 
Hon David Cunliffe 
: At least. 
Hon CLAYTON COSGROVE 
: —at least for the next 15 months. The political tactic from National is to adopt a bill that we authored such as this Taxation (Business Tax Measures) Bill which we will support—as my colleague said nine of the key 13 elements were authored by the previous Government as there was no plan from members opposite—or to abolish programmes that the previous Government put in place then to reinvent them and say there is a great victory in for instance housing. 
The Government abolished our housing programme with the many hundreds of houses that we were either to refurbish or build and then announced that it will build 69 houses. What a ripper that is! I talk to people in the construction industry who ask how 69 houses will save their jobs as painters joiners carpenters or the other jobs in all the ancillary services that go along with that industry. And Mr Heatley announced that as a great political victory! 
Then of course a key element of our plan was the research and development tax credit was it not? We constructed it we put it in place and the National Government butchered it. I ask whether any member on the other side of the House such as that genius Mr Foss a member of the Finance and Expenditure Committee and our resident expert on tax returns and other extraneous matters can get up and give us a rationale as to why this Government would not support businesses that elaborately transform our economy such as manufacturers and others that do research and development. If ever there was a time when we needed our manufacturing sector and others to be doing research and development in order to create new products and services and new jobs hey presto it is now. So Mr Foss should tell us why those members got rid of that tax credit and destroyed it before businesses had even put their first returns in. 
Australia has had such a measure for many years. National members see Australia as a nirvana; that is what they said when in Opposition. They saw it as a land of milk and honey and thought that everything was better if it was in Australia. Let me tell Mr Foss and other members opposite that the Australians have had a research and development tax credit system for many years. We introduced one and those members abolished it. That was our plan. It would have saved—not saved actually; it would have created—many many jobs. 
Hon David Cunliffe 
: Yeah thousands. 
Hon CLAYTON COSGROVE 
: Thousands of jobs would have been created. It is not only that but new industries would have been created. There are manufacturers in my patch and I suspect in all members’ electorates around the country that are full of innovative entrepreneurial Kiwis. Manufacturers will now say that if they can get a tax credit in Australia they will do the research and development there and that if they do the research and development there then it would make logical sense to take the whole operation there. 
But oh no! Oh no! The National Government’s plan was to simply get rid of the research and development tax credit. Its plan was simply to get rid of insulation money. Its plan was simply to ditch all the housing and construction work. Its plan was to re-announce and repackage it—dressed up like an old Christmas present that has been wrapped up again and given to two or three people—and to hoodwink people with it. And the plan is to build 69 houses—69 houses. Would any member care to get up and tell the House how many jobs that will create and save when we are losing a thousand jobs a week? Would any member care to get up and tell the House whether there will be a major impact on our economy by spending a couple of hundred million dollars on infrastructure dusting off the projects that we had already identified and bringing them forward by 3 or 4 months knowing that only 2000 jobs will be saved when a thousand jobs are being lost weekly? Would any member like to crawl up from behind his or her desk and tell the New Zealand people how one can justify that? 
I will tell members the danger with National’s approach. The danger as my colleague David Cunliffe pointed out is that every other robust economy in the world is hitting this economic tsunami head-on. New Zealand now has an outlier economy. Whether we are talking about the economy of Australia the United Kingdom or the United States we find the relevant Government knows the tsunami is coming towards it. Those Governments have had warning of that and they have launched their plan. We have a Government a Minister of Finance and a Prime Minister who have put politics before the interests of the country. The rolling maul of a drip-fed announcement here there and everywhere is not an economic strategy; it is a political strategy. It allows the Government to make an announcement a little press release every week where it says: “Aren’t we good little boys and girls in Government because we are announcing another little drop in the ocean a pebble on the beach as a project?”. 
Kevin Rudd launched his economic package hit it head-on and said it was not good enough. He launched another package and executed it. This crew over here see the economic tsunami coming towards them. They do not have a plan. They have had a warning though. Mr Key and Mr English will stand on the beach and wait to see how high the water level will get and whether it will be over the heads of the Kiwi people or whether it will be just below that. But we know that economic tragedy and impact is on its way soon. I do not celebrate that. I think it is terrible because every day one sees people in one’s electorate losing their jobs. This crew over here was elected and they told everybody they had a plan. Now we know from their Job Summit—and I saw Miss Bennett get up and speak—that their plan was to get a lot of people most of them were a captive audience into a room and ask to be told what to do. It was not to go to that audience and say: “We were elected we have a plan and we want the business sector and the commercial sector to sign up to it.” It was a case of asking to be given an idea please. That was only 3 to 4 months after National was elected and it stands in comparison with what Obama did when he jawboned his package through even when he had no constitutional levers to pull. 
The Government went to the Job Summit and asked for a plan. It came out of the Job Summit and what is the plan? The plan is to build a cycleway. I can see Gerry Brownlee on a penny farthing—well I may not be able to see the penny farthing. The Job Summit’s plan is to build a cycleway. Can members imagine what the media would have done to us if we had announced that the biggest economic hit we were to have in order to solve the biggest economic crisis in our history was a cycleway? What a cracker! The next plan was to have a 9-day working fortnight. That might work if the Government would back Kiwis but it has proved that it does not. 
KEVIN HAGUE (Green) 
: 
 When I spoke in the first reading debate on the Taxation (Business Tax Measures) Bill I offered the Green Party’s support for it. I thank the Finance and Expenditure Committee for its work which has been expeditious and I indicate now that the Green Party will continue to support the bill. 
I note that the select committee did have to make a number of technical amendments to the bill. In the first reading debate I registered my and the Green Party’s objection to the bill’s introduction under urgency. I expressed our commitment to healthy politics where urgency is used strictly only when it is required. One cannot help but wonder whether the technical errors in this bill could have been avoided if some more time had been taken in the first place. 
I agree with my colleague Craig Foss that the Government’s package to deal with the economic crisis needs to be taken as a whole. When one does that it becomes absolutely clear that the package totally lacks coherence as I have mentioned in a previous speech on this bill and in speeches on other bills. The Government’s response to the economic crisis is incoherent but it also fails to understand that the best approach to addressing the economic crisis is to do so concurrently with other crises we are experiencing both in the environment particularly in terms of climate change and in the area of energy. 
The example I previously used of the Government’s lack of coherence and policy is the withdrawal of the research and development tax credit. On the one hand the Government is saying “Here’s a hand-up with this tax relief.” and on the other hand it is pulling out the rug from under small businesses with the withdrawal of this reward for innovation in research and development. 
Yesterday the Government with its package to support workers in large businesses and for a 9-day working fortnight provided another example of the lack of coherence in its economic package. Some 20000 to 25000 people are expected to benefit from the measure. But what about the very much larger number of people working in small businesses? Will the devastation of unemployment be any easier to cope with because a person used to work in a smaller workforce? Of course not. There is no difference in the needs of the workers in smaller and larger businesses and therefore no sound and rational basis for the Government’s distinction. 
What is more the Government’s failure to extend a helping hand to workers in these small to medium sized businesses is a kick in the teeth not only for those working people but also for the businesses that employ them. It is one step forward with this bill but another step back with the failure to support the employment relationships within small businesses that are stressed by the economic situation. 
What else has the Government been doing to support small businesses? The Minister of Finance in his first reading speech on the bill said the Government would be looking at the recommendations of the Small Business Advisory Group which I supported at the time. I mentioned a couple of that group’s more recent recommendations. It recommended that “publications be produced that give practical and implementable advice and support for small to medium sized enterprises to improve their environmental performance and to derive business benefit from the recognised or certified environmental sustainability of their products and services.” 
This is something the Government could easily have moved on. It could have funded the Sustainable Business Network for example to produce exactly such resources. One month on there is nothing. The Small Business Advisory Group recommended that “all foodstuffs sold in New Zealand be required to be labelled with the country of origin of the defining component or the most significant component of the foodstuff.” One month on there is nothing. Small and medium sized businesses must surely have noted that despite all the rhetoric about urgency and pragmatism nothing besides this modest tax relief has been done to lend them a hand while the rug is being firmly and rapidly pulled out from under the feet of many. 
I spoke in the first reading perhaps a little obscurely about bees. I likened the Government’s dogged and robotic fixation on continuing to try to run the economy on the same unsustainable basis that caused this economic crisis in the first place to bees trying to find their way home and being trapped by a building lying in their path. The inability to consider other possibilities leads to disastrous consequences both for the bees and for our nation under this Government. 
There are some positive signs and I take issue with the comments of my colleague Clayton Cosgrove. The national cycleway is a great first step and I commend the Government for it. It will bring in sustainable tourism dollars will assist in reducing greenhouse gas emissions by encouraging people in some major urban centres to ride bikes instead of using motor vehicles and will produce health gains but it will also create jobs. Yesterday the New Zealand Contractors Federation called the cycleway “a vital boost for small and medium sized contractors.” Those members who have cycled the Otago Central Rail Trail or the Little River Rail Trail for example or similar cycle routes overseas such as the Sustrans network in Britain will know that this kind of cycling facility provides the lifeblood of many small businesses and indeed whole rural communities. 
I remember on one of the occasions when I rode the Otago Central Rail Trail another group of riders staying in the Lauder Hotel with us—a business that probably would have closed by now if it had not been for the trail—consisted of the Minister of Finance Mr English and a large family group. He will certainly have seen the profound impact the cycleway has had on the local economy. I hope he may begin to agree that it is possible to deal with more than one crisis at a time. 
