Volume 685 Week 27 - Thursday 8 November 2012 
Text is incorporated into the Bound Volume 
Volume 685 Week 27 - Thursday 8 November 2012 
[Sitting date: 08 November 2012. Volume:685;Page:6433. Text is incorporated into the Bound Volume.] 
Thursday 8 November 2012 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Business Statement 
Hon GERRY BROWNLEE (Leader of the House) 
: 
 When the House resumes on Tuesday 13 November the Government will look to progress the Electronic Identity Verification Bill the Identity Information Confirmation Bill the Lawyers and Conveyancers Amendment Bill and the Local Government Act 2002 Amendment Bill. With the agreement of the Business Committee the Wednesday 14 November sitting will be extended into the morning of Thursday 15 November for the third readings of the Ngati Whatua Orakei Claims Settlement Bill and the Ngati Manuhiri Claims Settlement Bill. Wednesday is a members’ day. 
Questions to Ministers 
Hon Kate Wilkinson—Pike River Mine Disaster and Ministerial Responsibility for Departmental Errors 
1. 
Hon DAMIEN O’CONNOR (Labour—West Coast - Tasman) 
 to the  
Prime Minister 
: Did Hon Kate Wilkinson have Ministerial responsibility for the departmental errors during her term as Minister of Labour which partially contributed to the deaths of 29 miners at Pike River? 
Hon BILL ENGLISH (Deputy Prime Minister) 
 on behalf of the Prime Minister: The  
Cabinet Manual 
 is clear that Ministers are accountable to the House for the actions and inactions of their department even if they have no knowledge of or involvement in those actions. The Minister made a decision that to honour the 29 men who died her department has to show New Zealanders that it takes its fair share of responsibility. As the Minister responsible for that department she resigned her portfolio. That was the honourable thing to do. 
Hon Damien O’Connor 
: Why is Kate Wilkinson still a Minister in Cabinet? 
Hon BILL ENGLISH 
: As I pointed out the Minister did take responsibility for the failure of the department which is more than we can say for that member when he was a Minister. When Liam Ashley was beaten to death in the back of a prison van he refused to resign and said he would stick around to fix the problem. 
Hon Damien O’Connor 
: When would the consequences of a department’s systemic failure be so severe as to warrant a Minister to resign from Cabinet entirely? 
Hon BILL ENGLISH 
: Clearly when that member was a Minister he did not think the consequences for Liam Ashley were sufficiently severe for him to resign. In this case the Minister decided— 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. That Minister ended his last answer inappropriately and he started this one here to the second question inappropriately as well. The fact is that the questioner is asking about a Minister who retains one of her portfolios having resigned only the other one. That is the question at issue here and he should be asked to focus on it rather than to attack another party’s questioner when that questioner did not change the policy and the National Party— 
Mr SPEAKER 
: Order! Order! The point of order was fine till that last point. The member then entered into debating material and he knows he should not do that. Points of order are not to score political points. 
Hon Gerry Brownlee 
: The question asked effectively for an example of when there would be sufficient severity. I think what Mr English was doing was giving clear examples of when there was a consideration of a matter that did not merit that severity thereby allowing the member who asked the question to reach some of his own conclusions. 
Mr SPEAKER 
: Can I check with the Minister whether he has finished his answer. The Hon Bill English to complete his answer. 
Hon BILL ENGLISH 
: As I was saying in that example that I quoted they obviously were not regarded as sufficiently severe. In this case the Minister made a decision that the results of the inaction of her department were sufficiently severe that she would resign. The Prime Minister retains confidence in the Minister and as he has explained there is no indication that by the Minister’s actions or inactions she contributed to the disaster. 
Hon Damien O’Connor 
: Given the warnings from the unions given the warnings from the department’s own internal review that point to deficiencies and given the letter I sent to that Minister in 2010 is it the standard of his Government that a Minister can remain in Cabinet despite the deficiencies in her judgment—the refusal to accept the warnings at least three times? What are the standards that deem a Minister should remain in Cabinet? 
Hon BILL ENGLISH 
: The member mentioned the letter he wrote. It was a considered letter and it was taken seriously and given a considered response by the Minister. In making that response the Minister relied on the advice of her department in exactly the same way as her predecessor Trevor Mallard had relied on that advice. As the royal commission report shows that advice was simply wrong. The Department of Labour was not adequately monitoring a mine that it should have known to be dangerous. 
Andrew Little 
: Does he agree that the failure of the department to take any further action on its options to introduce check inspectors or an approved code of practice for better worker involvement in mine safety which were being actively considered in September 2008 is of such gravity that when it is apparent that the failure has led to such a catastrophe the Minister should resign? 
Hon BILL ENGLISH 
: The Minister has resigned in a way that I have to say was doing better than the example of the member who asked the original question. In respect of check inspectors and so on it is possible that those kinds of changes may have made a difference. But I think what is shocking about reading the royal commission report is that the miners were aware of the danger the company was certainly aware of the danger and the Department of Labour absolutely should have been aware of the danger and acted on it. No one did and we ended up with this awful tragedy. The Minister has in a manner of real integrity put her hand up and said that she would take responsibility for that. 
Andrew Little 
: If as the Minister said in part of his last answer the company is at fault will he support the urgent introduction of an amendment to the Crimes Act to create a crime of corporate manslaughter? 
Hon BILL ENGLISH 
: I am advised that that is being looked at and no doubt it will be looked at in the context of the legislative framework in New Zealand around ACC—which I know that member supports—which is the deal with New Zealanders that there is not liability for accidents. That is one issue that will have to be taken into account. 
Economic Growth and Job Support—Progress and Unemployment Rate 
2. 
TODD McCLAY (National—Rotorua) 
 to the  
Minister of Finance 
: What steps is the Government taking to support jobs as part of its programme to build a more productive and competitive economy? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Data today showing 7.3 percent unemployment underscores the importance of the Government’s broad investment programme and policy programme that is supporting jobs building infrastructure and increasing the productive capacity of the economy. This is challenging when the world economy is struggling to gain momentum. Today’s unemployment data has been above market expectation but does not change the Government’s plans to continue to back businesses to make the decision to employ another person invest another dollar and help reduce unemployment. 
Todd McClay 
: How does New Zealand’s unemployment rate compare with other nations’? 
Hon BILL ENGLISH 
: Can I say in the first place that the—[ 
Interruption 
] 
Mr SPEAKER 
: Order! I apologise to the Minister. The member asking the question had a perfect right to ask the question. It was not a provocative question; it sought information. We do not need that level of interjection. 
Hon BILL ENGLISH 
: Can I first say that the unemployment rate is of course too high. We want an economy where it is easier for people who are looking for jobs to find them. New Zealand’s unemployment rate is equal with that of Canada lower than that of the US lower than that of Finland and much lower than the euro area unemployment rate of 11.5 percent. The OECD average unemployment rate is 8 percent. We do face significant head winds as Government and households rein in their spending and increase savings at the same time as dealing with an elevated exchange rate and a sluggish world economy. We are on track for moderate growth in the short to medium term. We will continue to work to ensure that there are the best conditions possible for businesses to employ more people. 
Hon David Parker 
: With 175000 New Zealanders now unemployed and unemployment at the highest rate of 7.3 percent since 1999 when he was Minister of Finance under Jenny Shipley—is it the highest since then? 
Hon BILL ENGLISH 
: I have not checked those facts but I can tell the member one interesting fact. In 1999 there were 150000 people on the unemployment benefit and today at a similar rate of unemployment there are only 50000 people on the unemployment benefit. In respect of these figures one story that does not quite fit is that the household labour force survey today shows an increase in unemployment mainly driven by increases in unemployment in Auckland but the number of people on the unemployment benefit in Auckland is actually dropping. We have yet to find out why both of those things are happening at the same time. 
Hon David Parker 
: Does he believe his Building a Brighter Future plan to create 170000 more jobs is working given that unemployment is 7.3 percent the highest rate in 13 years and the number of unemployed at 175000 is the highest number in 20 years? 
Hon BILL ENGLISH 
: Yes we do believe the plan is working because in the face of a slowing global economy New Zealand continues to create more jobs it has a higher employment rate than Australia and more New Zealanders are in work than it has ever had. For those who are looking for jobs the infrastructure team in Christchurch is on the road around New Zealand trying to fill 1000 places. I invite young New Zealanders in particular to apply for those jobs. 
Todd McClay 
: How is the Government’s investment through the Business Growth Agenda supporting jobs? 
Hon BILL ENGLISH 
: The Government is investing itself through the Business Growth Agenda and its wider investment programme. Just to give some examples there are 2000 jobs in the roll-out of ultra-fast broadband there are 1600 jobs in the Transpower grid upgrade there will be 1000 jobs at the peak of the Wiri prison construction there are expected to be 1300 jobs at the peak of the horizontal infrastructure rebuild in Christchurch and there are an estimated 1000 jobs over the next 4 years on the Waterview motorway. This is employment the Government is providing directly through its extensive infrastructure investment programme. 
Hon David Parker 
: Does he agree that with long-term unemployment up 12.5 percent in the year to September 2012 long-term unemployment is the biggest cause of welfare dependency in New Zealand? 
Hon BILL ENGLISH 
: No I do not. It is one cause but as the Government’s welfare reform process has illustrated there are large groups of people in long-term welfare dependency such as sickness beneficiaries— 
Hon David Parker 
: They’ve gone up under this Government. 
Hon BILL ENGLISH 
: No actually they went up strongly under the Labour Government even when the economy was growing fast. Despite the patchy growth of this recovery those numbers on benefits are stable or dropping. 
Hon David Cunliffe 
: I raise a point of order Mr Speaker. In response to an earlier supplementary question the Minister said that he could not remember the unemployment rate in 1999— 
Mr SPEAKER 
: Order! Order! Order! There is not remotely a point of order emerging from this. There was nothing to do with the proceedings of the House. It seems the Minister wants to either add information or dispute information. I am prepared to accept I am wrong and I will give the member a chance but he must indicate very quickly what the issue of order is. 
Hon David Cunliffe 
: With respect the Minister seems to have contradicted his own memory and therefore may have misled the House— 
Mr SPEAKER 
: Order! Order! That is not a point of order. [ 
Interruption 
] Order! It is nothing to do with the procedures of the House. The member is trying to make a political point and that is not a point of order. 
Hon David Parker 
: Which does he think is the worst indictment of his Government: the abject failure to meet his target of 170000 more jobs the record 175000 unemployed or the record 170000 people who have left to go to Australia since he promised he would reduce the number? 
Hon BILL ENGLISH 
: None of those. Some indications of some of those—[ 
Interruption 
] One indication of—[ 
Interruption 
] 
Mr SPEAKER 
: Order! I guess if members ask the question I imagine they want to hear the answer. 
Hon BILL ENGLISH 
: I think they think the one who shouts the loudest will get David Shearer’s job. But in the end they are all just Davids. 
Mr SPEAKER 
: Order! I have called on the Opposition not to interject so much and the Minister is now getting provocative. That ain’t going to help. 
Hon BILL ENGLISH 
: The answer to the member’s question is none but for the member’s benefit some indications of success are that the number of people on benefits was 354000 in January 2010 and it is currently 320000—a significant drop. The number of people on the unemployment benefit was— 
Rt Hon Winston Peters 
: I raise a point of order Mr Speaker. The Minister of Finance was asked which was the worst indicator. He said none of the three that he was given was and now he has gone straight off the question and is talking about something else. 
Mr SPEAKER 
: Order! I believe the Minister was asked not which was the worst but which would he consider was his best achievement I think— 
Hon Members 
: No. 
Mr SPEAKER 
: Oh it was the worst achievement I apologise—the worst achievement. The Minister is perfectly entitled to say: “None of the above.” but he should probably indicate if the—[ 
Interruption 
] Order! He should probably if he says: “None of the above.” indicate which is his worst achievement. 
Hon BILL ENGLISH 
: OK. Well the worst indicator is that the number of people on benefits has dropped from 354000 in January 2010 to 320000 in September 2012. 
Hon David Parker 
: If the Government’s record of 175000 unemployed is not its worst indicator if the record 170000 people leaving for Australia is not its worst indicator and if its failure to achieve its target of 170000 new jobs is not its worst indicator what is its worst indicator? 
Hon BILL ENGLISH 
: As I have said we believe that the indicator where we need to strive much harder to achieve more is an increase in the number of jobs. There are not enough jobs out there for the people who are looking for them but it is pleasing to note we are making progress on the decrease in the number of people who are unemployed. For instance the number on the unemployment benefit in January 2010 was 68000— 
Mr SPEAKER 
: Order! [ 
Interruption 
] Order! There was a very simple question asked and I think the Minister did answer that and because it was such a simple question that should be the end of the answer. 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. I know on occasion I have criticised you for assisting Ministers by explaining to the House but on this occasion I do not think anyone on this side heard the Minister indicate what he thought the worst indicator was. 
Mr SPEAKER 
: No I think he has— 
Hon Trevor Mallard 
: So he could not have answered it. 
Mr SPEAKER 
: Order! The Minister did. He indicated that the worst indicator was the issue of job availability. He indicated that it caused the Government the most concern and that was his interpretation of what the worst indicator was from the Government’s perspective. 
Hon David Cunliffe 
: I seek leave to table the Statistics New Zealand unemployment data from 1998-99 which was the last time the unemployment rate was as high as it is today at 7.3 percent. 
Mr SPEAKER 
: The data was compiled by? 
Hon David Cunliffe 
: The department of statistics. 
Mr SPEAKER 
: Leave is sought to table that document. Is there—[ 
Interruption 
] Well leave is sought to table it. Is there any objection? There is objection. Apparently it is a public document. 
Hon David Cunliffe 
: I seek leave to table the Statistics New Zealand unemployment figures for 2006-07 showing that at 3.4 percent under the previous Government— 
Mr SPEAKER 
: Order! Have these figures been figures that are released in the Statistics New Zealand release recently? 
Hon David Cunliffe 
: Clearly they are not available to the Minister of Finance— 
Mr SPEAKER 
: Order! That is a straight abuse of the point of order process. That is a straight abuse because it is using the point of order process to try to put down another member of the House and that is not on—not on. I politely— 
Hon David Cunliffe 
: Point of order Mr Speaker. 
Mr SPEAKER 
: Order! I am on my feet. [ 
Interruption 
] Order! And there will not be interjections. I politely inquired whether the information the member was seeking leave to table was information that was recently released by the statistics department. If it is information that can only be found through looking back over past series I am prepared to put the leave to the House. If it is information that has been released today or in the last couple of days then I am not prepared to waste the time of the House. I politely inquired that of the member—is this information information that was compiled by someone else or was it was included in releases today? 
Hon David Cunliffe 
: I do not wish to detain yourself or the House and I appreciate the Speaker’s courtesy. Mr Speaker the information was historical and the issue did arise because the Minister of Finance— 
Mr SPEAKER 
: Order! That is all I asked—[ 
Interruption 
] No no that is not a valid point of order. The issue is simply the member seeking leave to table a document. He has told me this information is not readily available. Leave is sought to table that document. Is there any objection? There is objection. 
Primary Industries Ministry—Confidence in Director-General 
3. 
RICHARD PROSSER (NZ First) 
 to the  
Minister for Primary Industries 
: Does he have confidence in the Director-General of the Ministry for Primary Industries? 
Hon DAVID CARTER (Minister for Primary Industries) 
: 
 Yes I do. I think the New Zealand Public Service is very fortunate to have leaders with the capability and the integrity the likes of Mr Wayne McNee. 
Richard Prosser 
: How can he have confidence in the Director-General of the Ministry for Primary Industries when there have been no prosecutions relating to culpability for the biosecurity breach that allowed the Psa bacteria into New Zealand with devastating consequences for the kiwifruit industry? 
Hon DAVID CARTER 
: Because despite numerous reports into that incursion no one can be sure how that particular bacteria arrived in New Zealand. 
Richard Prosser 
: Is the real reason there have been no prosecutions relating to culpability for the biosecurity breach that allowed the Psa bacteria into New Zealand with devastating consequences for the kiwifruit industry that they might reveal the extent of failures by the Ministry for Primary Industries and its predecessor the Ministry of Agriculture and Forestry? 
Hon DAVID CARTER 
: No that is definitely not the case. I sympathise with the member putting a lot of work into this question. His research unit phoned my office a number of times yesterday with questions such as “How do you spell ‘Director-General’?”. 
Mr SPEAKER 
: Order! 
Emissions Trading Scheme—Cost and Effect of Proposed Changes 
4. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Minister of Finance 
: What are the estimated costs to the taxpayer resulting from the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Based on the latest monthly carbon price of $1.73 a tonne the changes proposed will reduce Government revenues by $105 million between 2013 and 2015. 
Dr Russel Norman 
: I seek leave to table the Cabinet paper that identifies the cost as $328 million. 
Mr SPEAKER 
: Leave is sought to table that Cabinet paper. Is there any objection? There is no objection. 








Document by leave laid on the Table of the House. 
Dr Russel Norman 
: How is the $328 million cost of his changes to the emissions trading scheme as calculated by Treasury consistent with his 2011 election promise that states: “We recognise the Government’s finances are under pressure and our changes to the ETS will be fiscally neutral.”? 
Hon BILL ENGLISH 
: Just to explain the difference in the numbers the member is using the carbon price around the time that policy decisions were made which was $6 a tonne. The estimate I have given the member is based on the latest monthly price of $1.73 a tonne. In fact as of today the carbon price is around $1 a tonne. In fact the drop in price indicates that the recession is having quite an impact on emissions particularly in Europe and that means less of a problem and the Greens should be pleased about that. And now I cannot remember what the member’s question was. 
Dr Russel Norman 
: I raise a point of order Mr Speaker. I am willing to repeat the question. 
Mr SPEAKER 
: In fact the Minister actually disputed part of the information contained in the question and he is entitled to do that without further answer to the question. So the member cannot really ask for a further answer. 
Dr Russel Norman 
: Is the Minister familiar with this document that I hold up which is the National Party policy at the last election— 
Hon Clayton Cosgrove 
: He’s probably forgotten. 
Dr Russel Norman 
: —or has he forgotten? It says: “We recognise the Government’s finances are under pressure and our changes to the ETS will be fiscally neutral.” How are the changes to the emissions trading scheme which are not fiscally neutral consistent with this policy? 
Hon BILL ENGLISH 
: I can assure the member I am familiar with the document. As he would expect as Minister of Finance I am always keen to see fiscally neutral policy change—in fact policy change that saves money. In this case as the member will see the advice is clear from the Cabinet paper that the complexities particularly related to Treaty of Waitangi settlements and undertakings and agreements that the Crown had made in respect of carbon credits would have made it very difficult to unwind previous arrangements in a way that would allow us to have a fiscally neutral policy. Given that it would cost $105 million over the next 2 or 3 years that cost has to be incorporated into the Budget allowances and prevents the Government from spending the money on other things. 
Dr Russel Norman 
: Given his ambition to return to fiscal surplus by 2014-15 why is it that he prioritised spending between $100 million and $300 million on this policy to gut the emissions trading scheme when there are so many other much more important priorities for Government cash? 
Hon BILL ENGLISH 
: We looked at a range of solutions and of course the Government was keen—consistent with the policies from the Opposition—to make sure that the cost of living for New Zealand households did not go up more than necessary when they are under pressure. So we looked at funding it from the Budget. The other proposition we looked at was just printing the money but we were advised that that probably was not a good thing. 
Dr Russel Norman 
: How will eliminating a price signal for agricultural emissions as the changes to the emissions trading scheme do incentivise farmers to adopt the technology developed by the New Zealand Agricultural Greenhouse Gas Research Centre which according to the centre could reduce greenhouse gas emissions from pastoral farming to 25 percent of the levels prevailing in 2011? 
