Volume 630 Week 10 - Wednesday 22 March 2006 
Volume 630 Week 10 - Wednesday 22 March 2006 
[Volume:630;Page:2045] 
Wednesday 22 March 2006 
Madam Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Points of Order 
Dog Control (Exemption of Farm Dogs) Amendment Bill—Introduction 
Hon DAVID CARTER (National) 
: 
 I raise a point of order Madam Speaker. I understand the Minister of Agriculture is about to make an announcement of the Government’s intention to change the law with regard to the microchipping of farm dogs. To assist Mr Anderton and the Government I therefore seek leave of the House that the Dog Control (Exemption of Farm Dogs) Amendment Bill in my name be introduced and set down on the Order Paper for its first reading. 
Madam SPEAKER 
: Leave is sought. Is there any objection? There is objection. 
Questions to Ministers 
Conservation Minister—Confidence 
1. Dr DON BRASH (Leader of the Opposition) 
 to the  
Prime Minister 
: Does she have confidence in the Minister of Conservation; if so why? 
Rt Hon HELEN CLARK (Prime Minister) 
: 
 Yes because he is a hard-working and conscientious Minister. 
Dr Don Brash 
: Does she agree with the comments of the Hon Dover Samuels who said he was “galled” by the Minister of Conservation’s vetoing the Whangamata marina and that “Ministers should not be allowed to overturn the decision of a jury or a court. It undermines the integrity and the process”; if not will she be taking any action to discipline Mr Samuels for his very public criticism of a ministerial colleague which is a clear breach of the principle of Cabinet responsibility? 
Rt Hon HELEN CLARK 
: Of course the Minister of Conservation did not overturn the decision of the court. The court makes a report. The Minister must then exercise a judgment on restricted coastal activities. I am absolutely amazed that the party that wrote the law and passed it does not believe that. 
Dr Don Brash 
: Does she agree with the Hon Dover Samuels that it is galling that the Department of Conservation bureaucrats had an unfair advantage in the Resource Management Act process for the Whangamata marina because “they could go running off to their Minister to have decisions overturned if they did not agree with the decision of the Environment Court.”; if not why not? 
Rt Hon HELEN CLARK 
: Under the law the Minister makes a decision. He gets advice. I am not sure who else is supposed to advise him if it is not the Department of Conservation. 
Dr Don Brash 
: Does she agree with the comments of the Hon Dover Samuels that the “integrity” of the ministerial veto process under the Resource Management Act as it applied to the Whangamata marina needed to be “reconsidered”; if so what action does she intend to take as a result? 
Rt Hon HELEN CLARK 
: As I said yesterday it is an entirely open matter for debate as to whether the Minister’s power should in law be exercised at the beginning or the end of the process. That is what Mr Samuels is commenting on. 
Rodney Hide 
: When the Prime Minister is judging her Ministers’ performances why does she apply different standards to different portfolios such as she did yesterday when she said David Parker’s behaviour was not good enough for him to be Attorney-General but OK for him to be the Minister of Energy and the Minister of Transport and then again last year when she judged David Benson-Pope to be unsuitable to be the Associate Minister of Education but OK to be the Minister for Social Development and Employment and Associate Minister for the Environment; and where in the hierarchy of ministerial standards does the Prime Minister’s job sit—at the top or at the bottom? 
Madam SPEAKER 
: That question is extremely wide of the original question. If the member would like to—not taking one of his supplementary questions—focus the question on the primary question which deals with the Minister of Conservation. 
Rodney Hide 
: When the Prime Minister is judging her Ministers’ performances such as the Minister of Conservation why does she apply different standards to different portfolios as she has done with David Parker when she said that his standard of behaviour was not good enough to be Attorney-General but OK to be the Minister of Energy and the Minister of Transport; like she did last year with David Benson-Pope when she said his behaviour was not good enough for him to be the Associate Minister of Education but OK for him to be the Minister for Social Development and Employment and the Associate Minister for the Environment; and where in this hierarchy of ministerial standards does the Prime Minister’s job sit—at the top or at the bottom? 
Madam SPEAKER 
: The final part of your question Mr Hide is out of order but the first part is fine. So I ask the Prime Minister to address that part of the question. 
Rt Hon HELEN CLARK 
: I judge the Minister of Conservation on how he does his job. He has a difficult job to do. He must make a decision on restricted coastal activity at the end of quite a long decision-making process. [ 
Interruption 
] For the former Minister who administered this law to keep going on in a way that indicates he has no knowledge of it at all is reprehensible. 
Dr Don Brash 
: Can the Prime Minister confirm media reports that she fully supported the Hon Chris Carter’s handling of the Whangamata marina issue and does she acknowledge that Mr Samuel’s comments regarding Mr Carter are in fact therefore an attack on her as well? 
Rt Hon HELEN CLARK 
: To the best of my knowledge the Minister has followed a proper process. 
Dr Don Brash 
: I raise a point of order Madam Speaker. I have today asked the Prime Minister four supplementary questions. Three of the questions asked whether she agreed with the Hon Dover Samuels. She did not answer those questions at all. The fourth question asked about media reports relating to what Mr Carter said and what she herself said. She did not answer that question either. 
Madam SPEAKER 
: The Prime Minister did address the questions and I listened to the supplementary questions closely. I think it is unfortunate that normally more than one question was involved. So would the member like to redirect his question? 
Dr Don Brash 
: Can I simply read my question again? 
Madam SPEAKER 
: Yes. I remind members that all members are heard in silence. I also remind the member before he begins that members can ask for opinions but Ministers do not necessarily have to give them. That is what the Standing Orders state. As I said if we wanted only factual questions and factual answers then we would change the Standing Orders. 
Dr Don Brash 
: Can she confirm media reports that she fully supported the Hon Chris Carter’s handling of the Whangamata marina issue and does she acknowledge that Mr Samuel’s comments regarding Mr Carter are therefore an attack on her as well? 
Rt Hon HELEN CLARK 
: I can confirm that to the best of my knowledge Mr Carter followed a proper process. 
Working for Families Package—Benefit from Changes 
2.  
SUE MORONEY (Labour) 
 to the  
Minister for Social Development and Employment 
: How many families will benefit from changes to the Working for Families package from 1 April? 
Hon DAVID BENSON-POPE (Minister for Social Development and Employment) 
: 
 From 1 April three out of every four New Zealand families with dependent children will be entitled to tax credits through the Working for Families package. From 1 April therefore an estimated 85000 extra families will become entitled to those tax credits bringing to about 350000 the total number of New Zealand families eligible for family assistance tax credits under the Working for Families package. 
Sue Moroney 
: How do families know whether they are one of the three in four families eligible for Working for Families tax credits? 
Hon DAVID BENSON-POPE 
: Eligibility depends on family income and the number of dependent children. For example a family with one child under 16 could earn up to $69320 a year and still qualify while a family with three young children could earn as much as $93760 a year and still qualify. Families can easily check their eligibility through the Working for Families and Inland Revenue Department websites or by phoning or texting the advertised contact numbers. 
Sue Bradford 
: Why given Labour’s supposed commitment to social equity will the Minister not reallocate the money given to the Working for Families in-work payment so that family support is increased to at least $20 a week for all families including those of the 230000 children dependent on benefit income instead of redistributing more and more taxpayers’ money to the better-off? 
Hon DAVID BENSON-POPE 
: As I said in answer to the member’s question last week and can confirm the average weekly amount already received by beneficiary families from the Working for Families components has already increased by an estimated $32 per family. 
Sue Moroney 
: What other countries provide tax relief similar to New Zealand’s Working for Families package? 
Hon DAVID BENSON-POPE 
: Most OECD countries provide targeted tax assistance to families with dependent children. Australian families are eligible for a family tax benefit on a combined family income of up to about A$90000 depending on the age and number of children. In the United Kingdom tax assistance to working families is provided through a child tax credit for which around 85 percent of families are eligible. Those countries recognise as does this Government the need to target tax credits where they are needed and not provide tax cuts for the wealthy. 
Economic Development Associate Minister—Policy Development 
3.  
Hon Dr NICK SMITH (National—Nelson) 
 to the  
Associate Minister for Economic Development 
: What part has he played in general policy development as an Associate Minister for Economic Development since taking up the role? 
Hon DOVER SAMUELS (Associate Minister for Economic Development) 
: 
 I have been involved in the development of industry and regional development policy over several years. 
Hon Dr Nick Smith 
: Does the Associate Minister stand by his quoted statements in the lead article of the  
Independent 
 newspaper today? 
Hon DOVER SAMUELS 
: A number of statements were made in the article today. I say to this House that those statements were made from my experience as a member of the Far North District Council both as a councillor and a member of the hearings committee on the council over a number of years. 
Hon Dr Nick Smith 
: Is the Minister really telling the House that the extensive comments he made in the  
Independent  
article about the Whangamata marina which is about 200 kilometres south of the area of the Far North District Council and his comments about the ministerial veto in the Resource Management Act are to be believed given his role as a former Far North District councillor rather than as a member of this Government? 
Hon DOVER SAMUELS 
: I say to that member: absolutely. That is the contribution I made and I made it quite clear to the journalist Tim Donoghue that I was commenting and observing through the process and the experience I had when I was a councillor and a member of the hearings committee—and sometimes on the other side as an applicant. 
Rodney Hide 
: I raise a point of order Madam Speaker. I wonder whether you could help the House and perhaps help the Minister in answering the question. It seems to me that the Minister is taking an odd position when on being questioned in the House about what he is quoted in the press as having said he says that he was speaking then not as a Minister but in some other capacity. It seems to me that as a member of this House the Minister has no opportunity to do that. He is a Minister of the Crown 24/7 365 days of the year. He cannot make a whole lot of comments he now wishes he had not made then turn up to the House and not be held to account for them because he says he was talking about being a district councillor. That is certainly not possible. 
Madam SPEAKER 
: I thank the member. 
Hon Annette King 
: What about when the member’s a private investigator? 
Madam SPEAKER 
: No it is all right. I do not really need any assistance on this matter but I thank the member. I make two points in my ruling. First members are of course answerable only for comments they make in the course of their responsibilities as Ministers or Associate Ministers. Second I point out that many members have several capacities. For instance some are party leaders as well as being Ministers and as well as being members of the House. That is perfectly in order. 
Rt Hon Winston Peters 
: As the Associate Minister has brought his experience into the issue can he recall how many times while he was sitting on the Far North District Council the Hon Nick Smith told him and that council that he intended to repeal National’s Resource Management Act—was it 100 times 50 times 20 times or not at all? 
Madam SPEAKER 
: I am sorry; that question is out of order. The Minister is responsible in this House only for his actions as a Minister. Does the member wish to rephrase the question? 
Rt Hon Winston Peters 
: Given that the Minister in his second answer today put his experience as a councillor at issue which is one of the experiences that was brought into an evaluation of matters in respect of the Resource Management Act today does he recall how many times while he was gaining that experience as a councillor that Nick Smith then in charge of the Resource Management Act promised to repeal the legislation—was it 100 times 50 times 20 times or never? 
Hon Dr Nick Smith 
: I raise a point of order Madam Speaker. The member’s question is based on the premise that I was in charge of the Resource Management Act. At no time among the many ministerial portfolios I had was I the Minister for the Environment. I will be pleased to be put in that role in the next Don Brash Government. 
Madam SPEAKER 
: I come back to the original ruling. The Minister is responsible only for his actions as a Minister not as a councillor. 
Rt Hon Winston Peters 
: I raise a point of order Madam Speaker. The Minister was allowed to give the second answer at which time he put at issue his experience which I think is very valuable experience. I wanted to know whether while he was gaining that experience he witnessed any intervention from the then Minister of Conservation who was in charge of significant portions of the Resource Management Act. 
Madam SPEAKER 
: No I ruled the question out of order. I will not go back on that. 
Dr Ashraf Choudhary 
: Can the Minister give examples of his involvement in economic development and policy making? 
Hon DOVER SAMUELS 
: I have been involved in economic policy-making on behalf of the tangata whenua the Maori people of this country in advocating for the Hui Taumata in setting up economic development agencies right around this country and also in the promotion of Maori tourism throughout New Zealand—and right now 13 Maori tourism organisations make a valid contribution to the economy of this country. 
Gerry Brownlee 
: When he made his disparaging comments about the Hon Chris Carter to his colleagues in the Labour caucus room did he explain to them at the time that he was speaking as a previous Far North District Council councillor or had he forgotten to put on that hat at that moment? 
Hon DOVER SAMUELS 
: Let me say that I have never made disparaging comments about my colleague Chris Carter. I hold my colleague in the highest esteem and integrity and he and I have been friends for a long long time. It is a little different from that mob on the Opposition side of the House. I wonder what happens in their caucus when nobody is listening. 
Rt Hon Winston Peters 
: In his role as Associate Minister for Economic Development how many reports has he managed to access from the Minister of Conservation’s office when it was in the charge of the Hon Nick Smith that set out to amend or repeal the Resource Management Act; is it 10 five or none? 
Hon DOVER SAMUELS 
: In my time as a district councillor and member of the hearings committee there certainly were a lot of comments relating to the Resource Management Act and also to the then Minister— 
Madam SPEAKER 
: I am sorry but the Minister has heard me say that he is responsible only for matters in his capacity as Minister. The question was correctly put. Could the Minister please address the question. 
Hon DOVER SAMUELS 
: I have not heard any comments about Nick Smith. 
Hon Dr Nick Smith 
: For the benefit of the member for Tauranga who is usually asleep at Cabinet I seek leave to table the—[ 
Interruption 
] I am sorry the previous member— 
Madam SPEAKER 
: Would the member please be seated. I thought we were trying now not to make disparaging comments about other members when we raise points of order or ask questions. Would the member please put his point of order. If he wants to table a document he should please seek leave for that. 
Hon Dr Nick Smith 
: I seek leave to table the Owen McShane review done in 1998 of the Resource Management Act which included the recommendation that the ministerial veto of the Minister of Conservation be removed. It was supported by me at the time. 
Madam SPEAKER 
: Leave is sought. Is there any objection? There is objection. 
Rt Hon Winston Peters 
: I raise a point of order Madam Speaker. I think Nick Smith should be asked to withdraw and apologise first of all for making an allegation about Bob Clarkson and his ability to stay awake and second for misleading the House by saying he is a member of Cabinet which he will never be. 
Madam SPEAKER 
: That was not a point of order. 
Hon Dr Nick Smith 
: Does the Hon Dover Samuels Associate Minister for Economic Development agree with Dover Samuels Far North District councillor in criticising Chris Carter’s “unfair” decision in respect of Whangamata and his statement that the ministerial veto of restricted coastal activities should be repealed? 
Rt Hon Winston Peters 
: I raise a point of order Madam Speaker. With respect if he is asked to compare two experiences one of which by the Standing Orders and your rulings is out of order there cannot be an answer to that question. 
Rodney Hide 
: You have ruled already that a member can ask for an opinion and can certainly ask for a Minister’s opinion of some other comment. That question is perfectly in order and the Minister is required to answer it. 
Hon Peter Dunne 
: I draw your attention Madam Speaker to Speaker’s ruling 139/3 from Mr Speaker Kidd. He states: “The primary condition of asking a question of a Minister is that the Minister has ministerial responsibility for the subject matter of the question.” He then goes on to state: “If there is no ministerial responsibility there can be no question.” I would submit that not only this question but many of the other questions asked this afternoon on this subject are out of order in that there is no ministerial responsibility and further that much of the strife we have got into in recent weeks has been because of the practice of allowing members to ask questions that have only a tangential relationship to the responsibility of the person they seek an answer from. 
Gerry Brownlee 
: Mr Dunne raises an interesting ruling that was put in place by Speaker Kidd but let us be very clear. Dover Samuels is Associate Minister for Economic Development. Economic development is very much threatened by the Whangamata decision. We would assume that that is why Dover Samuels was so publicly critical of the Minister of Conservation. For two Ministers who are taking different positions to try to hide that difference by climbing in behind the Standing Orders or Speakers’ rulings is quite wrong. 
As for the comments that have been allowed from Mr Samuels that on that particular day he was not speaking as a Minister but rather as someone who had some recollection of being a district councillor some years before that of course opens up the whole question as well as to whether he should be asked other questions. I think that Mr Peters’ question should have been allowed to stand because the answers given by Mr Samuels would be about as ridiculous as the decision that was made by Chris Carter in the first place. So although Mr Dunne suggests that over a period of time there have been some supposedly tangential questions we suggest that many of those questions would not arise if Ministers gave straight answers in the first place. 
Madam SPEAKER 
: Points of order should be brief and not long speeches. I get the grasp of the member’s issue. 
Hon Dr Michael Cullen 
: Reiterating a false interpretation of the original answer does not make it true. Mr Samuels did not say he was answering as a Far North District councillor; he said he was drawing on his experience as a Far North District councillor. That he is perfectly entitled to do. 
Gerry Brownlee 
: I raise a point of order Madam Speaker. 
Madam SPEAKER 
: No I am ruling on the point of order. When looking at the Associate Minister’s responsibility I say there has to be an official connection between the two positions. So I rule that the point made by the Rt Hon Winston Peters is correct. The question needs to be resubmitted so that there is a connection. There is not at the moment. 
Hon Dr Nick Smith 
: Does Dover Samuels Associate Minister for Economic Development with responsibility for assistance in the development of policy agree with the Dover Samuels a former Far North District councillor who was quoted extensively in the  
Independent 
 today criticising— 
Rt Hon Winston Peters 
: I raise a point of order Madam Speaker. 
Madam SPEAKER 
: I think that the member is right. He could put his question without the latter bit and it would be within the rules. 
Hon Dr Nick Smith 
: For goodness’ sake! 
Gerry Brownlee 
: I raise a point of order Madam Speaker. 
Madam SPEAKER 
: There is no official connection between the two. 
Gerry Brownlee 
: I raise a point of order Madam Speaker. It was not the Opposition that went down the line of Ministers being able to wear different hats on different occasions. It was not the Opposition that allowed the Minister to suggest today that every comment he made as the Minister about Chris Carter was in praise of him. Yet we are able to read that somehow as district councillor Dover Samuels was not very happy with Chris Carter. All Dr Smith is asking is whether the Minister agrees with the chap who is apparently a former district councillor. It is Mr Samuels who has put on two hats and it is the Chair who has allowed that to happen. Our opportunity to question the Associate Minister should not in any way be diminished because of the utterly ridiculous way in which the Government wishes to present itself. 
Rt Hon Winston Peters 
: I want to make two serious points. The first one is that if the questioner seeks a comparison between a ministerial position and a prior one then no comparison can be made. That is the point I am making. But the second one is far more serious. It is the propensity of that member to get on his feet take the House’s time for minutes and not articulate one principle of law at all or any principle from the Standing Orders and get away with it. 
Hon Trevor Mallard 
: I raise a point of order Madam Speaker. My point of order is not on the substance of that issue but on the fact that you have repeatedly ruled that points of order are to be heard in silence. I saw four front-bench National Party members who were not silent during that point of order. 
Madam SPEAKER 
: Yes I did too so I remind members to please respect that ruling. I have endeavoured throughout question time to make sure questions and answers are within the Standing Orders. It seems to me it is important that we all do that and that questions should be within the Minister’s official capacity. I have ruled on that. I will take no further discussion on that point. 
Gerry Brownlee 
: I raise a point of order Madam Speaker. 
Madam SPEAKER 
: I am sorry Mr Brownlee this point of order has to be a totally different one. I have ruled on the matter and we have had a considerable discussion on it. If it is on another point that is fine. 
Gerry Brownlee 
: As you know all our questions have to be verified at various times so if we now receive a news report of a member of the Labour Government making a statement somewhere that is of interest to us are we constrained by the description that is put upon that person? It seems to me today that the Minister has decided that he will not be scrutinised on this matter because he is saying he made his statements in a capacity other than as a Minister. Perhaps there should be some directive to all members of the Government that when they make statements to indicate as you would put it Madam Speaker which hat they have on. 
Madam SPEAKER 
: The original question was perfectly in order; the supplementary questions have strayed off the point. But I would refer the member to Speaker’s ruling 140/6. 
Hon Dr Nick Smith 
: Does Dover Samuels the Associate Minister for Economic Development with responsibility in the delegations for policy development agree with Dover Samuels a former Far North District councillor who has extensively criticised— 
Madam SPEAKER 
: I am sorry but the member is repeating the question. 
Hon Dr Nick Smith 
: I made it absolutely plain that I am asking the Minister in his role as an Associate Minister for Economic Development. 
Madam SPEAKER 
: If the member stopped there he would be all right. 
Hon Dr Nick Smith 
: The delegations make plain— 
Rt Hon Winston Peters 
: I raise a point of order Madam Speaker. The member is now being deliberately obtuse. He has been warned twice as to the impropriety of his question. He cannot make that comparison. The question is out of order. 
Madam SPEAKER 
: I have ruled on this matter. It is the comparison that is out of order. It is not the substance of the question. 
Hon Dr Nick Smith 
: That is a farce. 
Madam SPEAKER 
: Would the member please leave the Chamber. 
Hon Dr Nick Smith 
: This is just a farce. 
Madam SPEAKER 
: You may well say so but you will be out of the Chamber. Please leave now. 
The Hon Dr Nick Smith withdrew from the Chamber. 
Gerry Brownlee 
: I raise a point of order Madam Speaker. Why have you accepted an answer from Mr Dover Samuels that he did not speak to either the Labour Party caucus or the  
Independent 
 as a Minister but rather as a free-wheeling individual who had some experience as a Far North District councillor of those matters and that those matters had annoyed him? You allowed that answer to stand. When we come to the House we look at the delegation and say the Associate Minister for Economic Development presumably recognising that the veto exercised by the Minister of Conservation will terrify anybody who is looking at that sort of development in the future makes those statements by drawing on his experience. But apparently he is not able to be questioned on them simply because he chooses to designate himself as being in a different role at the time he made them. That does make this process utterly farcical. 
Madam SPEAKER 
: I point out to Mr Brownlee for the last time that there is nothing new about Ministers acting in different capacities in which they are liable to be required to give answers to questions in the House. I have checked what the Minister said and have told him to confine himself to the responsibilities and I have said the questions had to be related to his ministerial responsibilities. That is what is in the Standing Orders. The question could have been asked within the Standing Orders. We will now move on. 
Rt Hon Winston Peters 
: I raise a point of order Madam Speaker. From my long experience in this Chamber I know that when a member is asked to exit the Chamber in the way that you asked the Hon Dr Smith and that member then hurls abuse at the Chair there are further consequences. I want to know what you intend to do in respect of his behaviour which is simply unacceptable. In the past any member who has done that has been punished. What does the Chair propose to do now? 
Madam SPEAKER 
: I am considering the matter. 
Gerry Brownlee 
: What consequences for development in coastal marine areas does he believe the decision of the Minister of Conservation over the Whangamata proposal will have? 
Hon DOVER SAMUELS 
: I believe that the Minister of Conservation should have overall jurisdiction in terms of the final decision under the Act. That Act was put into place by a National Government. But I also understand the complexity of any application for coastal permits when there has to be consideration of other stakeholders in terms of the particular activity being applied for. 