That is an example of how it is possible to address the twin crises in environment and economy by taking action to transform the economy to one that has a sustainable basis—what the Green Party and many world leaders have dubbed the Green New Deal. Early Green jobs visionary Van Jones has just been appointed a special adviser for green jobs enterprise and innovation at the White House Council on Environmental Quality. When the Green Party has asked in this Chamber about the Government’s intention to create green-collar jobs the Prime Minister has indicated that he neither knew nor cared. I guess that is another way John Key is not like Barack Obama. I am starting to keep a list. There is another list on ways John Key is not like Nelson Mandela. 
The new American President absolutely seems to get it. We are facing multiple crises right now. It simply is not possible to say we are going to choose just one. If it is possible to create jobs and help to move the economy towards long-term sustainability at the same time then why on earth would we not do that? If it is possible to create jobs and help protect or better still restore the environment then why on earth would we not do so? If it is possible to create jobs and ensure the entitlement of New Zealanders to the fundamentals of life such as affordable healthy food warm and safe housing and effective and efficient public transport then why on earth would we not do so? 
Let us see the jobs in insulating homes retrofitting homes and offices for energy efficiency installing solar water heating on every State house riparian planting native reforestation cleaning up toxic sites enhanced public transport services communities growing food locally and distributed electricity generation. Out of the teeth of these multiple crises it is possible to snatch the opportunity to shift New Zealand on to a new path that will ensure a future worth having for our children and grandchildren. 
We urge the Government not to blow it and we offer our support and assistance. The nature of the Green New Deal incorporates an inclusive society moving towards this positive common purpose. I will close by quoting Van Jones in this book  
The Green Collar Economy: How One Solution Can Fix Our Two Biggest Problems 
. 
“And now we stand at our own crossroads looking out upon two futures: one with rising temperatures rising oceans and rising violence on a hot and strip-mined planet and another with expanding organic harvests growing solar arrays and deepening global partnerships on a green and thriving Earth. Given those choices we know in our hearts what our parents’ generation—and our grandparents’ generation—would have done for us. Come then let us go forward together with our united strength—and win that better future for the generations to come.” Thank you. 
JOHN BOSCAWEN (ACT) 
: 
 I rise in support of this Taxation (Business Tax Measures) Bill. The ACT Party will be voting for this bill. 
I will start by saying that this is the first experience I have had of sitting on a select committee—the Finance and Expenditure Committee—and speaking following its deliberations. I congratulate the chairmanship of Craig Foss and I also congratulate the bipartisan support that this bill has received from the Labour members on that committee including the deputy chairman David Cunliffe. I also acknowledge the support of the officials and in particular the submitters. 
We received only six submissions but one was a detailed submission from the Institute of Chartered Accountants of New Zealand. Members of the institute made an oral submission and as a new member of Parliament I noted that it reflected on the amount of work that these groups do for the good of the people of New Zealand. Only yesterday we heard submissions from a number of legal and accounting firms on the new international tax bill. Two of those submissions totalled 150 pages each. So a huge amount of work is done freely for the benefit of New Zealanders. 
This bill makes a number of changes. It is designed to support small to medium sized businesses by easing the pressure of taxes on their cash flow and compliance costs. When the Minister of Justice was speaking on behalf of the Minister of Revenue he outlined some of those changes so I do not propose to go into them in a great deal of detail. But I will say that they lift the thresholds for a number of issues to do with GST and fringe benefit tax. For example the threshold for having to register for GST is lifted from $40000 to $60000 which enables a number of smaller enterprises that might otherwise have had to register for GST and be subject to those compliance costs to be exempt. Similarly larger organisations with a turnover in excess of $200000 that might have had to file 2-monthly GST returns can now file their returns every 6 months under the provisions of this bill as long as their turnover is less than $500000. 
It was also interesting that we received during the course of the select committee submission process a very detailed submission on the taxation of patents. I think it is fair to say that it was not an issue that many members of the committee had given a great deal of thought to. Once again that was a benefit of being involved in the process of hearing submissions. 
In rising to speak on this bill the deputy chairman of the select committee the Hon David Cunliffe talked about the deepening and worsening financial crisis that this country faces and about the fact that people fear the loss of their jobs. He noted that the Governor of the Reserve Bank reduced the official cash rate by 0.5 percent today and he also said that the world was going backwards. The issues that David Cunliffe raised are all very true. 
But I would comment that although this bill is aimed at small to medium sized businesses—and we heard earlier that the relief available under the 9-day working fortnight is available only to employers with more than 100 employees—another group in society is also very much affected by the recession the country is in. This group does not get a lot of air time in this country. This group is what I call the people who save. They are the people who save who go out to do their work and who rather than spend $1.10 or $1.15 for every $1 they earn spend 95c and put something away for saving. The issue of saving is very very important. Although we always look to the lowering of the official cash rate which has been good for those of us with mortgages the reality is that it actually reduces the income of our savers. They are mainly but not exclusively elderly people. It is very easy to ignore the effect of a reduction in interest rates on those savers. 
I stood in this House yesterday and said that I would raise at the Commerce Committee this morning the issue of an inquiry into the activities of various finance companies and into the issues associated with the failure of finance companies. I was very heartened to have the support of the chair of that committee the Hon Lianne Dalziel who said she has a very open mind on this issue. She has offered her assistance to me in drawing up a draft terms of reference for that inquiry and I shall be very pleased to have her help. I should also say that I have the full support of the ACT caucus in calling for that inquiry. 
My inquiry is made even more relevant by the submission given to the Commerce Committee this morning by Jane Diplock the chairperson of the Securities Commission. Jane Diplock appeared before the committee during the course of the committee’s annual review of the commission’s activities and she raised a number of issues of public policy. These are very serious issues and I do not believe that they can be swept under the carpet. It is very easy to look at what will benefit small to medium sized businesses and at what will affect big business but we cannot afford to forget the ordinary New Zealanders—the savers in society. 
I will start by looking at the issue of trustees. For the benefit of members of the House I inform them that a trust is a commercial relationship if you like between a trustee company or a trustee organisation and the directors or owners of a finance company. Jane Diplock pointed out that it is competitive; it is a business. We have seen over the last 3 or 4 years that trustee companies have been bidding against each other to get business. They have brought down their fees they have offered to do the work for a lower and lower price to gain the business and this has probably resulted in a lower quality of supervision of management. Jane Diplock pointed out that the trustees are not entitled to demand under the trust deed a number of things that they might like to do. Lianne Dalziel said that it was an issue of their own making because when they enter into a contract with a finance company to provide a trustee relationship they are negotiating a fee to do a certain package of duties and that therefore they have brought this issue upon themselves. 
Jane Diplock raised a number of issues of conflict of interest which I thought were very interesting. If a finance company is likely to fail or looks like it is close to failing one option is for the trustee to appoint a receiver. If a receiver is appointed to the finance company the receiver will go into that company and may find some failure on the part of the trustee. One of the receiver’s options is to bring a civil action against the trustee because until recently no criminal proceedings could be brought against a trustee. There is a conflict of interest because the receivers get their business from the trustees. Which receiver will dob in—to use Lianne Dalziel’s words—the trustee that is likely to give it its work? 
We also have the issue of moratoria. Under a moratoria the company— 
Hon Trevor Mallard 
: A moratorium. 
JOHN BOSCAWEN 
: A moratorium—that is right; I thank Mr Mallard. Under a moratorium the company is kept running under its current management and it is unlikely that the management will bring an action against the trustees. Once again there is a conflict of interest. The trustees have motivation if you like to support a moratorium rather than a receivership because if there is a receivership it lays open the opportunity for the receivers to make a challenge of that trustee. 
The other issue that Jane Diplock referred to was related party transactions. She said that a finance company can put out a prospectus and call for funds and as long as the prospectus meets the Securities Commission’s legal requirements there is nothing the commission can do. The commission does not act as an arbiter on the quality of that prospectus. It does not act as referee. What has happened is that a number of finance companies have used money they had raised for purposes other than were laid out in their prospectus. 
Finally I also attended the briefing of the Governor of the Reserve Bank to the Finance and Expenditure Committee this afternoon. When asked he made the point that when this country comes out of the recession what will be important are savings. This country has relied on a bigger and bigger quantity of the cheap savings of foreigners and we will need to save for ourselves. If we are to create a savings environment then we need to look at why finance companies fail and at the conflicts of interest. 
RAHUI KATENE (Maori Party—Te Tai Tonga) 
: 
 The Taxation (Business Tax Measures) Bill represents one of the more unusual moments in this House whereby the rapid passage of legislation is acceptable. Indeed I would go so far as to say that this bill should earn the unqualified support of the entire House because it is very much a product of the unique set of circumstances of the time. The Taxation (Business Tax Measures) Bill aims to improve the business environment for small and medium sized enterprises by easing the pressure of taxes on business cash flows and reducing business tax compliance costs. It responds to a call that was heard by a new Government with an eye to smoothing the inevitable rough journey ahead in the impending recession. 
We know from the expert advice of organisations such as the Federation of Maori Authorities that the arena of tax laws and business compliance costs for small and medium sized businesses is an area full of challenge. The federation has consistently promoted the view that the whole area of business tax needs urgent review. Its view is that tax laws need to be adjusted to allow businesses to grow and develop wealth for the whole nation. If the business tax laws are amended to support the growth of small and medium sized businesses the logical flow-on effects will be seen in employment higher wages investment research development and innovation. We know that Maori small businesses would particularly benefit from early intervention and the opportunity to undertake a process of being managed through difficulties. The advice again of those in the field is that such support would assist many to either stay afloat or if need be finish up with the minimum of administration and expenses. 