Hon BILL ENGLISH 
: I think we just have a different view about the state of that technology. There are some speculative options around but from the Government’s point of view there is really no technology available to farmers to enable them to respond to the price signal other than getting rid of livestock which we do not think is that good an idea because it would cut back New Zealand’s production. As it happens probably a higher environmental priority right now for our farming community is sorting out the issues around water which the Government is grappling with pretty intensively over the next 6 months. 
Te Ururoa Flavell 
: Kia ora tatou. What is the estimated cost to taxpayers and the forest sector of not placing a cap on imported units and does the Minister agree with the comments of another Government Minister Tim Groser in his speech to the Climate Change Iwi Leaders Group national hui in April 2012 when he said: “The Government also proposes to enable in legislation the introduction of a mechanism that would place a restriction on the proportion of international units a participant can surrender to meet their ETS obligations. Under current settings there is a serious danger of New Zealand essentially exporting capital for no good reason resulting in a loss of economic welfare.”? 
Hon BILL ENGLISH 
: Yes I do agree with the Minister and the Government is considering the policy issues related to both the capital export issue and the environmental integrity of some of the international units. The iwi leaders group made a very constructive contribution to what has been a series of challenging issues around the emissions trading scheme. That has been a positive engagement and we acknowledge their persistence and their patience in dealing with these issues. 
Dr Russel Norman 
: Does he accept that the changes his Government is making to the emissions trading scheme are at complete odds with the advice from his own Green Growth advisory group which reported earlier this year that many of our exports have very high carbon intensity and that if nothing is done to address this long-term damage will be done to our export sector in terms of market access and in terms of the premiums received for our exports? 
Hon BILL ENGLISH 
: No we do not completely agree with the Green Growth advisory taskforce. The Government thinks that an emissions trading scheme with its price signal is a useful policy. However we have through the last couple of elections promised to moderate it and those are the steps that we have taken. The member cannot have it both ways. On the one hand he says we should print money to lower the exchange rate in order to make our exporters more competitive; on the other hand he advocates ramping up the emissions trading scheme in a way that will make them less competitive. 
Dr Russel Norman 
: How will eliminating a price signal for agricultural emissions help agriculture become a world leader in sustainability and product integrity as demanded by the Riddet report’s transformational strategy to treble the value of our agricultural exports by 2025; and is not the key point that if we want our agricultural exports to be successful they must perform well environmentally and his emissions trading scheme does the exact opposite of that? 
Hon BILL ENGLISH 
: I believe that—and the Government does—New Zealand agriculture is a world leader in sustainability. We are probably the world’s most efficient producer of grass-produced meat wool and milk products and we intend to maintain that. The agricultural sector is incurring very substantial costs through the traceability of all animals in the National Animal Identification and Tracing System currently and over the next few years through substantial investment in the control of effluent so that we can maintain that environmental record. 
Question No. 3 to Minister 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 I seek leave to make a personal explanation in relation to an answer given by the Hon David Carter to question No. 3 today. 
Mr SPEAKER 
: Leave is sought for the member to make a personal explanation. Is there any objection? There is no objection. 
Rt Hon WINSTON PETERS 
: Mr Carter said that an office of my party had rung his office wishing to know how do you spell “Director-General”. My inquiries show that my office called Mr Carter’s office because Wayne McNee in the first reference on the website is referred to as “Wayne McNee Director”—no hyphen just a space—“General” and then the next reference has a hyphen in it. She wished to know which was the correct one—without the hyphen or with it. [ 
Interruption 
] Just listen listen. Mr Speaker this is a personal explanation; it should be heard in silence as you know. 
Mr SPEAKER 
: Order! And it must be a personal explanation. 
Rt Hon WINSTON PETERS 
: It is a personal explanation. I have made the inquiry of the only person who can supply evidence here. 
Mr SPEAKER 
: Order! If the member would just for a moment resume his seat. The dilemma—and I do ask members to be silent during a personal explanation—for the House is that what we are hearing is not a personal explanation. The member himself was not involved in this alleged activity and therefore it is not a personal explanation. That is what is causing some I think concern across the House. Personal explanations are meant to relate to matters that affect a person personally. 
Hon Trevor Mallard 
: Point of order. 
Mr SPEAKER 
: The Rt Hon Winston Peters has the floor. 
Rt Hon WINSTON PETERS 
: Let me say this here. The fact is that the House was—[ 
Interruption 
] I will conclude this but the fact of the matter is he drew attention to a matter that is to do with punctuation not spelling and then he totally misinformed the House— 
Mr SPEAKER 
: Order! Order! We are now getting into an argument by way of point of order. I am going to have to rule on this matter to sort it out for the House and I am going to have to rule that a personal explanation must relate to something that affects a person personally. From what I have heard I do not believe that it was the right honourable gentleman who contacted the Minister’s office. I do not believe that this matter affects the right honourable gentleman personally at all. Matters to do with members’ staff or other things like that cannot be matters of personal explanation as far as I can see. If I am wrong in that matter I apologise to the House—if I am wrong. But I think you know I cannot allow a personal explanation to continue that clearly is not actually a personal explanation. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 I raise a point of order Mr Speaker. 
Mr SPEAKER 
: I will hear from the right honourable gentleman further. 
Rt Hon WINSTON PETERS 
: What the Minister did—and I am asking your advice here—was throw into question the intelligence and education of a member of my staff who I might add is an immensely more qualified academic— 
Mr SPEAKER 
: No no. Order! That is—[ 
Interruption 
] No order! We cannot have that. Members cannot under a point of order abuse another member. There is a new Standing Order. Where Ministers make allegations recklessly in answering questions there is a procedure under the current Standing Orders that can be followed to sort the matter out. Where it does not involve a member personally it is not a personal explanation. I apologise—I do not want to be unfair to the Rt Hon Winston Peters—but what I am hearing is not a personal explanation. That is why I feel I must terminate it. 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 I raise a point of order Mr Speaker. What do we do in the interests of this House and this country to stop a Minister demonstrating that he is grammatically an illiterate— 
Mr SPEAKER 
: No no. Order! That kind of abuse is the kind—[ 
Interruption 
] Order! I have already explained that there is currently a Standing Order that provides for members to take up issues where they feel a Minister in answering a question has made a reckless allegation. It is Standing Order 355. The member is perfectly welcome to do that but he is not and I will not tolerate further abuse of the point of order system. To me it is totally unacceptable to use it to belittle another member of this House so that will cease. 
Social Development Ministry—Resignation of Head of Work and Income 
JACINDA ARDERN (Labour) 
: 
 Mr Speaker—[ 
Interruption 
] 
Mr SPEAKER 
: Forgive me I apologise to the member. I ask the House please to come back to order. I must be able to hear Jacinda Ardern.  
5. 
JACINDA ARDERN (Labour) 
 to the  
Minister for Social Development 
: Does she stand by all her statements relating to the departure of the Ministry of Social Development Deputy Chief Executive Janet Grossman? 
Hon Dr JONATHAN COLEMAN (Minister of Defence) 
 on behalf of the Minister for Social Development: Yes. 
Jacinda Ardern 
: Was she briefed by the Chief Executive of the Ministry of Social Development on the reason for Janet Grossman’s departure? 
Hon Dr JONATHAN COLEMAN 
: The Minister for Social Development has been very clear about the reasons for the departure. On 14 June in the House she said: “She handed in her notice because as far as I was informed her husband has had job opportunities in the UK and she wishes to return back there. That is the reason for it.” 
Hon Trevor Mallard 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: Order! I think I can foresee the point of order coming up. 
Hon Trevor Mallard 
: Very straight question: was she briefed? 
Mr SPEAKER 
: Order! I think I can see that. The question asked was whether the Minister was briefed on the reasons why Janet Grossman departed. The Minister I think implied in his answer that he was but he should tell the House—it would be helpful if he told the House—whether or not he was briefed. 
Hon Dr JONATHAN COLEMAN 
: I have said as far as I was informed. 
Jacinda Ardern 
: Was the only reason she was given for Janet Grossman’s departure in that briefing or information that “her husband has had job opportunities in the UK and she wishes to return back there.”? 
Hon Dr JONATHAN COLEMAN 
: Yes. 
Jacinda Ardern 
: Was Janet Grossman paid a termination benefit? 
Hon Dr JONATHAN COLEMAN 
: As you know $97000 was allocated across five people who left that year and there will be no breakdown given for privacy reasons of the allocation to any of those five executives. 
Jacinda Ardern 
: I raise a point of order Mr Speaker. I very explicitly and deliberately just asked whether Janet Grossman was paid— 
Mr SPEAKER 
: I think I can appreciate the member’s point of order. The member did not ask how much Janet Grossman might have been paid. She simply asked whether she was paid a termination sum. [ 
Interruption 
] Order! The Minister in replying said that there were five people who departed and he would not be advising how much anyone received. That was not the question. It did not ask how much she received; it asked whether she received a termination payment. 
Hon Dr JONATHAN COLEMAN 
: Yes. 
Jacinda Ardern 
: Why was Janet Grossman paid a termination benefit if the only reason for her departure was as the Minister stated to this House that her husband had job opportunities in the UK and wished to return back there? 
Hon Dr JONATHAN COLEMAN 
: Well this is a matter for the Chief Executive of the Minister of Social Development and the State Services Commissioner but presumably it was in her contract. 
Mr SPEAKER 
: Question No. 6 Simon O’Connor. [ 
Interruption 
] Order! That is the end of that question. [ 
Interruption 
] Order! I have called Simon O’Connor. 
Science and Research Funding—National Science Challenges Initiatives 
6. 
SIMON O’CONNOR (National—Tamaki) 
 to the  
Minister of Science and Innovation 
: How is the Government using science to address some of the biggest challenges facing New Zealand? 
Hon STEVEN JOYCE (Minister of Science and Innovation) 
: 
 The Government’s National Science Challenges initiative is designed to identify the key scientific questions crucial to New Zealand and fund them to make a difference to our future. From next week the Government is asking New Zealanders and the science community to put forward their ideas for science challenges. We have identified a number of illustrative challenges as starters for 10 including our rich seas land and water foods for health advanced materials and manufacturing protecting New Zealand’s biodiversity fighting disease our changing climate and resilience to natural hazards. Cabinet will select the final science challenges in April 2013 following public engagement and advice from an expert panel chaired by the Prime Minister’s Chief Science Advisor Sir Peter Gluckman. 
Simon O’Connor 
: How can New Zealanders have their say in which science challenges should be included? 
Hon STEVEN JOYCE 
: This Sunday will see the launch—[ 
Interruption 
] 
Mr SPEAKER 
: Order! 
Hon STEVEN JOYCE 
: Well obviously the Opposition— 
Mr SPEAKER 
: Order! 
Hon STEVEN JOYCE 
: This Sunday will see the launch of  
The Great NZ Science Project 
 a campaign to encourage New Zealanders to get involved in identifying our biggest science challenges. Television advertisements featuring New Zealand scientists explaining some of the illustrative challenges will stream from Sunday and these will be supported by  
The Great NZ Science Project 
 interactive website through which the public can provide their feedback. I would encourage everyone to have their say on what they think are the science challenges facing New Zealand. The 
 Great NZ Science Project 
 campaign is also the perfect opportunity to help lift the public profile of science and encourage more young New Zealanders to choose a career in science. We have a long proud tradition of creating outstanding scientists—[ 
Interruption 
]—but I do not think Mr Cunliffe would ever be one because he is indicating his ignorance right through the House this afternoon. 
Public Transport Auckland—Integrated Ticketing System and Snapper 
7. 
PHIL TWYFORD (Labour—Te Atatu) 
 to the  
Minister of Transport 
: What assurances did Hon Steven Joyce give Snapper CEO Miki Szikszai in relation to Snapper’s participation in the Auckland integrated ticketing arrangement when they met on 3 March 2012? 
Hon GERRY BROWNLEE (Minister of Transport) 
: 
 None. 
Phil Twyford 
: Is he aware that Steven Joyce shortly after becoming Minister repeatedly sought official advice on whether it was possible to cancel the integrated ticketing scheme being set up by the Auckland Regional Transport Authority because he thought that Snapper could just run it instead? 
Hon GERRY BROWNLEE 
: No but what I do know is that Mr Joyce did not meet Snapper chief executive officer Miki Szikszai on 3 March 2012 because he was not the Minister of Transport at that time. 
Phil Twyford 
: I seek the leave of the House to table an email from the Minister’s office of 24 November 2008 in which he asks the Ministry of Transport: “Why do we need to spend $100 million on an integrated ticketing scheme in Auckland when Snapper has been provided … privately?”. 
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. 
Phil Twyford 
: I seek leave to table another document. It is from the Minister’s office dated 16 December 2008 and it poses a number of questions to ministry officials including “Can this project be stopped?” “What would be the implications of stopping?” and so on. 
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. 
Phil Twyford 
: I seek the leave of the House to table another communication from the office of Steven Joyce dated 16 March 2009 in which his office asks: “Is there a clause in the ARTA tender process which provides an out clause prior to signing of the contract. … is there anything else that ARTA could reference as being a barrier to proceeding.” 
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. 
Phil Twyford 
: Does he agree with the policy decision made by his predecessor Steven Joyce which resulted in Snapper being allowed back into the integrated ticketing process against official advice which led to delays cost overruns Snapper being kicked out of the project and now the Auckland ratepayer facing a $20 million lawsuit? 
Hon GERRY BROWNLEE 
: Firstly I think the assertion that Mr Twyford is making is wrong just as the primary question he put on the sheet was completely wrong. What I would say is that there is nothing wrong with a Minister in fact trying to find out all the details of a circumstance in order to effect good public policy and save the taxpayer some money. It was always the position of the Government that there should be capacity for interoperability among different cards on the system. 
Phil Twyford 
: Will he accept responsibility for the decision to allow Snapper back into Auckland’s integrated ticketing project; and will he indemnify the Auckland ratepayer against any legal action by Snapper given that all of the evidence points to ministerial interference in the decision to allow Snapper back into the project? 
Hon GERRY BROWNLEE 
: Well there can be no truth to the assertion that all the evidence points in a particular direction. What is true though is that the contract is with Auckland Transport and it is its responsibility as to how it all ends up. 
Phil Twyford 
: Is he concerned about the comments from Mr Szikszai about the 3 March meeting given that they indicate that Steven Joyce gave assurances that Snapper would be let back into the project against official advice and given the apparent circumventing of proper procurement processes with regard to the use of public money; will he refer this matter to the Auditor-General? 
Hon GERRY BROWNLEE 
: It depends on which 3 March you are talking about because 3 March 2012 as mentioned in the primary question is not a date on which the Hon Steven Joyce was Minister of Transport and he did not have a meeting with Mr Szikszai. 
Offenders Serious Crimes—Support for Victims and Proposed Restraining Order 
8. 
IAN McKELVIE (National—Rangitikei) 
 to the  
Minister of Justice 
: What is the Government doing to further protect victims from their attackers? 
Hon JUDITH COLLINS (Minister of Justice) 
: 
 It is unacceptable for victims of serious violent crimes to feel intimidated by their offender moving into their local area near their home or workplace. I have today announced a new restraining order under the Harassment Act to protect victims from unwanted contact from a person who attacked them. The new order can restrict offenders from living in or visiting areas close to their former victims and from contacting their victims. 
Ian McKelvie 
: What other action has this Government taken recently to support victims? 
Hon JUDITH COLLINS 
: Putting victims first is a key priority of the Government. We have increased funding for the Victims Centre enabling the Victims Centre freephone to take 1500 calls per month and to help more than 20000 people through the Victims Centre website. We have also committed $1 million to expand the safe@home programme keeping women and children safe from domestic abuse. 
Broadband Ultra-fast—Projected and Actual Uptake 
9. 
CLARE CURRAN (Labour—Dunedin South) 
 to the  
Minister for Communications and Information Technology 
: What percentage of New Zealand homes did the Government commit in 2008 would be connected to Ultra Fast Broadband within 10 years? 
Hon AMY ADAMS (Minister for Communications and Information Technology) 
: 
 To the best of my knowledge in 2008 the Government did not make a commitment as to what percentage of homes would be connected to ultra-fast broadband. To clarify for the member in 2008 the Government made a commitment to “drive the roll-out of a ‘fibre to the home’ ultra-fast broadband network.” to “… 75% of New Zealanders.” and we are delivering on that promise with over 100000 end-users now able to connect to fibre. 
Clare Curran 
: What was the target uptake rate for people connecting to and receiving services through ultra-fast broadband in year 1 and what was the year 1 actual uptake in percentage terms? 
Hon AMY ADAMS 
: I can tell that member that the target uptake rate across the build period in total is for final uptake to be in the realm of 40 to 45 percent and of that for households to be in the high 30s. We do not have uptake projections year by year but I can tell the member that it is the Government’s expectation that the uptake would build very slowly and gradually as the build progressed and that international experience tells us that uptake does not really start to take up until the network is more than half built. In regard to your question about the uptake numbers at the end of year 1 I do not have that in front of me but I can tell the member that at the end of the most recent quarter uptake numbers were 2445 users representing 2.4 percent of those built to date. 
Clare Curran 
: Does she agree with the Commerce Commission that the ultra-fast broadband network will have just 20 to 25 percent take-up by Kiwi households by 2019? 
Hon AMY ADAMS 
: That is not my expectation. 
Clare Curran 
: What is the Government’s latest target uptake for ultra-fast broadband by 2019 for Kiwi households connecting to and receiving services and has she consulted with network providers such as Chorus about this target? 
Hon AMY ADAMS 
: I think I answered that earlier but to repeat our expectation for uptake by Kiwi households to the end of the build period in 2019 is in the range of 30 to 37 percent. I think I said mid-30s before. We have consulted with the providers; that was a key part of the discussions in the lead-up to the signing of the contracts. 
Clare Curran 
: Does she stand by the Government’s 2008 election promise to have 75 percent of New Zealand homes connected to ultra-fast broadband in 10 years; if so how is she going to achieve that given just 0.18 percent of Kiwi households are actually connected to date? 
Hon AMY ADAMS 
: The member clearly does not understand the difference between how many households are connected and our commitment which is to build a network available to 75 percent of New Zealanders. That was our commitment and that is exactly what we are on track to do. 
Clare Curran 
: I seek leave to table a speech given by the Prime Minister although he was the leader of the National Party then on 22 April 2008 in which he clearly—[ 
Interruption 
] 
Mr SPEAKER 
: Order! Order! This is a point of order. 
Clare Curran 
: —said: “Our initial goal is to ensure the accelerated roll-out of fibre right to the home of 75% of New Zealanders.” 
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. 
Clare Curran 
: I seek leave to table a newsletter by the Rt Hon Lockwood Smith dated September 2009 in which he said: “We want New Zealanders to have access to broadband at home work or school. National is delivering on its election promise to ensure ultra-fast broadband is available to 75 percent of New Zealanders over the next 10 years.” 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection—there is objection. 
Clare Curran 
: I seek leave to table the answer to an oral question by the Hon— 
Mr SPEAKER 
: No no. We do not table answers to questions. 
Clare Curran 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: Point of order Clare Curran. [ 
Interruption 
] Order! This habit of just tabling endless marginal documents is frustrating for the House but I recognise the member Clare Curran. 
Clare Curran 
: I raise a point of order Mr Speaker. 
Mr SPEAKER 
: Well please get on with it. 
Clare Curran 
: Thank you. I seek leave to table a report that states that— 
Mr SPEAKER 
: Order! No. Order! The source of the report? 
Clare Curran 
: It is a report compiled by the Parliamentary Library— 
Mr SPEAKER 
: Thank you. 