Dr Don Brash 
: Will the Hon Dover Samuels wearing whichever hat happens to suit accept the sincere and wholehearted congratulations of every member of the Opposition on his very perceptive comments about Mr Chris Carter’s decision on the Whangamata marina? 
Hon DOVER SAMUELS 
: I inform the Leader of the Opposition that I wear only one hat. 
Gerry Brownlee 
: What discussions has the Associate Minister had with the Far North District Council or any other district council or environmental council about the consequences of the Whangamata decision? 
Hon DOVER SAMUELS 
: I was on a local authority for over 20 years. I have not communicated with any local authorities or any regional councils in terms of the observations I have made to the  
Independent 
. 
Roading—Public-private Partnerships 
4.  
GORDON COPELAND (United Future) 
 to the  
Minister of Transport 
: Does he agree that public-private partnership contracts for road infrastructure are an efficient and cost-effective way to build roads and should be encouraged? 
Hon PETE HODGSON (Acting Minister of Transport) 
: 
 The member will be aware that it was this Government that made public-private partnerships a legal possibility. The fact that no one has yet to formally approach us probably reflects the fact that this Government’s huge increase in investment has to some extent crowded out opportunity. 
Gordon Copeland 
: Why has the Government ignored the importance of encouraging private sector involvement in the provision of infrastructure when it is “essential in helping to deliver the much-needed infrastructure required on the national road network” as stated by the Irish Government? 
Hon PETE HODGSON 
: We do not ignore the private sector. We could not build transport infrastructure without the private sector. They are the only people who build transport infrastructure. We contract to the private sector to build transport infrastructure. Part of the funding comes directly from the private sector and will increasingly do so under the current Minister of Finance. 
Hon Mark Gosche 
: Has the Minister seen a transcript of the Paul Holmes breakfast show this morning on which Mr Holmes said to Tau Henare: “The reason we’ve got all these roading problems in Auckland is because your lot failed completely in the 1990s to spend sufficient money on the Auckland roading infrastructure.” and has the Minister seen the member’s response? 
Hon PETE HODGSON 
: Yes I have. The member in question responded: “You are you are absolutely right. You are absolutely right.” I think the member is absolutely right when he says that is absolutely right. 
Peter Brown 
: Noting the answers to the earlier questions—not the last one—will the Minister tell us precisely what private participation can achieve when it comes to road building that cannot be accomplished by the public sector alone? 
Hon PETE HODGSON 
: Public-private partnerships can have some advantages in the bringing in of new ideas and understandings in terms of construction and management. That is the logical idea. It certainly is not cheaper money because the Government can borrow money more cheaply than the private sector can so it has to be something to do with the ability that the private sector brings to the process. What is also the case is that it is clear from international experience that public-private partnerships do not always work and often work best in large or very large projects. 
Dr the Hon Lockwood Smith 
: In light of the Minister’s answer today that the Government is prepared to proceed with public-private partnerships will he now make available the Government’s share of the investment required to enable the public-private partnership for the construction of the Penlink toll road to proceed given that the failure to proceed with it is strangling access to the Whangaparaoa Peninsula; if not why not? 
Hon PETE HODGSON 
: In an earlier time as Minister of Transport and prior to the last election I met with those people representing the Penlink proposal. [ 
Interruption 
] I am answering the member’s question if he would like to hold his tongue. I met them in Rodney. I met them prior to the election and I said: “The next thing that has to happen is that you guys need to approach us.” I am still waiting. 
Dr the Hon Lockwood Smith 
: They’ve approached you. 
Hon PETE HODGSON 
: To my knowledge there has been no formal approach to the Government in respect of Penlink. As far as I am aware there has been no approach. I must say that I want to know why the member voted against the legislation that allowed for this. I want to know that because those members are all in favour of it but when they had a chance to vote in favour of it they all said no. 
Madam SPEAKER 
: It was very difficult to hear the Minister’s answer. [ 
Interruption 
] Just because you shout does not mean you are necessarily heard. 
Peter Brown 
: Does the Minister accept that private involvement in road building will more than likely result in tolls and that employers can usually pass the toll on or make it tax deductible but the average New Zealander has to pay it out of his or her net income; if so does he believe that is fair and just? 
Hon PETE HODGSON 
: There are many ways to service the capital that needs to be raised for a public-private partnership and tolling is one of them. As the member suggests in his question internationally it is a commonly used method. In a number of countries including the one closest to us it has run into a number of difficulties. Tolling has meant that there has been diversion and that has meant that business models do not always stack up in practice. 
Gordon Copeland 
: Will the Government in the light of the Minister’s complimentary comments about public sector involvement support my member’s bill the Land Transport Management (Public Private Partnerships) Amendment Bill should it be drawn from the ballot which will remove remaining roadblocks to public-private partnerships or does the Government still feel constrained by its pre-2002 agreement with the Greens? 
Hon PETE HODGSON 
: I can say uncomplicatedly that unofficial feedback to the Ministry of Transport from the private sector is that the Land Transport Management Act provisions are not a barrier to private sector involvement in road building. Therefore the member’s bill seeks to correct a problem that as far as I am aware does not exist. 
SchoolSmart Website—Data Use 
5.  
Hon BILL ENGLISH (National—Clutha-Southland) 
 to the  
Minister of Education 
: What agreements if any exist between schools and education agencies that limit the use of data presented in the Ministry of Education’s SchoolSmart website? 
Hon STEVE MAHAREY (Minister of Education) 
: 
 The understanding is that the data is made available to inform schools of statistics of their own performance in a range of areas and to allow them to benchmark themselves against other schools. Parents can get this information from their local school along with other important information such as the sort of environment the school has the kind of teacher programme it operates and what actually happens in the classroom to benefit students. That gives context of course to that data. 
Hon Bill English 
: If the Minister has agreements that limit the use of the data why has he publicly released to me as a result of parliamentary questions some of the data available on the SchoolSmart website such as teacher turnover rates and suspension and stand-down rates but continues to keep secret other bits of the data such as a school’s spending on administration and student retention rates? 
Hon STEVE MAHAREY 
: As I said in my answers to a number of the member’s many questions on this topic we are not releasing data that identify individual schools but aggregate data that allow us to look at categories of schools. 
Moana Mackey 
: Can the Minister elaborate on SchooolSmart and the benefits of running such a system? 
Hon STEVE MAHAREY 
: SchoolSmart is a website that displays information about individual schools compared with data from similar schools. Thirty-six reports are available covering such areas as academic information annual teacher turnover expenditure on property and depreciation roll change comparison by school type and area ethnic and gender information school-leaver information and school retention to year 13 for secondary schools. I agree with the Secondary Principals Association of New Zealand the New Zealand Principals Federation the School Trustees Association the New Zealand Educational Institute and the Post Primary Teachers Association that the information is best released by the schools themselves so that they can give context to the raw data. For the information of members of the House I have here for example raw data on the turnover of teachers per school. It does not mean a lot to people unless it can be put into context and that is why everybody in the education sector apart from the lone critic would like it done the way it is done. 
Hon Bill English 
: Is the Minister not surprised to find that all teacher groups are opposed to parents seeing this information and why does he refuse to allow parents access to this website so they can see a range of data about the performance of their child’s school? 
Hon STEVE MAHAREY 
: It may be helpful to the member if I explain once again that teachers are not opposed to this. Parents can get access to this data through talking to their local school. What teachers are opposed to is having the data out of context. That is why they like to have it explained to parents within the local school. Mr English people understand wants to create league tables. Teachers see no value in that in relation to the education of people. They want to do it on the basis of good education not league tables. They can get that information and they can get the context of the school wrapped around it. 
Moana Mackey 
: What other information is available to parents to allow them to make informed choices about their children’s education? 
Hon STEVE MAHAREY 
: A number of sources of information are available for parents. The best way for parents to make choices about their child’s education is to look at things like the reports of the Education Review Office and to visit their local school to talk directly to teachers and principals who will tell them about the school. They can make use of SchoolSmart information if they are talking with their local school but because—and I repeat this for the member’s edification—the sort of data I have in my hand is the kind of data they will get it is best that they make use of that SchoolSmart data in the context of the school they are talking about. 
Hon Bill English 
: Could the Minister confirm for the House that what he has just said is not correct and that if parents go to the SchoolSmart website they are not in fact presented with pages of detailed data but with clear graphic illustrations that compare the performance of their child’s school with other similar schools—and that parents are not stupid and could quite easily digest that information? 
Hon STEVE MAHAREY 
: That is what I have just said. If parents talk to a local school they will gain access to that kind of information about their school but they will also have the advantage of having it in the context of that school. The data I have here was in fact pulled off the website so yes it is the data they could get. 
Hon Bill English 
: Is it the Government’s view that the school principal should be allowed to look at this information that the teachers in the school should be allowed to look at it that the Ministry of Education and the Education Review Office should be allowed to look at it that he should be allowed to look at it and that Opposition spokespeople who can find a friendly principal can have a look at it and that the only people who are not allowed to look at it are parents—the people who have the most vital interest in the progress of that school; and what does he say to parents to explain why he regards them as too ignorant to deal with this dangerous information? 
Hon STEVE MAHAREY 
: The first thing I would say to members is not to listen to the member’s characterisation of SchoolSmart because it is not true. The way that this data is used— 
Hon Bill English 
: I raise a point of order Madam Speaker. I take offence at the Minister making a statement that a statement I made in the House was not true. 
Madam SPEAKER 
: The member has taken offence. Would the Minister withdraw and apologise. 
Hon STEVE MAHAREY 
: The member has just told me that what I said was untrue. So it is OK for him but not OK for me. 
Madam SPEAKER 
: The member has asked for the statement to be withdrawn and for the member to apologise. 
Hon STEVE MAHAREY 
: I withdraw. Can I say to the member— 
Madam SPEAKER 
: And apologise. 
Hon Annette King 
: I raise a point of order Madam Speaker. I sat here and listened to Bill English call across this House: “That’s not true.” several times when the Minister was on his feet. He has double standards. He does not like it when the Minister says it back. I took offence. I believe he ought to withdraw and apologise. 
Madam SPEAKER 
: No you cannot ask for another member to do that. 
Hon Dr Michael Cullen 
: We are in a difficulty here because simply saying that a statement is not true does not imply that somebody is lying; it merely means that he or she got something factually incorrect. We continually get into this trouble in the House when people assert motives and implications behind a statement that is a simple statement of interpretation. If we rule out saying the statement is not true then I think we are in an awful lot of trouble in this House because we would have to find convoluted ways of saying the same thing. 
Rt Hon Winston Peters 
: I agree with Dr Cullen to the extent that to say something is not true is to say it is not correct—that it is not right. It does not mean that the argument is taken further to personalise that the person making the statement is seeking to lie to the House. If we have this lily-livered behaviour from National members every time they do not like something then this House will be a very—[ 
Interruption 
] This is a point of order I should be heard in silence. 
Madam SPEAKER 
: I thank the member. Would the member please just come to the point of order. 
Rt Hon Winston Peters 
: I am entitled to make my points of order without a barrage from National members something which is all too frequently happening. Can I be heard in silence? 
Madam SPEAKER 
: Yes and would you please make your point of order. 
Rt Hon Winston Peters 
: My point of order is this: to say that something is not true that it is incorrect or that it is false does not imply that the person is a liar or deliberately setting out to mislead the House. The other point I am seeking to make is that we have countless points of order being taken here that have no precedent in the past and if they were to be supported as your initial ruling suggested this House would be a thoroughly antiseptic and insipid place. 
Madam SPEAKER 
: I thank the members. The member is entitled to ask for a personal reflection to be withdrawn and I understood that is what the member was doing. If in fact a member does take offence then of course objection has to be taken by that member at the time. But the Rt Hon Winston Peters is correct: “untrue” does not imply lying—a point also made by Dr Cullen—but it can be taken as a personal reflection. 
Hon STEVE MAHAREY 
: I would say to parents what I said in my original answer and I repeat it for the member: what we have here is a data source that allows schools— 
Brian Connell 
: I raise a point of order Madam Speaker. You made your ruling. You asked the Minister to withdraw and apologise and the House is still waiting for that to happen. 
Madam SPEAKER 
: I am sorry. I heard the Minister withdraw— 
Brian Connell 
: You made a ruling Madam Speaker. You directed the Minister to withdraw and apologise. 
Madam SPEAKER 
: Would the Minister please affirm that he withdrew and apologised. If he did not would he please stand and do so. I am sorry I thought I heard the Minister say that. The Minister has said he withdrew and apologised. His word is taken. 
Hon STEVE MAHAREY 
: To make life a whole lot easier for the House I withdraw and apologise. In answer to the question I would say to parents what I said in my original answer to the original question—that is the data is made available to inform schools about their own performance in a range of areas which allows them to benchmark against similar kinds of schools. Parents can get access to that information by approaching the school and that is a good way to do it because then the information can be placed in context. 
Hon Bill English 
: Is the Minister now saying that he is happy for parents to have the information in any context except the context of comparison with another school and does he believe that it is evil intent on the part of parents to want to see comparisons between their child’s school and other schools? 
Hon STEVE MAHAREY 
: No and no. 
Hon Bill English 
: Can I take it from what the Minister has said that if schools agree to have their parents accessing this information then he will direct the Ministry of Education to allow access by those parents with the agreement of the school to the SchoolSmart website which is by far the easiest way for parents to get hold of the information? 
Hon STEVE MAHAREY 
: No I will not direct the Ministry of Education to do that for the very simple reason that we have a very workable system now. Schools can be approached by parents to talk about this. We will not buy in to league tables which is what Bill English is arguing for with his privatisation agenda. No one in the education system agrees with the lone critic. He remains the lone critic. 
Justice Minister—UMR Survey Maori 
6.  
Dr PITA SHARPLES (Co-Leader—Maori Party) 
 to the  
Minister of Justice 
: Has he been informed of the results of the UMR survey released yesterday which found there was strong overall agreement (66 percent agree; 12 percent disagree) to the statement that “in addition to having the same rights as all New Zealanders Maori have the right to live as Maori” and what is his response to this finding? 
Hon MARK BURTON (Minister of Justice) 
: 
 Yes I have been informed of the results of the survey that was released yesterday by the Human Rights Commission to mark Race Relations Day 2006. The finding that the member refers to is encouraging. 
Dr Pita Sharples 
: Ka taea e ia te whakamarama mai i te aronga o nga kupu “kia tu rangatira ai hei Maori?” 
[An interpretation in English was given to the House.] 
[ 
Is he able to explain what is meant by “live and succeed as Maori”? 
] 
Hon MARK BURTON 
: I did not author the report but certainly I would take it to mean to fully participate in and to have the economic social and cultural benefits of a full healthy and wholesome life in New Zealand. 
Pita Paraone 
: Can the Minister given his response to the primary question describe what is meant by “to live as Maori” and is this the reason that so many Maori are relocating to Australia—now one in seven; soon to be one in three—where they can obviously “live as Maori”? 
Hon MARK BURTON 
: What I meant is essentially what I answered to Dr Sharples’ supplementary question. To add to that answer a good example of what I was describing is the record number of Maori in jobs and the record number of young Maori in education in industry-based training and in Modern Apprenticeships—those are all good examples of young Maori in this country who are fully participating in New Zealand society. 
Dr Pita Sharples 
: I rungai te kaupapa kei te whakaae te nuinga o Niu Tireni kia “noho taketake te Maori hei Maori” he aha onatohutohu ki te Minitamo te Manatu Aorere na ko te whakautu o Niu Tireni ki te kaupapa kuawhakariteamongatangata whenua o te ao kei te he kei te kuare na te meakare he koreromo te Maoriengari ka hangaianakengakoreromo “te katoa o te iwi”? 
[ 
As New Zealanders generally agree that “Maori have the right to live as Maori” what action will he take to advise the Minister of Foreign Affairs that the New Zealand response to the draft declaration on the rights of indigenous people is both unjust and ill-informed in failing to mention Maori people but instead focusing only on “all citizens”? 
] 
Rt Hon Winston Peters 
: I raise a point of order Madam Speaker. To the best of my knowledge this country is called New Zealand. That is not the name that Mr Sharples just gave this nation and he should not be allowed to let it creep into the language by way of using the Maori language in the House. 
Madam SPEAKER 
: That is not a point of order. 
Rt Hon Winston Peters 
: I raise a point of order Madam Speaker. This country is not Niu Tireni; it is New Zealand and some call it Aotearoa. But that other name is not ascribed to New Zealand. 
Madam SPEAKER 
: That is not a point of order; it may well be a matter of fact— 
Rt Hon Winston Peters 
: I raise a point of order Madam Speaker. When the question was asked it had that word in it for describing this nation. The House surely recognises what name this country is called. 
Dr Pita Sharples 
: Since the 18th century Maori have been referring to this country as Niu Tireni Niu Tirani or Aotearoa. 
Madam SPEAKER 
: Thank you. Members can use whatever terms they like; it is not to be ruled what is correct or not. We will now ask for the interpretation please. 
[An interpretation in English was given to the House.] 
Hon MARK BURTON 
: As the member identifies I do not have ministerial responsibility for the report in question—but I do frequently engage in useful discussion with the Minister of Foreign Affairs. 
Oil and Gas Exploration—Bidding Result 
7.  
PHIL HEATLEY (National—Whangarei) 
 to the  
Associate Minister of Energy 
: When will he announce the bidding result of the Government’s four oil and gas exploration block offers off the East Coast of the North Island and nine block offers in offshore Taranaki that closed on 17 February 2006? 
Hon HARRY DUYNHOVEN (Associate Minister of Energy) 
: 
 I will be pleased to announce the results of the block offers as soon as the assessment process is completed. 
Phil Heatley 
: Will that Minister admit to the House today that he has again failed to secure successful bids for the oil and gas exploration off the East Coast and off the coast of Taranaki—just as earlier this year explorers rejected his three deep-sea Taranaki offers and his three Northland block on offer—and if he does admit that is he at all concerned in light of New Zealand’s urgent need to replace disappearing Maui gas? 
Hon HARRY DUYNHOVEN 
: In the mid-1990s the industry was concerned about the depletion of the Maui Gas field and drew attention to the need to address the issue—without any action from the then National Government. After careful consideration in 2004 the Labour-led Government introduced the following initiatives: firstly adjustments to tax provisions; secondly reductions in royalty rates for new discoveries; thirdly additional funding to promote investment in New Zealand; and finally the Government-funded seismic data that has since been made freely available to support block offers. Those initiatives were designed to encourage and expedite exploration and to yield discoveries that will make a material difference to the security of New Zealand’s gas and oil needs. 
Hon David Carter 
: Why are there no bids? 
Phil Heatley 
: Why no bids? 
Hon HARRY DUYNHOVEN 
: I invite members to wait for the announcement on successful block offers. 
Shane Jones 
: Has the Government’s expenditure led to increased exploration activity? 
Hon HARRY DUYNHOVEN 
: It has certainly. Bidding parties for the East Coast have stated that the timely availability of new data has materially changed perceptions of the potential of the East Coast basin and stimulated their wider interest in New Zealand. 
Phil Heatley 
: Is the Minister concerned that there is no bidding war when it comes to the Northland Taranaki and East Coast block offers but there is just him with a white flag of surrender wallowing around in failure—part of an entire Government that is in failure? 
Hon HARRY DUYNHOVEN 
: I am not sure where the member opposite is getting his information from at all. He certainly cannot have been at the recent oil and gas conference held in Auckland or he would know that the industry is not only very buoyant but we have twice—I repeat twice—the number of wells being drilled in recent years than in any time in which the National Party was Government. I invite those members to wait for the results of the bidders’ offers. 
Hon Trevor Mallard 
: Can the Associate Minister explain to the House that there has also been a hurricane called Katrina in the Gulf of Mexico which has slightly reduced the availability of drilling rigs? 
Hon HARRY DUYNHOVEN 
: The Minister is quite correct. There has been a reduction worldwide in the availability of rig slots. I can tell members just for their information that rigs were previously available prior to Hurricane Katrina for around US$150000 per day. A particular company working in New Zealand had one of its operations managers strongly criticised for agreeing to a contract at $180000 per day but he is now being lauded for agreeing to that contract because drilling rig rates will be around $500000 per day for the next 3 years. [ 
Interruption 
] I tell the member that he needs to do a thorough bit of research into how the industry operates. I have also to say that he is one of the brightest of the current National members of Parliament. 
Phil Heatley 
: In the Minister’s recent speech to that very Petroleum Conference he referred to he said: “Have these initiatives been successful? I think it is too early to tell.” so did he not really mean that all those failures mean it is too late to matter? 
Hon HARRY DUYNHOVEN 
: I am very happy that the member mentioned my speech to which I had a really marvellous reaction. We have received a very positive response from the entire oil and gas exploration industry to the initiatives taken. That is confirmed by companies recently telling the Ministry of Economic Development that the availability of data had very much influenced them to look seriously at New Zealand. We will wait for the results of the block offers. 
Phil Heatley 
: Has the Minister apprised the Prime Minister of all his modest successes in his portfolio as Associate Minister of Energy of his unwavering loyalty and endless years of service and of all those successful bids given that the job of Minister of Energy is now on block offer? 
Hon HARRY DUYNHOVEN 
: Unlike the little member opposite who waves the flag a lot I am sure the Prime Minister is aware of my ability or otherwise in every field of endeavour around here. The member has raised a very good question as to the reaction of industry to the initiatives taken by the Government. I can tell the member that even members of his own party have congratulated me on the initiatives taken. As the member has raised it I seek leave to table my address to the New Zealand Petroleum Conference titled  
New Zealand’s exploration outlook 
. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Hon HARRY DUYNHOVEN 
: I seek leave to table a document from the 1996 New Zealand Petroleum Conference proceedings a very good paper by a Mr C Stone about the shortage of gas etc. in New Zealand. 
Document by leave laid on the Table of the House. 
Phil Heatley 
: I seek leave to table a graph showing Maui’s decline over the next 4 years. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is. 
Phil Heatley 
: I seek leave to table an article titled “Explorers’ begging bowl goes unfilled”. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is. 
Phil Heatley 
: I seek leave to table an article titled “Government drags its feet on oil exploration”. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is. 
Phil Heatley 
: I seek leave to table an article titled “Overseas investors highlight barriers to investment in New Zealand”. None of these articles were written by Harry Duynhoven. 
Madam SPEAKER 
: Leave is sought to table that document. Is there any objection? There is. 
Climate Change—Obligations 
8.  
JEANETTE FITZSIMONS (Co-Leader—Green) 
 to the  
Minister responsible for Climate Change Issues 
: What is the Government’s current best estimate of the amount by which New Zealand will fail to meet its climate change obligations by 2012 and what will the likely cost of this be to the taxpayer in 2012? 
Hon PETE HODGSON (Acting Minister responsible for Climate Change Issues) 
: 
 The member will recall that in May last year the official estimate of the net position changed from one of surplus which had been the consistent advice over many years to one of a deficit of 36 million tonnes. This was revised upwards last month to a deficit of 64 million tonnes and the cost has been revised upwards to $562 million spread over the 5-year period from 2008 to 2012. 
Jeanette Fitzsimons 
: Does the Minister agree that it makes more sense to spend money now to pay New Zealanders to reduce our carbon emissions than to pay Russia for carbon credits in 2012? 