I said earlier that this bill is a product of its time and to persuade the House just how timely it is I bring attention to the initiative established by my colleague the hard-working Minister of Maori Affairs the Hon Dr Pita Sharples. My colleague is an action man. Dr Sharples moved fast hosting a very successful Maori economic workshop on 28 January 2009—a mere 7 parliamentary sitting days after he was appointed the Minister. I have it on very good authority that the world was created in 7 days. My colleague Dr Sharples was clearly setting out to follow that precedent. 
At the Maori economic workshop held in January there was considerable interest in this whole area of the nature of the assistance that would be useful to support small and medium sized enterprises facing difficulties in the current economic climate. Participants at the hui thought it was important to look at ways of reducing both the amount of regulation affecting business and the costs of complying with regulations. Specific concerns raised at the forum were to do with tax legislation and some of the suggestions proposed included tax relief for small and medium sized enterprises. Another proposal mooted at the Maori economic workshop was the deferral of provisional tax to small and medium sized enterprises over the next 3 years. A range of initiatives to support small and medium sized enterprises were proposed including developing an overarching organisation and investment fund to assist such enterprises to access finance. The thinking was that this could act as a clearing house to pool small and medium sized enterprise investment opportunities. 
Maori small and medium sized enterprises need to be positioned through advice and other support to take advantage of opportunities presented by the recession and future economic trends. I share some of these good points—OK brilliant ideas—with the House to make the point that Maori are investing in creative enterprise and applying their full entrepreneurial talents to create workable solutions to address the current economic climate. This therefore provides a very fertile ground for receiving the number of measures proposed in this bill. In fact when I consider that only six submissions were received and just 1 day was dedicated to hearing from interested groups and individuals I think the House should be very appreciative of the feedback I have been able to provide from these key stakeholders—the movers and shakers of the Maori business world. Indeed it is very good news for the Maori business community to be able to look over the host of amendments to current and proposed tax laws that are included in this bill. 
The aims of the bill are to reduce business compliance costs for small and medium sized businesses by raising reporting thresholds on PAYE fringe benefit tax and GST and by introducing simplified rules for deducting legal expenditure. These are in fact initiatives that reflect much of the korero that was laid down at the Maori economic hui. There was unreserved support from all participants at the hui to invest in job and business retention and stabilisation as the key short-term priorities. Change to reduce the tax liability faced by small and medium sized businesses was seen as a targeted measure to achieve the aspiration for job security and stabilisation. 
One of the particular strategies proposed by the small to medium enterprises cluster group was that tax relief should be provided for small and medium enterprises such as goods and services tax and pay-as-you-earn tax. Another proposal was grouped around the relaxation of penalties for late payment or staggered payment of compliances such as those related to Accident Compensation Corporation levies or GST.We believe that the Government could play a useful role in this period of transition through the means of tax relief and investment to maintain small and medium enterprise employment and cash flow. 
Another aspect of this taxation bill is related to instalments. Like Mr Boscawen I am a new member of the Finance and Expenditure Committee. The committee’s view on instalments in the context of difficult times was that it would be useful if taxpayers were able to enter into instalment arrangements with the Inland Revenue Department regarding tax payments This thoroughly good idea was shared with officials from the Inland Revenue Department and we were told that some new initiatives are being investigated to do exactly that. We in the Maori Party believe this initiative could be thoroughly relevant for providing assistance against the sharp edge of recession so we will be keenly looking forward to any updates from the Inland Revenue Department to this effect. 
We will be supporting this bill because we support any initiatives and interventions that allow businesses to grow. We support the reduction in business compliance costs; we support changes to reduce the tax liability faced by small and medium sized businesses; and we most particularly support the great initiatives taken by the Minister of Maori Affairs in bringing to the debate the perspectives of Maori in business of whanau hapu and iwi and of the greater Maori population about how to achieve growth and well-being while at the same time facing the current economic climate. I say to members that they should watch this space because very soon there will be more announcements to come regarding opportunities for Maori economic development. Kia ora. 
CHRIS TREMAIN (National—Napier) 
: 
 It is a pleasure to rise to speak after my Maori Party colleague Rahui Katene. She finished her speech by saying that the Maori Party supports any initiative that allows small businesses to grow. I could not agree more. It is absolutely fantastic that this evening we are introducing yet another key piece of National’s plan to blunt the edges of this recession and prepare our country to be in the best space to grow as a nation as we go forward. 
It was interesting that a couple of the leading acolytes in the race for the Labour Party leadership took the first calls on the bill for Labour tonight. 
Hon Trevor Mallard 
: Oh! I didn’t speak. 
CHRIS TREMAIN 
: Mr Mallard has not spoken yet but I am sure he would echo the same wish. Both Mr Cosgrove and Mr Cunliffe stood up and asked where National’s plan was so it gives me great pleasure to be able to enunciate and talk about that plan tonight and to expand on where it is at. This debate is a great platform on which to do that. We came into office just over 100 days ago and we have had a huge rollout of economic policies. I will go through some of them tonight. Firstly we said we would introduce and pass National’s tax package into law before Christmas for the tax cuts beginning on 1 April. Did we do that? 
Hon Members 
: Yes! 
CHRIS TREMAIN 
: Yes we did. Secondly we said we would appoint a Minister for Infrastructure and begin implementing our infrastructure plans. Did we do that? 
Hon Members 
: Yes! 
CHRIS TREMAIN 
: Yes we did. Thirdly we said we would introduce a Resource Management Act reform bill to reduce the cost of delays and the uncertainties in the Act. Did we do that? 
Hon Members 
: Yes! 
CHRIS TREMAIN 
: Yes we did. Fourthly we said that we would introduce and pass National’s transitional relief package into law in order to offer extra assistance to Kiwis who are worst hit by redundancy. Did we do that? 
Hon Members 
: Yes! 
CHRIS TREMAIN 
: Yes we did and a number of my own constituents have been able to benefit from that as I have already put them on to that plan. We said that we would call in the Public Service chief executives and instruct them to undertake a line-by-line review of their departments’ spending. Did we do that? 
Hon Members 
: Yes! 
CHRIS TREMAIN 
: Yes we did and we are seeing that roll-out as we speak—despite the cries of the Opposition members. We said that we would establish a Cabinet expenditure control committee. Did we do that? 
Hon Members 
: Yes! 
CHRIS TREMAIN 
: Yes we did. The seventh thing we said we would do is begin a regulatory review programme to identify and remove inefficient and superfluous regulation. We have done that. But what is even better is that we have a number of other parts to our plan rolling forward. We said that we would continue to build on our jobs and growth plan to combat the global recession with action and action ideas. Over 20 ideas came out of that plan and a range of work streams are progressing out there. Already the Minister for Social Development and Employment Paula Bennett has rolled out the 9-day fortnight package which is a fantastic package that will help employers to stay in business and keep jobs going. It amazed me today when members opposite criticised that package and said it was not good enough. The fact of the matter is that that package will save companies keep them in business and keep jobs in place. It is a fantastic package. 
We are also going forward by cutting personal taxes on 1 April. We are doing that. As part of the rolling maul of packages in our plan we said that we would implement the tax changes in our small-business package and that is happening right now with the Taxation (Business Tax Measures) Bill. That is excellent. We also said we would begin to fast track infrastructure projects to upgrade State highways build new State houses and improve schools. In my own electorate of Napier and in the wider region of Hawke’s Bay we have heard two announcements in terms of the southern expressway extension and the bringing forward by 9 months of the Matahorua Gorge project. Again that will bring jobs to that part of the region. I have to say that that is a tough part up there on that Napier-Wairoa road but those projects will bring jobs to that region and help our local economy there. That is absolutely fantastic stuff. 
It defies logic for anyone to stand there and say that there is no plan or that we are not taking this country forward in tough and difficult times. There is a plan and this bill is only just part of it. I am not going to go through the education things we have rolled out the health things we have rolled out the electoral law reform and the law and order provisions. They are all part of the wider plan that we have rolled out in a very short space of time since we have been in Government. It has been excellent. 
As I said earlier the goal of the Government has been to blunt the edge of this recession and to put us in the best position to grow quickly following the recovery. We saw that today actually—the first signs of that—with Governor of the Reserve Bank Alan Bollard giving the Monetary Policy Statement. He started interestingly to predict a recovery for us somewhat sooner than for other nations around the world. Clearly that was a gutsy call given the uncertainties in the wider global situation but on page 3 of that statement we can read that in the first quarter of this year we have already started to see a real rise in the growth of the country and that we will see up to 4 percent potential growth leading into the 2010 year. The strong V-shaped recovery profile that will come thereafter is absolutely fantastic. Combined with the official cash rate reduction—a drop of over 525 base points over the last period—and inflation pressure abating really rapidly monetary policy is now “very stimulatory”. Those are the governor’s words—“very stimulatory”. 