Clare Curran 
: —which clearly states that 2.4 percent of end-users are able to connect to ultra-fast broadband as of today— 
Mr SPEAKER 
: Leave is sought to table that document. [ 
Interruption 
] Order! That is sufficient description of the document. Leave is sought to table the document. Is there any objection? There is no objection. 









Document by leave laid on the Table of the House. 
Clare Curran 
: I seek leave to table a report of the Commerce Commission the transcript of the unbundled copper local loop benchmarking review conference which quotes on page 166 Chorus’ expectation that 20 to 25 percent of people will be receiving— 
Mr SPEAKER 
: Could we just check for the House whether it is page 166 or the whole document that the member is seeking to table? 
Clare Curran 
: I am seeking to table the whole document. 
Mr SPEAKER 
: It is the whole document. Leave is sought to table that document. Is there any objection? There is objection. 
Te Ururoa Flavell 
: In light of the percentages that the Minister offered the House earlier can she advise what percentage of marae kohanga reo kura wananga iwi runanga and Maori health and social service providers she expects to be connected to ultra-fast broadband within 10 years as a result of the negotiations with the Maori Party? 
Hon AMY ADAMS 
: Given the breadth of possible users that could fall within that definition I am not in a position to give an exact percentage but I can tell the member that all Maori health services and schools within the roll-out areas will have access by the end of 2015. The Government’s Rural Broadband Initiative programme will provide improved broadband services to Maori living in rural communities and thanks to our work with the Maori Party we have set up Nga Pu Waea who are focused on maximising the ability of Maori to connect to and benefit from the broadband roll-out. 
Natural Health Products Regulation—Natural Health and Supplementary Products Bill 
10. 
SHANE ARDERN (National—Taranaki - King Country) 
 to the  
Minister of Health 
: What progress is the Government making on improving the regulation of natural health products? 
Hon TONY RYALL (Minister of Health) 
: 
 The Natural Health and Supplementary Products Bill will regulate natural health products in New Zealand. It has been reported back with the support of all parties on the Health Committee. As part of its memorandum of understanding agreement with the Green Party the Government has agreed to involve the Green Party at every stage in the development of these regulations and I would like to acknowledge our work with it to date. I would also like to congratulate the Health Committee and also the Labour Party and the New Zealand First Party on their hard work on the bill which has struck a fair balance between sensible regulation and protection for consumers. 
Shane Ardern 
: How will the bill protect consumers of natural health products? 
Hon TONY RYALL 
: The Natural Health and Supplementary Products Bill will provide for low-cost low-bureaucracy regulation which will give the public greater confidence about the safety and integrity of natural health products. It will ensure greater transparency and accountability for the natural health market but will not penalise makers or buyers of low-risk products by introducing needlessly tough costs for bureaucracy. Further detailed regulatory work will be undertaken in consultation with the industry the Green Party and the public. I look forward to the passing of this legislation in the next year or so. 
Health Targets—Role of Health Personnel 
11. 
KEVIN HAGUE (Green) 
 to the  
Minister of Health 
: Does he regard the input and engagement of clinicians and the public to be critical to the achievement of his targets for DHB performance? 
Hon TONY RYALL (Minister of Health) 
: 
 Yes clinical leadership and engagement are fundamental to improving patient outcomes and achieving the Government’s six national health targets. For example with our more heart and diabetes checks target the ministry is supported by a clinical improvement group headed by Dr Paul Drury of Auckland and including eminent people such as Professor Jim Mann of Dunedin and we thank them for their contribution. 
Kevin Hague 
: What instructions or views has he expressed to anyone from the Southern District Health Board the Ministry of Health or the National Health Board concerning the disciplinary action being taken against Dr John Chambers an eminent emergency medicine specialist at Dunedin Hospital for publicly expressing a dissenting professional view about how best to achieve his target for emergency department waiting times? 
Hon TONY RYALL 
: I am aware of those matters. The chairman of the board Mr Butterfield has raised those with me and I have said to them that that is really a matter that they as a board have to deal with. 
Kevin Hague 
: Why has he used his influence to pressure the Southern District Health Board to take disciplinary action against Dr Chambers through his direct interaction with National Health Board chief adviser Yvonne Bruorton? 
Hon TONY RYALL 
: I wonder whether the member could repeat his question? 
Kevin Hague 
: Certainly. Why has he used his influence to pressure the Southern District Health Board to take disciplinary action against Dr Chambers through his direct interaction with National Health Board chief adviser Yvonne Bruorton? 
Hon TONY RYALL 
: I do not know what the member is talking about. What I have to say is that I have had an opportunity to discuss that with the chairman have made it clear to him that it is a responsibility for the board but have also made it clear to them that there are major issues in that emergency department that do need to be dealt with. 
Kevin Hague 
: Is he prepared in light of that answer to say publicly now to the Southern District Health Board the Ministry of Health and the National Health Board that any instruction concerning Dr Chambers that they have inferred from his comments should be disregarded? 
Hon TONY RYALL 
: All employment matters are the responsibility of the district health board. I would certainly not want anyone to ignore any views that I have given about the importance of improving the emergency department performance in Dunedin but I do not think the member is really on the right track if he is suggesting that I have told everyone what they should be doing on their employment relations. 
Kevin Hague 
: I raise a point of order Mr Speaker. The supplementary question gave the Minister the opportunity to let those entities know that they ought to disregard any inferred instruction if indeed they had perceived one. The Minister has not really addressed that in his remarks. 
Mr SPEAKER 
: But he has disputed that he made comments that could be inferred that way and I cannot ask him to answer it differently. That is the way he has answered the question and I do not think I can ask him to answer it in a different manner. 
Kevin Hague 
: I seek leave to table a portion of the Cabinet Manual relating to Ministers— 
Mr SPEAKER 
: No no. Order! We do not table bits of the Cabinet Manual. 
Schools—Funding 
12. 
TRACEY MARTIN (NZ First) 
 to the  
Minister of Education 
: Is she satisfied with the way schools are funded? 
Hon CRAIG FOSS (Associate Minister of Education) 
 on behalf of the Minister of Education: Yes. The National Government has invested $9.6 billion into Vote Education this year—the highest amount ever—but of course there is always room for improvement. 
Tracey Martin 
: Can the Minister assure the public that all New Zealand schools will be funded on a fair and equitable basis and that the $3.8 million in State support received by Wanganui Collegiate School is consistent with this policy; if not why not? 
Hon CRAIG FOSS 
: Yes. 
Tracey Martin 
: Will the iconic status for funding as bestowed by the Minister in her press release of 2 November on Wanganui Collegiate School due to its age also apply to Duvauchelle School which was established 152 years ago Burnham School which was established 125 years ago and other similar schools cited for closure in Christchurch; if not why not? 
Hon CRAIG FOSS 
: The primary question does not go down to any specifics. Those specifics will actually have to be addressed in writing. I am sure the Minister will answer those when she can. 
Tracey Martin 
: I raise a point of order Mr Speaker. I am sorry perhaps you could assist me. The original question—the primary question—asked whether the Minister was satisfied with the way schools are funded. I am asking whether the iconic status for funding which the Minister addressed in a National Party press release— 
Mr SPEAKER 
: Order! The member though asked about three specific schools in relation to that. One was Duvauchelle. Forgive me but I cannot recollect the other two. The Minister indicated in his answer that he does not have the detailed information on those schools. That is not unreasonable given the breadth of the primary question. 
Urgent Debates Declined 
Unemployment—Current Rate 
Mr SPEAKER 
: Honourable members I have received a letter from Jacinda Ardern seeking to debate under Standing Order 386 the failure of the Government to tackle rising unemployment as evidenced by this morning’s household labour force survey results which show unemployment surging to 7.3 percent. The urgent debate procedure is a means of debating matters that have occurred and of holding the Government accountable for its actions. The member in her application has not identified an action on the part of the Government that constitutes a particular case of recent occurrence. [ 
Interruption 
] Order! The accumulation of information with regard to an issue is not of itself sufficient. For there to be a particular case of recent occurrence there must be either a new situation of importance or a new development in an existing situation of sufficient importance in itself to warrant a debate being held. A proposal to discuss a continuing problem such as unemployment is not one contemplated by Standing Order 386. The application is therefore declined. 
Climate Change Response (Emissions Trading and Other Matters) Amendment Bill 
Third Reading 
Hon TIM GROSER (Minister for Climate Change Issues) 
: 
 I move  
That the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill be now read a third time 
. I want to make some formal comments about the process and then end with some more personal comments about some of the issues that have been raised in debate over what has been almost a 2-year process of consultation since the Hon David Caygill was appointed to start the process. As I said this does reflect a long and comprehensive review. It generated significant public debate and I do want to thank all of those who have participated and engaged constructively with the review and the subsequent amendment. I also want to acknowledge the excellent work and quality advice provided by New Zealand officials. I thank the Hon John Banks and the Hon Peter Dunne for their support of and contributions to the bill. 
It began as I said in December 2010 with the appointment of the Hon David Caygill to chair an independent panel. That panel received 162 submissions on its issues paper and presented its final report to my predecessor in June 2011. In response to this report the Government outlined proposed amendments to the emissions trading scheme in April 2012 and following a number of general meetings and hui around the country it received 359 submissions from the public. Following on from the first reading the Finance and Expenditure Committee received 758 written submissions from interested groups and individuals. The select committee heard in person from 73 submitters from amongst those who wished to be heard. The committee reported back to the House on 17 October this year and the bill has now had its second reading and has passed through the Committee of the whole House. 
Overall I am pleased that following this long and comprehensive process the bill meets the Government’s three objectives for the scheme. First the amendments improve the operation and administration of the emissions trading scheme and I thank the select committee for its contribution to recommending changes to the bill. The changes that it has introduced have brought more flexibility into the emissions trading scheme specifically relating to the exportability of forestry units a levy rate for synthetic greenhouse gases and eligibility criteria for offsetting; secondly they have provided flexibility to cater for various potential international outcomes in the period from 2013 to 2020; and thirdly they are supporting the Government’s economic growth priorities more effectively. 
I appreciate that some sectors looking to sell carbon credits would like to see a higher carbon price to incentivise greater participation. I will make some observations on that in a moment. However given the global climate in terms of the international economy in this case the Government had to make some tough decisions to not artificially inflate the short-term cost of the emissions trading scheme to households and businesses. 
Let me pass now to some more personal comments on this as I say extraordinarily protracted debate in the country that has taken almost 2 years to conclude and to reach this point where we are today for the third reading. I think what has actually confused much of the debate is that the final stages of this very long drawn-out process have coincided with an extraordinarily low international carbon price. Let me make this very clear: in my view our Cabinet might well have taken a different set of decisions if we had seriously believed the international price would for ever remain at this extremely depressed level. But actually what this debate has always been about—and I do know there is at least one member in the Opposition and I will not mention who who fully understands this point but for political reasons has chosen to conflate the two issues—is the structure of New Zealand policy. It is not a debate about the international price. We have inherited the broad structure from the previous Government and after a lot of internal debate which is all on the public record this Government decided to carry through the structure but take off some of the speed at which it is going down what I call the climate change highway. Why? Because we campaigned quite explicitly on the basis of the formula that we wanted New Zealand to pay its fair share but not to lead the world. 
Much of the debate that I heard in Committee and have heard around New Zealand has really carried that debate on from the point of view of the election campaign. 
Hon David Cunliffe 
: It’s a sell-out. 
Hon TIM GROSER 
: It is perfectly legitimate for Mr Cunliffe or anyone else to continue to argue the alternative proposition—that we want to lead the world—but that is not the position that we have taken and it is not the position that I think is the right position for New Zealand in trying to establish a more robust economy and trying to compete in a very very difficult economic environment and to not pass costs on to households and businesses. I think the fact of the low carbon price has confused much of the debate amongst some of our stakeholders but this I am certain will not pertain. What this debate is about is aligning New Zealand in a slow progressive way to the world price. What happens to the world price is very largely outside our control. 
There is a second—actually also unrelated—aspect around the environmental integrity of some of the units that are being imported. Here actually on a personal basis I have great sympathy with those who are expressing concerns around this issue. The Government previously moved against some units that were associated with some extremely—let me use ordinary slang—dodgy activities going on around hydrofluorocarbons around the world which have a global warming potential of 23000—from memory—times that of carbon dioxide and some utterly perverse outcomes seem to be possible. I give full credit to my predecessor for banning the importation of those units once he had received technical advice. Because I am personally very sympathetic to this concern about the environmental integrity of units I have also recently asked for further technical advice given heightened concerns around some other units. I will await that technical advice and if that technical advice suggests that there is good reason to ban it then that is the position I will be recommending to Cabinet and no doubt I will consult stakeholders to make sure there is not an alternative view. On this side of the House we actually share that concern and we have demonstrated already a readiness to move on that. 
It is very important to the integrity of the scheme because there still are climate change deniers out there in this country—absolutely. I am not one of them but they are out there and nothing will undermine support for a response on climate change more than this being revealed as a scam that may in fact increase emissions if done the wrong way. But the key point I am making is that this is a scheme about a structure of a policy for the long term. The future Government of New Zealand whoever that might be in 2015 will have an opportunity to look at the settings but we now have got a stable policy framework. 
The second broad observation I want to note is around the issue of this leading the world and how you would actually measure this. Well I mean obviously this is not a scientific matter but the true fact of the matter is that only Europe Australia and New Zealand out of all the regions of the world have got a policy in place that tries to address a comprehensive price on carbon—only Europe Australia and New Zealand. We may be joined in 2015 by Korea but it should be recalled that Korea’s scheme has 95 percent free allocation for all energy-exposed and all trade-exposed industries and has no statement about what will happen in 2020 and after that. So at the moment it is only Europe Australia and New Zealand. Yes there are promising pilot plants being talked about in China. Yes there is a regional scheme in certain states of North America the Regional Greenhouse Gas Initiative rather interestingly referred to as a ReGGIe but this scheme is in serious trouble. There are serious legal challenges and the price of carbon has fallen through the floor. So when people talk about this it is really important to remember this cliché about distinguishing between talking the talk and walking the walk. 
Finally let me conclude with agriculture. There is not a country in the world that has put a price on biological emissions. We do put a price on processed agriculture but we do not put a price on biological emissions and that is a decision that the Government—whoever forms the Government in 2015—will take. What we have done is require the compulsory reporting of biological emissions at the point of obligation of the processor level and we will work with stakeholders to bring it back to this but this is ahead of us. Finally although I would like to expand on this Fonterra—the biggest dairy exporting company in the world. Really the Green Party in particular should reflect on where Fonterra is going—20 percent reduction in carbon emissions is its target by 2020. By 2014 it will not pick up any milk from any of its suppliers if they have not got a nitrogen plan in place. This is a company that is ahead of every dairy company in the world on sustainability and it is about time people started looking at the facts. I commend this bill to the House for its adoption. 
CHARLES CHAUVEL (Labour) 
: 
 I was reading an article from the  
Independent 
 that was published on Monday— 
David Bennett 
: On an aeroplane—don’t try and make it look like you’ve thought about it. 
CHARLES CHAUVEL 
: I know Mr Bennett does not like to read but it is actually quite a useful thing to do from time to time if we want to know what is happening in the world. If he wants to follow the lead of the previous speaker Tim Groser and lay some sort of claim on behalf of his party to be doing something about this issue in a credible way he might like to do some reading as well at some point. 
The  
Independent 
 tells us that the world is destined for “dangerous climate change this century—with global temperatures possibly rising by as much as 6C—because of the failure of governments to find alternatives to fossil fuels”—and this is all contained in a recent report not from some group that this Government might like to try to malign as interested or fringe but from a mainstream consultancy the accountancy giant PricewaterhouseCoopers. What PricewaterhouseCoopers concluded was this: “it will now be almost impossible to keep the increase in global average temperatures up to 2100 within the 2C target that scientists believe might avert dangerous and unpredictable climate change … An analysis of how fast the major world economies are reducing their emissions of carbon dioxide from fossil fuels suggests that it may already be too late to stay within the 2C target that was set by the UN’s Intergovernmental Panel on Climate Change”. This was a key finding of the PricewaterhouseCoopers study. In order to try to get within that target the global economy would have to reach what it described as a “decarbonisation” rate of at least 5 percent a year for the next 40 years and obviously we have not seen anything like that happen since records began to be kept at the end of the Second World War. 
Even if we doubled the current rate with which we are dealing with this concept of decarbonisation there would still be “emissions consistent with 6C of warming by the end of the century. To give ourselves a more than 50 per cent chance of avoiding 2C will require a sixfold improvement in our rate of decarbonisation”. So we might as well just start planning for a warmer world. That is the conclusion from PricewaterhouseCoopers—it is too late. It says this: “This isn’t shock tactics it’s simple maths. We’re heading into uncharted territory for the scale of transformation and technological innovations required. Whatever the scenario or response business as usual is not an option.” 
What is the response from the New Zealand Government to this phenomenon? Well we just heard it: “We do not want to be leaders in this area.” If only that were just the simple truth. The Government does not want to do anything of practical effect in this area. Not only does it not want to do anything of practical effect but also it wants to hide and obscure the effect of what is being done. 
 I was astounded when I began to read the select committee papers relating to this bill the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill to see the extent to which Ministers and officials under the instruction of those Ministers have been seeking to obscure the truth of what is going on now. What I am sad we did not hear from the current Minister but I am hoping we might hear some enlightenment from Dr Nick Smith or other speakers is this: why is the Government seeking for example to exclude emissions trading scheme units from being valued in the Crown’s financial statements? The translation of that is that Ministers are asking whether local carbon credits given away by the Government as corporate welfare and compensation should even be shown as a cost to the taxpayer and whether the taxpayer who is paying for these things should even be allowed to know first that they are doing it and second what it is costing them. This Government has systematically suppressed detail on the cost of the emissions trading scheme. 
Hon Dr Nick Smith 
: Not true. 
CHARLES CHAUVEL 
: It absolutely has Dr Smith. It has done so so that this very complex scheme is harder still to monitor. It is absolutely breathtaking in my view that a Minister would ask officials to consider not valuing something that when given away means the recipient has to pay no tax. Such gifts must be recorded as costs to the taxpayer. This is in line with simple generally agreed accounting practice. It is in line with the sort of openness and accountability that we expect from Governments and that actually the law requires because we have a Public Finance Act in this country and we do require transparency from Government. If we do allow this sort of obscurity to take hold then it will be as was predicted longer than the 2-year time frame that the Minister seems to know about. This debate has been going on for a lot longer than that. 
As was predicted at the time that the Government originally introduced its so-called moderation of the scheme this is a recipe for corruption because if the public cannot know the value of the subsidies it is paying through the now perverted and ineffective emissions trading scheme that we will see emerging out of the other side of this legislation then we will have a major problem with transparency in this country. 
The chairperson of the Finance and Expenditure Committee will no doubt speak later in the debate. I hope he takes a close interest in this issue because we will all be looking to him to ensure that this does not happen. Yet we have a Minister responsible for this issue who wants to obscure the facts and who wants to make it far more difficult for us to know what the cost of this subsidy scheme is. 
On the question of transparency I think the most disappointing thing for me out of the debate over the last week or so in the House was the voting down of one of the Supplementary Order Papers put up by my colleague Moana Mackey. I said in an earlier contribution that one of the things I was heartened by in earlier parts of this debate years ago was Dr Smith’s professed commitment to transparency. But this commitment seems to have absolutely vanished because National voted against this Supplementary Order Paper 146. All it would have done was require the Environmental Protection Authority to publish annually the amount that industries charge their customers for carbon—that is all. It would have allowed the public to see through some of the opacity that this Government has now introduced around what is—thanks to the changes it has made—a massive transfer of wealth from taxpayers to polluters. But the public is not going to get that chance because National and its allies Mr Banks and Mr Dunne voted this amendment down. 