Hon PETE HODGSON 
: To the extent that that is a possibility I think it does make sense. That is why 3 years ago or thereabouts we introduced the Projects to Reduce Emissions programme which enabled people who could access carbon-abating technologies to do so in response to receiving carbon credits if their plan or their activity was more expensive than business as usual. 
Jeanette Fitzsimons 
: How much carbon and how many dollars have been saved by the Government’s Projects to Reduce Emissions policy which has enabled most of our current wind power to get going; and will the Minister be able to assure the international climate change conference at Victoria University next week that this approach will be continued and expanded? 
Hon PETE HODGSON 
: Let me answer from memory. The Government has put into the market something like 10.5 million tonnes worth of carbon credits and—because we run this thing at a profit—has probably secured about 12 million tonnes of abatements. That is a difference of about 1.5 million tonnes. The current Treasury price for carbon is about $8 or $9 per tonne. One can do the sums from that. It feels like a $12 million or $13 million profit or thereabouts. As to the continuation of the policy the member will be aware that the Government has climate change policies under review and the outcome of the answer to her last question will be part of that review. 
R Doug Woolerton 
: Does the Minister regret the fact that New Zealand signed the Kyoto Protocol ahead of our major trading partners given that all we have seen to date is increasing costs with no benefits whatsoever? 
Hon PETE HODGSON 
: Leaving aside the fact that the projects to reduce emissions managed to kick-start wind energy in this country as Jeanette Fitzsimons implied in her question we need to be careful to address the fact of costs on both sides. There is a cost of doing nothing. I refer the member to some advice that I received from a member of this House that the cost of doing nothing is such that it will “eventually stuff life on Earth”. That seems to me to be quite a costly thing to have happen. That advice comes from the Hon Dr Nick Smith. 
Jeanette Fitzsimons 
: Is the Minister concerned at the rate at which forests are being cleared for conversion to farming thus increasing our climate liabilities and will the climate change policy review he mentioned seriously consider making some payment to the owners of forests planted since 1990 for the carbon they have stored in order to discourage further deforestation? 
Hon PETE HODGSON 
: The policy suggestion the member has just come up with of course would increase the cost to the Government beyond the $500 million - plus that I announced in answer to the primary question so we would need to take cognisance of any fiscal effects thereof. What is my view about the shift from forestry into non-forestry activities? It seems to me that a country that bases its economy on land resources has to have some flexibility of land use and that is especially the case where forest was planted in areas where farming could not take place but now can because the cobalt deficiency in the soil that precluded farming from taking place has now been resolved. 
Hon David Carter 
: Will the Minister acknowledge to the House today that the entity responsible for the greatest amount of deforestation in New Zealand is the Government through its entity Landcorp? 
Hon PETE HODGSON 
: It probably is—I am just not sure but it probably is—because Landcorp has just picked up a bunch of land on the Rotorua-Taupo road which is the area where the cobalt deficiency occurred. It is logical that that would be the first part of New Zealand to be converted back to farming. 
R Doug Woolerton 
: Does the Minister really believe Nick Smith’s statement given the fact that New Zealand’s total emissions are 0.001 percent of the world’s carbon emissions and is it really credible that that will ruin life on Earth as we know it—because New Zealand First members do not think it is? 
Hon PETE HODGSON 
: It is hard to know what the truth is. It is even harder to know what the truth is when one examines the various positions of the National Party. For example its leader Don Brash quotes himself as saying: “I am one who thinks the science is still debated.” Even his mate President Bush does not believe that any more. On the other hand Nick Smith says it will “stuff life on Earth”. So one says nothing is going to happen and the other one says everything is going to happen and it is all a little bewildering. 
Question time interrupted. 
Points of Order 
Government Notice of Motion No. 2—Intelligence and Security Committee 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I raise a point of order Madam Speaker. I apologise for interrupting question time but this matter relates to business later in the day. I have had drawn to my attention just a few moments ago that there is a mistake in a series of Standing Orders references in Government notice of motion No. 2 relating to the setting up of the Intelligence and Security Committee. I seek leave for updated Standing Orders references to be substituted at this point so that members will have a chance to check the correct references well before we get to the notice of motion. 
Madam SPEAKER 
: Leave is sought. Is there any objection? There is not. 
Question time resumed. 
Questions to Ministers 
Corrections Department—Confidence 
9.  
SIMON POWER (National—Rangitikei) 
 to the  
Minister of Corrections 
: Does he have confidence in his department; if so why? 
Hon DAMIEN O'CONNOR (Minister of Corrections) 
: 
 Yes although there is always room for improvement. 
Simon Power 
: How can he continue to have confidence in his department when Department of Corrections officers are taking inmates to the beach rewarding them with porterhouse steak ice cream chocolates fizzy drinks and lollies and showing pornographic videos in their cells at night or is this what the Government meant when it said it was getting tough on criminals? 
Hon DAMIEN O'CONNOR 
: I will always support a system within the prisons that incentivises good behaviour. However the incidents the member refers to are outside prison protocol. Disciplinary action has been taken and they will not occur again. I would like to remind the member regarding the steak incident that we feed prisoners for $4 a day or thereabouts and steak is not normally part of their diet. 
Simon Power 
: Does he have confidence that his department has the capacity to improve its efforts at rehabilitating prisoners when only 65 inmates have been placed in drug treatment units in the last 7 months out of an annual target of only 174—a number the Ombudsman condemned as “extraordinary”—and when 83 percent of the prison population has a history of or a current drug and alcohol problem? 
Hon DAMIEN O'CONNOR 
: I do not think we are doing well enough in the area of drug and alcohol treatment. We will be reviewing and are reviewing those programmes and we will be delivering better programmes to more prisoners in the future. 
Simon Power 
: Can he give an assurance that the new rehabilitation programmes announced yesterday will include dedicated drug and alcohol programmes in light of the fact that the number of positive tests for methamphetamine use in prisons has according to his own answers to written questions increased from five in the 1999-2000 year to 66 in the 2004-05 year; if not why not? 
Hon DAMIEN O'CONNOR 
: I accept that the increase in incidents of P usage within prisons reflects the increase in incidents of P usage in the general community. That is a sad indictment of our society and we must do everything we can to stamp out the use of P. I have every confidence that the new programmes we have in place—the new ones to replace the ones cancelled yesterday—will offer better drug and alcohol treatment for those inmates. 
Simon Power 
: Can he give an assurance that none of the inmates of the 60-bed unit at Christchurch Prison who allegedly watched pornography in their cells at night were sex offenders? 
Hon DAMIEN O'CONNOR 
: I am not aware of that and I cannot answer the question. I would be more than happy to provide that information to the member if he wishes to write to me. 
Simon Power 
: How can the Minister continue to have confidence that there is no need for an independent and wide-ranging inquiry into prisons when even the Corrections Association which represents prison workers has said in recent days that it supports an inquiry? 
Hon DAMIEN O'CONNOR 
: The Corrections Association of New Zealand has not said that it would support an inquiry at all. The member should check with the association to get clarification on that point. We are dealing with a very difficult environment. We are not running kindergartens. We deal with over 50000 new sentences each year in this country and with over 9000 new people going into prison. I think that the Department of Corrections does an excellent job in a very difficult environment. 
Organics Industry—Support 
10.  
DAVE HEREORA (Labour) 
 to the  
Minister for Economic Development 
: What steps is the Government taking to increase the level of support available to the organics industry? 
Hon TREVOR MALLARD (Minister for Economic Development) 
: 
 The Government is providing $1.5 million to Organics Aotearoa New Zealand. 
Dave Hereora 
: Why has the Government increased its level of support for the organics industry? 
Hon TREVOR MALLARD 
: Because it is a small but important sector that is growing especially in the United States and European markets. 
Hone Harawira 
: E aha ana ia hei whakatauingaawangawanga o tona Hoa Minitakuaki mai ko te kaupapa a-moana he wawatanoa iho a ko tonamutunga hei whakakahoreingawhakahiatowhairawa? 
[An interpretation in English was given to the House.] 
[ 
What steps will he be taking to address the concerns of his Associate Minister that the oceans policy was just a dream and would undermine economic development? 
] 
Hon TREVOR MALLARD 
: When he approaches me on that I will consider it. 
Elective Surgery—Service Provision 
11.  
Dr JONATHAN COLEMAN (National—Northcote) 
 to the  
Minister of Health 
: Is he concerned about the Government’s ability to meet New Zealanders’ need for elective surgery; if not why not? 
Hon PETE HODGSON (Minister of Health) 
: 
 While I am delighted that the number of elective surgery procedures has increased by 12.6 percent on a case-weighted basis under this Government and by more than that when our patient procedures are taken into account there is always more to be done. This Government will never be complacent. 
Dr Jonathan Coleman 
: Can he explain from behind his statistical smokescreen why the Auckland District Health Board— 
Hon Trevor Mallard 
: I raise a point of order Madam Speaker. Ironic expressions in questions are forbidden by the Standing Orders. That is about as clear a case of one as one can get. 
Madam SPEAKER 
: Yes. Would the member just ask the question please. 
Dr Jonathan Coleman 
: Can the Minister explain why the Auckland District Health Board performed 813 coronary bypass operations in 2002 yet 3 years later in 2005 less than half that number—394—were performed? 
Hon PETE HODGSON 
: No I cannot because the member did not give me any notice that that was what the question was to be about. So I am not able to answer him. If the member wants to hide behind a bland primary question then his supplementary question will not get a good answer. What I need to do is to take a bit of a guess. All I can say is that around the country and therefore I assume in Auckland as well coronary artery bypass grafts are giving way to another form of surgery an earlier intervention known as angioplasty which reduces the need for coronary artery bypass grafts—which I would have thought a doctor would know about. 
Maryan Street 
: By the end of last year how many more people had commitments for elective surgery compared with the year prior? 
Hon PETE HODGSON 
: In December 2005 there were 4600 more people with commitments for elective surgery than there were in December 2004. That is 4600 more people who were benefiting from this Government’s work to create a fairer more transparent elective surgery system. The days when people were left on waiting lists with no guarantee of treatment as was the case under a National Government are gradually coming to an end. 
Dr Jonathan Coleman 
: Will the Minister accept that the number of angioplasties that he mentioned only rose from 930 to 1080 during the period under discussion which in no way explains the massive drop in open-heart operations; and will he also accept that 133 people who have been seen by an Auckland District Health Board heart surgeon are sicker than the threshold for treatment yet have been given no commitment that they will actually receive an operation? 
Hon PETE HODGSON 
: Again I say to the member that because he does not give notice of what his deep dark question is to be about an informed answer cannot be given. So I shall have to make a guess at this one as well. The member has done the classic thing: he has quoted the Auckland District Health Board without recognising that the Waitemata District Health Board and the Counties Manukau District Health Board have over recent years significantly increased their surgical procedures. Has he drawn that fact to the attention of the House? No he has not. Why has he not done that? Because he prefers to obfuscate. That is not a good look. 
Dr Jonathan Coleman 
: Would the Minister be so— 
Madam SPEAKER 
: The question will be heard in silence. 
Dr Jonathan Coleman 
: Would the Minister be so eye-poppingly angry if— 
Madam SPEAKER 
: I am sorry but the member already been warned. Just ask the question without a comical comment please. 
Dr Jonathan Coleman 
: Would the Minister further explain why as of January 2006 a further 140 sick people in the Auckland District Health Board area had been given a commitment to open-heart surgery but had been on the waiting list for over 6 months? 
Hon PETE HODGSON 
: I do not know because the member did not indicate at the beginning of the question what the question was to be about and that is where the matter rests. 
Dr Jonathan Coleman 
: Will the Minister be embarrassed if patients on the heart surgery waiting list of Auckland District Health Board are advised that the district health board cannot give them any assurance of when their operation will take place and that they should consider all options including going private if they can afford it? 
Hon PETE HODGSON 
: Certainly people who can afford to go private will consider that as an option but the public health system in this country is dealing with more and more elective surgery cases each year than the year before—more and more New Zealanders are getting their elective surgery. What is more the number of New Zealanders who have crossed the treatment threshold but have not received their surgery has dropped by one-third in the past 18 months. 
Gerry Brownlee 
: I raise a point of order Madam Speaker. Firstly let me observe that today we had a member of our caucus thrown out of the House as a result of that member’s considerable frustration at the way in which a question was being answered. When you consider the answers that Mr Hodgson has given I think you can get a sense of just how that frustration builds. This question dealing with elective surgery has been on the Order Paper since 11 o’clock this morning. The Minister has repeatedly said: “Oh there’s more elective surgery going on in the country than ever before.” but every time he is confronted with some appalling statistics showing that that is not the case he simply says: “I don’t know.” and “The member should have asked a more specific question.” I do not think that helps order in the House and I do not think it brings this Parliament into great respect. I ask you to consider perhaps ruling that Ministers should answer questions or at least address questions that are on the Order Paper. Saying “I don’t know.” would stand as an answer but to go on and give some speech of qualification behind why the Minister does not know that seems to be a condemnation of the person asking the question is just unacceptable. 
Hon Trevor Mallard 
: It has been a long tradition in this House that—and I can remember my predecessor the Hon Fraser Colman using the phrase—if a member wants a specific answer to a detailed question the member either asks a written question or gives proper notice of the nature of the specific detail required. That has been the history of the House and I think new members have to understand that if they do want details that drive right down to the number of open-heart surgeries in a particular hospital they have to be more specific in the original question or give notice. 
Madam SPEAKER 
: I understand the points of order and I thank the members. I am not clear exactly what the point of order was because the Minister did address the question and that is a common way to address questions of that nature—to ask for notice to be given of the specifics. If members want the rules changed then they should take that matter to the Standing Orders Committee and we can review those rules. 
Ron Mark 
: Given the National Party’s new-found interest in cardiothoracic issues I seek the leave— 
Madam SPEAKER 
: Would the member please get to his point of order without interpolating. Would Mr Mark just state his point of order please. 
Ron Mark 
: I seek the leave of the House to table a series of newspaper articles from 1997 to 1998— 
Hon David Carter 
: Ha ha! 
Madam SPEAKER 
: I am sorry but members are on notice that when points of orders and questions are being given they are to be without interruption. Would members please respect the member asking the question and would the member please put his point of order. 
Ron Mark 
: I seek the leave of the House to table a series of newspaper articles from 1997 to 1998 when New Zealand First was seeking to have a cardiothoracic unit built in Christchurch and it was consistently fought and opposed by Gerry Brownlee David Carter and Bill English. Fortunately we won and it was established. 
Madam SPEAKER 
: Leave is sought to table those documents. Is there any objection? There is objection. 
Gerry Brownlee 
: I seek leave to table a series of newspaper articles from the same period of time that show that the money that had been previously allocated for a heart unit in Christchurch was snaffled by New Zealand First to fund Aotearoa Television. 
Madam SPEAKER 
: Leave is sought to table those documents. Is there any objection? There is objection. 
Rt Hon Winston Peters 
: I seek leave to table countless press statements in respect of Aotearoa Television which was the brainchild of one Maurice Williamson the then Minister of Broadcasting. Those are the facts. 
Madam SPEAKER 
: Leave is sought to table those documents. Is there any objection? There is objection. 
Pacific Island Affairs Ministry—Policy Effectiveness 
12.  
TAITO PHILLIP FIELD (Labour—Mangere) 
 to the  
Minister of Pacific Island Affairs 
: What are the main conclusions of the latest Ministry of Pacific Island Affairs report on the effectiveness for Pacific Island people of Government policy? 
Hon LUAMANUVAO WINNIE LABAN (Acting Minister of Pacific Island Affairs) 
: The report shows that as a result of initiatives including the Work and Income Pacific Wave strategy there has been a 53 percent decrease in Pacific people receiving the unemployment benefit in Auckland in the last 2 years to June 2005. The report also shows that 140 Pacific people received TeachNZ early childhood education scholarships in 2004—an increase from 37 in 2000—which has strengthened Pacific participation in early childhood education. 
Taito Phillip Field 
: What does the report say about Pacific economic development and what is the Government doing to further strengthen Pacific economic development? 
Hon LUAMANUVAO WINNIE LABAN 
: Government has an increased focus on economic prosperity for Pacific people through initiatives such as the Pacific Economic Action Plan. More Pacific people than ever before are in jobs but we realise there is still more work to be done. It is about turning the one-day stalls at the Pasifika festival into ongoing sustainable economic businesses. 
Dr the Hon Lockwood Smith 
: Did the report examine any allegations of misuse of the Samoan or Pacific Island immigration quota system and the effects of such misuse on Pacific Island people and the integrity of the Government’s Pacific quota policy? 
Hon LUAMANUVAO WINNIE LABAN 
: No. 
General Debate 
GERRY BROWNLEE (Deputy Leader—National) 
: 
 I move  
That the House take note of miscellaneous business 
. Following the resignation yesterday of the honourable David Parker this House had a debate about the matter. There were two speeches that I think were reasonably well quoted by various media commentators: one from Jeanette Fitzsimons and the other in part at least from the Rt Hon Winston Peters. They raised the question about whether this House was headed in a direction that was to say the least unsavoury and worrying—whether individual members could expect to have their backgrounds raked over whether they could expect all sorts of investigations into their past and other such matters. 
I think those speeches missed the point slightly. It is not muckraking to ask the Prime Minister how $446000 of her leader’s budget ended up in the Labour Party campaign. It is not muckraking to ask the Prime Minister how five policemen and a civilian driver could end up in the dock for speeding while she did not notice that the speed of the car was 160 kilometres. It is not muckraking to suggest that misleading Parliament is a serious matter and it is not muckraking to ask how the falsification of a document came about. Those matters have been before this House and they are not matters that should be swept aside easily. I say to this House particularly to the Labour members who have had so much to say about those matters that if they want respect they will have to start showing it. 
I think that anyone who looked at today’s question time would see why the House has deteriorated in the way that it has. If one looked at the way in which Government Ministers dealt with question time today it was clear there was no desire on the part of Ministers to give serious answers to serious issues when the rightful role of the Opposition to scrutinise their portfolios was exercised. 
The Prime Minister today refused to say what she thought of the Whangamata decision. She hid behind a pathetic answer saying that the Minister of Conservation had followed a process. That virtually pushes the Minister out and hangs him out to dry. There was no group responsibility whatsoever. 
Dr Nick Smith decided he should ask Dover Samuels what he had meant when he said he thought the Minister of Conservation had acted inappropriately. We know that Dover Samuels had a heck of a lot more to say and that most of that was said inside the Labour caucus room but publicly he had questioned the right of the Minister to make that decision. And it is our role to ask why he did that. 
Why is it that a Minister can make an important public decision only to be questioned by another Minister? What we got was this idea that because the first Minister had a different coloured hat on at the time he made those statements he is exempt from being questioned about that matter in the House. That is an utter nonsense. 
Is there a point when a Minister walks out of this place during the day or the night and is no longer considered a Minister? I do not think Lianne Dalziel would agree with that. I do not think Ruth Dyson would agree with that. I do not think poor old Dover himself if he really asked himself the question would agree with that. So what happens is a level of frustration brews up inside the Opposition and of course we have a degree of disorder occurring in the House. 
A question was asked of the Hon Harry Duynhoven. It was a simple question: were there any bids for the latest round of gasfields that were on offer? The answer that came back in any form one likes was to get him out of answering simply that no no one was interested. 
For how long will we have people writing articles about the way in which the House appears and the business the House is supposedly preoccupied with while ignoring the fact that Ministers are not exercising their responsibility to be accountable to the public of this country? It does take us away from considering the big issues that face this nation. The looming energy crisis is right on our back-doorstep and we have a Minister of Energy who does not want to know about it. 
Hon Dr MICHAEL CULLEN (Deputy Prime Minister) 
: 
 National started this year by saying that the economy was going to be the issue. I have sat here in Parliament for 2 days this week and there has not been a single question to me as the Minister in charge of the economy. Where are all the big brave candidates for the leadership of the National Party taking on the Minister of Finance? They have all given up. Instead all they can do is complain about which hat Dover Samuels wears. I will tell them. The hat he wears is called an Akubra. It is one of those leather brown things that one can get in Australia. He wears it frequently but we will not go into how he sometimes uses it. The fact is that it is called an Akubra. The other complaint was that Harry Duynhoven’s answers were too long. I could have made that complaint as well as the Leader of the House but we will pass over that matter at this particular time. 
I point out that 1 April this year is a major date. It is a red-letter date for well over 1 million New Zealanders—parents children business people students graduates and superannuitants. That is the real political story. It is the real news that ordinary Kiwis actually care about. Instead of course we have the leader of the ACT party swimming around in the sewer and National members waiting by the outfall for their faithful dog to bring them something to chew on. Well I do not share the same taste as the National Party in politics or in anything else. 
So let us come to 1 April. What happens on 1 April affects every superannuitant in the country. It also affects three-quarters of all families with children the great majority of students and recent graduates and the great majority of New Zealand businesses. And it is good news for the economy. First it will put more spending power into the economy just as it is starting to slow down as part of the cycle. On 1 April we will see families with more spending power. That upsets John Key because he wants to have all the spending power in his own palatial home. It is not of course the home he registered on the electoral roll. Oh no he did not register his own home for that purpose but I will come back to that a bit later. Secondly when we come to the business changes they will be great for business investment. They will lead to more business investment and more growth within the economy. 
What happens with Working for Families? Under that package 350000 families qualify for targeted tax relief. Many families with two or three kids will be over $100 a week better of on 1 April this year. A billion dollars is going into support for New Zealand families with kids and I thank New Zealand First United Future and the Greens for supporting those measures. I cannot remember whether the Maori Party was split on that issue. I think it did vote for the last round of those particular matters. We will see a new in-work payment that will significantly increase the margin in terms of going into employment compared with being on a benefit which has been attacked by National members at every point. That is because they prefer the poor to be beneficiaries rather than being in work. 
And from 1 April we will remove the interest on student loans for those who stay in New Zealand. What that means is a much faster pay down of individual student loans. It means that all the payment goes towards paying off the principal not merely towards servicing the interest on the debt. That will remove a burden for many young people and as they move into adulthood they can begin to save have a home and have a family and not worry about the length of time the student debt incubus will hang over them. Will it cost as much as National has said? No it will not. I can tell National members that they will be even more disappointed than previously when they get the updated reports on the costing of that particular policy. 
The annual adjustment to superannuation this year does take people to 66 percent of the average wage but because of the agreement with New Zealand First that relativity will be maintained next year and the year after. So superannuitants will be better off while we work on the gold card. Indeed of course many superannuitants are better off because of higher interest rates. 
Debate interrupted. 
Points of Order 
Question No. 12 to Minister 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 I raise a point of order Madam Speaker. A few moments ago during this debate the Hon Taito Phillip Field crossed this Chamber and threatened me that I should accompany him outside. To use his exact words he said that if I had any balls I would go outside and repeat my question. I want to repeat to you Madam Assistant Speaker the question I raised in the House this afternoon. It was this: “Did the report examine any allegations of misuse of the Samoan or Pacific Island immigration quota system and the effects of such misuse on Pacific Island people and the integrity of the Government’s Pacific quota policy?”. At no stage did I mention the Hon Taito Phillip Field at all. I take objection and I think it is a very serious issue when members of this Parliament are threatened in this Chamber by members who seem to have some problem. I think you should take action on the matter. 