Across the House Mr Cunliffe was saying that we are not doing enough. Well when we questioned Mr Bollard at the Finance and Expenditure Committee today he said that we were in a very good position and that we were in a great position to take the economy forward as long as we rolled out the things we had already promised. We will also see further lending rate reductions in the pipeline we can expect to see banks helping in the recovery and we are seeing a combination of monetary and fiscal policy stimulus—particularly with the NZ$1 going down. That is absolutely helping our economy to recover. I was at a summit back in Hawke’s Bay last Friday with Mr Nash from across the House and Craig Foss my colleague who heads up the Finance and Expenditure Committee. It was very good to hear where a number of the business sectors were at in the wider economy. There was not the doom and gloom that those Labour members over there predict—like Mr Cosgrove the doomsayer. We heard a number of businesses up in Hawke’s Bay say that it is not easy and the going is still tough. But they are consolidating and they are looking forward into the future looking at where markets will be and looking at those free-trade agreements that Labour started and that National is driving forward. I think we are actually in a great position going forward. Those businesses were comfortable to consolidate going forward; they were in good shape in that regard. 
I come back to the detail of this bill as part of our plan because I have clearly covered the fact that we have a strong plan going forward— 
Hon Paula Bennett 
: Strong! 
CHRIS TREMAIN 
: —a very strong plan. We have rolled out a significant amount of it or are in the process of rolling it out as some of these bills come through select committees. In this particular bill we see some really good initiatives for small businesses like that 5 percent uplift rate on provisional tax which is absolutely excellent; the increase in the GST threshold rate so that compliance costs are reduced for small businesses; the raising of the PAYE once-a-month filing payment threshold from $100000 to $500000; and the raising of the fringe benefit tax annual filing threshold from $100000 to $500000 again reducing that threshold for small businesses in terms of having to get in there and do fringe benefit tax returns. These are all positive initiatives and are all part of a wider plan to blunt the edge of this recession and put New Zealand in the best place to go forward. I am confident that with a John Key - led Government we will take this nation forward deliver on the forecasts of the governor and by the end of this financial year be on the way to recovery. Thank you very much. 
STUART NASH (Labour) 
: 
 Members who wanted to know about the Taxation (Business Tax Measures) Bill would have had no idea what Mr Tremain was talking about because I think he mentioned it only once. 
I stand in support of the Taxation (Business Tax Measures) Bill because the Labour Party supports small businesses. In fact Labour supports all New Zealand businesses in a positive and proactive way as no other political party does. First of all let me say that I think all parties need to work together in this time of economic crisis to do what is best for the country. That is why I support this bill. Does it go far enough? No and Labour would have taken it further. 
David Bennett 
: In your dreams mate—in your dreams. 
STUART NASH 
: However members of the Finance and Expenditure Committee all agreed on a bipartisan approach—did we not I ask Mr Bennett—to immediate economic reform in a way that does not allow for political interference and at a time when the country’s best interests need to be considered. In line with the country’s best interests Labour will be putting forward amendments that we feel will considerably improve the bill and we hope that they will be received in the same bipartisan spirit of support that we have provided to date in pursuit of the nation’s economic health. 
This bill is targeted at the 96 percent of Kiwi businesses that are classed as small to medium sized enterprises. The New Zealand definition of a small to medium sized enterprise is a business with 19 employees or fewer. Such businesses employ approximately 60 percent of the country’s workforce and without a question of a doubt they are the backbone of the New Zealand economy. 
What does this bill set out to achieve? First and foremost there is recognition from all parties that this economic recession the country now finds itself in is hurting New Zealand businesses and industries. I was speaking to an importer of petrochemical derivatives just yesterday and he was saying that business is terrible. For most of his clients now it is just a matter of survival. These are the manufacturers who often see the signs of destruction first because they are producing for the retailers and wholesalers who then onsell to the customers and consumers. If business is hard for those at the back end of the supply chain then it will be reflected in the environment and conditions at the front end. 
If we who are resident in this House can help in any way to mitigate the effects of this crisis and therefore alleviate the suffering in the manufacturing sites and shop fronts of New Zealand’s towns and cities as well as in the living rooms of the nation’s homes then we as elected representatives charged with the mandate of securing this wonderful country’s future must act in a manner that delivers the optimal benefit in a timely manner. This bill is but a start. I ask Mr English where the rest of the plan is. 
This bill could have been bolder and should have been stronger. Now we must accept the substance of this bill which we in the Labour Party will help to improve through the Supplementary Order Paper process. We must then provide the Government agencies responsible for delivering its outcomes with the resources needed to implement it in the way intended by Parliament. I hope that Mr Dunne has advised the Inland Revenue Department in advance that it has a very important and proactive role to play in the easing of the economic and financial woes of many good New Zealand citizens. From what I have seen of the performance of Inland Revenue Department staff while in my role as a Finance and Expenditure Committee member I have formed a view that they are hugely competent and highly committed to doing what is right for the people of New Zealand. 
I go back to my original question. What does this bill seek to achieve? Well four new measures have been introduced by the coalition Government. First there is the reduction of the provisional tax uplift rate to apply from 1 April 2009. This rate drops from 105 - 110 percent to 100 - 105 percent. This uplift rate is essentially the rate at which companies are allowed to estimate their tax for the following year based on previous earnings. 
Labour argued that this rate should have been lowered even further. One submitter who presented to the Finance and Expenditure Committee suggested that this rate should have been dropped to 80 percent given the dire economic climate and the pain that many businesses are feeling. It was acknowledged by all that 80 percent was perhaps too low and Labour argued that it should have been closer to 100 percent while still acknowledging that even this may have been optimistic considering the economic times and the hardship that many companies are facing. I doubt that many companies today will be predicting the same level of taxable earnings as they were 12 months ago. But this measure is a start and a move in the right direction. 
There is an increase in GST payment thresholds from $1.3 million to $2 million which will apply from 1 April 2009. There is the introduction of the new threshold of $10000 below which all business-related legal expenses are fully deductible which will apply from the 2009-10 income year. There is an increase in the threshold under which the fringe benefit tax (FBT) is not required to be accounted for with regard to minor benefits provided to employees. This increases from $15000 per year and $200 per quarter per employee to $22500 per year and $300 per quarter per employee. 
Then there are eight proposed measures that are either directly from the Labour Party manifesto or are slightly altered but are still Labour Party policy. I guess the old cliché is true—imitation is the greatest form of flattery. If so we in the Labour Party blush and tip our hats because this bill is very similar to one that we would have introduced only not as robust forward-thinking or stimulatory. Dr Cullen should take a bow because in essence and form if not substance this is his bill. For example the enhanced Labour measures include the increase in pay-as-you-earn once-a-month filing and payment threshold from $100000 to $500000; the increase in the FBT annual filing threshold from $100000 to $500000; and the increase in the GST registration threshold from $40000 to $60000. All these measures apply from 1 April 2009. 
If we look at the five measures that have been directly lifted from Labour Party policy we see the increase in low-value stock trading thresholds to apply from the 2009-10 income year; accounting for financial arrangements also to apply for the 2009-10 tax year; the extension of FBT annual filing to include closely held businesses whose FBT liabilities are restricted to one or two vehicles used by owner-employees regardless of their annual PAYE deduction; the increase in provisional tax use of the “safe harbour” threshold to apply from the 2009-10 tax year; and an increase in the GST 6-monthly return filing threshold to apply from 1 April 2009. 
That is nice but perhaps I was a little hasty in asking the good doctor to take a bow as I would not want the honourable member’s fine legacy to be associated with a bill that he would have substantially changed to better reflect the dire economic mood at the time of final drafting. These were Labour ideas before the full force of the economic crisis was at least recognised if not its true magnitude fully understood. Dr Cullen would have gone a lot further. 
We know that the Labour Party is the party for small business—we all know this. 
David Bennett 
: Come on! 
STUART NASH 
: I say to Mr Bennett that one has only to look at the statistics to see that this is true. Mr Tremain’s firm in Hawke’s Bay did a hell of a lot better under Labour than it has ever done under National. Let me give members just one statistic. Annual business growth in the time of the last National Government was between 5 and 8 percent. In the first 6 years of the previous Labour Government that growth was between 15 and 18 percent. The economy actually grew by over 25 percent under the stewardship of Helen Clark and Michael Cullen. What a legacy Messrs English and Key have to follow! [ 
Interruption 
] I say to Mr English that if this bill is anything to go by he is not even close to “Labour-lite”; his legacy may be more of a brown colour. 
The last great recession took a war to fully solve and we certainly do not want to go through that even though globally geopolitical issues will become salient as the forces of nationalism begin to rear their ugly heads. In New Zealand the last great recession was expertly managed by a Minister of Finance who was I am proud to say a giant when compared with the member who is currently occupying that portfolio. With those words I support the bill’s passage through the House. We will be voting for it. 
DAVID BENNETT (National—Hamilton East) 
: 
 How the Labour Party’s spots have changed. This is a Labour Party that now says it is there for small business. Nobody in his or her right mind would believe that. People know that the Labour Party is not there for small business; the Labour Party is there only for itself. All those Labour members want is to get back into power. All those members were doing before the election was trying to get back into power. That is all the Labour Party has ever thought about. Those members do not think about their supporters the workers of New Zealand. They do not think about small business. They do not do that. The Labour Party has one goal and that is self preservation and power. That is the Labour Party’s mantra. 
I say to the new member Stuart Nash so bright-eyed innocent and fresh who came into this House and said that the Labour Party is all about small business: “Take a history lesson.” Let us look through the history of the Labour Party. What did the Labour Government do for small business in the last 9 years? Year after year after year it kicked small business in the guts. At the Finance and Expenditure Committee David Cunliffe made it quite clear that his whole line of questioning was about Labour Party policy. For everything that comes out of the select committee now Labour members have to say: “This is what Labour thought of many years ago.” It is all right to say that Labour members thought about it but why did they not actually do it? Why cannot Labour do something for small business? Why do Labour members just think about doing something for small business instead of actually doing something for small business? 