There is no evidence that the benefits of either the low carbon price which the Minister mentioned or the Government’s so-called moderation of the scheme are being passed on to consumers. They are being kept as profits by these polluters. I was astounded in question time in the last session of Parliament when Simon Bridges as the Acting Minister for Climate Change Issues was questioned in the House on what evidence he had that prices were being brought down by Government policy in this area. The only answer he could come up with was that his constituents told him so. 
Evidence to the select committee which all the members who sat on that committee know about showed that through fuel and electricity prices consumers are still being charged a carbon price of between $15 and $25. 
Hon Dr Nick Smith 
: No evidence at all. 
CHARLES CHAUVEL 
: Absolutely. That is absolutely the evidence. And we all know that the actual carbon price is about $1 so where are those profits going? And if I am wrong Dr Smith why is the Government so scared to be transparent to introduce a requirement that the Environmental Protection Authority have transparency around whether or not there is any pass-on of a reduction or whether these profits are being retained by the corporates? 
To give you an example Contact Energy has yet to review its levies introduced in 2010 which add to consumers’ power bills 0.77c per kilowatt hour for electricity and 0.27c for gas. It even wrote in its 2012 annual report that additional savings from carbon unit costs helped cause its improved profits in the last year. This is what the emissions trading scheme has become under this Government—an unjustifiable mess that cannot be penetrated as far as those who wish to see what is really going on here. It is simply corporate welfare and an opportunity for corruption and we must be very very worried about it. We must be very worried indeed. The tragedy of this bill which we are now reading a third time is that it will do so much to make a bad situation even worse. 
TODD McCLAY (National—Rotorua) 
: 
 This Climate Change Response (Emissions Trading and Other Matters) Amendment Bill is important legislation for New Zealand and it is New Zealand doing its part as part of international climate change action. The great travesty is in the last speech from that last speaker Charles Chauvel. It was full of bunkum across the board. You see New Zealand is not leading nor are we lagging behind other countries but we are doing our fair share. We are adding integrity to a New Zealand system and futureproofing it. Members opposite are saying that there is a great challenge at the moment because of the price of carbon. Well last year it was sitting at around $20 and before that $25. As the Minister for Climate Change Issues has said the price during the course of this year has gone down significantly. 
This piece of legislation is not about the price today; it is about making sure that the Government current and future has the tools to make sure that our emissions trading scheme can be robust so that New Zealand is doing its fair share—not lagging behind and certainly not out the front of other countries. I say to the Minister who spoke earlier Tim Groser that this is a pragmatic approach to climate change. The amendments to our emissions trading scheme will make it future-protected while supporting jobs in this country and not increasing costs on New Zealanders who are vulnerable. 
The last speaker in the debate Charles Chauvel said that there are companies in New Zealand that are profiteering because they are charging much more for carbon than the actual cost today. Well it will interest that speaker to know that we asked officials to go and get us proof of this and they said they could not find any. Indeed I have done a little bit of research myself and I have spoken widely outside of this. Just a couple of weeks ago I had a chance to talk to a carbon farming company which creates credits through growing trees leasing land and buying land and planting on it and then it enters into contracts with New Zealand companies to provide them with those credits. Although the company is saying at the moment that it wants the cost of the carbon units in the New Zealand scheme to be higher it also admits that in some of its contracts—forward contracts it had entered into—it is getting paid $18 to $19 for those. So it is not a simple case of saying the cost of carbon in New Zealand is low and therefore it can be passed on straight away. The reason for that is that climate change is extremely complicated and the New Zealand emissions trading scheme is extremely complicated at the same time. 
What this legislation does is ensure that the tools are there for a robust system. I want to mention a couple of those tools. The first one is the regulation power to deal with the quality of international units. Already this Government has banned some international units that we viewed as not being environmentally robust. Research was done some good scientific basis was found and they were excluded. So already we have taken action in this area because we are concerned about the veracity of the New Zealand scheme. Secondly there is a regulation-making power in the legislation over the quantity of international units. It is already possible under this legislation for the Government to ban a quantity of international units that enters into our scheme. Indeed when these international units are due to expire internationally in the next couple of years in the absence of any second commitment period—because there is no second commitment period on the table at the moment because the Kyoto Protocol is running out—it means that there is no great certainty that they will be available to the New Zealand scheme but the Government has the tool to deal with it. Also we have set up an auction scheme under this legislation to allow certainty for the Government industry and households. 
Again I challenge Opposition members. If they think that this has been done purely because we want the price to stay where it is today rather than be a fair market price then they are fooling themselves. It is not about the challenges on a day-to-day basis that we have around us. It is about what is happening for the scheme overall and making sure the tools are there. We have allowed the offset of pre-1990 forests to allow better productivity on land and that is important for jobs and our economy. But at the same time we have said to others that if they want to remain in the scheme and not offset their land they too can get credits for that. And finally there is a levy rate for synthetic gases that can be adjusted in the future—not set in stone but adjusted in the future—as it needs to be. Those are tools for a robust emissions trading scheme that are in place for the Government to use and act upon. 
What is needed here is international momentum to deal with climate change. New Zealand certainly has a role to play and this legislation is our part of that. But for the sake of jobs and income in New Zealand we must do only our part and all countries of the world must reach agreement. It does not matter actually for the sake of the world’s climate what we do in New Zealand; unless other large developing countries also play their part then the world’s environment will continue in the direction it has been going. 
I want to touch on two last points before I finish my intervention and they concern agriculture. We have heard from the Opposition that unless agriculture is put into this scheme consumers of the world will turn their backs on New Zealand and New Zealand produce. That is absolute rubbish because there is no country in the world that has included agriculture. So I challenge Opposition members to tell us where these consumers are going to go to see any country taking their concerns around climate change more seriously. Just in the last week or so the  
Daily Mail 
 in the United Kingdom printed this: “Buy New Zealand lamb to save the planet”. The UN has come out with a report that says the carbon footprint of New Zealand agricultural produce is lower than all produce in the UK except onions. So we are doing our part. Our farmers are doing our part and the United Nations is recognising that. 
To finish here I say that these changes will give increased certainty to participants by extending the way the scheme fundamentally operates until such time as comprehensive agreement is reached on a global scale. The Government has indicated that the emissions trading scheme should be reviewed in 2015 following the development of a new global agreement. I say to the members opposite that they should be supporting this legislation supporting new businesses and focusing on international agreement so that all countries can do their fair share rather than saying we should be doing more than others and putting jobs and industry at risk to the detriment of our economy. I commend this bill to the House. 
Hon RUTH DYSON (Labour—Port Hills) 
: 
 It was very disappointing to hear the contribution from the member Todd McClay who has just resumed his seat because he is the member of Parliament representing Rotorua which is an area surrounded by forests and forestry jobs. This bill above all others will have a significant impact on jobs in that member’s electorate. On this day when we have heard about the highest rate of unemployment for years the member stands up and says not one thing in defence or support of the forestry workers who are not down the other end of the country and not on the other side of the island but in his very electorate. That member knows because time after time after time our select committees have heard it from the forestry industry that unless there is a significant change in the Government’s attitude the forestry industry would be in trouble. What is it about good jobs decent advice and pleading from the forestry industry that that member did not understand? I think actually it is all three of those points. He clearly did not take any of it on board and has the ignorance and arrogance to stand up in this House after getting his riding instructions from his Minister—whom presumably he wants to sit alongside in Cabinet—and not say a single thing in defence of the workers in his electorate. 
I think—and perhaps it is a bit old-fashioned as the member for Rotorua thinks—that the security of a decent job is really important to every human being. I think that when we are passing legislation and we have had leaders in the forestry industry coming to Parliament and saying: “This is wrong; here is how to fix it.” Parliament’s response should have been to listen to them. 
 The other point the member made that I was fascinated by was that he stressed so adamantly that New Zealand should certainly not be leading in this area. The member seems ashamed to think of New Zealand as a country that could lead the world. We have in other things. We led the world in the right for women to have the vote. We led the world far more recently in being nuclear-free having nuclear-free areas designated. I do not know why we would not want to at least struggle to catch up with the world actually on having a focus on clean green and clever technology and having secure employment as a result. My colleague from Dunedin North Dr David Clark has just commented that perhaps the only thing we lead the world in is the current account deficit and I am not sure that that is something that we would be particularly proud of but it is an accurate comment. 
So we get to the end of this debate on the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill after a disgracefully rushed process. Not only did the National Government not listen to the clear submissions that were given to the Finance and Expenditure Committee not just on this occasion but other times as well but it has used a disgracefully rushed process to the point that members of the select committee often did not get advice on particular matters they were considering in time to be informed before they made a decision. The chairman of the committee has got his riding instructions; he has been told what to do. Who cares about listening to evidence facts or information? Clearly it is not the current member of Parliament for Rotorua. 
Instead of a decent length of time—instead of say normally having 5 or 6 months for legislation to go through Parliament—this bill has been squashed into a 7-week time frame. This is not a minor matter. This is a significant important and complex matter. It is one that is now directly threatening jobs employment in our country in the member’s electorate of Rotorua and in the electorate of another member of the committee actually—John Hayes who I am sure will be taking a call. I hope he speaks in defence of the forestry workers in his electorate because their submissions their pleading and their understanding of the impact of this bill was significant. So John Hayes and Todd McClay amongst the other members of the National Government whose electorates will be directly and negatively impacted by this legislation should stand up and speak in defence of their workers who are now at risk of losing their jobs. 
The introduction to this bill was really an example of amazing spin on the Government’s behalf. It should come clean in this third reading stage and say that what the bill does is just significantly weaken the emissions trading scheme. I do not know when the Hon Dr Nick Smith might be getting back into Cabinet but I certainly hope it is soon. Even though Dr Smith would not see me as a strong supporter of his I am desperate to have somebody in the National Cabinet who knows something about these issues who actually cares about the environment and conservation and who can charge through that bulldozer machine of Gerry Brownlee and Steven Joyce who are clearly running the whole show at the moment while the rest of Cabinet just sits around and agrees. I know that it may not have made Dr Smith popular among some of his colleagues in the past but at least he had a clear conscience on issues of principle in conservation and the environment and at least he understood the emissions trading scheme. What we have now is a total lack of any understanding of the scheme complete ignorance and a bulldozer approach. What we are ending up with is basically as my colleague Charles Chauvel so clearly spelt out in his excellent contribution to this debate corporate welfare—something that I thought the National Government would be pretty embarrassed about. 
This bill is fundamentally flawed. Not only does it not do anything to progress New Zealand’s position in terms of gross greenhouse gas emissions but it actually moves us backwards in that regard and that should be of dismay to this Parliament rather than something that the National Government will push through with a very slim majority. One of the votes that it will be relying on is from another member of this House who will have forestry workers in his electorate and who frankly has had the experience through his time in Parliament to understand this legislation and therefore in my view should not be casting his vote in support of it and that is the Hon Peter Dunne. He knows that his legacy by putting his vote against the Ayes lobby on this bill will be job losses which no member of Parliament should want to stand up for and a massive carbon deficit for future generations. I do not understand how somebody like the Hon Peter Dunne who has had experience in this area could put his name alongside this bill and I certainly hope that before the end of this debate he comes to his senses and votes against it. 
Labour sought to amend a bad bill to make it better. We had four Supplementary Order Papers: one was to restrict the international units one was to follow the recommendations of the review panel in regard to the transition period one was to give consumers the ability to know when they are being overcharged for carbon and the final one was to ensure that agriculture had a fixed date to enter the scheme. That certainty is actually more important to the industry than the National Government gives it credit for. All of those Supplementary Order Papers would have made a bad bill better. It would have remained a bad bill but it would have been significantly improved. The National Government for blind ideology—that was the only reason I could understand—voted down those four Supplementary Order Papers. 
We have now ended up with a scheme that is taking us in the opposite direction to that which most New Zealanders would be proud to have their name attached to. It is a scheme that is being led by a Minister who clearly has not got to grips with it and a select committee chair who does not stand up for what is good for his own electorate or the rest of the country and does not listen to submissions and who is prepared to be pushed around in promotion of his own career. 
This is one of the biggest disappointments amongst many from the National Party and I certainly hope that its very slim majority on these issues—significantly slimmer because the Maori Party listened to the voices of the submitters throughout the process and is I understand going to vote against the bill—changes before the end of this debate. 
Dr KENNEDY GRAHAM (Green) 
: 
 The New Zealand Parliament is about to enact an iniquity. With a bare minimum of numbers it will amend the emissions trading scheme and guarantee dangerous climate change for our children. There can be no issue of greater moment before this House than legislation designed to avert dangerous climate change. Climate change is not just another problem. It is about the future of the planet the future of life on earth the future of the human race the future of our children and our grandchildren. 
Anybody in this House—anyone anywhere—who belittles the matter of climate change whether they are a sceptic of the science or not is committing the greatest moral iniquity of all time for they are playing with fire assigning the future of the planet to the vagaries of chance. They are gambling with the lives of our children. They are taunting the gods playing roulette with the biosphere of the planet and they know not what they are doing. They who conceive and give birth to their children they who labour so long and lovingly succour their infants protect and clothe and feed them ensure their good health provide for their education enjoy fulfilment as their children grow to adulthood and produce grandchildren with the cycle of life beginning all over again—who among us can provide such human devotion to the present and such inhuman disregard for the future? For that is what we are doing. That is what we are doing. In our manic devotion to the illusory security in the present we erode the security—the real security—of the future. 
Where is the concept of guardianship in the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill—guardianship to our children to the earth that nourishes them? It is a test of our intelligence—our collective intelligence as a species as a global community as a nation with pride. In each case we are failing the test. 
I level the charge of ecocide at the leadership of this Government. I charge John Key and Tim Groser with moral ecocide: the conscious despoliation of the planet’s environment its carrying capacity that sustains life on earth. Ecocide is a legal crime in some countries. It is not yet in New Zealand or in international law but it is a political crime of the highest moral order. Those who commit ecocide in our contemporary global age are guilty of the act of omission to the point of criminal negligence breaching an obligation erga omnes violating the sacred trust in upholding the values and action that sustain civilisation. I charge Mr Key and Mr Groser both honourable men with gross negligence in failing to take due care of the New Zealand people in combating climate change. I charge them with breaching their fiduciary duty to humankind. 
This amendment bill is described as a balancing act. It balances our international reputation doing our fair share with New Zealand’s national interests in economic recovery and indeed future growth. It balances they say predictability for the sake of business investment at home with flexibility in international negotiations abroad. In calibrating such an exquisite balancing act the Government loses the plot. The aim is not to position ourselves on the deck of the  
Titanic 
; it is to turn the ship round. The goal is not to prevaricate in the present; it is to secure the future. The task is not to soften the pain for the current generation; it is to ensure the survival of the next. The leaders of this Government have lost sight of the goal. They are committing us to purgatory and thence to hell. Purgatory is the next decade hell is the decade after. I charge them with the moral crime of ecocide. 
As we watch the polar ice melt up in the Arctic we defer entry of agriculture in the New Zealand emissions trading scheme. As we hear warnings about the thawing of the permafrost in the northern tundra with the potential release of methane we continue with our one-for-two surrender obligations. As we anticipate ice melt in Greenland and Antarctica with a potential long-term sea level rise of 10 metres or more we retain regulatory settings that appear wilfully detrimental to foresters. 
Do we realise the effect that climate change is already having on our monsoon cycles in the tropics on the warming and acidifying oceans on the boreal forests with their searing summer fires? Do we know down here in Aotearoa about the global water and food shortage that is coinciding with the energy shortage? Are we aware of the epidemic diseases creeping in? Do we care about the decline of the frog population and the collapse of the bee colonies around the world? Are we mad? Are we so blindingly stupid that we do not see what we are doing here? Are we so craven that we cave in to the nearest latest commercial demand put upon us? Are we so intellectually weak that we can postpone action we know to be essential now because the consequence is not physically before us until it is too late? 
What have we done to deserve such leadership? What are we to say to our children when we go home tonight? We weakened the New Zealand emissions trading scheme today because we wished to retain flexibility in uncertain times because we were not prepared to place our trade-exposed firms at risk because we have signed an agreement with a coalition partner not to strengthen the scheme because we do not give a damn about the future because I choose not to look you in the eye. I charge Mr Key and Mr Groser with the moral crime of ecocide. 
I recalled in the first reading of this bill the global emissions gap that the UN has calculated. We have been unable over 20 years to achieve a binding global agreement to reduce global emissions so we content ourselves with voluntary pledges except everybody knows—they knew then and they know now—that voluntary pledges will never work. None of this surfaced in the deliberations of the Finance and Expenditure Committee. The report ignores the global climate change that is occurring around us as we debate. It focuses on the mechanics of an already dilapidated vehicle called the New Zealand emissions trading scheme. Well it is well named because what this scheme does is it trades in emissions. It does not reduce them; it trades in them. It may witness their reduction or it may not. Either way it is ancillary to the intent of the scheme which is to trade except we put it on credit for the kids to pay off with their lives because the global economy will be in such disarray from a thing called climate change turning into climate chaos. 
We are proving to be a very stupid species and we in New Zealand are doing our fair share. I charge the leaders of this Government with the moral crime of ecocide. I trust that in due course they stand accountable before the children of this world the children of John Key the grandchildren of Tim Groser and mine. The Green Party in Government will be 100 percent honest 100 percent accurate and 100 percent defiant in the face of increasing odds in this dramatic battle to avert dangerous climate change. We shall oppose this bill with all our strength. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Just before I call the next member can I advise members that I did not want to interrupt Dr Graham because I felt that he was making a very passionate speech about something he believes in very sincerely but I wish to advise members that there are 409 Standing Orders that grant us good grace and good order and it is an opportunity in this House for all members to make a commanding contribution. I would urge all members to play the ball and not the member. Remember that and we will preserve an excellent field for the full play of ideas. Thank you. 
Hon MAURICE WILLIAMSON (Minister for Building and Construction) 
: 
 I raise a point of order Mr Speaker. I wish to take issue with you. When a member gets up and accuses members of our side lays a charge of ecocide and you are asking us to sit here and tolerate that I find that offensive— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: No the member will be seated. I have asked members to restrain themselves. There were continual interjections. Under Speaker’s ruling 60/5 interjections are to be “rare and reasonable”—rare and reasonable. I have no problems with a robust debate. I think that is good for Parliament but interjections are to be rare and reasonable. What we have on the cross benches because people are in close proximity is actually interference with the microphone. Had the interjections been done from here—a different matter. I ask members just to understand that. 
Hon Dr NICK SMITH (National—Nelson) 
: 
 That speech from Kennedy Graham actually exposes the disservice that is done to the environmental movement by the Green Party. If we are to have a rational debate on these issues it is vitally important that we actually do stick to the facts. The claim is made of hell on earth in a decade. Actually the scientists predict that in a decade’s time global temperatures are likely—in a decade’s time—to be 0.3 of a degree higher than they currently are. Remembering that the temperature varies every day here in New Zealand which is a more mild climate by as much as 10 or 15 degrees it is a gross exaggeration to talk about hell on earth. Equally so with the completely over-the-top claims of ecocide and the like in the language that that member uses. 
Let us get down to earth and debate what this bill the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill is about. There are two important questions in this bill. The first is whether we should double the costs for manufacturers and for homeowners on 1 January next year to step up New Zealand’s climate change initiatives. The second question is whether we should include biological emissions in 6 weeks’ time in the New Zealand emissions trading scheme. We are a Government that campaigned on New Zealand doing its fair share. Is there any other country on 1 January that is going to double the costs of emissions trading on its core industries? Is there any country in the world Mr Kennedy Graham that is going to include biological emissions in its emissions trading scheme on 1 January next year? The answer is not only not one but there is not a single other country in the world that is even considering in the next 10 years including biological emissions in its trading scheme. 