The ASSISTANT SPEAKER (Ann Hartley) 
: I ask the member to respond. Did he say that to the member? 
TAITO PHILLIP FIELD (Labour—Mangere) 
: 
 Not in those words. Not in the words that Dr Lockwood Smith used. 
 What I did say—referring to his questioning not only today but yesterday with his insinuations in relation to my integrity—was that I would invite him to repeat them outside the House so that I could challenge the comments that he is making inferring on my integrity by his line of questioning. I said to him: “Say that outside the House.” 
The ASSISTANT SPEAKER (Ann Hartley) 
: I have asked the member whether he said it to the honourable member. It is certainly an allegation of disorder. If a member has acted in a disorderly manner or threateningly in any way he should withdraw and apologise. So I ask the member whether he acted in a way that was disorderly and threatening because if he did he must withdraw and apologise. 
TAITO PHILLIP FIELD 
: I withdraw and apologise Madam Assistant Speaker. But I would like to make it clear— 
The ASSISTANT SPEAKER (Ann Hartley) 
: No. You must be seated. 
TAITO PHILLIP FIELD 
: I raise a point of order Madam Speaker. I invite Dr Lockwood Smith if he has any question in relation to my integrity to say it outside the House. 
The ASSISTANT SPEAKER (Ann Hartley) 
: I warn the member that is not a point of order. 
General Debate 
Debate resumed. 
Hon BRIAN DONNELLY (NZ First) 
: 
 Members will know that I do not normally participate in the general debate. 
Hon Tau Henare 
: Winston speaks in them all the time. 
Hon BRIAN DONNELLY 
: I am talking about me. Quite frankly most of the contributions to it demean the dignity of the House particularly those of the two old parties who simply spend all their time hurling abuse at each other. But from time to time the general debate offers the opportunity to raise matters of genuine concern. I also say at this point of time that my contribution would be somewhat easier to make if I did not hear “Advance Australia Fair” being played every time I turn on the TV these days and a whole lot easier if a 17-year-old Australian had not stepped up to the circle and denied Beatrice Faumuinaa medal last night. I will put those feelings aside because Dover Samuels may wear an Akubra but I am going in to bat for the Aussies in this speech. 
The issue is the deplorable manner in which a New Zealand tertiary institution has treated students in Australia and the Australian Council for Private Education and Training. For the benefit of the listeners I will explain the issue. In 2001 The Open Polytechnic of New Zealand bought the Australian company Stotts Correspondence College and its subsidiary Stotts Correspondence College New Zealand. The Australian operation was losing money at the time and has continued to do so ever since. The New Zealand operation continues to make a profit. Indeed the Australian operation has lost $2.5 million in the last 5 years. Therefore it is completely understandable that it was placed into what the Aussies call voluntary administration in December last year owing $3 million which included $2.2 million to its New Zealand Government - owned parent The Open Polytechnic. A meeting of creditors was called and the company was put into liquidation. So far so good. It might have been an unwise commercial decision but those are made every day. 
But when an education institution such as that goes belly up the problem is that there are students enrolled in courses and there is a moral obligation and a cost associated with ensuring that those students are enrolled in programmes with other providers. To the deep discredit of The Open Polytechnic it simply washed its hands of that particular problem. It just walked away. And that is not good enough. Our national reputation is at stake in this particular case because however much we throw off at the Aussies however much we may cringe at their level of sporting success and however fierce our sporting competition with them may be they are our closest mates. We have very positive and constructive relationships in education with our Australian counterparts over a wide sphere. We have the trans-Tasman mutual recognition of qualifications. Our Ministers attend their ministerial forum of education Ministers. We have even flogged the Queensland approach to curriculum delivery in the revamp of our national curriculum. 
This issue has to be seen in the same way as if an Australian institution had set up in New Zealand and then cut and run leaving 600 to 800 students hanging out to dry. It is not an issue that is immaterial in trans-Tasman relations as Michael Cullen said. The replacement courses found for the students were all organised by the Australian Council for Private Education and Training. The Open Polytechnic dumped the students cut its losses and ran and the Australian Council for Private Education and Training picked up the pieces—and at a cost. The Australian Council for Private Education and Training does not want The Open Polytechnic to cover the tuition costs—that is not at issue. It does not even want The Open Polytechnic to cover the full cost of relocation. It is asking The Open Polytechnic to front up with half the cost of relocation which is a total of A$25000. 
I say to Paul Grimwood Chief Executive Officer of The Open Polytechnic and to The Open Polytechnic council: “Do the right thing.” This situation is damaging the reputation of all of our providers in Australia and elsewhere and it is damaging to our image as a nation. It makes us look small-minded petty mean and penny-pinching worried only about the bottom line but not about the students for whom we have accepted educational responsibility. There may not be a legal responsibility but there sure as heck is a moral and an ethical one. The problem is that the image that one of our institutions portrays across the ditch is reflected upon all our institutions and indeed on New Zealand as a nation. So I say again to Paul Grimwood and to The Open Polytechnic council that they should go and seek the A$25000 so that the matter can be put to rest and New Zealand’s educational reputation can be re-established. 
Hon PAREKURA HOROMIA (Minister of Maori Affairs) 
: 
 I want to reiterate some of the points made by Dr Cullen so that my learned Maori colleague from Auckland can understand the good work that is happening in Maoridom. On 1 April—and there will be only one lot of foolish people around on 1 April and they will be the Opposition—we will see in Working for Families targeted tax credits to Kiwi families to help them raise their children; in student loans the scrapping of interest on student loans for those people who live in New Zealand; in increases to the rate of superannuation the taking care of the old people; in business tax changes the biggest cuts to business taxes since the late 1980s which are in the area needed by the people especially Maori and Pacific Islands people; and in accident compensation the very important Accident Compensation Corporation levy discount programme. 
Working for Families is quite simple. About three in every four New Zealand families with dependent children will be entitled to family assistance tax credits from 1 April this year. That is the most effective way to target and support Maori families. 
There is no doubt that Maori are a unique people. The contributions that Maori make to New Zealand pervade this country. In the last year Maori actors were amongst those who received nominations for the Academy Awards—great actors—a Maori won the US Open golf tournament Maori achieved key positions in the commercial sector in New Zealand and Australia and beat the British Lions solidly in the rugby. So we do not have to pontificate about the heaviness of the past; we are really living in contemporary times and are quite clear and sure on where we want to go. Maori culture reinforces the dynamic identity of Aotearoa New Zealand in the global society and our team over there in the Commonwealth Games is doing the haka so well—they need a few more medals—that it has upset the Aussies. But the distinct difference in this country is those Maori families and Working for Families will ensure that they accelerate and keep up with the opportunities that are around. 
John Key 
: According to the  
New Zealand Herald 
 they are moving to Australia. 
Hon PAREKURA HOROMIA 
: And that is symptomatic of Maori moving to Australia as John Key moved to London in England. He learnt a lot about the money market and interest rates and then he came home. He went away and then he came home. So it is all right for the rich and the well-off but not for people who are determined to find out what it is like to go overseas for the first time. 
I will tell the member about the last major transition in this country. It was in 1950 to 1960 when 86 percent of Maori people lived close to their marae—they lived in the villages as it was perceived by some bureaucrats at the time—and they transferred and came to Wainuiomata and to Otara. That was because the global market at the time required manpower that they never had. 
We are right at the cusp of it now I tell Mr Key and Bill English. They should remember that. We have a growing asset base that the members and their mates should be interested in. We have falling unemployment rates though our climb in the employment area is four times slower than non-Maori—than that member’s people. On 1 April we will replace the child tax credit with the in-work payment. This is not about just taking people off the benefit—dependency. It is about helping those who are in work— 
Dr the Hon Lockwood Smith 
: It’s putting thousands more on a benefit. 
Hon PAREKURA HOROMIA 
: Ninety-two percent of those Maori who want to work are in work. The member should wake up. 
The family tax credit will increase from $15000 to $17680. That is a real increase for families who need that support. At last year’s Hui Taumata it was made clear that the path for Maori from dependency to development is through education employment and enterprise. 
In this changing time a dramatic thing is happening in Maori families. If we understand colonisation and if we understand the venturing of new peoples to this land like what is happening now with Asian people we know that a familiar thing happens. The settler society ensures that there is the labour force to provide things like the roadways and the telegraph poles. The constraint on that is that they do not get into the upper levels of business industry or education. 
Contemporary times can be hugely stressful for whanau. They are trying to earn a living gain more skills and new careers and raise a family—they are no different from other people. But the Working for Families package is not about welfare. It is targeted tax relief and it is fair targeted tax relief. It is not for rich mates who get discounts without doing too much hard work. This is a great time for Maori. The Working for Families package is excellent even in Southland. 
Hon BILL ENGLISH (National—Clutha-Southland) 
: 
 That member may be pleased with his efforts on behalf of Maori but he must have a sick feeling in his stomach when he sees the Cabinet of the Labour Government rotting around him. Dr Cullen told us about the 1 April lolly scramble and he is right—much money will be pumped into the pockets of middle New Zealand. It is unfortunate that they will not get what they could have had though which is 85 percent of New Zealanders on a tax rate of 19c in the dollar and an economy taking a step up instead of slowing to a crawl. 
In the last couple of days a number of people in the media and to some extent in the public have started to talk about the standards in politics dropping. I believe they are wrong. I believe that the standards of accountability and scrutiny in this House are as they have always been and that is tough but fair. 
The Labour Party members have done their best to explain away their own problems as being some kind of change in the National Party’s tactics as an Opposition but that is absolutely not the case. I say to this House that National members were not sitting in the front seat when Ruth Dyson was caught drink-driving. We were not at the table drinking wine when John Tamihere gave his famous interview and revealed what it is really like in the Labour caucus. No National Party MP posted the false returns that David Parker made to the Companies Office. No National MP was holding the painting when Helen Clark signed it. It was not a National MP who was sitting in the seat beside Helen Clark when she was speeding through the townships of the South Island. No National MP held the microphone while Lianne Dalziel lied to the media about her role as a Minister in the Government. 
We were here when David Benson-Pope misled Parliament and is it not a shame that a reasonably promising member of Parliament lost his job yesterday because of something he did that people will regard as being potentially against the law certainly ill-judged and that David Benson-Pope of all people gets to keep his job? The Labour Party members know that David Parker had to go because David Benson-Pope stayed. It would have been much better for the country if the opposite had happened. 
It is not a change in the Opposition that has brought about this avalanche of problems and this list of miscreant Ministers. What has brought it about are the low standards of the Labour Party. Really there is only one difference between the leader of the Labour Party and those Ministers who have all been dealt with with justification and that is that they are not as good at it as she is. She is the master of the half-truth. She has set the environment in which Ministers some of whom are otherwise competent and capable people take risks with the truth do not tell it avoid it and when they get caught always act as if it is not their responsibility—and who does that best of all and always gets away with it? It is Helen Clark. 
So those people in the media who are starting to feel morally superior about what is going on in politics in New Zealand ought to put that superiority aside. It is absolutely vital that a rotting Government is held to account and the National Party will continue to hold Labour members to account. It will mean scrutinising the decisions and the paperwork of Ministers it will mean questioning them when they do not tell the truth it will mean pulling them up when they mislead Parliament and it will mean making sure that they take personal responsibility for the things they do that break the law. 
Hon RUTH DYSON (Minister of Labour) 
: 
 As a Minister and member of Parliament who has always taken responsibility for my own actions both good and bad I reject and resent the whingeing whining gutter-scraping behaviour of that member who has just resumed his seat. I remember that when I first came into Parliament in 1993 the brat pack of Bill English Tony Ryall Roger Sowry and Nick Smith were regarded as young and energetic and frankly they added a bit of flair to this House so desperately needed from the National Party. Now look at them: Roger Sowry has gone so I have no comment to make about his contribution and the remaining three members are tired bitter twisted and nasty contributors in this House. 
Hon Bill English 
: Stop talking about yourself. 
Hon RUTH DYSON 
: I say to Mr English that I have never been nasty and I am certainly not bitter. I can only assume that the resentment those members exude in the House is because the born-to-rule brat pack does not like being in Opposition for another 3 years. 
The first day of April 2006 will be a very good day for lots of New Zealanders. I want to start though by highlighting one particular New Zealander who will have a particularly good day on 1 April 2006 and that is my mother who turns 80 on that day. She will have a good day but so will three out of four families who are in the paid workforce and have dependent children. Yet again they will receive a significant boost to their income and that is because of our Working for Families package. 
Students and graduates who have been burdened by the interest accumulating on their student loans will know that from 1 April that interest is gone as long as they are in New Zealand. What a great incentive for young students and graduates to stay in New Zealand and pay off their student loans—which they will be able to do more quickly than in the past—or to come home again. We will see that student debt go down and that is a fantastic contribution to the skills shortage we are facing in New Zealand. 
Superannuitants will have a significant increase longer term in their standard of living. That will occur not only because of the adjustment on 1 April taking the rate for a married couple to 66 percent of the average ordinary-time weekly wage but also because of the agreement New Zealand First has with the Labour-Progressive Government which means that that level—the relativity at 66 percent—will be maintained. 
 Also on 1 April we will see the biggest changes to business taxes since the late 1980s and that is a well-deserved initiative from our Government. But the final point I make in terms of the announcements that will come into force on 1 April is about the accident compensation levy discount programme. We have had this scheme in place for larger employers for a long time. I am really pleased that this initiative which rewards good practice for the self-employed and small businesses is now being rolled out. We are targeting the six highest risk industries—the ones that have the most injuries: agriculture forestry construction road freight transport motor trades and inshore fishing industries to start with. If those industry players—with small businesses and the self-employed—can demonstrate they have a serious commitment to health and safety in their workplace they will get a 10 percent reduction in their accident compensation bill and I know they will really welcome that. 
From 1 April those businesses will be able to apply to join the programme. and I really encourage all small businesses to do that. Not only will it be good for their pockets in that they will have a 10 percent reduction in their bill every year but also—and I am sure everyone in this House will agree—it will be better for every New Zealand worker if we can improve health and safety standards within the workplace. Too many of our workers go to work in the morning and do not come home at night so if we can do anything to reduce the fatalities and the number of serious injuries that happen in our workplace I am sure this will get very strong support from all parties in the House. 
The initiatives I discussed at the start of my contribution are the result of a lot of hard work by the Labour and Progressive parties over the last few years. We are doing that work because we are committed to having a better future for all New Zealanders. We want a country where we have a strong economy where our families can enjoy better opportunities and are secure and where we can have pride in the unique identity of our nation. 
SIMON POWER (National—Rangitikei) 
: 
 Today I do not intend to canvass the behaviour or the actions of the two Ministers who have been in the centre of the news media swirl over recent weeks. Others in the fullness of time will make their own judgments on those issues. 
What I do want to raise this afternoon is the judgment of the Prime Minister over the last 6 to 8 weeks. I have been pondering that at some length because I find it extraordinarily curious. I find the behaviour of the Prime Minister and her decision making particularly interesting from an objective point of view. Why would the Prime Minister spend valuable political capital on Mr Benson-Pope leaving herself out of valuable political capital for Mr Parker? Although I do not excuse in any way the original mistakes of Mr Parker at least in my view he had the dignity to act in an appropriate and responsible way. As a student of political science prior to becoming a member of Parliament I guess it was in a difficult way reassuring to hear a Minister at least refer to the doctrine of individual ministerial responsibility at the point he handed in his resignation and refer to his respect for the Westminster system. But it was curious from my point of view that although huge political capital from the Prime Minister—and from the front bench when one thinks back to the nature of supplementary questions and the like from the start of this year—was afforded Mr Benson-Pope none of that protection or political capital remained to give Mr Parker in any way the type of buffer he must have sought. 
The curious thing about that is that both Mr Benson-Pope and Mr Parker were well recognised as protégés of the Prime Minister—people she regarded as having bright futures in this Parliament. That was not just the talk in this building; it was the talk around Wellington. I find it curious that one was given the full strength of support of the Prime Minister’s office and the front bench of Cabinet and one was not. I wonder at what point the decision makers came to the view that that capital was to be invested in one member but not in the other. I suspect it was because that political capital had been well and truly exhausted on the first member and the Prime Minister was simply left without the political capital to deal in any way other than in the honourable way—in my opinion—that Mr Parker reacted seemingly without those same support networks. 
I guess it begs the question now of who would want to be a protégé of Helen Clark’s because those protégés are now in a very difficult position. There will be members opposite thinking they would rather be in Phil Goff’s camp. I think it will be particularly interesting over the coming weeks to see how the Labour caucus repairs itself in relation to its respect for its leadership structures. I will use my usual litmus test to decide how that is going because I will watch how David Cunliffe moves over the next month and a half as I decide exactly where the power balances are shifting inside the Labour caucus. 
In the meantime there are serious issues in the law and order area that I will continue to scrutinise while that sideshow carries on and while others make decisions about issues relating to the future of those two members. There are also issues in the corrections area that continue to burn considerably. Damien O’Connor’s constant refusal to face up to the fact that Parliament and the public of New Zealand should have an opportunity to scrutinise the Department of Corrections is almost beyond comprehension when one tallies up the list of awful incidents that have occurred in his department over recent months. Not only has there been a massive budget blowout of nearly $890 million—double the original $400 million—but Damien O’Connor has still not told us that that amount is capped. 
Hon DAVID BENSON-POPE (Minister for Social Development and Employment) 
: 
 I am delighted to have the opportunity today to talk about Labour once again delivering on its promise to people in New Zealand. The Working for Families package is delivering targeted tax credits to Kiwi families to help them raise their children. Almost three in every four New Zealand families with dependent children will be entitled to family assistance tax credits from 1 April this year. Not many New Zealanders will think that is anything but fantastic news. It is just plain dishonest for anyone including the Opposition to suggest that those families are getting welfare or becoming beneficiaries. 
Ninety-nine percent of that $1.6 billion package is being delivered to families by way of the tax system. Families will access their tax credits from the Inland Revenue Department which will calculate and pay their entitlements. At the last election Labour put it to the electorate that by targeting families through the tax system we have the best chance of helping Kiwis create strong families and healthy confident young people. The electorate agreed and on 1 April Labour will deliver in spades. 
Let us take the example of a couple earning the average income for families with dependent children because that gives a pretty good idea of the amount of tax relief the average New Zealand working family can expect from 1 April. A family with two teenaged children aged 11 and 16 that earns $67000 a year and pays $350 a week on its mortgage will from 1 April 2006 get an extra $68 a week in the hand from the family assistance tax credits. From 1 April 2007 that amount will increase by another $20 a week to $88 a week when family assistance increases again. 
The good news gets even better. Almost all families with children that earn less than $70000 a year will become eligible for family tax relief. Many families earning between $70000 and $100000 will also be eligible. Around 85000 more families will become eligible from 1 April this year as a result of this tax relief package. 
In total 350000 families will be receiving family tax relief in 2006—because Labour wants all New Zealanders to have a stake in the future. Working for Families is the most effective way to target and support our New Zealand families and their children. It also reflects a common approach internationally. Supporting families and children via tax credits is a widespread approach in the OECD. Australia’s annual spend on family tax credits is $15 billion and 82 percent of Australian families with dependent children are supported in this way by their Government. 
New Zealand tax credit income limits are now comparable with Australia’s. Families are eligible for the family tax benefit up to a combined family income of around A$90000 depending on the age and the number of children. For a New Zealand family with three children that amount is up to $93760. The UK also operates a system of tax credits that is very similar to ours. It provides assistance to help beneficiaries and working families with the cost of raising children through a child tax credit which is similar to New Zealand’s family support. Around 85 percent of families are eligible for that assistance. 
We can contrast this system with across-the-board tax cuts which deliver the highest gains to people with the highest incomes regardless of whether they have children. Tellingly it is lower and middle income families who get much much less from a tax cut. Targeting through the tax system is fairer and more cost-effective than having general tax cuts because it ensures that families with the greatest need get the most support. That is why the Government has invested in a 3-year communications campaign to make very sure that newly eligible families know their eligibility and know how to pick up their entitlements. 
In addition to helping working families through targeted tax credits the Government is also improving the incentive for families to find work and to stay in work. Under Working for Families a new in-work payment will be introduced to provide more support to working families with dependent children to make work pay and to make it more worthwhile for unemployed families to move into work. This means that rather than making more New Zealanders beneficiaries the Working for Families package has by design set out to contribute to fewer families being reliant on community support. 
To work out how much tax relief a person is entitled to is easy and people can check by visiting the calculator on the Inland Revenue Department website or simply by ringing 0800 257 477. The Working for Families package is delivering targeted tax credits to Kiwi families in order to help them raise their children. Labour once again has delivered on its promise. 
Dr PITA SHARPLES (Co-Leader—Maori Party) 
: 
 Kia whakawhenua au iahau! Hi aue hi! Ko Aotearoa e ngungurunei! Au au aueha! Let me become one with the land! This is our land that rumbles! It is my time! It is my moment! Those are the concepts of nationhood of passion and of strength that create a distinctive international presence for New Zealand. Yet when the new haka of the All Blacks was first performed at Carisbrook last August it was greeted with insults and attacks from the media and the English public alike. A throat-cutting gesture at the end of the haka was interpreted as implying the slaughter of opponents which was reason for particular anxiety. Indeed the editorial in  
The Times 
 had this to say: “if a crazed thug drew a finger threateningly across his throat while screaming into someone’s face on a high street police would have good grounds for arrest.” Yet if this editor had talked to haka expert Derek Lardelli he or she would have heard that playing rugby at that level and with that intensity is the cutting edge of sport. The across-the-throat action symbolises the intensity of first-class rugby and the consequences of defeat. 
Yesterday Aotearoa celebrated Race Relations Day. The theme for this year is turangawaewae—our home. What better way to celebrate turangawaewae than by celebrating and seeking to understand the haka as a national icon—the source of pride and belonging. The significance of the haka overseas with comments made about it being past its use-by date is a theme that the House needs to give some consideration to. Is it time to replace our haka with something akin to the national chant across the Tasman: “Aussie AussieAussie! Oi oioi!”? A haka was first performed in an overseas representative rugby match by our native team in 1888. Then in 1908 an Aboriginal war cry was performed by the Wallabies. The Springboks came up with a Zulu war dance in 1928 the Fijians chanted the Cibi Tonga performed the Kailao and Manu Samoa performed its own Le Manu Samoa. 
Embracing the uniqueness of the indigenous identity is not just the domain of sports teams. I know many New Zealanders who when travelling overseas have burst into a haka or sung “PokareKare Ana” at the top of their lungs claiming that Aotearoa New Zealand is their home and why not? Indeed Tourism New Zealand has identified Maori culture and branding to sell New Zealand’s uniqueness. We should be proud of the haka we should understand it and we should celebrate it as an art form of intense passion for Aotearoa New Zealand. 
Henare Teowai an acknowledged master of the art of haka was asked on his deathbed what was the art of performing haka. He replied: “Kia korero te katoa o te tinana—the whole body should speak.” Last Saturday night the 12 spontaneous haka that the Sevens rugby team erupted into during their victory lap displayed their expression of honour and pride to its fullest extent. In fact the team did so to such an extent that the captain TafaiIoasa lost his voice and Tamati Ellison broke his medal—haka can be a dangerous sport! 