The reality is that those members do not care about small business. At this point in time the Labour Party is trying to backtrack—big time. Labour members are trying to go back through any little document from the last 10 years and say that it was their idea when it was not their idea. The reality is that the ideas being passed here are National ideas because the National Government is passing them. If they were Labour ideas they would have been passed by the Labour Party during its 9 years in Government. It did not pass those ideas. It is pretty rich of Labour members to come into this House and say that they are their ideas that they have ownership of them and that they should take credit for them. The reality is that they do not have ownership of them they cannot take the credit for them and the public and especially the small-business community of New Zealand know that. They are very sure that the Labour Party is not there for small business. 
Stuart Nash 
: There was no recession during that time. 
DAVID BENNETT 
: The new member is telling us how great the Labour Party is for small business and how great it is for the economy. Let us look at what the Labour Government left for the New Zealand economy before the world recession. What did Labour leave for New Zealand before a world recession? It left it as the only Western country in recession. It made New Zealand a recessionary country before the rest of the world. 
Hon Darren Hughes 
: Wrong—the United States. Don’t you count America? 
DAVID BENNETT 
: The member who lost his seat in Levin is telling us that the United States was in recession before us. That is not true. New Zealand was in recession before the United States but the member would not know that because Labour members do not know anything about business. Those members have never had to run a business. In fact all they do is stand in the House and try to spend business people’s money. That is all they want to do. They just want to keep it churning around and say that they are the great people who look after everyone. That is not the reality. 
The reality is that small business needs help. The National Government gives help to small business and the National Government is here for the New Zealand economy. The Labour Party is here only for itself it always has been here only for itself and it only ever will be in this House for itself. That is why Labour did not win the last election and why its members cannot go around saying that they are there for small business or that they have the best interests of New Zealand at heart. 
When we look at all these measures we see that they are not rocket science. We are not saying that these measures are rocket science but they have been sitting there and they could have been carried out by the Labour Party. All that was missing was the will to do them. The will was not there amongst those members. They did not want to do them. They can come around now and say that they are supporting these measures but how can they change their spots at this late stage just because they know that public opinion is against them? They needed a general election to tell them where to go with small business. They did not need to hear it from small-business owners. Labour members would not go around small-business owners and listen to what they said they wanted and then actually do it. They waited until the general election told them what small-business owners wanted and now Labour members are trying to take the credit for something that Labour did not do. That is not the New Zealand way. 
In New Zealand we do not take credit for things we do not do. That is the Labour Party way. That is the general equality of their world—that everybody is the same and nobody can make a decision to do the right thing for this country. But that is not the way the National Government views it. National members say that they will go out there they will listen they will take the concerns of their people they will make constructive decisions and the National Government will pass legislation that will give the results the community deserves. That is what this bill is about. It is basically the National Party listening and delivering. It is action. That is the way the National Party is different from the Labour Party. National is a party of action. It is delivering and it is taking constructive action to deliver solutions at a time when New Zealand needs them the most. National is a party of action; it is not a party of ideas that never come to fruition. National is not a party whose members come back 6 months later and say “We could have done it but we never actually did.” National is a party that does it. National has the support of this House because the House knows that these are the best measures that can be passed at this point in time. 
I think we also need to have a look at what happened today when the Reserve Bank governor came and talked about the growth that could potentially come to the New Zealand economy if we come out of this downside equation more quickly than the rest of the world. I think it offers opportunities for New Zealand and I think New Zealand businesses and individuals are looking at a John Key - led Government and seeing that opportunity. They see a man of action. They see a Government that is actually making the right decisions and is providing the stimulus for New Zealand. This Government is looking forward and making simple but effective decisions. Its members are not out there trying to tell the world how to live its own life and we are not out there trying to change the way that people have to live their social lives. We are out there building a stronger economy so that New Zealanders can deliver a prosperous future for their children. That is what the National Party is doing. We have it right the public knows we have it right and it is not for the Labour Party to now change its spots and for its members to come into this House and say that they support this bill and that it was their idea. It was not their idea. 
I say to the public of New Zealand that we are not standing for the Labour Party trying to take over these ideas and say that they are theirs when they are not. These ideas are the National Party’s ideas because the National Government is passing them. Labour members had their chance when in Government but they did not pass them so they cannot now say that they are their ideas. There is a whole raft of reforms in the Taxation (Business Tax Measures) Bill that are very important for small business. The reforms of GST fringe benefit tax and PAYE are all measures that small-business owners have been looking for and they will get them in a timely way. 
The National Government is different from the previous Labour Government in that it will not wait until year 3 to deliver these reforms. It will implement these reforms as soon as it can. If the Labour Party had its way it would wait until year 3 just before an election and then try to put these reforms on a pledge card which the people of New Zealand would have paid for. Labour members would not go out and try to make constructive decisions at an early point in the electoral process because they are not like that. Labour members cannot think of things. When they do think of things they have to save them up so that they still have them at the end of the election cycle and they can then say they actually did something. But Labour members could not think of anything they had done during the last 3 years so they went into the last election not knowing what they had done and that showed in the election results. 
Hon David Carter 
: They hadn’t done very much. 
DAVID BENNETT 
: No they had not done anything. There are some home truths that the New Zealand public needs to know. The first is that the National Government is there taking constructive actions and making decisions for the New Zealand public. That is the first point New Zealanders need to know. The second point is that these are not Labour Party ideas. They are National Party ideas because the National Government is passing them. The third point the public needs to know is that the National Party has a vision. It has a dream for this country that will take us beyond the mediocrity that the Labour Party tries to incite amongst New Zealanders. 
BRENDON BURNS (Labour—Christchurch Central) 
: 
 I am very pleased to speak on the Taxation (Business Tax Measures) Bill and to follow the preceding speaker David Bennett whose rather screwball analysis suggested that National supports small business. Actually National was the party that voted against business tax cuts and axed the research and development tax cut which would have been very helpful to businesses particularly small and medium-scale ones. 
The Labour Opposition supports this bill. Indeed despite the previous speaker’s claims most of the measures contained within it were proposed by Labour. The bill eases tax pressures and compliance costs on business. Although we are supportive of this bill and what it does to assist business particularly small to medium sized enterprises it is simply not enough. That applies most especially at this time. I have to say as a new member of the Finance and Expenditure Committee that I was surprised and concerned that this is in fact the first bill that the committee has reported back to the House. Given the scope and scale of the world recession I had imagined that we would deal with some legislation and Government actions that were representative of big and bold ideas—a mini-Budget or a pre-Christmas economic summit and the major ideas and stimulus packages flowing from it. Instead we are at the second reading of a technical and modest bill that although we welcome it and acknowledge that it will be helpful to business is hardly a new deal. 
The adhockery of the Government is illustrated by this bill and it is also illustrated by some of the Government members’ responses—such as they have made. I note for instance in housing that the first commentary was that there would be no new State houses. That changed overnight after a TVNZ report showed people in South Auckland living in garages. Suddenly we were going to get new State houses. Then we learnt that the total number of new State houses was 69. On that basis I will be lucky to see one new State house in my electorate of Christchurch Central. 
So really this bill and the Government’s response in toto indicates that it is business as usual despite the world’s worst economic forecast in our lifetimes—in just about anybody’s lifetime. We are seeing another missed opportunity at a time when this country needs real leadership and a real response. What we are getting is a rolling maul and contained within it are Labour’s ideas repackaged and re-presented to the New Zealand public as a stimulus plan. The relief for small to medium sized enterprises is ours the tax cuts are ours and the proposals for infrastructure are a rehash of our proposals. There is regrettably no broad-based plan that gives New Zealand’s public confidence that this Government understands—really understands—the scale of the crisis and that it is taking the action that is truly necessary particularly to help vulnerable New Zealanders and also to reposition New Zealand so we are ready to take advantage of the upturn whenever it comes. 
Today the Governor of the Reserve Bank appeared before the Finance and Expenditure Committee. He recognises the scale of the issues that he faces. He today reduced the official cash rate to 3 percent. None of us in this House can remember when the official cash rate was last at that level. He recognises the scale of the issues. He also recognises that inflation is no longer public enemy No. 1 as far as the economy is concerned. Yet at the same time as the Governor of the Reserve Bank is saying that to the Reserve Bank and to the nation through the Monetary Policy Statement we learn that the Prime Minister is telling the  
Wall Street Journal 
 that his biggest fear is rising inflation on the back of rising money supplies. That fear is not shared by the Governor of the Reserve Bank nor by anybody else. The expectation in today’s Monetary Policy Statement is that inflation through to 2010 and beyond will be well contained within the targets as outlined by the Governor of the Reserve Bank. 
So we come back to the question of where the plan is. What stimulus from this Government can New Zealanders look towards? We look by way of contrast to the United States which has a NZ$1.5 trillion stimulus package. I look across the Tasman to our friends in Australia who have a NZ$67 billion stimulus package. Those responses are taking place because the Australians and the Americans acknowledge and recognise that we are facing the most severe financial crisis since the Great Depression. The International Monetary Fund chief economist is advising Governments around the world to commit to taking whatever steps they can to avoid a depression. The advice is to be bold and decisive; we are ignoring it. Today US President Barack Obama called for other nations to enact stimulus packages such as the one the United States has enacted. He obviously wants to see the world attempt to deal with these issues. We are an interdependent world yet New Zealand stands aside as indicated by the interview the Prime Minister gave this week to the  
Wall Street Journal 
. 