This difficult issue of climate change is actually a balance between how much progress we wish to make as a nation in curbing our emissions down on that long-term challenge compared with what costs we are prepared to impose on our economy. I firstly would point out that a Ministry for the Environment report that was tabled in this Parliament last week showed that in contrast to the previous Government when emissions from New Zealand increased from 63 million tonnes a year up to 78 million tonnes per year in the 4 years of this Government emissions have come down. So my next challenge to Mr Graham is this: if the John Key - led Government in reducing emissions is guilty of ecocide with what would he charge the previous Helen Clark Government which the Green Party propped up and which did nothing in 8 years in this key area? 
But the further point I want to make is this. I have heard Labour and Green members repeatedly say—and not surprisingly with the job figures today of 7.3 percent unemployment—that this Government should be totally focused on jobs. Well can a member next say this: how will doubling the costs of the emissions trading scheme on every manufacturer in New Zealand on 1 January help protect jobs? How will doubling the costs of the emissions trading scheme for every manufacturer in New Zealand—and members opposite claim there is a crisis in manufacturing—help jobs? 
The second question I have got for them is this. Both the last Green member who spoke and Labour members repeatedly have said the biggest economic issue for New Zealand is its balance of payments. Well let us just ask what New Zealand’s biggest export industry is. It is primary industry. It is agriculture. Can I ask the question of how we increase exports by imposing additional costs on to that primary exporting industry? The answer is you do not. The answer is that this bill is balanced it is sensible and it is progressing our climate change policy consistent with the promises that National has made and that is why members on this side of the House are taking that sensible responsible view. W should progress this bill. 
ANDREW WILLIAMS (NZ First) 
: 
 I take a call on behalf of New Zealand First on the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. Once again New Zealand First reasserts that we oppose any emissions trading scheme of any nature. We know that any such schemes are just basically Ponzi schemes around the world for others to make money at New Zealand’s expense: at the expense of our corporations at the expense of our companies at the expense of our taxpayers and at the expense of the people—the men women and children—of New Zealand. Emissions trading schemes are all about other people getting rich from our money. New Zealand First does not support that. We do not want to see people in Chicago New York Frankfurt London and other places making money out of good taxes that are paid in New Zealand. 
What New Zealand First wants to see is proper attention to pollution and emissions within New Zealand and sorting out our own emissions problems within New Zealand and sorting out our own pollution problems within New Zealand. If some of the money that was being taken in terms of all these carbon credits and all these various other levies was actually applied here in New Zealand we certainly would see a far better outcome for our country for our companies and for our people rather than paying to some offshore scheme that has gone from over $25 per unit and is now scraping the barrel at something like $1 per unit for the carbon credit taxes. 
It is just shocking that New Zealand even got involved in such a scheme. I could see that many years ago. I could see this 4 or 5 years ago when we were first negotiating these things and I thought goodness gracious me we are going down this track again getting involved in some Ponzi global scheme to appease other people sitting in other countries. It started at $25 and lo and behold earlier this year it had dropped to $10 then it dropped to $5 and in recent weeks we are hearing it is trading as low as $1. Basically what a waste of time the whole scheme is. 
This serves to turn environmental protection into a carbon credit bank to make environmentalism a speculative business. It is issuing tradable credits and it is verging on a Ponzi scheme to give good money from some to pay for the wrongs of others. There are much better mechanisms for New Zealand than uncontrollable financial machinations such as emissions trading schemes. This will cost New Zealand more than $2 billion. An emissions trading scheme will cost New Zealand more than $2 billion—$2 billion that this country simply cannot afford. These funds should be retained in New Zealand in order to provide better funds to tackle our own pollution problems and emission problems here in this country and help to keep New Zealand “100% Pure New Zealand”. 
We should not be paying for somebody in China or India or some other country who is a bad polluter to get payments to rectify their problems. As we have seen so many times in the world figures New Zealand has something like 0.001 percent of total emissions in the world. Our total emissions in 1 year are less than 1 day of emissions in China. What impact would a little place like New Zealand have in that global environment when China in 1 day can produce more than we do in a whole year? Yet it is the likes of China India and other countries that will benefit from this scheme because they will receive the payments to try to reduce their pollution. So we are paying for other countries and other organisations to get rich while we—our taxpayers—get poorer. 
It is disturbing that we are ignoring things. Here in New Zealand I have written to the Associate Minister of Transport asking about emissions in terms of diesel emissions in our trucks and our buses. We have buses that go back as far as Euro 1 buses and Euro 2 buses and trucks as well that are still pouring a lot of diesel out here in this country yet we are not addressing issues such as that. There are technologies available to address our own emissions in this country but we ignore that. Letters that I have written to the Associate Minister basically come up with no solutions at all yet we pay into an emissions trading scheme. 
I would far rather see some of our good money going into sorting this out—and perhaps some of our older trucks our older fleet and our older buses being retrofitted to reduce our own emissions and our own pollution and our own pollution in the likes of Lambton Quay Queen Street or around Christchurch from our buses and trucks—than be paying into some scheme where some guy in New York or Chicago or London is going to get rich from our taxes. 
The emissions trading scheme does not decrease emissions; it just trades them and moves them around the economies that can afford to buy carbon credits. The emissions trading scheme was devised by this Government and it is unsustainable. It is nothing more than another tax on the people and production of New Zealand. New Zealand First is about proper solutions to solve our problems here within our country and not helping people in international markets to get richer. New Zealand First opposes this bill or any other bill that proposes any form of emissions trading scheme. 
DAVID BENNETT (National—Hamilton East) 
:  
The Climate Change Response (Emissions Trading and Other Matters) Amendment Bill which we are talking about today is in its final reading in this House. I think there are a couple of things that people listening should be aware of. The first is that the Labour Party and the Green Party want to bring agriculture into the emissions trading scheme. They oppose this bill for the reason that agriculture is not being brought in at this time. So they would attack our biggest export-earning industry with a carbon charge. This would be the only country in the world that would be attacking that industry with a carbon charge. And they would be doing it in a way that is going to at the same time create a growing economy! Go figure how that is going to work. That is the Labour-Green economic model which is rubbish. It is total rubbish. 
Those members come into this House high and mighty like some kind of false prophets that have had some ability sent to them to come and tell us that they are here to deliver the world from evil and failure and that. The real world is one where you have to pay your way. The Green members sit there enjoying this place flying on planes all around the country and travelling in cars all around the country not doing their bit. If they believe that New Zealand needs to do our bit why do they not do their bit? But no they want to have a first-class standard of living and they want somebody else to pay for it. They want to be able to turn their eyes away from it and say: “It never happened under my watch. I was perfect. I was innocent. I was cleaner than white.” Well look in the mirror and see what you actually do and look at the truth in your life. 
The Green Party and the Labour Party have a second fundamental thing that they want to do and that is that they want to set a carbon price. When they set that carbon price at $10—because that is the next stage of their argument: it is not just to deny agriculture; it is to set a carbon price—that will then lead to higher costs on New Zealand consumers. The very people those members purport to look after will be paying through the nose for their policies and that is not in the best interests for New Zealand going forward. 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 That was a short and interesting contribution from that member opposite David Bennett. Probably— 
Hon Members 
: Short. 
Dr DAVID CLARK 
: It was short say my colleagues. They are more than willing to agree with that statement. 
There is actually not much to say. I think that speech spoke for itself but I do want to take up some of the earlier points raised in the debate on this matter and in particular firstly some of the points raised by Andrew Williams who indicated that New Zealand First would not be supporting this bill the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. 
I was confused by some of his logic in his argument because some of it to me seemed to be an argument for supporting the bill and some of it was against. He was concerned about the cost to taxpayers of the international Kyoto agreement. We have signed up as a country to the agreement. Indeed Jenny Shipley signed up to it originally and it was ratified by Helen Clark. So we know that is something that has happened. 
The original emissions trading scheme that was brought into this Parliament was supported by that member’s party the New Zealand First Party. So New Zealand First supported it coming into legislation. If it is opposing the bill on the basis of the fact that it will now cost taxpayers more to meet those obligations then that I can understand because that is indeed the effect of the bill. The bill is designed to increase the subsidy to polluters to prolong the period in which polluters are not in the scheme and to make sure that polluters do not begin to meet the costs of their pollution thereby keeping industries trapped as they are today and without change—in effect discouraging businesses from making positive contributions in the climate change area. 
The bill as it was originally drafted was designed to encourage businesses to consider carefully their investment decisions when making decisions around future infrastructure and investments to ensure that they did not invest in carbon-intensive activities unless they thought they had a very real advantage internationally in that area and therefore could afford the offsets that would be required for whatever activity that might be. That might be for activities around mining and producing the materials necessary to make windmills which make a longer-term contribution or solar panels or whatever it is. There are reasons as we know that many of today’s activities that are regarded as amongst the dirtier activities are actually required in the shorter term to take our country forward. 
The scheme as it was designed was designed to ensure that those industries that were engaged in those things that had an environmental cost were encouraged to offset that cost and also to consider whether there would not be a better way of doing things. The changes proposed in this bill make that question a little less directly posed because the carbon price is effectively lowered with the two-for-one deal extended indefinitely by this Government. So already the Government had offered to pay for half of the pollution made by those industries that have not transitioned to a lower carbon solution. Now it is saying it will do that for ever and again is advantaging those businesses at the cost of taxpayers generally because of course it is the taxpayers—when the Government offers those subsidies to polluters—as a whole who end up paying for meeting our Kyoto obligations that the Government has signed up to. So it is effectively a scheme that is designed so that taxpayers pick up more of the bill. It seems I guess at least consistent with the kind of ill-thought-through legislation we have often seen this National Government bring to the House: legislation that increases costs on business and that means the taxpayer picks up the bill. 
 But I want to strongly suggest that it is foolish for the long-term future of this country. The original scheme was itself fairly modest. It set out expectations of a future carbon price and asked businesses to be making decisions and consumers to be making decisions that helped transfer New Zealand into a future lower carbon economy that would be competitive in the years to come and also obviously concerned with doing its fair share and its bit towards reducing emissions on our planet. 
We know and we acknowledge and the countries that signed up to Kyoto acknowledge that the world needs to move to a low-carbon future if there is going to be sustainable life on this planet. In order to do that we need mechanisms to achieve that. An emissions trading scheme is just one such mechanism. The Government signed up to the Kyoto obligation. It is not at this stage proposing to renege on its international obligations. It is not proposing that we pull out of the UN agreement we have signed. It has said: “We’ll meet the costs we’ll meet the whatever billion dollars it costs but we’re actually going to shove that on to the taxpayers. We’re not going to encourage businesses to change. We’re not going to provide the incentives. We’re going to provide the subsidies to not change. We’re going to encourage businesses to stay stagnant. We’re not going to encourage them to change and we’re certainly not going to reward those relatively that are making the positive change.” 
I think that is disappointing. I think that is very disappointing because this is a Government that talks a lot about business but often makes changes that are actually bad for business. Again this legislation actually increases the uncertainty for business. We know that businesses that face costs associated with their emissions are not always going to be happy about that. When I worked on the original legislation I remember talking to businesses of higher energy intensity. People who were their representatives told me: “Look we will squeal. We will squeal if you put a price on carbon. But we’ll squeal a lot louder if we don’t have some certainty around it if we don’t have a neat transition in.” 
What businesses really want is certainty for planning so they can make wise investment decisions that are in the interests of their business. The role of the Government is to make sure that those wise business investment decisions are aligned with the wider interests of society. What we see clearly in this bill is a Government that is reneging on its responsibility to align the wider interests of society with business interests. 
Let me give some specific examples. The transition phase—National expects to end the transition phase by putting a date back in using its review system. That creates regulatory uncertainty. In the agricultural sector the National Government intends that agriculture will enter at a date set by its review of the scheme. Again that is creating uncertainty. Businesses cannot plan in that environment. It will depend upon the international negotiations the Government of the day and a range of other factors. It is very hard to do business planning on that basis. So it is disappointing for business. 
It is particularly disappointing in the agricultural sector where the costs to be imposed were just 5 percent of pollution. Although it would have placed New Zealand dairy products at a premium place in the market because it would be shown that we were taking our international obligations seriously instead we have a situation where New Zealand is seen to be fading away from its international obligations. It has high per capita emissions and our international reputation is taking a battering. 
On top of that we have a situation where foresters are the losers. In this updated scheme we have a likelihood of forestry going downhill. There will be job losses. In the electorate of Mr McClay who chaired the Finance and Expenditure Committee we will have job losses in the forestry sector directly. Forestry is the real loser in the way in which this scheme suppresses the carbon price indefinitely. The amendments that were put up in the name of Moana Mackey included one very good amendment that would have seen some guarantee at least of some of the units having some value which would have advantaged the foresters but we saw there that that was defeated by the Government because it does not want a price signal in the market. Effectively it is saying it does not want a market solution. 
This Government seems determined to put all of the costs back on to the taxpayers and I think that is very disappointing—very disappointing. I personally believe that markets are often a very good solution. If they are properly regulated they make excellent servants; they just make terrible masters. When we let the markets rule when they are clearly errant—when they are not working—we allow them to make us their servants. This is disappointing because we as taxpayers are carrying the can for this bad legislation. That is why the Labour Party opposes this legislation forcefully and regards the passage of this legislation as a great disappointment to New Zealanders and an embarrassment really for this Parliament. 
MAGGIE BARRY (National—North Shore) 
: 
 I rise to speak to the final reading of the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. Specifically this bill seeks to modify the emissions trading scheme. As a member of the Local Government and Environment Committee I can honestly say that I believe that as a country we do our fair share in regards to this. Broadly speaking this Government intends to maintain incentives for reducing emissions without loading more costs on households and businesses. Our emissions trading scheme is helping to contribute to a stronger and more productive economy. These are arguments that have been played out many times not only in the select committee but also in the previous readings speeches and debates that have been brought through today. It is straightforward and sensible—something that the person who has just sat down in the Opposition benches David Clark will probably always fail to appreciate but that is his loss. This is a pragmatic series of measures that have been put together with a sensible approach in these troubled economic times. 
My colleague the Hon Dr Nick Smith posed two very sensible questions which the opposing voices have not been able to answer. What other countries have included agricultural emissions? None that are intending to—not very many. Apparently Australia South Korea Japan China and possibly some American states might look at introducing emissions trading schemes. There is political mayhem in their own countries about this and it is unlikely that anyone is going to do it before 2015. I would like to reassure those who are sensibly following this debate and these discussions that this Government will be monitoring other countries’ contributions very closely. The emissions trading scheme should be reviewed in 2015 but that will follow the development of a new global agreement. 
 The other interesting question that I think the Hon Dr Nick Smith posed which again was not answered by anyone else on the opposing side of the argument is how doubling the costs from 1 January next year will actually help us in one of the biggest challenges facing our nation which is to increase jobs. It will not at all. Members opposite have avoided that question because they know that the proposals that they are putting forward the la-la land stuff that we heard from the Greens is completely unlikely to do anything to improve our job situation. 
I must say and my colleague David Bennett touched on this that the Greens with the nonsense about false prophets the holier-than-thou nonsense that was delivered to us—it would almost be laughable if it was not quite so tedious and self-righteous. I would urge them to get a grip on the reality around these arguments if they want to make a useful contribution to this House. I commend this bill to the House. 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: I understand that this is a split call. The Hon David Cunliffe—5 minutes. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I appreciate the opportunity to take a 5-minute call towards the end of this debate on the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. It is often the role at the end of the third reading to do a bit of a sweep-up of the arguments that have been mounted by the opposing side and also the key issues from our own side. Perhaps to start at the highest level what is the order of logic here? Is the climate changing? Resoundingly the world’s scientists say that yes it is. Is that change generated by human-induced emissions? The Intergovernmental Panel on Climate Change says there is a 95-plus percent probability that we will get a human-induced change between 1 degree and 6 degrees Celsius this 21st century. If that does not sound a lot 6 degrees in one century is species threatening. That is our species. That is a catastrophe. Let us hope and pray that that does not come to pass but there is certainly a very high probability 95-plus percent that we are in the danger zone already. 
Can we stop it? Is the science good enough? Do we know the causality? Yes we can as Barack Obama would say—and good on him for getting a second term. Climate change denying did not help Mitt Romney with the American voters. Can we stop it? Yes we can. We know the causalities. We know the mechanisms. We know that it is methane carbon dioxide nitrous oxide and sulphur dioxide. We know that 53 percent of our emissions come from agriculture and the rest from transport and industry. Having an emissions trading scheme in New Zealand without agriculture as part of it provides an inappropriate subsidy to farming and it provides an inefficient penalty to industry transport consumers and of course taxpayers who are picking up the tab. 
Is there an economy/environment trade-off here? The Government’s arguments are based upon that assumption. As my colleague David Clark has I think very eloquently pointed out that assumption is false. Indeed getting price signals right so that they contain the signals for investment and business to take account of environmental needs is something that both sides of the House should surely strive to agree on. In fact a sensible emissions trading scheme does represent the middle ground in this debate. It is an economic instrument. It is designed to help commerce take the long-term view and find an equilibrium position that is pro-economy and pro-environment. 
What about the jobs argument raised by Maggie Barry? Well you know there are lots of jobs in smart agriculture. I was in I think David Bennett’s electorate last week on a Fonterra dairy farm—I do not think it was yours Mr Assistant Speaker Tisch but it might have been—and the dairy farmer said to me: “What we really want is a reliable price on carbon because then we would know what we were managing to. It would support our efforts towards greater sustainability in the dairy industry.” Farmers who are managing effluent and other issues wanted to see a carbon price. 
Then there is the forestry industry. Without a carbon price we are restricting the ability to develop carbon sinks and forests which will be of long-term benefit to New Zealand. We are restricting the ability of that industry to grow. 
I will say a couple of words on contributions from the National speakers. Nick Smith—the tragedy of Dr Nick Smith is that with all his intellect I would warrant with a good dose of goodwill towards this issue he seems to have missed the point that he is being used. The token Bluegreen element from his side is not reflected in mainstream National policy and his advice to his colleagues has been largely ignored. Then on to Todd McClay—there are no such qualms there. He turns a blind eye to the needs of the forestry industry in his own electorate just as Mr Bennett has to the interests of sustainable dairy and other agricultural industries. 
In the last contribution to this debate in the second reading I was pretty passionate about this not just as an MP but as a father. Because when you put all the economic arguments aside and you put all the scientific details aside and you put all the partisan bickering aside we are left with an inescapable fact that in our lifetime our children’s and our grandchildren’s these chickens come home to roost. The climate is changing. Super-storm Sandy may have impacted the US presidential election. It was without precedent in the United States. Mitt Romney the climate change denier did not get the job. 
New Zealanders know what the right thing to do is. They do not welcome a bill that is gutting the emissions trading scheme and that could have found a sensible middle ground— 
The ASSISTANT SPEAKER (Lindsay Tisch) 
: Sorry to interrupt the honourable member. His time has expired. 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Speaker. Nga mihi nui ki a koutou. Kia ora. I rise to oppose the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. With the Arctic melting super-storms droughts floods heat waves killing people right now and the global temperature inexorably increasing here in New Zealand our Parliament is passing a bill to gut our country’s main response to climate change. Climate change is real. Climate change is happening and climate change is hitting us faster and worse than scientists predicted only a few years back. 