Since the age of 7 I have been doing haka and competing in the national clubs—it is my love. We must cherish our haka as a traditional Maori performance art form that is unique to New Zealand and perhaps in doing so we may understand the richer stories beyond the haka because every haka expresses a universal truth. Our haka tells us who we are what we thought of this action or that action of the Government how we honour our Commonwealth Games swimmers how we celebrate marriage how we acknowledge our ancestors how we welcome people to the marae and how we pay our final respects to those who have passed beyond the veil. 
I was so enthused to see the Pakeha boys of our national swimming team clearly owning the haka as they celebrated and honoured with great joy the efforts of our swimming team in Melbourne. Haka is a point of identity and a point of difference for Maori and on the world stage for all New Zealanders. It has such rich potential as a form of cultural expression to honour to welcome to farewell to acknowledge to celebrate to mourn and to be. The haka may well be part of our formula towards building a united nation. 
PAULA BENNETT (National) 
: 
 First I acknowledge the speaker before me Dr Pita Sharples. I have felt the chills go down my spine many times while standing on a marae in a meeting or something like that. But to watch telly the other night and see those skinny white boys doing their thing made me feel every chill as well. I felt they did us really proud and it is one of those moments when one feels proud to be a Kiwi. 
I have been here for 6 months. I came into Parliament on 17 September so obviously I am a new MP. I did not expect to agree with how Labour was running the country. I stood for Parliament because I did not agree with the Government’s agenda and with a lot of things that were happening. I felt that it was not listening to the people that “Big Sister” knew what was best and that there was not a real debate going on in society about what sort of society we were going to be. Instead things were getting pushed through and decisions were being made at that level. That is what drove me to stand for Parliament. 
Things have changed in this term. It is not so much that I do not agree with the Government’s agenda; I have discovered in my short term that I do not feel that it has one. I am struggling to see quite simply what this Government is doing and what it intends to do in this term. It is tired and there is a real lack of vision. Well maybe the Government does have an agenda actually and maybe that agenda is to do as little as possible. 
Hon Annette King 
: Give us one policy today from the National Party and I will go home happy. 
PAULA BENNETT 
: I have just realised that that is something as well—I thank the member for raising what the National Party policy is—because everything is our fault! Even though the National Party has not been in power for the last 6½ years everything is actually our fault! Labour has done nothing to fix the Resource Management Act which it put on our shoulders and everything else but that is our fault. The Minister can stand up and veto a decision made by our courts and it is our fault that he is vetoing that decision. So everything really is about the National Party. I am quite happy for everything to be about me quite frankly but it is not. 
It has been 6½ years I tell those Labour members so it is time to take some responsibility. It is time to actually see a vision. It is time to actually give us some direction on where the country is going and what they will achieve. They cannot make up their minds about anything. They just say “Let’s review review review.” There is no vision; there is just meddling. An example of it today was when the Minister of Health answered questions. [ 
Interruption 
] Sorry I should rephrase that really should I not? The Minister of Health did not answer the questions. He did not know— 
Hon Annette King 
: Why not ask the questions you want answered? 
PAULA BENNETT 
: Well you probably could have answered them Annette King— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Order— 
PAULA BENNETT 
: Sorry I should speak through you Mr Assistant Speaker. I am sure that Annette King could have answered the questions because she has been there for some time— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: No no. The member brought the Speaker into the debate by using the word “you”. 
PAULA BENNETT 
: Sorry I do apologise for using “you”. As I was saying through the Assistant Speaker I feel that answers could perhaps have been given in some other way. But the Minister did not have answers so he could not answer those questions. 
Let us talk about Working for Families because I notice an agenda is going on with Labour Party members this afternoon. They have all sat down and decided what they will talk about today and they will talk about Working for Families. I am quite happy to talk about that package. I can give quite a few examples but here is a nice key one. There are two workers in Auckland in a company I used to work for who sit next to each other and do pretty much the same job. They have the same key performance indicators and they are on the same salary. They are doing the same work they are enjoying their jobs and they are doing the same hours. But quite simply under Working for Families one of them will be getting through the benefit system a heck of a lot more money than the other one. Why is that? Because one has younger children and the other has adult children. So are you going to say— 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: The member has done it again. 
PAULA BENNETT 
: Will we say that the work of one of those workers is worth more or less than the work of the other? Will we actually make a judgment like that? 
Hon NANAIA MAHUTA (Minister of Customs) 
: 
 The Government has spent this whole general debate outlining what its policies are but not one member of the Opposition or the previous speaker said anything about what they would do. There was not one policy from members of the Opposition. I gladly pick up the challenge of the previous speaker to outline what this Government’s position is. It is going forward. More important it is going forward together. “Eharatakutoa he toatakitini; he toataki tahi he toatakitini—my strength is not that of one who stands alone but of one who stands with many.” 
Maori are now reflecting their Maori selves in a more vibrant creative and innovative way and this Labour-led Government wants to support that energy and that trend. We are serious about that because we know we have a good story to tell. Maori are moving forward into new territory and in part the Working for Families initiative helps to support that direction by supporting families into work and by investing in a skilled workforce. We need that. In fact in the Hui Taumata it was said by Rob McLeod one of the members there that by investing in the human capital of Maori we will do much to elevate opportunity for Maori going into the next generation. 
So I pick up the challenge and reiterate that this Labour-led Government contributes to a vision for this country of going forward together—all of us together. We are not leaving people behind. That is why the Working for Families package is so important. Across New Zealand 350000 families will benefit from the Working for Families package. We want to support families young and old. We know that on 1 April there will be many good stories to tell and the announcements will be good for families good for whanau. 
The whole emphasis of the Working for Families package is to support people by giving them a hand up not a handout. It will help to build a skilled workforce. It will help more people into employment by recognising that it is important to support families where it matters most. How? The Working for Families package will help by providing support for accommodation costs childcare costs and in-work payments. Members can go to any case managers who help people move off the benefit into work and they will tell them that the Working for Families package helps people into meaningful employment—long-term employment. In fact it helps people who never thought they would ever get off the benefit. I know that the previous speaker knows that more than most. I know she knows that; I know she agrees with this Government; and I know she knows that the Working for Families package will help people to get off the benefit and into long-term meaningful employment. 
How do I know that? Going into communities where it really matters we hear stories every day about people from real communities and real families who say: “This package actually helps me to see a future not only for myself but for my children. It helps to provide a direction that says they don’t have to be on the benefit. In fact they can make a meaningful contribution to this society and their community.” That is an important thing. The Working for Families package will help real families in real communities make a difference not only in their lives but in the lives of their communities. 
Maori in New Zealand are in a good position to some extent. The New Zealand unemployment rate is the lowest in the OECD. The Maori unemployment rate stands at about 7.6 percent—the lowest in 28 years. If that is not a good story then I do not know what is. The Opposition did not proffer any policy that would help to support people who have been on the unemployment benefit to get back into work. The announcements on 1 April about the Working for Families package will do much to support many families to get back into work. It will help real families in real communities to change and make a difference in their lives and in the lives of their families to get ahead. It is a hand up not a handout. 
I want also to talk in brief about the numbers of people in tertiary education because again 1 April signals quite a significant change in terms of students and one that is welcomed—interest-free student loans for all those students and graduates in New Zealand. It is great; we hear a number of students saying they want to celebrate that on 31 March. 
HEATHER ROY (Deputy Leader—ACT) 
: 
 Last Wednesday was members’ day and my member’s bill to remove the exemption that Pharmac currently enjoys under Part 2 of the Commerce Act was narrowly defeated. Unfortunately New Zealand First members who over the last 6 years have complained terribly about what Pharmac is doing to the access to medications in this country saw fit to support the Government and prevent the bill from going to a select committee. 
Mark Blumsky 
: They are the Government. 
Paula Bennett 
: They are the Government now. 
HEATHER ROY 
: That is dead right. Since then we have had some toing and froing between the Researched Medicines Industry Association representing the pharmaceutical industry and Pharmac with regard to numbers. Since 1993 when Pharmac was first established New Zealand has progressively moved backwards in terms of the accessibility of pharmaceuticals for New Zealanders. Less and less choice has been available. 
Australia now has 729 chemical entities available on its pharmaceutical benefits schedule compared with 713 here in New Zealand and there is a total of 2500 products on Australia’s pharmaceutical benefits schedule but only 1815 here in New Zealand. Earlier this week Pharmac came out disputing those figures but further investigation showed that when it was counting—on its fingers and toes presumably—it was fudging the difference between non-medicines and medicines. When Pharmac put its figures out it included things like condoms bandages and peak flow meters—all of valuable assistance to people of course but not in fact medicines. So there was quite a lot of dishonesty in the figures that were being passed on to the Minister who then repeatedly stood up in the House during the week and said what a wonderful job we were doing in New Zealand. 
Pharmac produced a table which it has put on its website and it is very enlightening. It shows the difference in both the breadth and the choice of available funded drugs in each country. What the table does not show though and what is even more telling is the restricted access to medicines to new pharmaceuticals in New Zealand. 
What has been lost in this whole debate however about numbers of listed medicines and those medicines that are not available is the patients themselves and what they cannot get access to. A general practitioner I saw earlier this week gave me several very good examples of things he comes up against day upon day when patients are sitting in front of him in his surgery. The first example—and this is a terrible example of waste—is a patient with quite bad diabetes who requires an insulin pump. Because the general practitioner is not a specialist when he is prescribing the insulin to go in the insulin pump that the patient uses at home the general practitioner cannot prescribe the sort of insulin the patient actually needs because Pharmac rules prohibit that; he must prescribe two different sorts of insulin. The first is the sort that Pharmac says general practitioners because they are not specialists have to prescribe. So the patient goes to the pharmacist with his prescription picks up the two different sorts of insulin and throws the first one in the rubbish bin outside the pharmacy on his way out because it is totally useless to him. What a terrible waste that is! 
The second patient the general practitioner told me about is a young Maori man who like many young men of his age has acne. He has tried all sorts of treatments but nothing has worked and he requires a drug that specialists can prescribe freely but general practitioners have much more difficulty with because they are not dermatologists. Because the patient gets the medication from his general practitioner he has to pay $60 a month for it as the prescription attracts no subsidy when it is prescribed by a general practitioner. If the patient were to see a dermatologist he would pay only $5 for a month’s supply of the medicine. The difficulty though is that the patient cannot afford to see a dermatologist because that would cost $175. So he is stuck seeing the general practitioner and paying $60 as opposed to $5 a month. Again it is absolutely ridiculous. 
The third example concerns my own mother-in-law. She has lived a long hard fulfilling life but unfortunately in her old age she has started to develop symptoms of Alzheimer’s disease. Pharmac in its wisdom despite the fact that in other countries people have ready access to the cholinesterase inhibitors that are very successful in treating those symptoms—only about 30 percent of patients do not respond to such treatment in some way and 30 percent of patients who do respond get quite a significant reversal of their symptoms over a period of time—is denying patients good-quality treatment. 
The debate having concluded the motion lapsed. 
Intelligence and Security Committee 
Membership 
Hon Dr MICHAEL CULLEN (Deputy Prime Minister) 
 on behalf of the 
 Prime Minister 
: I move  
That pursuant to section 8 of the Intelligence and Security Committee Act 1996 this House endorse the following as members of the Intelligence and Security Committee: 
Hon Dr Michael Cullen and Rt Hon Winston Peters nominated by the Prime Minister under section 7(1)(c) of the Act; and 
Rodney Hide nominated by the Leader of the Opposition under section 7(1)(d) of the Act. 
This motion creates the Intelligence and Security Committee under the Intelligence and Security Committee Act 1996. The committee is a parliamentary committee but not a select committee. However under Government notice of motion No. 2 it acts very like a select committee for a range of purposes as it mirrors the Standing Orders in relation to the functions of a range of select committees. This process is laid down clearly in statute. 
The committee consists of the Prime Minister who after consultation nominates two other members; and the Leader of the Opposition who after consultation nominates one other member of the committee. After consultation the Prime Minister is nominating myself as Deputy Prime Minister and the Rt Hon Winston Peters as Minister of Foreign Affairs. The Leader of the Opposition Dr Brash is nominating Rodney Hide the leader of the ACT party. Traditionally this debate is not very long because obviously it would not be considered appropriate by and large and the House has never accepted amendments to the motion that would in effect override the processes undertaken respectively by the Prime Minister and the Leader of the Opposition in that regard. 
The committee performs a very useful role. I might say with my Minister of Finance hat on—rather more than Dover Samuels I have considerable trouble over which hat I am wearing at various times at the moment—that I find the work the committee does is quite helpful in terms of getting a deeper insight into what the intelligence and security agencies spend their money on. Also I might say that with almost no exception I can think of those appointed to this committee have been aware of the obvious need for discretion around some of the matters that are discussed within the committee. So it is with those very few comments that I have moved Government motion No. 1 on behalf of the Prime Minister. 
Dr WAYNE MAPP (National—North Shore) 
: 
 I thank the House for the opportunity to speak on this motion. There will be two debates on this matter today and I imagine that I will be speaking in both. The first point I want to make is that the Intelligence and Security Committee is one of Parliament’s most powerful committees so it properly consists of Parliament’s most senior members: those who are party leaders or who hold as in the case of Dr Cullen very senior office. Under MMP it is deliberately a multiparty committee and currently it covers—or will cover—four parties in Parliament. All but one of the members nominated served on the committee in the last Parliament. 
I note that Rodney Hide is new to the committee. He is there because he is the leader of the ACT party. He brings 10 years’ experience to the committee. The importance of that is that the committee is the legislature’s oversight guardian of our freedoms. It is the way the legislature checks on the executive and because it deals with sensitive issues it is critical that it have highly experienced members. The committee does not usually act in public or under the glare of television cameras—and frankly nor should it. It deals after all with sensitive information. But the committee is intended to give a clear signal to the country that executive action by the Government is subject to legislative oversight by the most senior members of Parliament. That alone serves as a check on the abuse of power. 
Events since 2001 have put rather more focus on the anti-terrorism laws and the role and powers of the committee. That no doubt is why this debate may take a little longer than it might otherwise have done. It is worth noting that the Foreign Affairs Defence and Trade Committee deals with the legislation pertaining to terrorism as opposed to the operational aspects of the New Zealand Security Intelligence Service and the communications service. 
I want to make some points that I may also make in my second speech. The purpose of the anti-terrorism legislation is to ensure a proper balance between protecting the community and preserving individual liberty. That is a very significant challenge in an era of terrorism because terrorism is not just any crime. The whole act of terrorism is intended to undermine our confidence in our own institutions and freedoms. No other criminal act has that particular intent. That is why terrorism has engaged the democratic nations in the way it has. We have made a clear distinction between the terrorist and what we may call the ordinary criminal and it is proper to do so because the ordinary criminal does not intend to overthrow our society and our values. 
Post-2001 we are no longer talking about what we may call warfare between States. Terrorists operate shadowy networks and are a threat to the whole system of international law and the protection of freedoms because they want to overthrow them. So contemporary terrorism is much harder to deal with than say the attack on the  
Rainbow Warrior 
. Once the French agents were caught and tried the French Government—after a bit of delay—acknowledged its responsibilities and accepted that it was fully culpable and knew the attack was wrong. Has anyone ever heard a terrorist organisation do that? That is not the modus operandi of such organisations and that is why terrorism is such a difficult challenge to deal with. 
How we as a nation deal with the global challenge of terrorism is a measure of how we value our own liberties and freedoms.I refer the House to a paper by Justice Baragwanath entitled  
Liberty and Justice in the Face of Terrorist Threats to Society 
. It superbly illustrates the dilemmas. The paper I believe demonstrates why Justice Baragwanath is rightly regarded as one of New Zealand’s most distinguished legal minds. He sets out very clearly how terrorism challenges modern democracies. 
For instance Justice Baragwanath notes that conventional criminal law will not always be enough to deal with the terrorist—that sometimes special powers are necessary. I am sure that the Green Party member will dispute that but he needs to read that paper and understand why Justice Baragwanath draws that point. The judge makes a clear distinction in his paper from the views of Auckland University lecturer Dr Paul Buchanan who has taken an absolutist view that the criminal law is always enough. Well the truth is that it is not. That is why this Parliament very carefully passed in compliance with United Nations resolutions the legislation dealing with terrorism. 
The judge in his paper contrasts the law of New Zealand with that of the United Kingdom. He says that New Zealand has struck a more appropriate balance than the United Kingdom between protecting its freedoms and being able to deal with terrorists. New Zealand has not been a prime target as yet since 2001 for terrorism. It is not surprising that countries where that has happened Britain Australia and the United States will strike the balance a little differently from New Zealand. Justice Baragwanath treats that issue solely as a jurist. His concern of course is to ensure that the rule of law is observed and that liberty is always protected. That is after all one of the fundamental reasons why we have an independent judiciary. 
But the executive and the legislature have quite a different role from that of the judiciary. We have to often under the urgent pressure of events deal with the overall safety of society. Every member in this House I believe is imbued with the ideas of liberty and democracy. It is after all one of the foundations of our country. It is one of the reasons why we come to Parliament in the first place. When we are passing legislation we always have to keep those values uppermost because they can disappear by neglect. 
But I make this point. If we did have a terrorist event and 20 people were killed for instance would we reject out of hand the notion that we should be able to detain people for 48 hours who are suspected of involvement in terrorism even if they could not be immediately charged? Under our current law we cannot do that. But in Britain and in Australia they can be detained. Why? Those countries face a different threat from New Zealand’s. Are their fundamental values and liberties seriously questioned by that fact? I suggest they are not. 
I conclude this debate by saying that the Intelligence and Security Committee and its membership are charged with protecting our liberties. The country looks to those members to have that uppermost in their minds. They are deliberately chosen as senior members of this Parliament. They are there to protect our freedoms but at the same time to defend public safety—to ensure that we are safe. The experience certainly in my time in the House is that the committee has always satisfactorily fulfilled that goal and I am sure it will in the future. 
KEITH LOCKE (Green) 
: 
 The Green Party will be opposing this motion. Wayne Mapp pointed out the security issues of terrorism etc. and stressed the importance of the Intelligence and Security Committee. I think it is for that very reason—that it is an important committee—that we should oppose the motion on its membership. It is not like a select committee. It is made up only of nominees of the Labour leader and the National leader. The National Party leader is described in this motion as the Leader of the Opposition. That is not a term that the Greens like. We have criticised it ever since we have been in Parliament. It is a pre-MMP term. There are a number of parties in this House. There is not just one Labour Party and one party the National Party heading an Opposition. We all have our different politics and it is not right to have a committee that gives only the leader of the National Party the authority to offer nominations from parties such as ours or from the Maori Party whose members are sitting behind me today. 
We have a problem here because I would like to replace some of these nominations. The motion itself is to endorse all the nominations. I understand that we cannot just offer an amendment. [ 
Interruption 
] I might take advice from the National member but I understand that I cannot just put in an amendment to replace one of the members with another member. But I think there is a case for doing that. I asked written questions of the Minister in charge of the NZ Security Intelligence Service Helen Clark. She replied a week ago and informed me that in 2005 the committee met on only one occasion for 43 minutes. I do not think that is good enough and I will be explaining the situation regarding the whole parliamentary term further in my second speech which will be on Government notice of motion No. 2. The committee’s record has got worse year by year in terms of the amount of time it has met. I think one of the problems to give the members some benefit of the doubt—and I am not giving them the full benefit—is that they are busy people. The Prime Minister is busy Don Brash is busy and the other members on the committee including Michael Cullen and Winston Peters who have been renominated are busy people. I think we should try to change the composition from that which is in this motion. 
It is a bit difficult I think to take the Prime Minister away from the committee particularly when she is in charge of the Security Intelligence Service. I think it would also be a bit difficult to take away Don Brash. I would give Rodney Hide a chance because this is his first time on the committee. He is not responsible for the failings of the committee in the last Parliament. I think Richard Prebble was a member previously. Was he a nominee last time? I am not sure. Rodney Hide certainly was not. But Michael Cullen and Winston Peters were on the committee previously. I think the technique of individual nominations and hopefully the House will agree with this would improve the workings of the committee. 
Later on at the end of my speech I will seek leave for the House to vote separately on those nominations. If that is the case I will propose that we do not vote Michael Cullen or Winston Peters on to the committee. Clearly they do not have the time or there is something wrong with their involvement with the committee or it would have met more than once last year. I think it would serve the interests of the House and the interests of the committee if we have on it people with previous ministerial experience who are less busy. I will be proposing that instead of Michael Cullen and Winston Peters we have two former Ministers namely Marian Hobbs and David Parker. I think it would be a good challenge for David Parker to take up now that unfortunately he has been relieved of his other responsibilities. 
If we have a better committee and it has a better composition it might deal with some of the issues that Wayne Mapp talked about because clearly it did not in the last Parliament. The committee had to do reviews of the estimates and financial reviews in the 43 minutes that it sat in the whole of last year. I do not think its members would have had time to do much more than make themselves a cup of coffee and do a very quick job on those financial reviews. I do not think they really got into the issues of terrorism etc. that Wayne Mapp talked about. That is my proposal. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I compliment the Green member who has just resumed his seat. At least he spoke about the composition of the committee because I did not hear one word from the National Party that referred to it. 
For those who might be listening we are debating a Government motion in the name of the Prime Minister the Rt Hon Helen Clark whereby we are requested to endorse members nominated to be on the Intelligence and Security Committee. The Prime Minister is automatically on that committee and as I understand so is the Leader of the Opposition Dr Don Brash. The three members we are asked to endorse are Dr Michael Cullen the Rt Hon Winston Peters and Rodney Hide MP. New Zealand First has absolutely no problem at all in supporting the nomination of Dr Michael Cullen nor indeed that of the Rt Hon Winston Peters. They are both long-serving MPs they have both had ministerial experience and they both know how to address security issues and keep confidences. 
But we have some significant concerns with Rodney Hide. I am not a person who likes to make personal attacks and that is one of the things I deplore about Rodney Hide. Speaking absolutely frankly I consider that he operates in the political gutter more often than not. He is prepared to make major personal attacks on individuals without having supporting information. I say that because I believe he would be the MP who has been asked to withdraw and apologise or who has been thrown out of the House the most times. New Zealand First asks whether that is the sort of person we want to represent Parliament on the Intelligence and Security Committee. The answer to that in the minds of New Zealand First members is no. I recall that Rodney Hide went to Fiji and supported a pyramid selling scheme. If that had taken off millions of dollars of people’s savings would have been at risk and could have been lost. I know that several hundreds of thousands of dollars were. That is a concern to members of New Zealand First. We recall that he supported an American who classified himself as a friend of paedophilia. I would not go so far as to say that the American was a paedophile but many people thought he was. But Rodney Hide came out and supported him and said he was his friend. We say that Rodney Hide is not the sort of person who should be serving this country on the Intelligence and Security Committee of Parliament. Further we say that for the National Party to nominate such a person does not really do it credit. If members look at the history of this committee they will see that some very fine upright MPs have been nominated in the past and to pick Rodney Hide as National’s representative— 
Hon Brian Donnelly 
: Scraping the bottom of the barrel. 
PETER BROWN 
: I would like to be a little more kindly than my colleague and say that the National Party could have done a great deal better. 
What about the Hon Peter Dunne who has served Parliament pretty darn well in his time here? He is a very experienced MP. What about a member of the Maori Party? 