What is the National Government’s plan? Well it goes back to such things as scrapping the research and development tax credit to gutting KiwiSaver and to trashing the Fast Forward Fund which would have created $2 billion of expenditure for our primary sector as has now been represented by the Minister of Agriculture. We are seeing cuts to the contribution to the Superannuation Fund that will endanger future superannuation entitlements. We are seeing a crisis manufactured around the Accident Compensation Corporation so that a board can be sacked other people can be lined up and New Zealanders can be told that they can no longer have the accident compensation entitlements that they once relied on. In the area of broadcasting for which I have Opposition responsibilities the Minister of Broadcasting is demanding a dividend from Television New Zealand (TVNZ) at the very time that TVNZ is saying that it may need to shed as many as 150 staff. Within 1 week of the Job Summit TVNZ is being told to go ahead and cut the staff and to pay the dividend. 
Then we have a tax cut programme that simply will not deliver as it should to those most in need—to those who would have spent every last cent of their tax cuts if they had been implemented as they were to have been under Labour’s programme. We urge the Government to retarget those tax cuts. They are essential for New Zealand. We need to make sure tax cuts are focused on those who need them and that discretionary spenders get them. It is not just Labour that is advocating that; Air New Zealand’s chief executive Rob Fyfe got it right when he said that this crisis is so big that “all the bets are off … We need to stimulate this economy and there are more effective ways than broad-brushed tax cuts.” That is the big picture; that is the kind of approach we need. I say good on Rob Fyfe for those comments. 
Labour has been very clear to the select committee and to this Government that we are quite prepared to support this bill. It will provide some small measure of assistance to business. It will be supported by this Opposition party but we want to make sure that some changes are made and we will be recommending some amendments as the bill proceeds. The report from the select committee acknowledges that as a result of earlier initiatives some changes were taking place in the Inland Revenue Department that will assist. We will be proposing some technical amendments which my colleagues have already outlined in part. 
One thing I will touch on is the whole issue of tax deductibility of patent costs. A submission was made to the select committee by the Manufacturers and Exporters Association. At the moment New Zealand takes 20 years to wipe out the costs incurred in building a patent to protect intellectual property against world challenge. We would like to see that moved back to the world average of 10 years. It makes much more sense. 
In conclusion Labour will support the Taxation (Business Tax Measures) Bill. It was largely a Labour bill that was inherited by the new Government; it is not a key measure in National’s package. It is a modest technical bill that will take some of the pressure off businesses particularly small to medium sized enterprises. However as recently as this afternoon the Governor of the Reserve Bank appeared and it was clear that he was outlining at least a tough year ahead for this nation. His forecast for the period beyond next year was an optimistic one. He suggests that we could be out of the decline by about this time next year. We in Labour hope that Dr Bollard is right; we note that there are some gloomier prognoses. Dr Bollard correctly notes that stimulating the economy is the key factor in the United States Europe and New Zealand. I think that he is as mystified as anybody else as to why the Prime Minister continues to identify inflation as being of major concern. He should tell that to the thousands of New Zealanders a week who are losing their jobs because inflation is not an issue for them. Holding on to their jobs is what is important. They need a stimulus package. This bill is a very small step but it ain’t a stimulus package in any sense at all. Thank you. 
HEKIA PARATA (National) 
: 
Tena koe e te Mana Whakahaere huri noa i to tatou Whare tena koutou katoa. 
[ 
Greetings to you Mr Deputy Speaker and to you throughout our House greetings to you all. 
]  
I am pleased to stand in support of this Taxation (Business Tax Measures) Bill. I am delighted that it has cross-party support despite the Opposition damning it with faint praise. That seems to suggest little understanding of how meaningful how practical and how responsive this suite of measures is to people who are engaged in small to medium sized enterprises. Nevertheless I am pleased to know that the bill enjoys cross-party support because the sooner that we can get it passed and apply it the sooner that small to medium sized enterprises will be able to experience the relief intended by this legislation. 
The bill has specific measures to assist small to medium sized enterprises which are the bulk of business participants across the New Zealand economy. These people invest their own money their own time and their own creativity into making a success of their particular enterprise. These people lie awake at night and decide whether they can afford to upgrade their information and communications technology. These people have to decide whether they can continue to employ the people they have on their payroll. These people have to decide whether they need to downgrade the amount of space of the business area they occupy. These people have to make courageous decisions every day about whether to continue to invest for their future. These are the people for whom this technical albeit modest suite of measures will go a significant way towards lifting the burden of compliance and allowing a greater cash flow to remain within their businesses. Having been a small-business owner myself and having wrestled with these very issues I stand in support of this bill so that others who are engaged in this type of business can feel this relief. 
The bill contributes to National’s overall jobs and growth plan. It is not to be read in isolation although as I have said within and of itself it offers significant assistance to small and medium sized businesses. It is but one part of an overall comprehensive approach that this National-led Government is taking to the challenges that face us. In meeting these challenges we have two main objectives. The first is to soften the edges of the recession and the way that New Zealanders are experiencing it and the second is to prepare our economy for recovery. Although we have inherited the legacy of being the first in the developed world to go into a recession we would like to work very hard to be the first in the Western World to go into a recovery. This bill is part of the measures that we think will assist across the economy to restore confidence to give greater certainty and to assist small to medium sized business owners to continue with their plans confidently to retain their employees and to continue with their everyday operational realities. 
This bill is about achieving balance as is so much of what this National-led Government is focused on. It is about achieving balance between leaving as much cash flow as possible in businesses and simplifying the compliance regime they must attend to while at the same time maintaining the tax base that we rely on to continue to offer the services that this National-led Government is committed to offering. 
So what are these measures? I do not propose to rehearse all of them but I do wish to speak about one in particular which as a previous small-business owner I was constantly alert to providing for—that is the 5 percent uplift rate that businesses pay on provisional tax instalments. As we all know in a successive year business people base their tax provisions on what they paid the previous year and add 5 percent. The supposition of course is that they are improving their business growth each year. But we are in a recession. We know that there are many challenges to our economy and we know that it is very unlikely that many businesses will be looking forward to a 5 percent increase on what they earned in the previous year. So the bill provides the ability to remove that provision for the 2008-2009 and the 2009-2010 tax years which means that there will be better tax cash flows for the next 2 years for small to medium sized enterprises. 
We also see within this bill the provision that business-related legal expenditure of $10000 or less will be able to be fully deducted. That is a very great leap forward for a number of small businesses because when they retain legal advice they fully understand that those giving the legal advice are also in business and need to meet their expenses. But legal expenditure has been a particularly onerous expense for small to medium sized enterprises and the opportunity for it to be deductible will be greeted with great relief by many small businesses around the country. Similarly the PAYE requirements—whereby payments will be filed once a month instead of twice a month and the payment threshold will move from $100000 to $500000—will allow more employers to file fewer PAYE returns. Again these requirements have been very onerous but necessary for small to medium sized enterprises and the changes are ones that will be and are being greeted by many businesses around the country with great relief. 
National is committed to making it easier for small and medium sized companies to operate their businesses effectively; this package of relief measures is aimed at doing that. It recognises that there are no silver bullets to all the challenges that face us in this time of economic recession but that it is one way of contributing to those businesses that form the bulk of the New Zealand economy in order to simplify their tax compliance regimes while also leaving cash flow within their businesses. I have had significant feedback from business people around the country who do not minimise the contributions that these measures will make to their businesses. The Opposition has described the measures as modest and technical but it has nevertheless said that it will support them. However others around the country who are engaged every day in these businesses see these measures as opportunities to get their heads above water to conduct their business in a much more simplified way and to have that cash flow available to them so that with greater confidence and certainty they can continue to operate those businesses. 
This package of measures is what the National-led Government is committed to; it is part of an overall jobs and growth plan. It meets our dual objectives of softening the hard edges of the recession while also contributing to preparing our economy for recovery. I am delighted to support this bill and I commend it to the House. 
Heoi ano ra e te Mana Whakahaere o tenei Whare tena koe otira ki a tatou katoa nga mihi nui. 
[ 
So greetings to you once again Mr Deputy Speaker of this House and much greeting to us all 
.] 
Bill read a second time. 
Insolvency Amendment Bill 
First Reading 
Hon SIMON POWER (Minister of Commerce) 
: 
 I move  
That the Insolvency Amendment Bill be now read a first time. 
 At the appropriate time I intend to move that the Insolvency Amendment Bill be referred to the Commerce Committee for consideration that the committee report finally to the House on or before 12 May 2009 and that the committee have the authority to meet at any time while the House is sitting except during oral questions during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 187 and 190(1)(b) and (c). 
This bill amends the Insolvency Act 2006 in order to address a small number of significant issues that have arisen since it came into effect in December 2007. Unfortunately—and hence the shortened time frame for the select committee to consider this matter—these changes have become even more pressing in the light of the expected impact of the current economic downturn on rates of insolvency. Having said that by introducing changes designed to preserve the integrity of the personal insolvency processes—namely the new no-asset procedure and bankruptcy—this bill is also timely because it aims to provide more protection for creditors and potential creditors. 