In my previous speeches I talked about my motivations for opposing this bill. I talked about my children and my desire to leave them a safe climate. In the last call I talked about how a carbon price signal through a strong emissions trading scheme was the main economic opposition to opposing this bill. What we are doing by gutting the emissions trading scheme our main mechanism to reduce emissions is going to cost us all. It is going to cost taxpayers who are subsidising it. It is going to cost the country with the increase in fuel bills and sham credit imports. But we are also missing the boat. We are missing the biggest economic opportunity of our century which is to invest in and transition to a clean economy. 
But in this speech I do not want to talk a great deal about the detail in this bad bill this bill that significantly weakens the emissions trading scheme removes agriculture from it and entrenches those sham credits and those State subsidies for polluters. I mean we all know it is bad for the environment and the economy. The Government benches know it is bad for the environment and the economy. That is why we have seen such a rushed shoddy process. Everyone in the country knows it is a bad bill for the environment and the economy. With this bill and the weakening of the emissions trading scheme that we have seen before—the removal of other measures to tackle climate change in New Zealand—the public are hearing the message loud and clear that this Government does not take the climate seriously. 
Where do we go from here? That is what I would rather talk about in this speech. The Government has clearly shown it will not act on this fundamental environmental economic and most of all moral challenge. If the Government will not act it is up to the people. The challenge for Kiwis and communities now is to build a movement to make it impossible for any Government of any hue not to act on the climate. We need to hit the streets we need to organise. We need to speak loudly the scientific truth about climate change and what it means. It is that 6 degrees that the International Energy Agency is warning us about. It is about just saying no to new coal and to risky oil. We need to give people hope that we can act and we can rise to the biggest challenge of our time. 
In 4 weeks’ time a thousand young Kiwis are gathering in Auckland for Power Shift and this is where I take my inspiration from. This is where the leadership the passion and the honesty to address this great challenge comes from. I hope that we can triumph over this challenge. I believe we can put our global long-term interests based on the science first over the narrow short-term thinking partisan politics and vested corporate interests. I believe we can do that. I believe New Zealand does matter to the world. I believe our emissions do matter. The fact is per capita we have got one of the highest emissions per person on the planet. We can also show leadership. 
The answers are obvious. They are available right now and they will benefit our economy because what we are talking about—tackling climate change—is about jobs. It is about new jobs in clean energy. It is new jobs in energy efficiency new jobs in forestry new jobs in transport and new jobs in smart farming. It is about farmers and city dwellers working together coming together for localised food production. It is about people installing insulation in their homes. It is about communities coming together and investing in a wind turbine. It is about Kiwis being able to put sustainable biofuels in their fuel tanks. It is about Kiwi firms putting solar panels on people’s homes. It is about Kiwi businesses innovating exporting and manufacturing. It is about measuring the things that really matter. It is about tackling climate change to give our kids a safe future. 
Tackling climate change is not the cost you hear about from those Government benches; it is the biggest economic opportunity of the century. This bill just leaves a bigger bill for the taxpayer but it misses that opportunity. We can rise. I believe we can rise to this big economic environmental and moral challenge. We are not going to do it with the leadership we see there so it is up to the people. It is up to the people. We can do this. I do have hope. After all what is at stake is our future—our planet. Kia ora. 
LOUISE UPSTON (National—Taupo) 
: 
 I am proud to rise as the final speaker in this third reading of the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill. It has been very clear from the National speakers in this debate that we are 100 percent committed to a clean green future. Unlike the previous Green speaker Gareth Hughes I can say that—having witnessed it in the Taupo electorate—the emissions trading scheme is actually driving investment in renewable energy. It is driving investment in energy efficiency. 
Hon David Cunliffe 
: It was—it was. 
LOUISE UPSTON 
: It is driving investment in tree-planting and that is providing jobs in the Taupo electorate which I think is important. Thank you. 
A party vote was called for on the question  
That the Climate Change Response (Emissions Trading and Other Matters) Amendment Bill be now read a third time. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 58 
New Zealand Labour 32; Green Party 14; New Zealand First 8; Maori Party 3; Mana 1. 
Bill read a third time. 
Advanced Technology Institute Bill 
Second Reading 
Hon DAVID CARTER (Minister for Primary Industries) 
 on behalf of the Minister of Science and Innovation: I move  
That the Advanced Technology Institute Bill be now read a second time 
. The bill establishes a new Crown entity the Advanced Technology Institute—also known as ATI—a new high-tech HQ to support innovative New Zealand businesses primarily in the manufacturing and services sector. The purpose of the Advanced Technology Institute is simple: to help get New Zealand’s best ideas out of the lab and into the market place more quickly. Kiwis are great at coming up with smart ideas but we need to become more successful at translating those ideas more quickly into commercially successful products. The Advanced Technology Institute will help increase the number of research and development - capable firms lift New Zealand’s exports of high-value manufactured goods and services and support the Government’s aspirations around economic growth. It will focus on industries with high-growth potential such as the food and beverage manufacturing sectors the agritechnology sectors digital technologies health technology therapeutics and high-value wood products. 
When the Advanced Technology Institute Bill was referred to the Education and Science Committee the House requested that it be reported back by 6 November in order for the Advanced Technology Institute to be up and running in early 2013. The committee in fact reported back on 23 October and I am grateful to the chair and the members for their prompt consideration of this legislation. Submissions on the bill were highly supportive of the Government’s ambitions for the Advanced Technology Institute. Useful information was provided on how submitters saw the Advanced Technology Institute operating within the research and development sector and how it could operate to minimise perceived negative effects. The Government shares the views of many submitters that collaboration will be the key to the success of the Advanced Technology Institute. No single institution can expect to maintain all of the research capability required to service the manufacturing and services sector. To succeed therefore the Advanced Technology Institute must work with Crown research institutes with the universities and polytechs and with other research providers to develop partnerships that maximise commercialisation opportunities and to ensure that businesses better utilise existing research and development capabilities. 
To underline the importance of those objectives the bill’s operating principles mandating collaboration have been strengthened. I am aware that the committee heard a number of submissions regarding the nature and the extent of the Advanced Technology Institute’s in-house research capability. It was always intended that the Advanced Technology Institute would look to harness capability that exists across all research institutions and that it would not seek to unnecessarily duplicate expertise elsewhere. That said Industrial Research Ltd currently undertakes a significant research and development programme and it will become part of the Advanced Technology Institute upon its establishment. The Advanced Technology Institute board will decide the mix of resources and capability it requires to deliver its functions and this will naturally evolve over time. The bill simply provides the Advanced Technology Institute with the function of undertaking research and development. It is not prescriptive as to the extent or form. 
A number of submitters requested that membership of the board of the Advanced Technology Institute or the stakeholder advisory group be prescribed to those with characteristics such as geographical or professional representation institutional type or unions. The board’s appointment is governed by the Cabinet circular outlining the process for increasing diversity of board membership while the Minister must consult with the board before establishing the advisory group providing the means to identify specialist areas of assistance. The potential area of conflict of the institute being both a funder of business research and development grants and a research and development provider has always been recognised. This bill requires that systems and procedures are put in place to ensure that the Advanced Technology Institute acts fairly and transparently in allocating and administering research and development funding. I am confident those systems and procedures will be robust and will withstand scrutiny. The Advanced Technology Institute must also report on its implementation in its annual report as must the Auditor-General as part of the annual financial audit process. 
The Advanced Technology Institute which is to be named after the late Sir Paul Callaghan forms part of this Government’s commitment to promoting science and innovation in New Zealand through the Business Growth Agenda. In recent months we have announced a number of initiatives to improve linkages between science business and innovation. These include making improvements to business incubator settings assessing whether the tax treatment is discouraging firms from research and development expenditure promoting co-funding to encourage business innovation improving the economic contribution of both universities and polytechnics better monitoring of public science investment and incentivising public research institutions. Increasing business innovation is key to growing the economy. It is key to creating jobs and key to raising the living standards of all New Zealanders. This Government has set the goal of raising the amount businesses spend on research and development from where it is currently at 0.45 percent to 1 percent of GDP. 
The success of the Advanced Technology Institute will be measured in many ways but one of the most important will be how much it helps manufacturing and services firms to innovate to increase productivity to grow exports and to operate more efficiently. The Advanced Technology Institute Bill strikes a balance between being flexible enough for the Advanced Technology Institute to determine which services and activities will best support firms in the manufacturing and services sector to innovate and to commercialise their products while also being clear about the institute’s purpose the scope of its functions and the operating principles by which it is expected to abide. The Advanced Technology Institute will help ensure that innovative Kiwi firms have access to the necessary skills facilities infrastructure and new technologies that they need to lift their competitiveness and in turn boost New Zealand’s economic growth. I commend this bill to the House. 
Hon DAVID CUNLIFFE (Labour—New Lynn) 
: 
 I would like to acknowledge the Minister who has just resumed his seat the Hon David Carter and I wish him well in his bid for Speaker Mr Assistant Speaker. I also acknowledge the late Sir Paul Callaghan a very distinguished scientist and author of the book  
Wool to Weta 
 and a passionate advocate of a high-tech strategy for the New Zealand economy. I note that we are a long way from the noble aspirations that Sir Paul has left us with. 
The Advanced Technology Institute Bill will make a very small but unfortunately insignificant contribution to that goal. Labour is supporting the bill because it would be inappropriate not to but I wish to comment in these remarks on the great gap that will remain between the Government’s rhetoric and the strategy that its policies are employing. 
Just in the last week we are reminded again of that gap. Haier bought out Fisher and Paykel Appliances and we stand to lose I think the country’s second-largest provider of patents to overseas deployment and ownership. Hillside railway workshops has again been in the news with the chief executive of Farra Engineering criticising the failure of the Government’s policy mix to reflect the overall interests of the region’s engineering and manufacturing sector in the State-owned enterprises’ decision making. Today the Government has presided over the further watering down of the emissions trading scheme to reduce the incentives for smart clean technology. Dynamic Controls announced a downsizing of its Canterbury plant and unemployment—here is the kicker—hit 7.3 percent against projections of a decline. It actually went up by a massive 0.6 percent which is the worst since Bill English was last the Minister of Finance in 1999. Why is this happening? I guess the key point is it is not an accident. It is the logical necessary outgrowth of a fundamentally flawed strategic framework which this bill does not change. 
What did Government members think would happen when they have a tax system that favours speculation over high-tech which has no capital gains regime—we are almost alone in the Western World in that—no research and development tax credit and no accelerated depreciation for high technology? What did they think would happen with an insufficient savings regime that starves local business and high-tech of investment capital and makes them overly reliant on imported overseas capital and the sell-out of ownership which that too often too young too frequently requires? What did they think would happen if they continued to subsidise pastoral agriculture by not bringing it into the emissions trading scheme and providing irrigation subsidies while starving industrial and manufacturing industries of the investment capital and the fair opportunities that they need? 
We have a perpetual bias in our economic framework that is seeing farms and banks do OK—banks do more than OK—but is seeing industry high-tech and manufacturing sliding to what looks like an eventual demise. In the meantime we are exploiting mineral and petroleum resources through foreign-owned multinationals through which we claim too little in royalties and through which we will lose control of our underlying resources. The Government is failing to provide appropriate market signals to State-owned enterprises like Hillside railway workshops in Dunedin and is instead dressing them for sale. The Government is running a 20th century monetary policy framework during a 21st century global financial crisis and wondering why our exchange rate and interest rates are too high and our current account deficit is overtaking that of Greece to become the worst in the developed world. 
These are not accidental consequences. These are the logical the predictable the necessary and the scientifically proven results of a fundamentally flawed economic framework. What do we get? We get high unemployment a world record current account deficit and manufacturing and high-tech in crisis. “What to do?” says the Government. “How will we dress this up?” says the spin doctor. Well National is too locked into its low-tech dumb-development strategy to change that. Its political constituencies and its own rhetoric will not allow it to make that change and what it desperately wants to avoid is for the public to get the idea that to change the strategy they first have to change the Government—to change the strategy they change the Government. 
This side of the House will rise to that historic responsibility because that side of the House not only will not but cannot. So it came up with the following plan. In Budget 2012 it would cut Vote Economic Development by something like $130 million and it would reinvest about one-third of it in the Advanced Technology Institute and it would have the Advanced Technology Institute Bill which it would then trumpet as the solution to the decline of high-tech. 
Well I am a former director of Industrial Research Ltd the current name of that body before the Government invokes the name of the late and great Sir Paul Callaghan and a director of the current body said to me: “The bill is flawed.” Why? “Because companies” he said “are best placed to understand their own technology needs. What they need is more support around finance and marketing and internationalisation and this bill will not help the commercialisation process.” 
Scott Simpson 
: Nothing to do with a whiff of personal interest? 
Hon DAVID CUNLIFFE 
: No personal interest in that—no personal interest in that. That is scraping the barrel Mr Simpson—scraping the barrel. So if a fig leaf is required that is this bill. 
Labour supports the bill. Might the public be surprised? Well I suppose a fig leaf is better than no leaf and throwing a few crumbs at manufacturing is about all this Government is capable of. We will take the crumbs and then when we are elected in 2 years’ time we will have a decent strategic framework and a proper policy mix as well. Then we will see unemployment come down. Then we will see exports go up. Then we will see hope in the eyes of young New Zealanders especially young science graduates. Then we will see a decline in the queues to the departure gates for Kiwis whose dream has faded whose future is fading and whose commitment to the current Government has gone. 
One thing that cheers me up is that the polls are not lying—this Government’s hold on New Zealand is weakening day by day week by week and month by month. The right track / wrong track has crossed over and the left bloc is ahead of the right bloc on most polls and change is coming. Change is coming—it just cannot come soon enough. It cannot come soon enough for the high-tech firms. It cannot come soon enough for the Dunedin manufacturing cluster. It cannot come soon enough for the 7.3 percent of New Zealanders on the unemployment scrap heap—oh they have gone quiet now. Where are the Weet-Bix now National backbench? Let me say it again—7.3 percent. Budget 2011 said it would be 5 percent by now but it went up not down. It did not go from 6.7 percent to 6.6 percent; it went up from 6.7 percent to 7.3 percent. 
It is a catastrophe and it is a predictable catastrophe. It is the logical outgrowth of a flawed strategic framework and policies that are not worth the paper the glossies are written on. And Steven Joyce fiddles while Rome burns. Steven Joyce’s main claim to fame is pumping out glossy papers to repeat projects that were done in yesteryear and now there is this fig leaf for the science community. 
What the science community is saying to the Labour Opposition is: “Get a real plan guys. Sure we will take ATI that is fine but get a real plan.” New Zealand’s future does not lie in chopping down and exporting raw logs. It does not lie just in milking more cows. Sir Paul Callaghan was a great man and his vision was from wool to Weta—from wool to digital technology. It was not subsidies for polluters and borrowing to pay for it. It was not locking in the industries of yesteryear with a flawed monetary policy and a flawed tax framework. Oh yeah we will take this bill but we want a whole lot more besides. 
NIKKI KAYE (National—Auckland Central) 
: 
 I am very pleased to speak on the Advanced Technology Institute Bill. Can I start by acknowledging the late Sir Paul Callaghan. He was a great man he did have great vision for New Zealand and this legislation is actually about delivering on that vision. But firstly can I take just a moment to comment on the wider economic agenda and the theatrics that we just had from—I believe it was David Cunliffe but I think it is interesting that he is filling in for the actual research and innovations spokesperson who has been very quiet on this bill the leader of the Labour Party David Shearer. Perhaps this is a very ominous sign. Perhaps this actually— 
Scott Simpson 
: Ian Shearer? 
NIKKI KAYE 
: My colleague says “Ian Shearer”. Perhaps the real truth is that we just heard the leadership speech of the Labour Party from David Cunliffe. But can I say that everything that we just heard from David Cunliffe is rhetoric. Whenever it comes to many economic initiatives—and we heard about Weta—when it comes to  
The Hobbit 
 films do those members support these initiatives? No they vote them down. When it comes to greater intensification they vote it down. When it comes to mineral exploration they vote it down. 
What has been very interesting through this legislative process is to see a very clear comparison between the parties. We are a party that is supporting a framework to enable businesses to get more ideas to market quicker. This bill was supported by a range of parties across the House but the key thing is—and we saw it in the Labour Party minority report—those members talk the talk but when it comes to the actual detail we see them looking after their mates. We saw this with their advocating for union seats on the Advanced Technology Institute Bill. That is extraordinary. Their major economic solution for New Zealand is to hold up our commercialisation vehicle with union seats. 
It was a very collaborative process for this bill and there were many great changes as a result of the Education and Science Committee’s consideration. But can I say that when it came to the crunch when we saw Labour’s true colours in the minority report we saw a party that is outdated and back in the 1990s. We saw a party that is absolutely beholden to the unions. We saw a party that is committed to legislating for everything. 
What I am confident of is that whether it is the fact that we have increased science funding by 17 percent whether it is the fact that we have made major investments in infrastructure or whether it is the fact that we are delivering a crucial piece of legislation that is going to ensure that we have greater collaboration between our scientists and our businesses we are actually delivering. We have a plan and we are investing in that plan by 17 percent additional science funding. 
If you compare that with the Labour members they are very clear that they want to legislate for their union mates and that they want to stop everything else from happening in other areas of our economy whether it is mineral exploration intensification in terms of farming or labour laws—all of these things that add up to having a much more flexible economic agenda that is actually focused on growth and jobs. I think we need to mention that because we constantly hear the rhetoric but we do not see the detail that will actually take New Zealand forward. 
We had a range of submissions on this bill that were incredibly supportive. I think there were 23 submissions—seven oral submissions. I also acknowledge that in terms of the changes made to the bill we strengthened the clauses around collaboration and I want to thank Kiwinet for its submissions on that. I also want to acknowledge other members of the committee such as Tracey Martin David Clendon Megan Woods and other members of the Labour Party. I think it was an incredibly collaborative process. Under very tight time frames we achieved a lot in making some very valuable changes to this bill whether it was the collaboration clauses or whether it was ensuring there was consultation with the wider sector. 
I think this is a very good piece of legislation. It is part of our wider economic agenda which involves not only greater investment in science which we have delivered on and not only ensuring that we have very good economic policy in terms of our labour laws but also ensuring that we have greater collaboration via vehicles like this. The sum of $166 million is an extraordinary amount to ensure that we have high-tech centres right across New Zealand particularly in Auckland and in Canterbury. I am very confident that through the select committee process we have delivered a vehicle that will be crucial in delivering on Sir Paul Callaghan’s vision of ensuring that more businesses are able to take their ideas to market. 
I want to comment on a couple of key clauses such as the net benefit clause. I think that was a very positive change. We recognised that we wanted to have a similar test to the Crown research institutes so we changed that from “net benefit” to “benefit”. As I said before we made a key change around the collaboration to ensure that the Advanced Technology Institute would not be replicating current and existing funding structures. Another key point that was made throughout a number of submissions was the issue of the research framework and its capability. We were quite clear on this side of the House that we do not think it is appropriate to be legislating for that detail because things do change in a rapidly changing environment in terms of technology. Also if a country wants to be flexible about where it spends its money and where its economic agenda is we do not want to tie up the institute by being overly prescriptive. Finally a number of other points were mentioned in the speech of the Minister for Primary Industries around the need not to necessarily prescribe the detail around stakeholders—the stakeholder advisory board. I think that was the right thing to do because as has been mentioned in Cabinet circulars there are a number of provisions around ensuring there is greater geographical representation. 
I am very pleased to commend this bill to the House. I think it will be a key vehicle for greater commercialisation taking more New Zealand businesses’ ideas to market. I think it has been a very collaborative process across the House. I think it was done under difficult time frames but that we mitigated that by ensuring that we wrote to a range of submitters. It was very pleasing that only a couple of submissions were opposed to the bill. It is important to note that this is part of our wider Government economic agenda which includes greater investment in science real policies around infrastructure investment and good policies around labour laws. The Opposition has raised what I think are very overly prescriptive policies in terms of this bill as part of its philosophical vision for New Zealand which is to tie the country up and oppose everything. I am very pleased to commend this bill to the House. 