Dr Wayne Mapp 
: Too new. 
PETER BROWN 
: “Too new” the member says? Whether or not we agree with the Maori Party’s political views its members have come into this House this term—they were represented briefly in the last term—and have taken a positive attitude towards security and issues of concern. I think that Maori Party members could serve on that committee exceedingly well. 
Mr Assistant Speaker may I ask whether this motion can be split into two so that New Zealand First can vote for the first bullet point that supports the nominations of Dr Cullen and the Rt Hon Winston Peters? 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: I say to the member that New Zealand First can so move by leave and I suggest that the member look at Speaker’s ruling 179/2. I suggest that the honourable member Keith Locke also look at that ruling. 
Keith Locke 
: I raise a point of order Mr Speaker. Perhaps it would make it easier if I seek leave now. I indicated that I would seek leave for each nomination to be voted on individually so that if we voted any nomination down we could put up another nomination. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Can I just respond to that and read to the member Speaker’s ruling 179/2: “As appointments to the Intelligence and Security Committee are made on the nomination of the Prime Minister and the Leader of the Opposition and are submitted to the House for endorsement only the House cannot amend the nominations. The motion could be severed so as to allow members to vote on each nomination separately.” So Mr Locke can seek leave to vote on each nomination separately but he cannot renominate. 
Keith Locke 
: I seek leave for that to happen. 
The ASSISTANT SPEAKER (H V Ross Robertson) 
: Is there any objection to that course of action being taken? There is. 
PETER BROWN 
: I have just about come to the end of my contribution. However if we cannot have a split vote on that then New Zealand First will vote for the motion. But we give notice now that we will be taking a close interest in Mr Hide’s activities and approach to that committee. Indeed we will be watching the National Party with close interest because we believe that it could have picked a person more appropriate to this issue. We do not believe that Mr Hide fills the bill at all. So we give notice now that we are watching the situation but we will give Mr Hide the benefit of the doubt at this point in time. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 The Maori Party is pleased to stand today in respect of the motion that refers to the Intelligence and Security Committee. We certainly support the call that has been consistently presented by Mr Keith Locke and the Green Party for a broader debate on the issue of intelligence and security matters. 
When I was not yet an MP the word was that the new anti-terrorism legislation currently going through Parliament could see protestors or activists designated as terrorists. Mr Locke argued publicly that the proposed legislation being pushed through by the Government at that time was a travesty of democracy. His concern was the obscene rush in which the strict new measures were being forced through without public consultation and it made me think at the time—and I still am considering—about why there was not a broader discussion on how this nation protects itself and who it is protecting itself from. Now that the cold war is over who is the enemy? 
It is a very appropriate time for such a debate to be generated as the State Services Commission embarks upon its recruitment period for a new Director of Security for the New Zealand Security Intelligence Service. From what I understand there has always been a fascination for that particular place—the so-called “Kingdom of Secrets”—and for what consequences it has in curtailing the freedom and civil rights of citizens. Tangata whenua have consistently put forward concerns that the Security Intelligence Service has bugged decent law-abiding New Zealanders to find the dirt on individuals. 
The Maori Party had a particular involvement with the nature of the checks and protections made upon citizens in late 2004. At that time many will remember a Sunday newspaper reported that intelligence sources had revealed that the Security Intelligence Service had launched a major covert operation investigating the Maori Party—our members leaders networks and associates. The newspaper provided a detailed description of a top-secret programme called Operation Leaf which was a major Security Intelligence Service programme targeting a variety of Maori organisations and individuals over several years. At that time one of the former Security Intelligence Service agents interviewed in the article allegedly said that he quit the operation because he was disgusted at the system which was spying on decent law-abiding New Zealanders. 
As we considered the most appropriate action to take in that matter as a party the Prime Minister responded with reports that those allegations were “a work of fiction” and “laughable”. The party was in a quandary. Was the Prime Minister speaking in her capacity as the Prime Minister or in her role as the Minister in charge of the Security Intelligence Service—the same Minister who signs all interception warrants? Frankly we were in no position to judge. 
We decided instead to take action on behalf of everyday decent law-abiding citizens to allay any concerns that they too would run the risk of coming under Security Intelligence Service surveillance if they made the fine decision to join the mighty Maori Party. We therefore called on the Inspector-General of Intelligence and Security retired judge Justice Paul Neazor to initiate an inquiry into the allegations made about the activities of the Security Intelligence Service. 
The motions we are discussing today are focused on the special parliamentary committee charged with the oversight of the intelligence agencies. The Intelligence and Security Committee was set up under 1996 legislation to increase the level of oversight and review of the Security Intelligence Service and the Government Communications Security Bureau. Yet no matter how effective the committee’s members might be—and we know full well that ACT leader Rodney Hide will do his utmost to apply rigor and reason to his role in that forum—it is still somewhat hampered in its coverage. I say that because my understanding is that although the committee can examine policies administration and spending it is barred by law from delving into operationally sensitive matters including any that relate to intelligence collection. 
Returning to the time when our party was under the spotlight for security issues there was unprecedented support across all parties—National ACT New Zealand First United Future the Greens and the Maori Party—for some kind of inquiry into the allegations published in the media. As any member of this House will know achieving a collective voice on any issue on any one day is extremely improbable. That widespread support to uncover who spies on the spies is clearly an issue that we are all keen to explore further. 
As I understand it Dr Brash—himself a member of the cross-party Intelligence and Security Committee that oversees the Security Intelligence Service—stated that he thought the allegations were too serious to ignore and that only an independent inquiry could clear up the issue. Indeed he believed that the claims had the potential to put the public confidence in the Security Intelligence Service at risk. Our now Minister of Foreign Affairs said then he thought that the allegations were disquieting and that a ministerial inquiry would work only if the person had the public’s confidence and was independent of the Government. ACT leader Rodney Hide said that the only way to deal with such serious allegations was to initiate an independent inquiry by a judicial officer with the powers to ensure that the Security Intelligence Service cooperated. 
I will not go on but I think it is noticeable that such widespread cross-party support is rare and it reminds us all of the need to stay vigilant. The perception of bias and dirt gathering accurate or otherwise by politicians and the public must be investigated if we are ever to develop trust in our existing systems of freedom and justice. The security and intelligence systems operating in this land must be subject to the scrutiny of public debate and official inquiry. New Zealanders take for granted that our freedom to live in an open democracy is a basic standard of living for our nation. But we also recognise the significance of every country having a right to security and a right to be secure from its neighbours. No country should ever be in a position of being threatened in the way that we have seen with nations around the globe. We have an expression in te reo Maori: “Me te kahu e topaana ki te kiore.”—like the hawk swooping down on the rat. By this we consider the taua the war party who may attack another without warning. Essentially it refers to the need to be aware of the unseen enemy. But we also need to be open to exploring this new concept of protection security and being threatened. We need to think carefully about how we agree on those we think will be like the kahu swooping down on us and on those who are the unseen enemy. 
The Maori Party is aware of the double-edged sword that comes with any debate on intelligence and security matters. There is no argument that we must ensure individual liberties and also ensure that people are able to have a voice whether it be by ministerial letter submission appeal to the court talkback radio liberation movements or mass protest. We also agree that there are mechanisms for responding to crimes of terrorism through the criminal law system. We must have the right to have our rangatiratanga protected as we affirm the right to the rangatiratanga of any other people—the right to maintain our and their sense of being. 
Hon PETER DUNNE (Leader—United Future) 
: 
 I have three very brief comments on the actual motion: firstly United Future will be supporting it; secondly we have that notwithstanding absolutely no confidence whatsoever in the ability of Mr Hide to make a contribution to anything constructive let alone to the work of this committee; and thirdly we note with sadness and disappointment the bad judgment of Dr Brash in nominating him. 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 109 
New Zealand Labour 50; New Zealand National 48; New Zealand First 7; United Future 3; Progressive 1. 
Noes 10 
Green Party 6; Maori Party 4. 
Motion agreed to. 
Standing Orders—Sessional 
Hon Dr MICHAEL CULLEN (Leader of the House) 
: 
 I move  
That— 
(a)the Intelligence and Security Committee shall examine the Estimates Vote for each intelligence and security agency (Standing Orders 248 249 250 330 are to be read and applied accordingly); 
(b) the Intelligence and Security Committee shall examine the Supplementary Estimates for each intelligence and security agency (Standing Orders 248 249 250 333 are to be read and applied accordingly); 
(c)the Intelligence and Security Committee shall conduct a financial review of the performance in the previous financial year and the current operations of each intelligence and security agency (Standing Orders 248 249 250 335 336 are to be read and applied accordingly); 
(d)no select committee shall examine an intelligence and security agency; 
(e)a bill or other matter relating to an intelligence and security agency may be referred by the House to the Intelligence and Security Committee (Standing Orders 248 249 250 251 252 275 276 285 286 287 288 289 291 292 294 295 296 are to be read and applied accordingly); 
(f)the Clerk shall allocate any petition relating to an intelligence and security agency to the Intelligence and Security Committee (Standing Order 361); 
(g)for the purposes of this order— 
‘intelligence and security agency’ means the New Zealand Security Intelligence Service or the Government Communications Security Bureau; and 
‘Intelligence and Security Committee’ means the Intelligence and Security Committee established by section 5 of the Intelligence and Security Committee Act 1996.  
This motion essentially repeats the motion moved at the start of the last Parliament by defining a number of roles for the Intelligence and Security Committee that essentially mirror those of a parliamentary select committee and this of course is a parliamentary committee set up under statute rather than under the Standing Orders of Parliament. So in other words the committee carries out the estimates functions supplementary estimates functions and financial review. It may consider bills referred to that are within the appropriate scope of the committee and petitions that deal with Intelligence and Security Committee matters. Obviously this is the appropriate range of work for this particular parliamentary committee and I think again that it shows that progress has been made in terms of opening up but carefully the work of the intelligence and security agencies to parliamentary scrutiny. 
Dr WAYNE MAPP (National—North Shore) 
: 
 The first motion deals with the membership of the committee. The second motion deals with what the committee actually does which is primarily to examine the activities of the New Zealand Security Intelligence Service through the estimates and so forth. 
I want to return to the points I was making earlier and in particular to comment on the speech made by a member of the Maori Party and the role of the Inspector-General of Security. The role of the Inspector-General is intended of course to be precisely the opportunity for the actions of the Security Intelligence Service to be examined critically in an independent and impartial way. That is the whole purpose of that particular entity. As we all know at the present moment the Inspector-General is doing a very careful and thorough job in relation to Mr Ahmed Zaoui and it is not for this Parliament to prejudge the way he does that. We must trust him as a very senior member of the High Court to be able to do that job understanding fully the importance of the rule of law and protecting freedoms. 
 So I believe that the issues raised by the Maori Party were properly dealt with by the very kind of independent inquiry it sought through the role of the Inspector-General of Intelligence and Security. 
In turning to the issue of David Baragwanath’s paper I point out that he raised two further important points. I say to members of the House that in dealing with an issue of this nature his paper is an important one to read. I know that Mr Brown was critical of the fact that I did not deal too deeply with the membership of the committee but rather went on to talk about the more general issues but this is probably the only time we can do so. It is actually the fundamental issues that we should spend the debating time of Parliament dealing with. In his paper David Baragwanath talked about the balance between protecting public safety the challenge of terrorism and at the same time protecting the rule of law and our fundamental freedoms. 
Further in the paper David Baragwanath makes another two points. The first is the role of civil society to properly examine measures undertaken by the legislature and the executive not just at the time but also on mature reflection. That is particularly important to do because let us be honest those pieces of legislation were passed under the pressure of events—the terrorist acts of 2001 and following—and it is right and proper that they should be carefully analysed. I know that the Foreign Affairs Defence and Trade Committee has done that very task. Dr Lockwood Smith was part of the select committee that undertook that careful examination and the committee made various recommendations. Of course it is one of the roles of university academics legal commentators and others also to undertake that careful analysis. That has also been done in other jurisdictions. 
The judge raised an interesting final point and that was the idea of redemption. It is not a term that one would normally think of in relation to terrorism but the truth is that yesterday’s terrorists can become today’s statesmen. Nelson Mandela is the most obvious example of that. I suggest that in more contemporary times this will have to be dealt with in relation to Israel Palestine and Iraq. The truth is that at some point Israel and Hamas will have to find a way to talk to each other because the alternative is actually just a continuation of violence. The British Government and the IRA were faced with precisely this dilemma a number of years ago and they came to the realisation that they had to move forward and talk and put down the gun. 
I might say that the situation also prevails in Iraq. These are perhaps personal comments. The coalition has won the war. Saddam Hussein was arrested in November 2003 out of the spider hole. He is being tried in a court as he should properly be. Surely there can hardly be a single Iraqi who would now wish to return to the days of Saddam. So the coalition achieved its goal of setting Iraq on the path of democracy. 
One of the things that I suggest now has to be done—and it is a role that New Zealand has within the United Nations—is to think how the current situation can be resolved and the role of the coalition in that. The truth is that the war against Saddam’s regime was won. Iraq is on the pathway to democracy. It had a huge turn-out in its recent elections and it is now time for it to work out its own democratic future and notwithstanding the current turmoil in that country I am sure that it can do so. 
I can see some people looking at me and wondering why I am raising this matter in the context of this debate. It is for this reason: the way in which democracies deal with global terrorism and its other effects tests the balance of public safety and liberty. It is the role of the Intelligence and Security Committee when dealing with issues around the Security Intelligence Service to also assure the New Zealand public that it has a complete and full understanding of that position. Maybe 43 minutes was a bit short—perhaps. 
I conclude on this point: this committee is a multiparty committee. It consists quite carefully of senior members. The New Zealand First Party might go on about Rodney Hide but I have certainly heard another member of Parliament make the same kind of outlandish allegations and that person is the Rt Hon Winston Peters. Yet he has always been able to discharge his role on that committee properly. I do not think anyone has ever questioned his role on that committee. I was heartened by the final comments made by Mr Peter Brown when he said that New Zealand First members would give Mr Rodney Hide the chance to prove himself. The truth is that Mr Hide is a robust debater in this House. He uses the freedom of speech in this House. But I also believe that with 10 years’ experience he understands the importance of the role of protecting the critical balance between public safety and protecting our liberties. I guess the one thing we could say about Mr Hide more than we could about most people is that he is acutely conscious of protecting individual liberties and freedoms. That is the very raison d’être of his party. 
So I think that it was fair for Mr Brown to say that Mr Hide should have a chance to prove himself on the committee just as Winston Peters did—and certainly some of my colleagues questioned his appointment 3 years ago. I believe that Rodney Hide will also demonstrate that he is a proper person to discharge the responsibilities of the committee. 
KEITH LOCKE (Green) 
: 
 The Intelligence and Security Committee in the last Parliament had the most disgraceful record of any committee in this House. 
This parliamentary debate by my calculations has gone for nearly three-quarters of an hour which is more than this committee sat for in the whole of last year. This committee sat once last year on 14 June for a total of 43 minutes. The committee was not much better the previous year 2004 when it met for 84 minutes—that is for 49 minutes on 15 June and for 35 minutes on 14 December. In 2003 the committee met for a little more time—a total of 113 minutes made up of 44 minutes on 19 March 20 minutes on 10 June and 49 minutes on 16 December. In 2002 after the July election it met just once for 49 minutes on 17 December. This makes a total of 4 hours and 49 minutes for the whole of the parliamentary term. So in 3 years this committee sat for not much more time in total than a normal select committee meets for every week. We are lucky even to know how hopeless the committee is because it has not reported on the record I have just described to the House. I obtained the information through written questions to the Minister in charge of the New Zealand Security Intelligence Service Helen Clark. 
Let us look at what the committee did report on to the House in the last Parliament. It reported three times on the Budget estimates three times on supplementary estimates and three times on financial reviews. None of the committee’s reports to the House exceeded two sentences and none told us anything other than that the committee had done an examination or a review. For the financial reviews it needed a second sentence to ask that the House take note of its report. Yes I think that the House should take note of the three reports on the financial reviews and conclude that this committee is not doing its job. 
I have here the estimates and supplementary estimates for the Security Intelligence Service and the Government Communications Security Bureau during the last parliamentary term. They tell us nothing other than the gross amount spent by these agencies. For example for the 2004-05 year the figures were $22.5 million for the Security Intelligence Service and $38.963 million for the Government Communications Security Bureau. Unlike the estimates for all other State agencies there was no breakdown for capital expenditure staff etc. Why did the Intelligence and Security Committee not comment on that in its report? Why did it allow that to happen? It cannot argue security reasons for denying Parliament and the public such general information on expenditure. We are entitled to suspect that the reason for that is to avoid any substantive debate on intelligence matters. 
If the Security Intelligence Service and the Government Communications Security Bureau keep quiet about what they are spending money on and the Intelligence and Security Committee goes along with that then there will be less public debate. Is that why there is all the secrecy? Why for example can we not know how much the Waihopai satellite communications interception station is costing the taxpayer? It is primarily a spy station for the US National Security Agency which is the same agency that George Bush has been misusing illegally to spy on American people—that is spying on them without a warrant. Every day the National Security Agency takes information from the millions of phone calls faxes and emails that are drawn down into Waihopai near Blenheim from the two communications satellites over the Pacific equator. 
There is pressure on the Government Communications Security Bureau to be a little more forthcoming in its activities and it was good that its director Warren Tucker wrote an op-ed in the  
Dominion Post 
 and the  
Press 
 newspapers on 31 January. However it included only generalities about the good work it is doing in the communications surveillance area and claimed without any evidence the “immense benefits” of its close links with American and British partners. In the article Mr Tucker claimed that the Intelligence and Security Committee functioned in much the same way as a select committee. 
The problem is that it does not. It operates outside of the Office of the Clerk and Standing Orders in general do not apply to it apart from some in reference to financial reviews and the things mentioned in the motion before us today. One of the problems with the motion is that it shuts out all other committees from even considering intelligence issues. It specifically forbids other committees from doing so. The Foreign Affairs Defence and Trade Committee does overlap the intelligence area to the extent that its members know that intelligence gathering is going on through police and customs and the defence intelligence units. Why should we not be allowed to stray into the security and intelligence and Government Communications Security Bureau areas at all in our consideration if we want to have a coherent understanding of intelligence gathering across all agencies in New Zealand? 
Also the motion before us prevents any petitions from going to any other committee than the Intelligence and Security Committee which means that one cannot have proper consideration of those petitions if the oversight body for the intelligence services is also the body having to respond to the petitions. 
The abysmal record of the Intelligence and Security Committee proves the point the Greens have been making for years that the committee should be abolished and replaced by a true select committee in Parliament. A member’s bill in my name the Intelligence and Security Committee Act Repeal Bill was debated in the year 2000 but unfortunately was defeated in Parliament. Hiding behind a wall of secrecy the Security Intelligence Service the Government Communications Security Bureau and the supposed supervisory body the Intelligence and Security Committee have been able to avoid real accountability to the House. We need a true multiparty select committee not one appointed by National and Labour leaders that meets so infrequently that it effectively gives the intelligence services carte blanche to do what they want with barely any questioning. 
It is true that with any supervisory committee of intelligences services a certain level of confidentiality needs to apply. But when one has total unaccountability to Parliament—as is currently the case—as with any other Government department incompetence may be hidden. I am not just stating that hypothetically; we can see the Security Intelligence Service’s incompetence in the Ahmed Zaoui case. Firstly in 2003 the Refugee Status Appeals Authority was “surprised at how limited” the Security Intelligence Service material was it being mainly unsourced extracts from various news reports containing “erroneous claims” and relying in one case on a “self-evidently dubious source”. Then we have the Security Intelligence Service’s summary of allegations against Ahmed Zaoui provided in February 2004 which are laughable. The paranoid incompetence of the Security Intelligence Service reached new heights when it described a tourist video of Mr Zaoui’s that has his face and voice on it as being “suspiciously like a casing video”. 
That is the same summary of allegations that let the cat out of the bag that the Security Intelligence Service’s concern about Mr Zaoui was all about not upsetting other Western Governments and their intelligence agencies—that is diplomatic concerns—rather than because he is a threat to our security. The paragraph in the Security Intelligence Service summary of allegations reads: “If Mr Zaoui with his public record were allowed to settle here that would indicate that New Zealand has a lower level of concern about security than other like-minded countries. That would impact adversely on New Zealand’s reputation with such countries and thus on New Zealand’s international well-being.” So much for the rights of Ahmed Zaoui to have due process and as the Supreme Court said in its judgment be proved to be a real threat to security. I am confident that after all those processes that have been gone through he will be proved to be a genuine refugee as already stated by the Refugee Status Appeals Authority. 
With the incompetence of the Security Intelligence Service and the wrong political approach that it has taken in the Zaoui case it is important that any parliamentary supervision be cross-party and more interrogatory. I agree with my colleague Wayne Mapp that there are a lot of issues for the Intelligence and Security Committee to deal with; there is just no way it has dealt with them in the time it sat. In fact it has not done anything more than hear a few briefings and do a very sketchy financial review in the last Parliament. There is no indication with the present membership of the committee being largely unchanged that it will do a better job in this Parliament. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 There are two lifestyle attributes that New Zealanders value: one is freedom—the freedom to do what they want and the freedom to go where they want—and the other is security. New Zealanders want to feel secure in their homes and secure when they travel. Not too many years ago New Zealanders had both. They could feel free they had total freedom and they were totally secure. That is no longer the case in part because of internal problems and in part also because of external problems. 
New Zealand First sees the role of the Intelligence and Security Committee—albeit it is a relatively small one in a global sense—as being to balance lifestyle choices between freedom and security. The members of this committee are undertaking an important mission. It is important not only for the security of the country but also for the well-being of New Zealanders. 
New Zealand First will support the motion. We do not share the views of the Green member who has just outlined why the committee should not be in existence. We do not share that view at all. We believe that there is an important role for the committee. We do not measure the importance of that role on how often the committee sits or how long it sits for. We believe that there is a function for the committee and that it should be there and should sit and meet as required. New Zealand First supports the motion because we believe that the committee plays an important role in the administration of New Zealand. 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 109 
New Zealand Labour 50; New Zealand National 48; New Zealand First 7; United Future 3; Progressive 1. 
Noes 10 
Green Party 6; Maori Party 4. 
Motion agreed to. 
Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill 
Third Reading 
Hon PETER DUNNE (Minister of Revenue) 
: 
 I move  
That the Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill be now read a third time 
. This bill gives effect to a number of business-friendly tax measures that were introduced in last year’s Budget with the primary objective of promoting and sustaining New Zealand’s economic growth. The measures that the bill includes are inherently technical but are extremely important. They include for example proposed changes to tax depreciation rules aiming to ensure the more productive use of capital—a package that over the next 4 years alone will amount to $1 billion in revenue forgone by the Crown in the interests of fostering economic growth. 
The measures also include a series of changes aimed at making the tax side of business a little bit easier for the many small businesses in New Zealand. We have made changes to the provisional tax date fringe benefit tax and GST rules in terms of the dates by which returns have to be filed. We have introduced the notion of compensation for payroll agents and a range of other measures that make it that little bit easier to do business in New Zealand. We recognise the contribution that our small to medium sized business sector in particular plays in promoting and sustaining New Zealand’s economic growth. 