The no-asset procedure or “NAP” was introduced as an alternative to bankruptcy in December 2007 as part of the new Insolvency Act. Debtors may be eligible for a no-asset procedure if they have no realisable assets that can be sold to pay their creditors they have not entered into a no-asset procedure or a bankruptcy process before and they have debts of between $1000 and $40000 with no other means to repay them. 
By enabling individual debts of up to $40000 to be written off the intention of the no-asset procedure was to grant financially distressed people relief from liabilities that were incurred contractually. However the Act does not explicitly exclude the discharge of fraudulent debts leaving open the possibility that debts such as fraudulent social welfare payments could be wiped under this regime. Rewarding dishonesty was never the intention of the Act and clearly contravenes the fundamental policy objectives that underpin insolvency laws. The changes proposed in this bill stop fraudulent debts from being written off and will apply retrospectively to debtors who were in the no-asset procedure process when this bill was tabled in the House 3 days ago—a slightly unusual step but a necessary one—and to those who have entered no-asset procedures since them. 
To further protect the integrity of the no-asset procedure the bill also proposes to empower the official assignee to extend the period of discharge under a no-asset procedure by a maximum of 25 working days. This allows more time for the official assignee to investigate any new information or creditors’ objections that are received at the eleventh hour in relation to a person’s eligibility for the no-asset procedure. When the no-asset procedure allows someone to forgo up to $40000 in debts it is essential that any new information that may relate to concealed assets or debts can be brought to the attention of the official assignee right up to the day that person is discharged—hence the change. Such information could lead to the no-asset procedure process being terminated if an entrant is found to be concealing assets or debts from the official assignee. 
The bill also proposes to restore the official assignee’s ability to recover gifts made by a bankrupt prior to his or her bankruptcy. The insolvent gift provisions in the Act were inadvertently weakened in the 2006 insolvency law reform making it difficult for the official assignee to deal with gifts made to a third party in the period leading up to a person’s bankruptcy. The changes proposed in this bill will ultimately ensure that creditors are not out of pocket as a result of those gifts being made. The bill will allow contingent liabilities to be included in the assessment of the bankrupt’s insolvency at the time of making the gift and will cancel any gifts that are made in the 2-year period prior to a person’s bankruptcy. This 2-year time frame is consistent with the longstanding presumption that an individual is technically insolvent for a period of time before he or she files for formal bankruptcy proceedings. It is often within this period that those individuals shift assets set up trusts etc. to avoid paying creditors. The bill shifts to the recipients of gifts the onus of proof of a debtor’s solvency for the purpose of gifts made in the 2 to 5-year period before he or she was adjudicated bankrupt by the official assignee. 
Finally the bill proposes to increase the length of time a debtor’s information is kept on the no-asset procedure public register. Currently someone under the no-asset procedure regime remains on the register only for as long as the no-asset procedure lasts which is 1 year. The bill increases the time period on the register to 5 years from the date of entry. I will be interested in the select committee’s views on that matter. Furthermore where a person has been through multiple insolvencies it is proposed that his or her information will be permanently retained on the register. This information will be publicly available enabling credit-rating agencies and providers of credit access to make informed decisions about doing business with these individuals. 
Costs incurred by businesses that transact with bad debtors become a drain on the economy particularly as these costs are eventually passed on to everybody else. The changes proposed in the bill will strengthen New Zealand’s personal insolvency laws. I commend this bill to the House. 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I am happy to follow the Minister in speaking on the Insolvency Amendment Bill and to confirm to him that the Opposition will be supporting the referral of this bill to a select committee. But I cannot give an assurance beyond the referral to the select committee. This is not because of the first three items that the Minister identified in respect of this bill but because of the fourth. I will run through them. I downloaded the Cabinet paper off the Internet before I came to the House just to make sure that I had got it right in terms of the nature of these amendments in the bill. 
The first amendment is the provisions that were identified in the Cabinet paper as preventing the discharge of fraudulent debts under the no-asset procedure and we are very happy to see that addressed in the bill. The second amendment is to allow the official assignee to extend the no-asset procedure period when an objection is received just prior to a debtor’s expected date of discharge from the no-asset procedure. There is no problem with that. It is a very good strengthening of the existing law. The third amendment protects the interests of creditors of bankrupts by strengthening the ability of the official assignee to void gifts made by a debtor in the 5 years leading up to his or her bankruptcy. Again I am very happy with this. 
It is a strengthening of the provisions in the legislation. These all obviously have come from the Ministry of Economic Development. The ministry obviously has provided advice to the Minister stating that these matters need to be addressed. I can see that the first provision needs to be addressed as a matter of urgency which is why the Government has taken the position that it will apply from the day that the bill was introduced to the House which was as I understand it on Monday or Tuesday of this week. In that way it will stop fraudulent debts from being discharged from this day forward. 
But what I am concerned about though is the fourth provision. It is described in the Cabinet paper in a positive way without highlighting the negative potential of it and that is what disturbs me. The fourth provision is to provide improved access to the public register on the no-asset procedure and bankruptcy in order to enable informed lending decisions to be made. That provision cannot have been generated off the concern that the ministry had in relation to the implementation of the legislation because this issue was debated at some length when we introduced the Insolvency Act. The no-asset procedure was probably the most debated part of the legislation being a very new procedure. The issue was whether we should have a strong separation between the bankruptcy provisions and the no-asset procedure to make it very clear that the no-asset procedure was a one-off once-in-a-lifetime opportunity for somebody who had otherwise acted in good faith had come across a very poor set of circumstances and hardship in his or her life and was able to get a fresh start. That fresh start included the ability to carry on a business and the ability to travel overseas which are prohibited under the bankruptcy provisions. 
The third amendment was not to have this on the record as it were for any longer than the no-asset procedure. The public register’s relation to bankruptcy has been 7 years for many years now and that was not adjusted when we looked at the Insolvency Law Reform Bill. So the 7 years remains for bankruptcy. But the suggestion that we now increase the time for having the no-asset procedure on the record not for the 1 year that the no-asset procedure is in place but for 5 years creates a real concern. I am deeply concerned about the way that it has been publicly released by the Government. It is almost as if this has been added as an extra measure to a technical bill that Labour would have supported completely—100 percent. For the first three items alone we would have said there was no problem. We could whisk the legislation through the committee—it is a very good committee—and get the legislation back to the House well within the time frame as proposed by the Minister. But this inclusion of another item that is clearly coming from the credit agencies not from the Ministry of Economic Development worries me. Nowhere in the entire Cabinet paper could I find out where anyone in the credit industry had been consulted yet the suggestion has obviously come from there. The fact that the credit industry had been consulted was not mentioned. 
The other people who had not been consulted were those in the budget advisory services. I have seen Raewyn Fox’s comments in the media in response to this bill saying there are concerns about people coming into budget advice services and asking for assistance to fill out the forms for a no-asset procedure. That is not what budget advisers do. Budget advisers do not help people just to fill out forms for a no-asset procedure. On the ground they have been using the fact that there is a no-asset procedure to approach the creditors of people in dire straits and working through arrangements that are outside the summary instalment order regime and outside the no-asset procedure so some commitment is made to repaying what is owed under the circumstances. I think the no-asset procedure has ended up being quite a useful tool. It is one that did not exist before in terms of providing a realistic bargaining tool with a number of creditors in order for them to accept less than the full 100 percent return. 
When we change the provisions around the no-asset procedure it will change the number of people who want to contemplate that as an option. Will that change then weaken its ability to be used by budget advisers as a negotiating tool? I think it could and that is the sort of thing I want to spend some time on at the select committee. Quite frankly if we do not get the opportunity to seriously consider this issue then I think the bill itself will become an abuse of process. I would much rather carve out this provision if we are not able to deal with it within the time frame. As a responsible chair I will do what I can but I also want very much to have on the record our concern about the way this has been included in the bill which will mean that we have to take some serious consideration over it. In many respects it is a bit unfortunate because if this provision had not been included in the bill we could have made an absolute assurance about getting the bill back to the House in the time frame concerned. 
The regulatory impact analysis is perfectly legitimate under the circumstances because secrecy had to be afforded to one of the provisions in the legislation and that is preventing the discharge of fraudulent debts under the no-asset procedure. I quote from the Cabinet paper where it says: “Any publicity at this stage would unnecessarily draw attention to the loophole that allows fraudulent debts to be cancelled under the NAP process which has the possibility to reward individuals for their dishonesty. This may encourage such dishonesty therefore I am proposing that no publicity be given to this matter until a bill is introduced to Parliament.” That is perfectly appropriate for that provision but not for the fourth one. The fourth one needs to be properly consulted. The Privacy Commissioner has raised serious concerns about the inclusion of this provision in the bill. I think we are going to have to talk to the commissioner and get a very clear steer on a matter that I know she is currently undertaking a review of. I have a real concern about that fourth element being included but I am confident that we are able to address all of the other matters that are contained within the bill. 
I will close by expressing my disappointment at the inclusion of that element which clearly was not driven by a Ministry of Economic Development expectation but by the interests of those in the credit lending business. 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 I rise to speak in favour of the Insolvency Amendment Bill. This bill amends the Insolvency Act 2006 as has been said earlier to address a small number of significant issues that have arisen since that legislation was passed. The bill as has been stated preserves the integrity of the no-asset procedure by preventing the discharge of fraudulent debts and of bankruptcy by restoring the official assignee’s ability to recover those gifts made by a person prior to bankruptcy. The bill also amends public register provisions to better enable creditors to make informed lending decisions by ensuring a public record of people who have been discharged from the no-asset procedure is available for an appropriate period of time. 