Dr MEGAN WOODS (Labour—Wigram) 
: 
 I am very happy to take a call on the Advanced Technology Institute Bill and to deal with some of what we have heard in the House this afternoon because it is simply astounding that members opposite can think that this legislation is going to deliver on the vision of Sir Paul Callaghan. It is just astounding. This is a woeful piece of legislation that needed strengthening and it is a missed opportunity. Labour is supporting this legislation. It is supporting it in a very lukewarm way. We firmly believe that this is an opportunity lost. We are very disappointed that members opposite have failed to take the opportunity that setting up something like the Advanced Technology Institute could have afforded us. I think it speaks volumes that the chair of the Education and Science Committee Nikki Kaye who saw this legislation through used 3 or 4 minutes of her speech on this piece of legislation to take low blows and cheap shots instead of addressing the substance and some very real concerns that have been raised in this legislation. 
We on this side of the House are fearful that this is yet another grand scheme from a Government that talks big on science and innovation but has failed to deliver a game-changer. We are fearful because of its track record. We have real reason to be fearful here. There is nothing in this legislation that addresses the structural flaws for the manufacturing sector. It is with some irony that we are standing here today discussing and debating a bill that is around more innovation for our high-value manufacturing sector on a day when we have had unemployment figures out that show the manufacturing sector is continuing to bleed jobs. This is what this bill is about. It is about strengthening this sector and it is about the creation of high-value jobs and highly skilled jobs and this bill will fail to do that. 
There are some worrying echoes of other initiatives that this Government has tried. We can just look to its voucher scheme which has been a complete and utter flop. This was talked big in Budget 2010. There was going to be $20 million over 4 years to high-value manufacturing firms with co-investment for projects of over $100000. Well what has happened? It has failed to spend this money because it has no understanding of what is required for innovation in New Zealand. What have we got in 2012? Well less than $4 million has been granted in 2 years and only one in three of these projects has been over $100000. It has had to expand this into the agritech sector away from concentrating just on the high-value manufacturing sector and it has had to take the co-funding option down to $30000. There are some very worrying parallels with what has happened with the passage of this Advanced Technology Institute idea since it was born. 
So what we had from the chair of the select committee Nikki Kaye was her saying that there were some very clear comparisons that emerged in the deliberations over this legislation at the select committee. Well I agree completely with her. There were some very clear comparisons that emerged between the Government and the Opposition side of the table. What emerged from the Government side of the table was a failure to understand what 21st century innovation looks like in New Zealand and what it will take to truly transform our economy. We have heard a whole lot of hysterical shrieking that we want to look after our union mates by daring to suggest that maybe workers might have some input into innovative processes. 
I actually want to take you through what Labour suggested in terms of the stakeholder advisory panel. Labour said it would be really good if we had good industry input into what was happening in the high-value manufacturing sector. We noted that there were very few submissions from industry because of a rushed process which I will come back to later. But we thought about the people who were investing their money setting up the businesses—we want to have their voice heard. We want them on the stakeholder advisory panel and we would quite like the other providers of research science and technology innovation there as well as the universities and the Crown research institutes. We would like their voice heard. And then what about the people who actually perform the innovation? What about the people who work as scientists the people who work as technicians and the people who work in the manufacturing firms on the shop floor and on the lines? These people have got a pretty good idea about what innovation takes and how it is that we can transform this. Because you know what? This is what happens all over the world. 
If members opposite knew anything about what 21st century innovation looks like and how other countries are doing it and succeeding they would get past their hysterical shrieking. We need only look at one of the most effective lobby groups in science in this country the Public Service Association science committee which is made up of some of the top scientists in this country. But no they are members of unions! You certainly could not have them inputting into anything! Members opposite need to take off their blinkers and realise what it will take to transform our manufacturing industries in New Zealand. Hearing from everybody with some stake in the game is something that we are fully supportive of.  
We also thought it would be a really good idea to ensure that there would be some regional representation on this stakeholder advisory panel. We thought that it would be really good if the areas where the economic development potential resided and existed were represented so that we could get a broad view of what innovation in this sector in New Zealand might look like. But no we could not have anything like that! Labour will be putting up a number of amendments that address these representation issues. We will be putting up a number of amendments for this bill because actually we want to see this succeed. 
What we are really disappointed by is the fact that this Government simply does not understand what it is going to take. For us innovation is a means to an end. It is about good regional and economic development that will create jobs and higher-paying jobs which is clearly something that this Government does not turn its mind to when we look at the employment figures that came out today. Actually jobs do not happen by magic. They take a Government that is willing to take an interest and a Government that is willing to invest. We think that the Advanced Technology Institute could actually afford us such an opportunity but this is a Government that is not willing to even countenance that we may have a look at that. 
What we believe is that innovation in New Zealand needs to be an interconnected and joined-up process and that we need to have industry we need to have the science providers and we need to understand what it takes to commercialise. We have a number of concerns with this bill and not only about the representation. We have a worry that the Advanced Technology Institute is going to succeed or fail on its ability to be part of this interconnected and joined-up group of people. It is going to rise and fall on its ability to be an active player. The way that this Government is setting this institute up is ensuring and is embedding—through this very permissive enabling legislation—that it is going to be seen as a competitor to be feared. 
Members on the Government side of the House will not even countenance that we put in some protections to make sure that it is seen as an organisation that does not unnecessarily replicate and duplicate functions that are already successfully being carried out. They simply would not countenance that we would put those protections in place. Nor would they even agree to the fact that the idea that this new organisation is both a funder and a provider might create a little bit of suspicion amongst other people with whom it is going to have to go out there and form very strong collaborations. It is its ability to collaborate and its ability to work not only with industry but with other providers that will make this an institute that will succeed or fail. 
Labour also sees the Advanced Technology Institute as something that needs to be part of a wider economic development strategy. Labour thinks that the Advanced Technology Institute cannot succeed unless it also has a research and development tax credit sitting alongside it. We heard from one submitter the Manufacturers and Exporters Association—in fact one of the few industry submissions that we received—that it saw that the tax credit was a fundamental thing that needed to be addressed for manufacturing to succeed in this country. We also heard from the Manufacturers and Exporters Association that one of the biggest impediments to it being able to innovate to it being able to hire and to it being able to grow was the volatility of the New Zealand dollar and that it was about time that we had a Government that was willing to address the macroeconomic issues that were undermining the manufacturing sector’s ability to get on to succeed in this country. 
The Advanced Technology Institute cannot exist in isolation. I hope members opposite will consider at future readings the amendments that Labour put up because we want to see this succeed but we are fearful that in its present form it will not. Thank you. 
DAVID CLENDON (Green) 
: 
 We had our first sight of this Advanced Technology Institute Bill on 10 September this year—not last. Three days later we had our first reading and in those 3 days we looked at the bill—as much as you can in a few days—and frankly we saw no harm in it. We saw no massive benefit nor did we see a great deal of harm. We thought there was a possibility that this proposed new entity might do some good and so we supported the bill through to the Education and Science Committee. 
We entirely agree that it is important that we seek to maintain and increase the strength of the direct links between science and research and actual commercial activity. We are very much in favour of a cleantech greentech economy. That is the way of the 21st century unlike some of the Government’s policies which are leaping backward into the early 19th century. We see that this is an important and necessary thing to do—to increase our output in the high-tech sector. 
The question that has since come to us in terms of the proposal to establish this Advanced Technology Institute is quite a simple question. It is simply to ask why. What is actually the need for such an organisation? What gap does it fill? What is the necessity for an entirely new entity a new structure rather than working within existing structures and existing sets of relationships perhaps enhancing those and making them work a little differently or better? What is so wrong with Industrial Research the institute that to date is effectively doing what this new entity is supposed to do? If one has a look at the statement of intent for the current year to June 2013 the objectives the strategic goals of our Industrial Research are fundamentally the same as what is proposed for this new Advanced Technology Institute this new organisation. 
I must say that it seems that this Government seems to have a very peculiar relationship with the public sector. And I must say in passing that I was equally surprised and somewhat amused by the chair of the committee Nikki Kaye launching into the Labour Party for daring to suggest that the unions might be represented on the board of this entity. The representatives of the scientists the technicians the tradespeople who actually design and make stuff—how dare Labour propose that they should be represented on a body that will make key decisions about linking the science and the economic and social outcomes! 
More particularly this Government seems to have a perverse situation. It is putting the boot into the public sector. In the name of so-called efficiencies it is actually taking away the capacity of the public sector to do its job and yet when the Government perceives a problem it tends to create a new entity a new public sector entity. It did it with the Productivity Commission. Acknowledging that we have a very low productivity economy the Government said “Let’s create a public entity to try to solve it.” which to date has clearly failed to address even the key issues let alone resolve them. Similarly with this bill we have an issue about not getting enough high-tech high-value manufacturing so let us create a new public organisation a new bureaucracy. Perhaps that will do the trick. It is a very peculiar response from a Government that alleges that it represents the private sector rather than the public sector. 
We received submissions on the Advanced Technology Institute proposal on the bill. There were not that many of them and clearly they were written in haste because submitters were given really only days never mind weeks to come up with and prepare them. Nevertheless they were of very good quality. They were from some very significant commentators some important players in the sector and they all offered—with one or two notable exceptions—very qualified support and I do stress the word “qualified”. Everybody agrees as the Greens did at the first reading that an entity some sort of a networking organisation that can bring together our science and research capacity with our good business brains and our good business organisations is a good thing. But the qualifications came through and they tended to follow themes—common issues that came through again and again from the various submitters. These included the likelihood that this new organisation would duplicate and even disrupt existing successful and productive relationships and situations that already exist with the commercialisation arms of the universities and the members of the economic development agencies that have done some very solid and robust work over a number of years in this area. 
The committee did agree on prompting from particularly Labour and the Greens that clause 14 of the bill should include the word “collaborate” just to drive home the fact that this organisation the new Advanced Technology Institute should demand that we get a high level of collaboration rather than a more top-down hierarchical approach. That was a good step. It was a positive step and we supported that. It was a necessary step but it was not a sufficient one in terms of endeavouring to avoid the almost inevitability of duplication and disruption of what are currently well-functioning and very productive relationships. 
The world has not been sitting idly by waiting for this Government to create an entity that will bridge the gap if you like or will strengthen the relationships between research science and technology—that creative sector—and the business sector. Of course business done well is also a creative activity. Again as I say we absolutely support the principle of doing that but there has been a great deal of very good work done over a number of years. Nowhere in this bill—it is so loosely drafted; it is so poorly supported by argument—do we see any reassurance that the institute will not come in with size 11 boots and trample all over disrupt and set back a lot of those very positive relationships that already exist. One hopes that the Minister of Science and Innovation is even aware of them and that he has considered that but there is no evidence of that having happened. We asked the obvious question of the committee about what the nature would be of the relationships between the Advanced Technology Institute and these other incubators—the commercialisation arms and so on. The answer we got was that no decisions had yet been made about how those relationships will be maintained or held. What an entirely unhelpful response that was. 
The extent to which the Advanced Technology Institute would become a provider of science and therefore a competitor to the other organisations was also of concern to many of the submitters. Again I hope nobody will raise the imaginary objection of self-interest. These are senior respected scientists and commentators who are actually looking at what is good for this country—what is good in terms of achieving the proposed goals of this legislation. The dean of science at Auckland University gave the committee a supplementary submission. He was very concerned that the Advanced Technology Institute should function in predominantly a service role. He suggested that the research function should be a very minor component of the institute’s role and ideally should occur only through the transition period. He went on to say that the arguments that the Advanced Technology Institute requires a research capacity to fill the gaps that other institutions could not meet are not persuasive and are based on a limited understanding of research and the challenges of working with the high-value manufacturing sector. 
In regards to concerns about the Advanced Technology Institute being both a funding agency and a provider of research clause 13(1)(f) of the bill tells us simply that the Advanced Technology Institute will allocate and administer research science and technology funding. The very obvious and logical question for the select committee to ask was what funding? How much? How much control will it have over research funding in New Zealand? Again the response we got back from the Ministry of Business Innovation and Employment was that no decisions had been made regarding which funding the Advanced Technology Institute will administer because the ministry is currently reviewing the schemes. A report back to Cabinet is due on 30 November by which time this bill we expect will be done and dusted. We are being asked to support a pig in a poke. We do not know what the boundaries of this organisation will be. We do not know what its relationship will be with existing very positive initiatives. We do not know what funding it will control. We suspect that it will be a lot.  
The issue of funding would be less critical if this was an organisation with any autonomy. It is a Crown agent. It must give effect to Government policy. It has very little autonomy. This gives the Minister of the day licence to pick winners and picking winners was one of those activities that the late great Sir Paul Callaghan directly advised us to avoid like the plague. He was absolutely clear on that point. Governments are very bad at picking winners and the New Zealand Manufacturers and Exporters Association which has already been mentioned in its opposition to this organisation made it clear that picking winners has a dishonourable history of complete failure. It is very hard to argue with that.  
I have outlined some of the objections from submitters. I look forward to the Committee stage and the third reading when we will be able to engage a little more. For the moment on balance the Greens given all the flaws in this bill—we see that Labour is supporting it and we respect its decision; we were on a bit of a tightrope as well—cannot support an entity we know so little about when the legislation is so poorly drafted and where the intentions the operational functions the role and the powers of this entity are unknown. We will therefore not be supporting this legislation. 
COLIN KING (National—Kaikoura) 
: 
 It is a pleasure to take a call in the second reading of the Advanced Technology Institute Bill. In doing so I just want to cover off a couple of issues that other members have raised in their speeches. Effectively of interest is the submission from Business New Zealand where it quoted that it firmly advocates that the Advanced Technology Institute needs to have operational research and development capability in order to have credibility and skin in the game. That is a very relevant comment because when we look at it what the Advanced Technology Institute will be is a business-led market-focused research institute and it needs to be successful. 
There has always been a gap in the market and we have known for a long time that we do need a business-focused research institute. When you look at the genesis of this bill it came not only from a Government agenda of innovation and economic growth. One has only to research the situation the genesis came from and also the empowering innovation conference. One has only to read that document to understand how in sync with business this Government is. I just have to make that point because there is a history of a gap in the market and the Advanced Technology Institute is designed to fix this. 
There were those comments that were raised on the other side of the House of a lack of accountability. For goodness’ sake inside this bill it prescribes how that transparency will be brought to this House. The Auditor-General will annually audit the process. It will be very transparent. 
With regard to the argument from the other side of the House about the confusion and confliction between the funder/provider split this is part of the efficiency that we also saw when we brought together the New Zealand Transport Agency which was something Labour did. Some of the arguments that we are hearing are about a trip back to the 19th century. This is a bill that has its day in the 21st century. I have great pleasure in supporting the bill. 
TRACEY MARTIN (NZ First) 
: 
 Kia ora Mr Speaker. I stand to speak on the Advanced Technology Institute Bill. I would just like to remind the House that New Zealand First was actually the only party that opposed this bill at its first reading on the grounds that this work was already being done. I am pleased to stand here and say that we were right and we were proven right by just about every submitter who came to see us. We are very pleased with the work that the Education and Science Committee has done within very tight time frames. We would have liked to have more opportunity from the Government to really flesh this out and to have a greater input from the industry itself but the submissions we did get were valid they were in-depth and they were well-thought-out and I appreciated the level of expertise that was brought by the submitters to this topic in the very short time frame that we had. 
There was a lot of work done around the word “collaboration”—a lot of work done—and a lot of talk and discussion around the role of the Advanced Technology Institute and making sure that it did not duplicate that it did not compete with people currently doing the research work and currently inside this environment. However those submitters who were doing this work although they were very concerned that another competitor was not put into the contestable research funding market and that there was not a duplication of expense and a duplication of work done did acknowledge the need for an organisation that was aware of all the players in that area so that people could be connected. I think if I recall correctly one of the conversations we had at the select committee was that 80 percent of the Advanced Technology Institute’s role is actually going to be about connecting people. Eighty percent of the institute’s role will be about the relationship between business and the researchers and bringing those organisations together appropriately to take a product from a certain place and be able to commercialise it. 
I am going to take this opportunity however while the Hon David Carter is here to talk about the fact that there still is a bit of a gap here. I hope that the other 20 percent of the institute’s role that we have talked about—we do not know how much money will be dedicated or what budget line will be given to this 20 percent which is the research itself that the institute will be looking at undertaking because that information is not available to us yet. There is a bit of a concern I still have when I hear the Hon David Carter speaking and Colin King talking that we are still talking about widgets and gadgets that have been produced that this bill is just about looking at them figuring out a way to improve and going on to commercialising that market. I see Mr King shaking his head and that is a good thing. I am pleased to see that. We have now got that in the  
Hansard 
. That is great. 
For example on 30 October I was with the Taipei cultural and commerce office representative the consul-general of Japan and the deputy consul-general of Japan at the Mahurangi Technical Institute in Warkworth. It has taken eggs from eels. It can take 2 million eel eggs get 2 million live births and keep those eels alive for 12 days but it now needs $3 million to take those eels from 12 days to mass production. That market if we can get that investment from this Government—I do not know whether it is something the Advanced Technical Institute would be able to use part of that 20 percent to invest in—is not yet commercialised. Should that industry be commercialised should that investment be made it would be bigger than oyster farming and bigger than mussel farming. That is an industry that this country could really lift off on. 
But when we do not have an organisation that can invest in that way we leave those people vulnerable to having to sell their intellectual property overseas and that intellectual property goes overseas and it stays overseas. So I am hoping that part of what we are trying to create here is that the 20 percent that the institute will actually be using for research investment will be invested in those sorts of areas and will not—definitely not—be used to compete with other researchers and other business organisations that are working well but just need linkages. 
There was another point that New Zealand First tried to have—as mentioned in our minority report—and it was a very small thing. It was a single word. It was a single word that we were hoping to have inserted into clause 14(1)(b). Clause 14(1) reads: “In meeting its main objective and performing its functions ATI must—… (b) proactively engage and collaborate with businesses other RS&T providers and other persons that ATI considers relevant to the performance of its functions;”. All we asked for was the word “identify”. We asked for the word “identify” to be inserted after the word “proactively” and before the word “engage” so it would read “proactively identify engage and collaborate”. It may seem very small but the point of inserting that word was to ensure that one of the things the Advanced Technology Institute must do is first of all find out who is in the market so that it can then go and engage and collaborate. That word would take away the excuse should it enter into competition with anybody currently in the market that it did not know they were there. It is a very small thing but a very practical thing to make sure that people do know who is in that market that the institute does not enter into competition with people who are providing this service already. 
There is another little concern that I have. I voiced it at the time. It is around the FoodBowl of Auckland. The FoodBowl is going to be absorbed—that may not be the appropriate word. It is going to become part of the Advanced Technology Institute. The FoodBowl was partially funded by the ratepayers of Auckland and it is about to be absorbed. I would suggest that there is some compensation that needs to be paid to the ratepayers of Auckland for losing this asset. If the Government benches would like to know the amount of money that has been invested by the ratepayers of Auckland in the FoodBowl then they can contact my office and I will have that amount sent to them. 
We opposed this bill to start with. New Zealand First will now be supporting this bill. We support it because we have been listened to. The submitters have supported our original concerns around this bill. We believe that the work done by the select committee was adequate and strong for the time frame it was given. We will be watching the institute to see that it does not compete for contestable funding. We will be seeking support for the Mahurangi Technical Institute and the eel project and if there is anything extra there is a whitebait project there that could actually do with a bit of an input as well. Just in closing we would like to thank all members of the select committee for what was a collaborative process. We will be supporting this bill. 