The bill also contains some important measures aimed at improving our access to worldwide capital skills and labour and it recognises the contribution that returning New Zealanders and new residents make to this country by allowing the forgoing for a period of some of their overseas tax obligations once they return to this country. During the Committee stage there was some debate about this particular set of provisions and the relationship they had to certainly our major market Australia and how comparable they might be. In essence the situation we arrived at was that these changes are positive. They have been amended by the select committee from what was originally proposed. In many senses they are not quite apples and apples with Australia because of differing conditions and differing interpretations in that country regarding residence status. But they are a start and a step in the right direction and I gave an undertaking that particularly the 10-year limit that is imposed by the bill will be kept under review as we move forward. 
There are other significant measures in the bill. An important change which has been widely welcomed was introduced by way of a Supplementary Order Paper to deal with the issue of what has become known as an unacceptable tax position. That issue arose out of the 1996 penalties regime whereby a genuine error by a taxpayer or an agent acting on behalf of the taxpayer hitherto potentially attracted a penalty compounding at 20 percent but the changes mean that a discretion is now available to the commissioner to apply some judgment in favour of the taxpayer in such circumstances where it is clear that the action has arisen as a result of a genuine error. That move has been widely welcomed and understandably so. I indicated to the Committee that it was an interim step pending a wider review later this year of the penalties regime although I expected that the change made in this bill will not be inconsistent with the changes that are to come a little later on. The bill also gives effect to changes to both the depreciation regime for bloodstock and also the duty applicable to racing clubs pursuant to the agreement between the Labour-led Government and the New Zealand First Party. I imagine that the Minister for Racing will take a call a little later in the debate to speak about those matters in more detail. 
I simply want to say at this stage that I acknowledge the contribution of my own officials in the Inland Revenue Department the officials in Treasury and those responsible for the drafting of this bill. It is a very thick tome as these essentially remedial matters usually are and it is in clear English—as best as tax legislation ever will be. I acknowledge those who made submissions to the bill. I acknowledge the regulars like the Institute of Chartered Accountants of New Zealand and the Law Society and the many other groups that made submissions to the select committee and had an input. I appreciate the consideration that Mr Shane Jones and other members of the committee gave the legislation over a long period of time and the amendments they recommended which we were pleased to adopt. 
Finally I want to acknowledge the members of the House who contributed to the debate last evening. I thought we were able to have a pretty robust and informative Committee stage debate. I appreciate the support of virtually all parties in the House for the measure. 
Dr the Hon Lockwood Smith 
: Except for the colleague on your right. 
Hon PETER DUNNE 
: I did say I appreciate the support of virtually all members of the House. I was also gratified by the abstention of some not turning into outright opposition and I shall say no more on that point. 
I commend the Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill to the House and I observe as I close that this must be one of those rare occasions where near unanimity has been achieved in the passage of tax legislation. I certainly cannot recall offhand—I am looking at one or two of my advisers at the other end of the Chamber who may be able to dredge their memories and prove me wrong—in the time I have been here another bill that has been as well received as this one. Maybe that is a harbinger of good things to come. I commend the bill to the House. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 I am pleased to rise to speak in the third reading debate of the Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill. I would like to make it very clear from the outset that National supports the legislation. We have supported it right the way through its proceedings through the House. 
I congratulate the Minister of Revenue who has just spoken because during the Committee stage of the legislation yesterday he paid the Committee including members of the Opposition the courtesy of listening to the serious issues raised and responding to them in an intelligent manner and that was appreciated. I would like to cover some of those issues. It is also gratifying that the Minister has taken on board some of the issues raised and that he intends to make sure that the Government monitors the situation over the next period of time to make sure that the measures that the bill is implementing have the desired effect and do not produce unexpected outcomes. 
The issues that National focused on related particularly to three groups of issues. The first was the issues surrounding the amendments to the legislation to try to make New Zealand a more attractive place to internationally mobile people with high-value skills. Both sides of the House realise now that there are people in this world who are attractive to a number of countries because they have sought-after skills. They often command quite high wages and salaries and they are the kinds of people who can live and be paid well in a number of countries. But they have the skills we need here. 
If we want to attract those people here we must make our taxation regime attractive to them. If we have to provide special exemptions to them I think it does beg the question as to whether our overall tax regime is sufficiently internationally competitive. That is not the subject of the legislation but it is a point I make. If New Zealand were to make our personal tax regime more attractive—and I appreciate that the business tax regime is currently under review—people who had the choice could then choose to have their international income taxed in New Zealand. So there is the wider issue. The need in the legislation to provide exemptions does bring into question whether our personal tax regime is sufficiently competitive internationally these days. I think it is fair to observe that our higher tax rates cut in at pretty low levels of income and that does not make our taxation regime particularly attractive internationally. 
 I come to the specific provisions of the bill. Clause 77 sets out exemptions for certain classes of people seeking to return to or come to New Zealand by exempting certain of their foreign income from taxation here in New Zealand for a period of time. 
The debate during the Committee of the whole House focused on a couple of particular issues. There are two sorts of people whom we are trying to attract here. I will deal first with the New Zealanders whom we are trying to attract back to New Zealand. They are highly skilled New Zealanders who have been offshore for a while and who have offshore income because of their time offshore. We want to attract those people back to New Zealand. That is the first group of people we are addressing. 
The legislation that is having its third reading today provides a tax exemption for certain of their foreign income if they have lived outside New Zealand for a period of 10 years. The Minister just referred to that. National argued during the Committee stage that the 10-year period is a long time. Ten years is too long for New Zealanders to have to be offshore before they can come back home and qualify for this exemption on certain of their foreign income—they would always be taxed on any income they earned in New Zealand. By the time New Zealanders have been offshore for 10 years they are thoroughly settled in those foreign countries. They may have married into a family offshore their children will probably be involved in schools there and they will be totally involved in those societies and their communities. It will be more difficult to attract those people back to New Zealand. 
National members argued that if the time period that New Zealanders had to live offshore in order to get the benefit of the tax exemption could be reduced a bit it might have greater effect in attracting New Zealanders back here. We all agree that those are the people whom we want back first and foremost—our own people who have gained the expertise experience and skills of having worked offshore. So it is a really important clause. How do we get those people back to New Zealand? 
I think it is unfortunate that the Minister—although he did listen to our arguments and I certainly appreciate that—was not prepared to accept our amendment to reduce from 10 years to 5 years the time period that New Zealanders would be required to be offshore to qualify for the tax exemption. It is interesting that a number of senior tax experts in New Zealand have commented similarly that the Government is missing a golden opportunity here. Having recognised the problem and seeking to address it the Government is not really solving it by having that long 10-year period. I appreciate that the Minister has accepted that National may have some argument here and he has given an undertaking that the 10-year period will be under review. That is something National members have achieved through this debate on the legislation. I take it that if the review shows that the 10-year period is too long and that the provision is not having the desired outcome then the matter could be brought up again for further amendment. 
That was the first issue. The second group of people that clause 77 seeks to attract to New Zealand is the new immigrant—that high-value person who is attractive to a number of countries particularly our competitor Australia across the Tasman. The provision proposed here is that a new migrant should be able to come to New Zealand and get the tax exemption for 48 months. That would apply to new immigrants coming to New Zealand after 1 April this year. National drew to the attention of the Committee the fact that Australia—although it talked about enacting a very similar provision in recent years—in February this year finally introduced legislation that is more flexible in respect of those new migrants. The Australian proposal includes those tax exemptions for temporary residents who have recently arrived in Australia. It is a measure that would help to keep them in Australia. 
Again tax specialists in New Zealand have pointed out that we have temporary residents here—high-value people on work permits. Their employers may have to renegotiate to extend those work permits and may be vulnerable to losing those high-value people because they will not qualify for the tax exemption yet they would qualify if they were in Australia. In respect of new migrants this issue of the competitiveness of our position in this legislation compared with Australia’s position has not been assessed adequately. 
Again I accept that the Minister listened to the arguments of National members. We proposed to extend the provision to make it available to temporary residents or people in New Zealand on work permits who had arrived in New Zealand after 1 April 2005 rather than 1 April 2006. That would enable people who are resident here at the moment to obtain the benefit of the provision. But the Government did not agree with our amendment. We also sought to extend the tax exemption to 60 months rather than 48 months to make sure we are really competitive with Australia. Sadly those amendments did not achieve the Government’s support. I think this whole issue should be kept under review to make sure we remain competitive with Australia. 
Finally I express National’s appreciation for Supplementary Order Paper 19 which the Minister the Hon Peter Dunne introduced last night to amend the legislation on unacceptable tax provisions. It has National’s support. We argued strongly in the Finance and Expenditure Committee that the amendment must be brought in because the way shortfall penalties have to be applied to unacceptable tax positions is simply damaging the goodwill of taxpayers. It is totally irrational and unfair. 
Our remaining concern about the amendment is that it leaves a lot of discretion to the Commissioner of Inland Revenue. We would prefer to see a measure that made it automatic that someone who having been advised of an error in a tax position then paid the correct amount of tax by the due date faced absolutely no risk of being penalised. Despite those misgivings National does support the legislation. 
Rt Hon WINSTON PETERS (Minister for Racing) 
: 
 My colleague the Minister of Revenue has covered the main part of the bill. I want to concentrate on the two Supplementary Order Papers that were in my name and in the name of my party New Zealand First in respect of the racing industry. 
In essence this is a red-letter day for all three sections of the racing industry in this country. The Supplementary Order Papers set out to change the taxation regime from a headline rate of 20 percent down to 4 percent for racing—the same rate as for casinos. Racing is of course New Zealand - owned while most casino ownership is foreign. How this situation has lasted so long is beyond me but we are about to rectify it and hopefully by 1 o’clock on Monday the Governor-General will have signed off this legislation and it will be a fact. 
The second thing we set out to do was to provide a fair internationally competitive depreciation regime for New Zealand stallions down from 4 years to 2 years. There is a different regime for mares so that a horse starting at age 3 will be totally depreciated by age 8 and a mare starting at age 8 will be totally depreciated by age 9. That is dramatically different from the current law and is internationally competitive. Alongside that we have other plans but they do not require a statutory framework. 
I thank the racing industry the thoroughbred industry the harness industry and the greyhound industry in respect of the changes that they have argued for over a long long time and that are now to become a reality. It is a pity that my colleague Keith Locke mentioned the length of time that the Security and Intelligence Committee sat for. He does not seem to understand that it is not the time spent that matters but what is done during that time. We have set out to change the shape of racing in this country in order to make the industry far more competitive and to give it a fair go which is something it has requested for a long long time. 
It is great to be able to tell people going home tonight in drive time traffic who have been concerned about the unfair treatment that this industry has received that it can now confront the United States the UK Ireland Australia Hong Kong Singapore and the Middle East with a new regime that will make us competitive for the first time in a very long time. I thank my colleagues in New Zealand First who have supported this policy for so long and who have made it—alongside our supply and confidence arrangement with the Government—a reality. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
JOHN KEY (National—Helensville) 
: 
 It appears that the time of the previous speaker Winston Peters has expired so I will take over in his footsteps. On behalf of the National Party I rise in this third reading debate to support the Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill. 
I start with the point that the bill contains certain measures that are supportive to business. The National Party clearly supports those measures and the attempts to make depreciation rates more realistic as they apply to the modern economy. This measure was trumpeted by the Labour Party in the last Budget as heralding a great success for businesses around New Zealand and it was said that New Zealand should be rejoicing because somehow Budget 2005 was business-friendly. When one looks at Budget 2005 one probably reflects on the fact that it was a Budget in the proportions of about $4 billion a year. It was a massive spend-up that was followed by a Labour give-away programme as we moved towards the election campaign. No doubt the Government will argue that that is the reason it has very little money available this year. 
It was interesting that the business tax cuts that were delivered—we will talk about those in a minute—were paid for by the introduction of yet another tax. It is the Michael Cullen philosophy of taxation for all New Zealanders: when he gives with the left hand he takes with the right hand. Theoretically on the one hand he was giving businesses something but on the other hand he was taking and that was the $360 million tax grab in relation to a carbon tax that was frankly a “New Zealand experiment” as the  
Guardian 
 newspaper described it. Lo and behold Michael Cullen had to come before the Finance and Expenditure Committee a few weeks ago with his tail between his legs and forlornly tell the committee that he did not have the numbers to get that bill through the House. So he was forced to make a rapid retreat from his carbon tax—and that was a wonderful idea. The National Party as members may remember had already launched its “Axe the carbon tax” campaign and we were delighted when the carbon tax was removed. 
The point I make is that as soon as he got the words out of his mouth—that he was axing the carbon tax—he went on the hunt as Minister of Finance for another $360 million to make up the shortfall. Lo and behold we learnt that tax threshold adjustments would not be introduced. That was the threat at least from Michael Cullen—that the tax threshold adjustments that were going to take place—the infamous chewing gum in the “chewing gum Budget”—would not occur in 2008 because despite the fact that the Government was predicting that it would run somewhere between a $3 billion and $5 billion surplus around that time there was not enough money. I think New Zealanders find that quite remarkable and it really does not bode well for the infamous business tax review that is taking place at the moment. 
The infamous business tax review was pitched in the same way as the supposed infamous deep dark secret in Budget 2005. The infamous business tax review was sold and pitched in such a way that businesses were led to believe that it would be good for them and that like at Christmas there would be a present neatly tucked under the bottom of the tree. What they did not know was that Michael Cullen was back to his old tricks of fiscal neutrality and that if he was going to give with one hand he would need to take with the other—and the other would come in the form of a payroll tax. That is what is coming down the line for businesses in New Zealand under a Michael Cullen – Labour-led Government. That is the bad news. 
But should businesses be rejoicing because of the passing of the Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill tonight? Well they should probably be grateful for small mercies because goodness knows that under Labour they do not get a lot of small mercies. But really businesses should be far from rejoicing because the bill effectively says: “We are going to increase the write-off rate—the depreciation rate—for things like laptops.” A laptop can be written off at something like 40 percent in year one. I ask in all seriousness whether any New Zealand business thinks it can buy a laptop and sell it 6 months later for anything more than about 60 percent of what it paid for it. I would be amazed if a business got 50 percent of what it paid for it. In fact quite frankly in the modern technological age I would be surprised if a business got anything for it. So for Michael Cullen to be trumpeting this as business-friendly was quite unbelievable. 
Members may remember around Budget time—I certainly do—that we had a remarkable scenario whereby Michael Cullen was trumpeting this measure as a $1.5 billion return to business. What a business-friendly Government Labour was proclaiming itself to be! The only small problem came in this regard. During the Budget lock-up that occurred an hour before Budget 2005 we asked Treasury officials whether they could tell us what this missing $800 million was that was theoretically some reduction for business. 
Chris Auchinvole 
: What did they say? 
JOHN KEY 
: Their answer was that they did not know. Fifty-five minutes later 2 minutes before we came back to the House a Treasury official came scurrying in. He told me that he had discovered as apparently Michael Cullen discovered literally weeks before the Budget—and we all know Michael Cullen can blow a foo-foo valve at the least sort of aggravation so one can only imagine that the walls were pretty blue when that discussion was finished—that there was not an accrual process for the recognition of GST and because the Government was changing the GST rate and aligning it with I think the fringe benefit tax (FBT) payment rate that meant a movement from one income period to another. So as businesses moved over to that income period they were in effect paying eleven-twelfths of their GST payable at that particular date. But because they were not paying that other one-twelfth for another 42 days I think it was Michael Cullen was claiming that that was a $800 million benefit to them when in fact they were getting the use of money for 42 days. It was more trickery from the Minister of Finance—similar to the trickery we saw on the student loan policy. 
We saw Michael Cullen in the general debate today—and I do not like to digress Mr Deputy Speaker because I know you like to keep these third reading debates tightly and narrowly constructed but let me digress for a second. We saw Dr Cullen in the general debate today telling the House that somehow student loans would be even less expensive than the 18th calculation he has now received from Treasury. But he forgot to mention the $1.5 billion write-down to the New Zealand books—the $1.5 billion write-off in assets that has occurred from that student loan policy. 
So let me just say to business that National is supporting this bill. It is a breadcrumb though in a breadbasket. The actual loaf is gone; it has been long since toasted by the Labour Party—as have so many of its Ministers in recent months. This bill is a crumb that has come off the bit of the crust that is left and businesses should be grateful because under Labour that is all they will see. But I do not think businesses should be doing cartwheels over it in any shape or form. 
There are some other interesting changes in relation to for instance the elimination of “nine to five” leases. As a member of the Finance and Expenditure Committee I know we received a lot of submissions in relation to “nine to five” leases. I quote a comment that came from KPMG in relation to the cancellation of those “one plus one plus one” leases or “nine to five” leases as they are sometimes known. The comment was: “Officials see these as FBT avoidance. Taxpayers see them as a means of reducing their overtaxation.” That was a heated area of discussion for the committee but it was an interesting point. Some of those taxpayers make the fair point that they are being charged FBT on a car park they are not using for any private expenditure at all—only for working time—and that sounds a little bit crazy. 
 I want also to refer readers of this bill—it is quite a long bill so for insomniacs it will be a wonderful piece of information—to the provisions around the subsidy for payroll agents. That is actually a very interesting and typical Labour Party response to taxation. It is a case of: “Don’t go out there and simplify the tax system because that is a far too simple thing to do. Don’t make tax simpler and easier to understand with fewer compliance costs but do pay for yet another bean counter so that that bean counter can work out the mess that is going on behind the scenes.” That is no way to be treating business in New Zealand particularly small businesses and particularly the small to medium enterprise sector which dominates New Zealand’s business face. They really should not be having to pay or get a subsidy for another accountant. They really should be getting a much more simplified broad-based low rate of taxation. I think that is really important. 
Lastly I want to mention the racing industry if I may for a moment. National’s policy on racing was the right policy. New Zealand First is getting this legislation through only because that Government desperately needed New Zealand First. It was National’s policy and when I go on racetracks around the country people say to me: “Thank you National for what you have done.” so we say: “Best wishes and good luck with this legislation—we are off to the races.” National will be voting for this bill. 
SHANE JONES (Labour) 
: 
 After hearing an opinion like that I think that someone is about to be scratched from the Opposition no doubt. However I have a few things to say which are obviously in support of what has become colloquially known as the “May tax bill”. Its formal name is the Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill. Despite the public policy differences amongst members on the Finance and Expenditure Committee as I have said earlier there was a passable level of collegiality. We members of the select committee had different levels of experience and different war stories to tell about either our constituents or our personal interfaces with the revenue collection system. 
I point out something that must not go unmarked—that over the period of 4 years in excess of $1 billion will be restored to taxpayers via let me say it this taxation set of measures. I also remind the House that in the last 20 years this is probably the first heavy-duty attempt we have had at finessing or rationalising the fringe benefit tax regime. When the committee left those matters we could not finalise with the officials it was heartening to know that the officials would go away put unresolved matters in a business programme and continue to look for better ways to make the regime more business-friendly or more compliance-friendly. 
I think this bill has attempted to do two additional things. Obviously it is pro-business and pro - economic growth and the depreciation changes are the largest contribution that the business world or business owners—taxpayers in a commercial sense—will enjoy. As I have said they will have in excess of $1 billion over 4 years. But there has been far too much scaremongering over the question of whether we are disappearing into some black hole—something akin to Tasmania—because the rest of Australia is taking us over. This tax bill actually provides incentives and simplifies the process for our people to come back home. 
Once again the officials said they would monitor the situation in relation to the 4-year holiday. We have heard from members of the Opposition that recently changes have been coming out of the Australian regime and it is pleasing to note that the officials are conscious that we are in an inexorable contest with our friends in Australia as to whether we can retain develop and attract back to Aotearoa the diaspora. It is pleasing to see that although people are going over to Australia others continue to come back home as well. 
In addition to that we are seeing an attempt here to lessen the burden on those elements in the small-business community who find the whole tax regime either confounding or an unnecessary distraction. Whether they are in strugglers’ gully or up on the summit looking at a vista of gold they struggle with the ongoing hassles of dealing with the bureaucracy and ensuring that they are compliant with the tax regime. To that extent although it is a relatively small amount of money an important step is being taken in order to ensure that small-business owners have an opportunity to call upon the subsidised services of a payroll agent. 
That however does place an ongoing obligation on those who implement the regime—in particular the Inland Revenue Department. Indeed today we had the review of that department and we were assured that it continues to believe that the centre of its creed is to be professional and also to make it easier for those payers to be more conscious of their obligations or to facilitate their meeting. Of course there are always mistakes and errors and there are many reasons why those errors take place but it was pleasing to see that the department will now have discretion to ensure that the full force of the penalties regime does not fall like a guillotine on the necks of a lot of long-suffering taxpayers. 
In closing I say that the bill is business-friendly. It was useful to have the perspectives of all the select committee members. As I said earlier although there are differing perspectives as to where tax rates should be I think all of us felt that this legislation is a definite step in the right direction and officials have gone away to do further work. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
Tena koe Mr Speaker. Tenatatou katoa i te Whare. You know Mr Speaker whenever I talk about tax to my constituents their eyes start to glaze over the shutters come crashing down and before I can say “payment alignment dates” they are all asleep. But I know as do my colleagues in the Maori Party that every issue raised in Parliament is important to Maori and that we as a caucus have a responsibility to give each issue the serious consideration it deserves. 
During the passage of this bill the Maori Party has raised a number of issues including problems with compliance costs the role that taxation plays in helping to drive local economies and the need for a sustainable economic base. We have also raised the basic question of how taxation will impact on Maori throughout Aotearoa. Will it eradicate poverty and how can we refocus our efforts to be more positive in our use of taxation? 
We note how easily our Government can make political decisions to improve the status of the poor in South Africa. In that regard I am mindful of a comment made by Bishop Desmond Tutu who said: “If everyone who wants to see an end to poverty hunger and suffering speaks out then the noise will be deafening. Politicians will have to listen.” Although the noise during question time can be painfully loud a stronger and more enduring noise is needed if we are to be inspired to act swiftly and honourably in the interests of the people whose needs are far greater than our own. 
When the chairman of the Finance and Expenditure Committee spoke to this bill he mentioned that tax breaks for those who want to bring finance into Aotearoa would be addressed. The Maori Party would add that it is probably even more important that we look to our own land and see how we may improve economic growth here rather than look to overseas investment and the problems that it brings for Maori particularly and for our nation as a whole. 
For example the export revenue from Maori farms is about $800 million a year but those farms still operate at a level that is only about 70 percent of the national average. It seems that some targeted tax relief in research and development and farm management could go a long way towards improving that return yet this bill seems to be more focused on research and development tax relief for companies that are bringing in new investors. Again perhaps we need to look closer to home in order to realise positive growth. 
Another area we could target for economic growth is marine farming. The Maori Party notes that the Maori Commercial Aquaculture Claims Settlement Act was rushed through the House as a vote-getter but not one new marine farm has been set up as a result of it. The potential for marine farming for Maori and for the nation’s economy is huge and I note that when the Act was launched last year the Hon Dover Samuels said it signalled new opportunities for Maori in the marine farming industry. So members can imagine how concerning it is to see less than 9 months later the same Dover Samuels report huge frustration amongst coastal Maori over the unworkability of the aquaculture legislation. The Maori Party is happy to back Dover Samuels’ call that Maori marine farming be supported and as the member of Parliament for Te Tai Tokerau I will do my best to see that the Government’s decisions do not continue to deny Maori access to that industry. 