That period is yet to be finalised. It also provides for permanent public records where the offender has had multiple insolvency events. 
The bill makes two amendments to the existing no-asset procedure and one amendment to the current bankruptcy process. The fourth amendment is the one that may be contentious. 
The no-asset procedure has been described as the soft bankruptcy procedure. It applies to debtors who have not previously gone through the no-asset procedure or been declared bankrupt and it remains in place for only 12 months. After 12 months the debtor is discharged from the debts that were owed at the start of the period. We know that the debts are between $1 and $40000 and that entry into the no-asset procedure can be refused only by the official assignee. The procedure provides a one-off opportunity for financially distressed individuals to avoid the stigma of bankruptcy and to rebuild their financial lives as well as their personal lives. 
The changes to the no-asset procedure are significant in that they close a current loophole around fraudulent debt. We seem to have cross-party support for closing that loophole. The changes also allow for further investigation of a person who is undergoing the no-asset procedure. 
I will turn to the four amendments to the Act. The current Act does not explicitly exclude fraudulent debt under the no-asset procedure as it does for bankruptcy. An example is where someone racks up a fraudulent debt where maybe a benefit has been obtained under false pretences from a Government department. The changes stated will prevent fraudulent debtors from avoiding their legal obligations to repay a debt. That is a good thing. It is about personal responsibility accounting for one’s mistakes and putting right what has been done wrong. 
The second change I refer to is a reversion to the provisions in the Insolvency Act 1967 around gifts made in the 5 years prior to someone becoming a bankrupt. Those provisions put the onus of proving that the debtor was solvent at the time of the gift on the recipient rather than on the official assignee. This is in line with the longstanding presumption that debtors are technically insolvent for a period of time before they file for formal insolvency and that gifts during that time are given for the purpose of avoiding payments to creditors. For example if a husband is insolvent and gifts a number of items to his spouse or children then that is deemed to be captured by the legislation. In my view this not only reduces the workload of the official assignee but also clearly puts the onus on the debtor to discharge that duty before he or she is absolved of that debt. 
The third amendment allows the official assignee to extend the period of time a debtor is under the no-asset procedure by a maximum of 25 working days. This allows for the investigation of any late objections or information received about the termination of a debtor’s entry to the no-asset procedure. In my view it is a common-sense provision. It allows the official assignee the requisite time and eases the workload so that the right decision is made in the right circumstances. 
The fourth amendment—probably the most contentious point that the former Minister of Commerce and the current chair of the Commerce Committee Lianne Dalziel pointed out in her representations before me—is around extending the period of time a debtor’s name remains on the no-asset procedure and bankruptcy public registers. Currently a debtor’s name remains on the no-asset procedure register only until the debtor is discharged from the no-asset procedure process which is up to 12 months. This prevents future investors lenders and credit-rating agencies from accessing that information once the debtor has been discharged. That information once that time period has expired cannot be accessed by lenders credit agencies and future investors. That is a very important and crucial point. 
Hon Lianne Dalziel 
: It’s a decision we made 2 years ago. 
PESETA SAM LOTU-IIGA 
: It is a decision that the former Minister made 2 years ago but that we are about to— 
Hon Lianne Dalziel 
: No Parliament. 
PESETA SAM LOTU-IIGA 
: It is a decision that we are about to debate at future select committee meetings. 
A bankrupt debtor remains on the public register for a minimum of 7 years. After a bankrupt debtor is discharged investors lenders and credit agencies cannot access that bankruptcy information. So there is a discrepancy there. 
There is a difference between bankruptcy and the no-asset procedure which we will investigate. Under the current legislation an accurate credit history cannot be compiled. As the Minister of Commerce alluded to earlier that presents in itself an increased business risk. Although I accept the argument made by the Hon Lianne Dalziel that we may have a person who acts in good faith and who becomes bankrupt during the normal course of his or her business career we also have to balance that consideration with the needs and desires of investors lenders and credit agencies. They require up-to-date and accurate information as to a person’s financial risk. 
This is a critical point and it is one we will get into serious discussions over. As the deputy chairperson of the Commerce Committee I would be happy to hear representations and to listen to the submissions of the Privacy Commissioner and other parties from the business area and from across the board even from those who may have been made bankrupt under the no-asset procedure and have experienced a revival in their fortunes. I think it is important to hear submissions from across the board. 
This bill is about delivering for businesses. It is about delivering for individuals who have made errors but it is also about delivering on the rule of law. The rule of law states that one should not profit from one’s own dishonesty fraudulent behaviour or other lack of probity in one’s business transactions. 
The amendments are required to maintain the integrity of the personal insolvency processes. They also promote confidence in the official assignee’s ability to administer these processes effectively. As I said earlier these changes will prevent fraudulent debtors from avoiding their legal obligations to repay debt. The bill also removes the potential for a dishonest person to be rewarded. In my view it is consistent with the overriding policy objectives of the personal insolvency legislation. I reiterate that I support this bill. I look forward to the vibrant discussions during the select committee process. That is my submission. 
CHARLES CHAUVEL (Labour) 
: 
 I would like to make a brief contribution to the debate in the time that remains this evening. As has been said the legislation makes a number of changes to insolvency law. 
First in relation to insolvent gifts the rules have changed. There are four sets of rules that entitle the official assignee to cancel certain things done by a debtor before bankruptcy that reduce the assets available to creditors—for example giving money to a spouse or a family trust. This is what we might refer to these days as the Madoff exception. 
The Insolvency Act 1967 stated that gifts given within 2 years before the adjudication of bankruptcy were voidable—as was said in those days—against the official assignee. This meant that the assignee could cancel the debts if the assignee wished to do so without having to prove whether the debtor could pay them at the time. And gifts within 2 to 5 years before the adjudication were voidable unless the party claiming under the gift proved that the donor was able to pay all his or her debts without the aid of the property comprised in the gift. This meant that the onus of proving that the debtor was solvent when he or she made the gift fell on the recipient of the gift. 
Now the law in section 204 of the Insolvency Act passed in 2006 is that the gift by a bankrupt to another person may be cancelled by the assignee if the bankrupt made the gift within 5 years immediately before adjudication and the bankrupt was unable to pay his or her due debts immediately after making the gift. But the effect of section 205 is that the onus of proving that the debtor was solvent when the gift was made falls on the recipient of the gift if the gift was made within 2 years of the adjudication and on the assignee if the gift was made between 2 and 5 years before it. 
This Insolvency Amendment Bill provides a new set of rules so that gifts made within 2 years of the adjudication may again be cancelled entirely at the assignee’s discretion. For gifts made between 2 and 5 years before adjudication the onus of proof will no longer lie with the assignee; it will shift to the recipient of the gift. The time at which the debtor must be proven to be able to satisfy the solvency test will shift. Instead of being immediately after making the gift it becomes either then or at any time up to the adjudication. For example if the debtor wins Lotto between making an insolvent gift and becoming bankrupt the debtor may be able to avoid the gift being cancelled—and that is obviously a sensible provision. 
When proving solvency account is to be taken again of debts that have not yet fallen due—for example contingent liabilities. The 2006 Act would have provided on that point that the solvency test would look only at due debts. So as Lianne Dalziel said the first part of the legislation—as far as changing the insolvent gifting regime—makes a lot of sense as do most of the changes mooted to the no-asset procedure which speakers including the previous speaker have detailed and which I will not repeat. 
Clearly we are in a position in our history where insolvencies are on the rise. I refer to an article that appeared in the  
New Zealand Herald  
in November last year in which comparison was made between the 3938 insolvencies in the 10 months to October that year and the 2963 insolvencies in the same period the year before. So we saw a 33 percent rise in insolvencies and in the 4 months prior to that article there had been a 46 percent rise. 
Clearly as we head into more difficult times we will be facing further insolvencies. Anything this Parliament does to strengthen the alternatives—like the no-asset procedure so that it is a proper avenue for people who really need that relief—is a good thing. As Lianne Dalziel said we will support that. 
We have a real concern however about the provisions relating to the retention of information on the register. We need to take proper account of what the Privacy Commissioner said about this area. In fact the whole area of information around insolvencies needs a proper look. Veda Advantage wrote to me some time ago and made the point that at the moment it is very easy to obtain someone’s negative credit-rating in New Zealand but it is an expensive and cumbersome process to get information on whether that person has a positive credit-rating. 
I urge the Commerce Committee when it looks at the information provisions in this legislation to take a proper look in the round at those requirements to look at the Privacy Commissioner’s concerns about the 4-year requirement in this particular case and to also look at the wider issues about whether for example it would be a good thing to be able to get positive credit-ratings on people rather than just the negative ones that exist at the moment. 
So with those words I repeat that Labour supports the bill’s going to a select committee but in respect of the information provisions we have serious reservations and would like to see a proper consideration of them. 
JOHN BOSCAWEN (ACT) 
: 
 It is 1 minute to 6pm but let me very briefly say that the Minister of Commerce Hon Simon Power gave a very detailed summary of the Insolvency Amendment Bill’s provisions. He was followed by the Hon Lianne Dalziel giving her very detailed knowledge of the circumstances that gave rise to the original Insolvency Bill being passed just 2 years ago. 
This is a bill that the ACT Party will be supporting for referral to the Commerce Committee. I do not propose to go into the details of the bill. But I would like to talk about the issues of insolvency and saving because insolvency is an issue that I personally know something about. 
Debate interrupted. 
The House adjourned at 6 p.m.