SCOTT SIMPSON (National—Coromandel) 
: 
 It is a pleasure to rise in support of the second reading of this Advanced Technology Institute Bill. I would like to join with previous speakers in acknowledging how appropriate it is that the institute will be named after the late Sir Paul Callaghan. I think that naming the institute after such a distinguished New Zealander gives weight to the very appropriate benefits that the institute will provide for us as a nation. It is all about good ideas good initiatives and good inventions being collaborated with research and put together to get good products to market faster so that we can grow our economy and so that the real benefits for New Zealand will be constructively turned into something positive tangible and real. 
I too would like to acknowledge the good work of the Education and Science Committee. Under the very capable chairmanship of Nikki Kaye I thought the select committee worked diligently and promptly through a tight time frame. I want to particularly acknowledge the contribution of the previous New Zealand First speaker Tracey Martin. As she rightly said her party started off opposing this legislation but because of the collaborative approach and the sensible intelligent and dignified way that the committee conducted its affairs we were able to come to I think a very workable conclusion. So I think for me this process has helped demonstrate the very effective nature of the entire select committee process even when working under tight time constraints. I want to acknowledge that. 
There were a number of very good submissions. In fact the committee received 23 excellent submissions I thought. Seven submitters appeared before the committee and gave oral presentations. The vast majority of those were in favour of the bill. I think that when we heard the submissions we were able to get a real insight into the potential that exists in the marketplace for this collaboration of ideas wit and imagination when put together with research and the potential for great things that can come when those two are put together and come out at the other end of the exercise producing not just widgets but eels possibly whitebait and a whole range of other things. I am looking forward to the whitebait-tasting sessions. I am a person who has come from a business background. I now find myself as an MP finding as I trip around the very beautiful Coromandel electorate that not only do we have a wonderful environment but we have these remarkably innovative people who have terrifically good ideas. 
I think that the Advanced Technology Institute set-up and establishment will provide a terrific opportunity for those people to work with some really smart research development people and bring together terrific ideas. So I commend this bill to the House. I am looking forward to the Committee stage and to progressing it to its final conclusion. 
SUE MORONEY (Labour) 
: 
 I rise to support the second reading of the Advanced Technology Institute Bill but it is lukewarm support as you have already heard from Labour speakers before me because effectively unfortunately this is an opportunity gone begging. It is another example from this Government of too little too late—far too little far too late. Today we have heard the unwelcome news—the shocking news actually—that unemployment has increased again to 7.3 percent. The Government would have us believe that it has got a plan. Apparently we are hearing through this debate today there is an economic plan. Well if there is a plan it is not working. And when that was put to Bill English earlier this week he said that its economic plan is working. That is what he informed the House. Well that economic plan if it is working must be a plan to have high unemployment and low wages because that is in fact exactly what is happening in New Zealand and that is why we need a much better response than this bill from this Government. 
Although I guess it sounds like the Government is doing something—it is going to create a new Crown entity. That is what it is going to do. That is going to fix the problems in New Zealand! Go and create a new Crown entity. That is exactly what this bill is doing. There is high unemployment and low wages and what does the National Government do? It goes and establishes a new Crown entity. And in that new Crown entity the Government clearly has no interest in what workers have to contribute to the innovation of this country. During this debate it was very sad to hear the chair of the Education and Science Committee Nikki Kaye use her—oh she did not use even 10 minutes; I think she might have used 5 minutes because there is not too much to say about this bill. It does not do too much. She used most of that time to attack the Labour Party for daring to say that workers should have a say in this Crown entity and that workers have something to contribute to innovation. Has that Government learnt nothing from the Pike River mine disaster? Has it learnt nothing from the events of this week and the report that landed on its desk about the importance of involving workers in big decisions? Has it learnt nothing? Nikki Kaye used this debate to attack the Labour Party for insisting that workers do have a right to have something to say about their future and that workers do have something to contribute about innovation. They certainly have a lot more than that Government has to contribute to the discussion of innovation. If this is the best that the Government can come up with it is woefully—woefully—inadequate. 
I too want to acknowledge and honour the memory—honour the memory—of Sir Paul Callaghan but this bill does not honour his memory. This establishment of an Advanced Technology Institute falls woefully short—woefully short—of the sort of vision that Sir Paul Callaghan had for a proper investment in innovation in science. He had a vision of a high-wage economy not the low-wage economy that that Government is investing in and continuing to argue for in this House by saying that unions have no role in innovation. For goodness’ sake! Read the Pike River mine report. Understand the importance of working people and their contribution to the economy. Understand how important it is that we get it right for this country. We will not get it right if working people are not invested in and engaged in and part of that decision-making process. This bill demonstrates again how little faith—how little faith—the Government has in working people how little it values their contribution to the economy. It is another example of exactly that. 
I have a real concern about the process for this bill because it was entirely rushed. I can think only that the Minister of Science and Innovation did not have his act together with regards to this bill because suddenly without any notice to the Education and Science Committee—and this is a select committee I sit on—there was a bill put on us that apparently we had to deal with in a matter of weeks. This is supposed to be a large vision the new vision for this Government that is going to save the country and yet the Education and Science Committee had to deal with it in a matter of weeks. Blink and you would miss it the process for this bill. In fact in my instance go and hear a few submissions on paid parental leave and you miss it. I actually was not able to participate in hearing any of the submissions on this bill because it was so truncated—so truncated. If this is the thing that is going to turn round the New Zealand economy if this is the big hope that this Government is going to give those several thousand newly unemployed people in New Zealand whom we have learnt about today then it deserved to have more attention paid to it. It deserved to have a Minister who at least could get the bill in a form where it could be presented to the House for first reading so that a select committee could have a reasonable amount of time to actually deliberate on it. The select committee did not have adequate time to deliberate on it. It was not given due regard and if that rushed process is an example of how the National Party wants to honour one of our very finest scientists then I am afraid it does fall woefully short. I hope that I can be proven wrong and I hope that this Crown entity does live up to his vision but there is nothing in the bill that would convince me that that in fact will be the case. 
The Government does not want to address the really big issues when it comes to research and development. It will not—despite now overwhelming expert advice—consider returning the research and development tax credits that it slashed that this Government actually dumped. Research and development tax credits were warmly welcomed by business were warmly welcomed by the science fraternity as being a really significant way not like this bill that we could actually make a great deal of difference and improvement in the investment in research and development in this country. That is the type of very specific and detailed policy that would make a tangible difference to research and development and innovation in this country. Will the Government go near that? Will it even entertain the idea? Worse than not even entertaining the idea it got rid of it. 
When the Government got rid of that policy it got rid of a significant opportunity to improve this country’s record when it comes to research and development. Ever since it got rid of it it has been scrambling to try to find a replacement. As we have heard from a previous speaker the voucher system has not replaced it. That has been a failure. Now it is trying to say that the development of a Crown entity will somehow replace that very good Labour policy of a research and development tax credit. Well it plainly will not. This is woefully inadequate and I challenge the Government to actually come up with something that will work. We do not need any more slogans like a cycleway. That failed as well. A Crown entity is another attempt to make it look like the Government is doing something. But we will support it because quite frankly doing something no matter how little is better than doing nothing at all which is what the Government has been doing to date. 
SIMON O’CONNOR (National—Tamaki) 
: 
 Exhausting—absolutely exhausting. The Advanced Technology Institute Bill is a positive bill. There has been a little bit of focus actually on what was seen as a truncated or a supposedly fast process. I actually think the process was sufficient. 
Those of us who do research in different forms know that you come across a eureka moment and it can come at any point in time. I think this Government realised fairly early on the eureka moment around the Advanced Technology Institute Bill. This is an opportunity for the country and one that should be embraced enthusiastically. I think that when we look at the majority of the 23 submissions that we got in the Education and Science Committee people were behind this. There are always I suppose some cosmetic or small aspects to be discussed but by and large people are supportive of this project. This Government is keen to get on with the job—that is the key. 
When we look at the Advanced Technology Institute Bill there have been a number of distractions today in the speeches around it but there really are two words that sum up the bill. The first is “mechanism” and the second is “conduit”. This is a mechanism a legislative mechanism to bring about a body to facilitate research and development in New Zealand. It is a mechanism. It does not need to be incredibly prescriptive. It does not need to reflect ideology. It does not need to say which mates have to be on the boards. This is a mechanism a legislative mechanism to bring about an Advanced Technology Institute. 
What is this institute about? It is a conduit. At the end of the day it is about taking the best research in New Zealand and acting as a conduit to make the research into a commercially viable option. It mirrors a lot of institutes around the world. I can think of one that is somewhat similar. I had the pleasure earlier this year to go to the United States to look at the American political system. One part of our trip was to go into Massachusetts—it was actually back to a place Cambridge where I had lived—to see the Cambridge Innovation Center. This is a place that acts as a conduit taking good ideas and linking them to business. One of the most fascinating elements of the Cambridge Innovation Center was that the likes of Google and Microsoft had chosen to build nearby it. It is acting as a conduit—again facilitating research development and good ideas supportively and actually linking them across to business. I think when I look at the Advanced Technology Institute there are degrees and direct similarities at work there. 
Again it is important to see that this bill is firstly a mechanism and secondly a conduit. It is not something to be distracted pulled apart and seen as sort of a facilitation of cronyism or whatever else has been thrown at it today. This is a conduit for the substantial funding that the Government does put into research and development. There is often talk about these tax credits and so forth but what is often forgotten is that this Government has successively increased the total funding into research and development. As part of Budget 2012 this Government has allocated approximately $166 million over 4 years to the Advanced Technology Institute—$166 million over 4 years. This is a substantial contribution by the Government to support people in New Zealand. 
In fact it also touches on and gets very similar to something we have already out by Auckland Airport. There is a facility there to act as a conduit around the food industry a place where people come with their ideas and their research if you like and turn them into something that is commercially viable. Again there are really good examples both local and overseas that this Advanced Technology Institute Bill is working on. 
So I think it is really important that we do not get distracted by the cronyistic designs of some parties. It is certainly not a place to fall into the Chicken Little argument that this is going to be the end of research in New Zealand—we have heard that today. This is a bill a legislative mechanism—[ 
Interruption 
]; indeed—to facilitate and help people bring that cutting-edge research that New Zealand has. We think about the work that Orion Health does we think of the work that Fisher and Paykel Healthcare does. I think actually of a few of my friends who work within the scientific area. They want this bill. They are already at the coalface doing fantastic work. Let us get on with it. We promptly looked at the bill. We appropriately looked at the bill. Let us get it on to the Committee and the third reading. 
Mr DEPUTY SPEAKER 
: Dr David Clark—a 10-minute call. 
Dr DAVID CLARK (Labour—Dunedin North) 
: 
 There has been under-investment by National in research and development—less than 1 percent of GDP compared with Denmark and Finland with about 3 to 4 percent of GDP. We know the OECD average is around 2.5 percent. This woeful under-investment in research and development is something this Government is doing nothing to address. National chose of course to cut the research and development tax credits that Labour put in place and it has also slashed budgets in other areas. It goes to show that those members just do not get it. You know they just do not get it. There are some issues they just do not get. There is also a woeful under-investment in private sector research and development which is linked to the public sector research and development investment as is shown across the OECD. The bureaucratic subsidy approach that National favours does not even fit with its language of having a business-friendly business-led approach. It is unfortunate; that is all you can say about it—a whole lot of red tape a slow way of doing business and it does not really encourage those who are the innovators in our society who want to take it forward and who want to make sure that there are high-paying high-skilled high-tech manufacturing jobs for the future ahead of us. 
We saw with the emissions trading legislation that we debated just before this Advanced Technology Institute Bill that instead the Government is preoccupying itself with taking the country backwards by extending subsidies for the businesses that are not in the high-tech space. That paints a picture of a Government that has its eye off the ball that does not have a plan for this country— 
Michael Woodhouse 
: Are they sunset industries too? 
Dr DAVID CLARK 
: —for taking our industries forward. Mr Woodhouse the member opposite is talking about sunset industries. No doubt he is including in there Hillside in Dunedin. Fisher and Paykel probably which shut down its manufacturing would be a sunset industry to Mr Woodhouse I suspect. He does not care that the jobs are going in Dunedin. He does not care that Tamahine Apparel Solutions shut down. He does not care that the jobs went at Delta Utility Services. He does not care that the Inland Revenue Department is shutting down its local services or that the taxpayer money that goes into Dunedin is being taken out so that there is an increase in unemployment locally. These are foolish things to argue Mr Woodhouse. The local situation in Dunedin is dire and the unemployment levels are rising and it is because of policies like this one we see before us which really is not favourable to businesses that want to innovate but instead makes it more complicated. 
It would be a good thing as part of a wider package and it is a timid step in the right direction. So ultimately although it is a slightly bitter pill Labour will be supporting this legislation because we think this kind of thing can be built on—if we did have decent research and development credits if we had some joined-up policy if we had decent procurement policies if we took care of the bigger picture if we looked at the kind of macro-prudential tools that the Reserve Bank might need to ensure that we actually had jobs and a thriving economy and an exchange rate that was favourable to our manufacturing export sector if we had pro-growth tax policy if we had the likes of a capital gains tax that would see money flowing from the speculative sector toward the productive sector and if we had procurement policies that actually looked at the whole economy. 
When the Hillside trains were to be built if we had looked at the wider economic benefit it might have been a very different equation. If we had looked at the tax paid by those people who were doing the manufacturing who had the jobs and if we looked at the money going to those industries that provide work into Hillside and the other engineering firms and if we looked at the wider benefits to our country of having a capable manufacturing sector we might have had a different outcome. So the research and development tax policies of course are critical in this context but those other things cannot be ignored because they are about ensuring that we do have economic development in New Zealand. 
To come back to that point John Key did promise 170000 new jobs and today just today we have the highest jobless rate in 13 years. It is the highest jobless rate in 13 years. There are 175000 people looking for work. It has not been this bad since Bill English was last finance Minister in the 1990s. Things have not been this bad. The only common element I guess we can see there very plainly. This timid approach to innovation which sees this under-investment is part of a bigger picture and it is also in some ways explained by the way this bill has been put through. We in the Labour Party believe that if you want to get good policy that supports industry that supports commercialisation that supports the scientific community and that actually builds our economy you need proper input from industry. You actually have to be willing to listen to the businesses that are doing this stuff not ramming it through at high speed not putting it through a “blink and you miss it” select committee process. 
You need to be looking at that bigger picture of course—the overvalued currency and the tools that would address that—and the other things that are going on in the New Zealand sector that are leading to the job losses that this Government has overseen the current decline in the economy and the drop in real wages. Recently announced was the median wage drop of 3 percent. Those things all need to be taken into account when you are setting the policy. But this process has not helped. Speeding this through the select committee does not give industry the scientific community economic development communities and members of the public the opportunity to make the contributions they can make that would actually make sure that we had proper decent policy in this area. Even if the Government does not have a vision for it that select committee process is an opportunity to get input from those that do. 
The high-tech manufacturing sector job skills and so on should also be given an explicit focus in this bill. This is what one of the submitters—one of the few submitters who was allowed to come along in the time frame or was able to—pointed to and we support this. Those objectives of having a high-tech manufacturing sector for increasing jobs and increasing skills should be given an explicit focus in the bill. Why not make it clear that that is what we are trying to achieve with this? Then questions can be asked if it is not being achieved so that we can actually have accountability measures and a clear focus. Likewise in the purpose statement it would be great—it would be crucial—that there not be unnecessary duplication and competition with pre-existing research provision by the Advanced Technology Institute. Why not make that explicit in the legislation? Again there were some submitters who were able to make the tightened time frame who made that point and Labour agrees with that. There are sensible and serious things that could have been included to improve the economic prospects associated with this initiative that were not taken into account. 
 Another aspect another conflict that sits in this bill is the funder/provider split. This is something that fits into basic public sector management principles. The funder/provider split is something you can ask Treasury about. It will wax lyrical about the importance of making sure that there is not a conflict between those who are bidding into the process and those who have got the funding. So that exists with the active functions of the Advanced Technology Institute: the research and development the knowledge and technology transfer functions and the enabling functions—the funding to third parties. We also note that there were very few submissions from industry and businesses directly engaged in high-value manufacturing and that has got to be a concern. 
Hon Trevor Mallard 
: They hardly had time to do it. 
Dr DAVID CLARK 
: Well they did not have time to do it as my colleague the Hon Trevor Mallard points out. That means that we are likely to get flawed legislation and that we are not going to get legislation that could be achieving to the extent that is possible if the proper processes of this Parliament are observed along with the habits of good parliamentary conduct. Labour also thinks that the education sector could be quite directly tied in so that again the advice and so on that is coming in takes account of that wider context. These are all things that were overlooked. 
On its own the Advanced Technology Institute cannot successfully transform our economy. It could be better but overall it fits within a wider context where the Government has its eye off the ball does not have a plan and is not taking care of those bigger-picture issues such as the exchange rate which makes it very difficult for the manufacturing sector. That is why we are seeing those engaged in the manufacturing sector drop off—the lowest numbers since statistics began we learnt yesterday. That is why if you do not pay attention to those things if you do not have pro-growth tax policies that support industries if you do not have simplified business practices if you are not actually looking out and listening to what is going on more broadly and if you are not willing to make the big changes to get our economy back on track it will not happen. This Government does not have a plan. It is overseeing the worst economic record of any Government in 50 years. It potters along. It is not making a difference and I look forward to hearing what Mr Woodhouse has to say about how this is going to be turned round because there is no evidence it is in the current settings. 
MICHAEL WOODHOUSE (National) 
: 
 It is my great pleasure to take the last call in the second reading debate on the Advanced Technology Institute Bill. I want to make a couple of comments based on submissions from previous speakers. I start by acknowledging Tracey Martin and the New Zealand First Party for firstly what was a very thoughtful contribution to this debate but also for the fact that having voted against this bill at its first reading the New Zealand First Party has considered and changed that position. I think that is a merit of the maturity of the thought that has gone into it. Also my colleagues on the Education and Science Committee have acknowledged the contribution Ms Martin is making to that committee. 
I want to congratulate Sue Moroney and Dr David Clark on and thank them for their continued support of a research and development tax credit. I do so on behalf of my colleagues in the Institute of Chartered Accountants of New Zealand because it will be they who benefit the most from that philosophically flawed goal. Please keep campaigning on it. If that is all Labour has to innovate in this country then that is fine by us. 
The last thing I would say is to Dr David Clark. I do not have the luxury of focusing on just the negative things that are happening in Dunedin—and Hillside is a very concerning thing. It is my duty my obligation and a challenge to point out the positive things. So for the New Zealand Honey Co. AbacusBio Farra Engineering Cowell’s Genuine Pavlova Pacific Edge Biotechnology Separett Silver Fern Farms Fonterra Speights Brewery for the many small companies that are benefiting from record numbers of cruise ship visits into Dunedin and the oil and gas exploration opportunities that present a massive manufacturing opportunity I will stand up I will fly the flag and I will say that the policies of this Government and this bill will benefit Dunedin. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Speaker. Is it appropriate for the member to refer to “you” in that way? 
Mr DEPUTY SPEAKER 
: We have ruled on that several times. The debate has now concluded. 
A party vote was called for on the question  
That the Advanced Technology Institute Bill be now read a second time. 
Ayes 101 
New Zealand National 59; New Zealand Labour 30; New Zealand First 8; Maori Party 2; ACT New Zealand 1; United Future 1. 
Noes 15 
Green Party 14; Mana 1. 
Bill read a second time. 
The House adjourned at 6 p.m.