 I note also Dover Samuels’ comments yesterday that the Government’s oceans policy was pie in the sky and would undermine economic development. The Maori Party will be watching to see what changes are made to legislation as a result of the advice of the Associate Minister. 
We all suffer the errors of flawed policy and we must all take the steps necessary to address those flaws. Yesterday we saw the latest in a long line of Labour MPs trip over his sense of self-importance but we acknowledge David Parker for recognising his mistakes and taking the appropriate action. His actions were similar to those we have seen in the Maori world where those who do wrong are expected to front their people on their marae and receive the justice they deserve. It is a pity that we are losing touch with a justice that is as honest as it is simple. 
Although I recognise the importance of the changes to the depreciation rules I know that my constituents will not jump for joy or weep into their beers over them for the simple reason that they really do not give a stuff. They are more worried about the rise in fuel prices and the impact of that on their wallets and on their lives. 
We applaud the Inland Revenue Department for agreeing to waive the penalties for people who make genuine mistakes in their tax returns—and if the tax police can deal with flawed policy then anyone can. 
I also note that the Inland Revenue Department has aligned the GST and provisional tax payment dates to make it easier for those who pay business taxes. That decision will I know help Maori businesses greatly. They have often been affected by the tight payment schedules and the penalty clauses that kick in when they are late due to sickness of the whanau travel medical costs tangihanga and the need to give koha at times that simply do not fit with Inland Revenue Department schedules. Although we oppose this bill we support the initiatives to simplify the tax rules and to reduce the number of times people need to deal with the Inland Revenue Department so that provision is a move in the right direction. 
I remind the House that although the Government receives $1.2 billion every year from the taxes on tobacco products the real costs of smoking—through smoking-related illnesses and the associated health care through fire property life and health insurance costs through the cost of refurbishing homes offices cars and workplaces to rid them of the stench of cigarette smoke through passive smoking through the loss of earnings of those in care and those who have died unnecessarily and through the incalculable damage caused to whanau throughout the nation both Pakeha and Maori—make the tax take look downright miserable by comparison. 
Productivity and growth are not just about hourly output. I recall the comments of New Zealand Council of Trade Unions Maori vice-president Sharon Clair who said that productivity need not be a negative perception if the benefits of productivity are shared. We need to enhance our potential in areas like marine farming and aquaculture reduce development that exploits or puts at risk the health and well-being of our communities and do all we can to achieve real progress for our children for future generations for the nation and for our planet. 
I end my speech by paraphrasing the words of Dr Martin Luther King—I hope I can do justice to them. As long as there is poverty I can never be rich. As long as there is such illness amongst my people and their life expectancy is so wretchedly low I can never myself be totally well. I can never be what I ought to be until my people are what they ought to be. That is the way my world is made and such is the way I see it. 
CHRIS TREMAIN (National—Napier) 
: 
 I rise to support the third reading of the Taxation (Depreciation Payment Dates Alignment FBT—[ 
Interruption 
]—it is a mouthful—and Miscellaneous Provisions) Bill. In my opinion this is the first piece of legislation from the Labour - New Zealand First Government that goes some way to helping this country take a step forward and lift itself up the OECD rankings. It is the first piece of legislation in over 6 years to do so. Despite our having had the best set of economic circumstances in a generation only now do we finally see a business-friendly piece of legislation enter this House at the death knell of this Labour Government. As we are sitting in 21st place out of 30 OECD countries one would think that a focus on policy likely to push up our standard of living would be welcomed. But no over the last 6 years we have seen a focus on income redistribution social engineering and increased bureaucracy. Yes this is the first piece of legislation in over 6 years that will provide genuine benefits to business people and flow-on effects to employees. 
Let us be clear about this: business drives the economy. Without businesses we have no economy—we have no ability to drive social services or to redistribute wealth. Yet what are business surveys currently saying? The New Zealand Institute of Economic Research quarterly survey shows that firms are the most pessimistic they have been since 1986. Seasonally adjusted the result is worse—firms are more despondent than they have been for 35 years since 1970. 
Business pessimism is not alone in condemning the current economic climate. We need to consider a few more hard facts and a few more warning signals. Interest rates have increased. In 2004-05 they were 6.83 percent; now they are 7.53 percent. The current account deficit back in 2004-05 was $8.7 billion; now it is $12.9 billion. Inflation has increased. In 2004-05 it was 2.7 percent; now it is 3.2 percent. Of most concern is the fact that the rate of economic growth is falling and falling like a stone. Economic growth in 2004-05 was 4.3 percent; now it is just 2.7 percent. Next Friday the fourth-quarter growth statistics will be released. In the September quarter growth was just 0.2 percent and indications are that growth in the December quarter will be even worse. It could be zero or even negative. That means that the New Zealand economy has stalled for 6 months—not a good sign for the months ahead. Economic growth has not only fallen like a stone; it has hit rock bottom. 
So this taxation legislation is long overdue. It is but one part of the recipe needed to put the economy back on the path towards higher achievement—towards a place in the top half of the OECD rankings. The problem as I see it is that this legislation stands alone. As Mr Key pointed out it is a breadcrumb. I see little other legislation waiting in the wings to help grow the economic position of this country. We urgently need clear direction in the areas of review of the Resource Management Act investment in transmission and energy transport infrastructure research and development further emphasis on taxation and employment flexibility. 
Fortunately the country has some allies in the National Party. Already despite being in Opposition we have been able to place on the agenda legislation that will address some of this country’s employment-related issues. Wayne Mapp’s Employment Relations (Probationary Employment) Amendment Bill was successful in getting through the first reading stage which is excellent. That legislation will give more people the opportunity to enter the workforce will allow employers to take a risk and will improve the productivity of this country—so long may that continue! 
Returning to the bill before us I will focus on two areas: firstly depreciation and secondly tax exemptions for new migrants. While the bill deals with many other amendments to a variety of Acts I believe that those are the two sets of measures that will contribute most to furthering the prosperity of this nation and helping us to move up the OECD ladder. 
A number of changes to the tax depreciation rules have been introduced. Firstly depreciation rates will be more closely aligned with the commercial reality of an asset’s useful life. That is sensible and will further encourage investment in assets that help to make team members more productive to increase efficiency and output per employee and to lead to economic growth. Secondly the low-value asset threshold will be changed from $200 to $500. That will allow companies to write off assets in the year of purchase up to the level of $500 which is a significant improvement on $200. Once again this is a positive move that encourages investment in assets in order to make businesses more productive—to increase the output per employee and to increase efficiency and productivity. Both of those items are moves forward and businesses will welcome them. 
However there is a surprise in waiting. That surprise is for building owners. While depreciation rates for many assets have been increased depreciation rates for buildings have been reduced. Most submitters to the select committee did not support that move. They reasoned that the pace of change in technology and in consumer preferences means that the useful life of many buildings is in fact shorter than the 50 years on the table. I say that they are right. National members voiced their opposition in the select committee to that adjustment but unfortunately it fell on deaf ears. This is an opportunity lost. Investment in buildings is one of the key drivers of the economy and of economic growth. Buildings house businesses; businesses drive economic growth. Any decision to discourage investment in that key resource sends the wrong signal and to some extent counteracts the positive signals sent by the changes to depreciation in the first part of the bill. 
There is also a missed opportunity—the opportunity to add a provision that allows depreciated assets to be fully and finally written off written out of the asset register once they reach a minimum threshold level. Under diminishing value the asset can effectively remain on the books for years. Small-business owners do not have time to run around their businesses or resources to check every asset that is on their registers. So once that value goes below a certain level they need to be able to write the asset off and to write it off legally. 
Last night Dr Lockwood Smith put forward an amendment to introduce a $10 threshold. That was considered by the Minister of Revenue at the time but was rejected at that point. Interestingly the Rt Hon Winston Peters in the House last night across the floor accused us of being frugal with that request by asking whether we were from Bosnia. We were in fact being fiscally responsible in our request hoping to place on the table a realistic amendment to the legislation and one that we could list in future years. It actually showed that we had thought about the fact. The Minister—listen to this one—went on to say that business owners should instead just write “lost” beside the asset in question. [ 
Interruption 
] I suggest to Mr Woolerton that that is a dangerous recommendation to make— 
Chris Auchinvole 
: From a Minister. 
CHRIS TREMAIN 
: Yes from a Minister. I am sure that other parties in the House will not be recommending to business owners to write “lost” against items on their asset register. We would do better to write sensible law that prevents people from having to break the law because the current law is just not practical in that respect. 
It was almost as bad as the faux pas Mr Peters made in referring to long-time New Zealand First supporter Sir Patrick Hogan as Frank Hogan—not once but on four separate occasions. I extend apologies to Sir Patrick. At least Mr Peters has picked up on the National Party racing policy and implemented it via the bill. I am satisfied that that was an excellent step forward for the racing fraternity. Rather than making policy on the hoof I suggest that having a threshold write-off position for small businesses is a very good idea and one that should demand further attention from the Minister. 
The second matter I would like to address tonight is the positive steps the bill has made towards new migrants and the encouragement for New Zealanders to come back to these fair shores. God only knows we need to implement stronger policies to bring people back to New Zealand. We all know that the net outflow from this country has doubled in the last 3 years. For the year ended January 2004 10221 people left New Zealand; in 2005 15547 people left; and in the last 12 months 21439 people exited the country. Last night I thought Opposition members including Mr Shane Jones and given his extensive business background would have known better. He shouted out that the answer to bringing people back to New Zealand was to lift the minimum wage. 
R DOUG WOOLERTON (NZ First) 
: 
 Tonight we are witnessing a unique event. We are seeing a tax bill proposed by Labour going through the House supported by National and supported I might say by New Zealand First as well. During this debate we have heard a lot about the Supplementary Order Paper introduced by the Rt Hon Winston Peters Minister for Racing and we have had claims from National Party members that it is National Party policy. All I would say to the public of New Zealand is that if it really was National Party policy I think I can say fairly that National has been in Government more often than New Zealand First so how come National did not put it into legislation? How come the National Party did not put this racing policy into legislation? Because it was not National Party policy back then; that is why. The National Government was busy cutting this cutting that relying on the free market for everything and the last thing it was interested in doing was aligning the racing industry with casinos which New Zealand First has had to do. 
Just for the record New Zealand First’s racing policy was posted on its website on 18 July 2001 and that was some time before the National Party’s racing policy. If National is going to swipe our policies it should either implement them when it is in Government or shut up about them and get on with the business. 
New Zealand First has introduced a policy for the racing industry that will return $30 million to that industry. We are confident that it will be used well that the racing industry finally understands that as well as being in the export industry and the breeding industry it is also in the entertainment industry. If the pages of the  
New Zealand Herald  
are anything to go by where there are not many pictures of racehorses on carnival day but a lot of pictures of beautiful women in very fashionable clothes the industry has certainly come to grips with the idea that it is in the entertainment business as well. But we are pleased to help the industry along with the introduction of this legislation. It now lines them up fairly for the first time for many years with gambling and other types of gaming. 
We also make no bones about the fact that New Zealand First believes that the taxation system can and should be used by way of incentivising and giving messages to industry. We have had no hesitation in saying that depreciation on brood mares and other stock in the thoroughbred industry should be speeded up so that it is more advantageous for those people to get into producing good mares producing good breeding stock and indeed exporting them thus helping us with our chronic balance of payments deficit. 
It is no surprise to anybody that through this taxation bill—and I might say that the Finance and Expenditure Committee was ably chaired by Mr Shane Jones and he is getting better and better every day— 
Hon David Carter 
: He’s the last up-and-coming star they’ve got. 
R DOUG WOOLERTON 
: That is true. 
Hon David Carter 
: It won’t be long before he falls off. 
R DOUG WOOLERTON 
: That is true. I said to him at the select committee—and I hope I am not hauled before the Privileges Committee for letting out things that happened at the select committee— 
Hon David Carter 
: I will give evidence on your behalf. 
R DOUG WOOLERTON 
: Thank you Mr Carter. I said to Mr Jones that I was surprised to see him because as he is one of the few last rising stars I would have thought that today would be the day when he was plucked from amongst us and elevated to a higher position. But it was not to be. 
Hon David Carter 
: Still could happen. There’s a couple of hours to go yet. 
R DOUG WOOLERTON 
: That is true. The day is not over. He will just have to wait for another day. I am sure he is waiting and I am sure he is looking forward to holding the office that everybody expects him to achieve one day. But it will be no surprise to anybody that during the debate and discussion on this bill we had calls for tax cuts by the National Party. All sorts of cunning little plans were laid out by the members on the National side of the table. They asked deep and piercing questions of all the submitters and the officials. As Blackadder would say: “Any smarter and they could have pinned a tail on it.” But those members were on about tax cuts. That is the new mantra in the National Party. It used to be that the free market will fix everything; now it is that tax cuts will fix everything and they are still searching for the silver bullet. 
 There is no silver bullet—“bullet” might be the wrong word—and we in New Zealand First are pleased to see that some aspects of depreciation are taken care of in this bill. We would urge this Labour-led Government to go further. As we go head to head with the industrialised nations of the world—and we are talking about China India Vietnam Cambodia Thailand and all of those countries—we will not compete with them on an hourly pay rate that is for sure. We will not compete with them when it comes to mass production that is for sure. We will have to compete with them in the areas in which we have some expertise areas where we will have to use our brains areas where we have a niche market and they will be areas where the advantages we obtain for ourselves are very brief very lucrative and they will not be by means of mass labour. So the machines the equipment the scientific knowledge that is used in developing those sorts of products that will reward us with high income will have to have an increased rate of depreciation. 
I look forward to the day when we in this Parliament are looking at realistic rates of depreciation for machinery and increased depreciation rates for all sorts of scientific endeavour. Rather than have tax cuts across the board I believe that incentivised areas like that are the areas that we should be looking to. However this bill goes some way towards that and we applaud it. 
I must put on record that I am sorry for Lockwood Smith. Week after week on the select committee he would go on about his asset register and how he needed to drop those things off that were depreciated to a low level. As members heard the previous speaker Chris Tremain said that that did not happen. It is sad but the saddle the bridle and the whip that Lockwood Smith keeps in his shed will just have to stay on his asset register and have to be depreciated at the normal rate for some years yet to come. I cannot pretend to come to grips with the mathematical equations that Dr Lockwood Smith aspires to but suffice to say that he tells me that the figure can never reach nought at least in our lifetime and I take his word for that. But depreciation is something that New Zealand First is all in favour of and we would like to see more of it. If there are to be any amendments to this bill in the future we look forward to depreciation being one of the main ones. 
CRAIG FOSS (National—Tukituki) 
: 
 I rise to speak to the third reading of the Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill. My apologies for the length of that title to those who may be listening to the radio at the moment. It has been a pleasure and I congratulate all those who have progressed the bill this far. It is the second major bill that I have been involved in while I have been in this Parliament and I have learnt a lot from some of the more seasoned hands on the Finance and Expenditure Committee. I reiterate the earlier comments that our chair did a pretty reasonable job although I do wonder about the amount of patsy questions he seems to ask in the House. 
The National Party supports this bill. I personally support this bill but it is not bold enough. Quite frankly it does not go far enough and I look forward to building upon it using it as a platform for further and fundamental change and fixing the New Zealand system under the next Don Brash - led Government with Mr John Key as finance Minister. I look forward to being part of that action. 
This 353-page bill is allegedly business-friendly. How 353 pages can simplify taxation law I am really not sure to be honest. Essentially it just tinkers with existing law regulation and our statutes. 
I would like to run through some of the key points that the bill addresses. The bill deals with depreciation rules and schedules as the previous speaker just alluded to and in particular changes the economic life frames of buildings and certain aircraft. It also changes the low-asset thresholds from $200 to $500. My party argued quite intensely on the committee that those thresholds should be higher as recognition of the investment that many companies are trying to make that add value to New Zealand as opposed to forever worrying about the cost. The fiscal cost of going from $500 to $1000 would be $400 million I think Minister Cullen said the other night. Quite frankly I think that is a very good investment to make in the New Zealand business scene. 
The bill also aligns the payment dates for provisional taxation and GST. On its own it is a minor business-friendly measure but tragically that measure has been delayed from 1 April 2006 to 1 April 2007. It also provides for a subsidy for payroll agents. Mr John Key spoke to that earlier and did a very interesting take on it. Goodness gracious after another 353 pages of taxation law more payroll agents will be employed all over the show and it will probably be New Zealand’s biggest growth industry over the next wee while. Again tragically the implementation and application of that measure has been changed from 1 April 2006 to 1 October 2006. 
The bill also touches on the fringe benefit tax particularly around flip-flop leases and 9 to 5 leases—they have various names. We had an awful lot of submissions on that particular point of the bill. Personally I found it fascinating that most of those submissions came out of Auckland for some reason. I do not know quite why that was but it is a major deal there. However I will be quite upfront and profess that I do not fully understand flip-flop leases and nine to five leases. 
The bill also starts to deal with corporate migration and the treatment of assets when a corporate is no longer essentially tax domiciled in New Zealand. OK it is a fair enough step in the right direction but I think we need to have the discussion and debate as to why those corporations are choosing to leave New Zealand in the first place. I think that as we speak we will see more and more of those corporates leave. 
The bill also provides tax exemption for new migrants and for people returning to New Zealand. The threshold is for them to have been 10 years away. Most New Zealanders leave in their early twenties so after 10 years away they have spent over a third of their life overseas. They have established themselves they have paid good tax overseas and they have started to put down their roots. For an increasing number of New Zealanders one really has to ask why they would return. 
The bill also touches on foreign trusts particularly in regard to reporting across the Tasman and the sharing of information. Again I can see the logic behind it and it is fair enough but another debate that I believe we need to have in this House and across New Zealand is the increasing Australianisation of all things New Zealand and the de facto adoption by New Zealand of Australia’s various laws and statutes. I point out that as we get more Australianised by the day Australians are still not eating our apples. 
The bill also addresses trans-Tasman imputation credit streaming. It is a reflection of reality and starts to reflect some of the listings on the New Zealand Exchange and the Australia equivalent cross share ownership. It is a good move in the right direction but a small one. 
The bill also addresses reverse takeovers and again that is a small step in the right direction. Basically it is recognition of the reality of international commercial life and of some of the cut and thrust of companies that are much much larger than any of those we see in New Zealand. 
As the Minister of Revenue and as my colleague Lockwood Smith particularly spoke about earlier the bill addresses what has been known as the unacceptable tax shortfall penalty and a Supplementary Order Paper was tied up with that. National endorses the direction that that is trying to take tax regulation in New Zealand but I think we have quite a long way to go. 
A few Supplementary Order Papers are linked up with this bill and appear under it on top of it and inside of it. I will touch on one: Supplementary Order Paper 380 which has been and gone surrounding the wine equalisation tax. I just raise the flag that what all of my sources say and everything I hear is that the implementation from the Australian side of that is actually becoming quite difficult. Quite frankly the Australians are being Australians and are looking after Australia first. Perhaps there is a lesson there. 
A Supplementary Order Paper sponsored by another member is very good and beneficial to our racing industry. Essentially it is a cut and paste of the earlier National Party policy apart from a couple of key dates and it is a good move in the right direction. I congratulate Mr Lindsay Tisch on the formulation of that policy. 
But what is bold about this legislation? What is new? What will thrust New Zealand forward and help us at least to move from No. 21 in the OECD rankings? What will stop us from sliding down those rankings? What will raise the productivity of labour here—and I definitely do not mean “Labour” because I think that is pretty much a lost cause? What is needed? We must ask that question because bold and dynamic thought is needed and required. We hear from the Prime Minister and the Minister of Finance lately about the “economic transformation” required for New Zealand yet they do not seem to be able to explain from what to what and how. They must stop tinkering around. It is interesting that this Government has surfed on the back of 6 years of fantastic economic growth but that it had very little part in formulating and starting it. We see from the headline in the New Zealand Institute of Economic Research consensus forecasts that a soft landing is settling in right now so perhaps there will be some questions to Mr Cullen on the economy as he was begging for today in the House. 
But why do we need this bold change? Well quite frankly at the moment the Inland Revenue Department is collecting about $42 billion in revenue out of a total of $60-odd billion of revenue in this economy every single year. Why do we need bold change? Because the dollar has been skyrocketing through the roof and the damage has been done. There is a crippling cost of working capital for our industries because of the Government’s “spend-athon” and “tax-athon.” Why do we need bold change? Because there are policies such as Working for Families that essentially create 102 percent marginal tax rates for some who are desperately trying to move off welfare. Why do we need bold change? Because over 600 New Zealanders are leaving for Australia every single week. What is the best that the Government can come up with as an alternative to that? We hear about the payroll tax but the payroll tax—it is nuts by the way—can be implemented only if it is fiscally neutral. Let us be bold fiscally aggressive and innovative. Boldness is what New Zealand needs. Why have the key planks of this business-friendly bill been delayed by 6 months for payroll tax and 12 months for GST? 
As I conclude I point out that these 360-odd pages need to be managed by the Inland Revenue Department. I would like to share with members a little something that I discovered in the Inland Revenue Department’s statement of intent because it may come as a surprise to some people. This is the desired future according to the Inland Revenue Department so listen carefully: “Taxpayers and other customers meet obligations of their own accord—and Inland Revenue makes this easy”. The final goal states: “The community regards Inland Revenue as professional approachable effective and efficient.” Well I certainly hope so but with all this new tax legislation I do wonder. 
A party vote was called for on the question  
That the Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill be now read a third time. 
Ayes 109 
New Zealand Labour 50; New Zealand National 48; New Zealand First 7; United Future 3; Progressive 1. 
Noes 2 
ACT New Zealand 2. 
Abstentions 10 
Green Party 6; Maori Party 4. 
Bill read a third time. 
Tariff (Trans-Pacific Strategic Economic Partnership) Amendment Bill 
In Committee 
DARREN HUGHES (Junior Whip—Labour) 
: 
 I seek leave of the Committee for the Committee stage of this bill to be taken as one debate across the five clauses with one question at the end of the debate. 
The CHAIRPERSON (Ann Hartley) 
: Leave is sought for that. Is there any objection? There is not. 
Clauses 1 to 5 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 We would normally focus on each of the clauses of the Tariff (Trans-Pacific Strategic Economic Partnership) Amendment Bill in the Committee stage consideration of the bill and I think we should therefore give some scrutiny to the bill even though we are taking it as one question. 
Of course the title of this bill gives some understanding of the significance of the bill. The bill does not simply talk about a four-way free-trade agreement it talks about a trans-Pacific strategic economic partnership. I think members of the Committee should be aware that this bill is actually of strategic significance. If we look at the detail of our trade with the particular parties that are involved in this trade agreement namely Singapore Brunei and Chile we see that we already have a free-trade agreement with Singapore so there are no tariffs to be dealt with in respect of Singapore. In the year ended June 2004 we exported $36.6 million of goods to Chile and paid $2.2 million of import duties. In the same year we exported $3.5 million of goods to Brunei and the duties were estimated at $52000. 
So it is quite clear that this bill is not about saving New Zealand massive amounts of duty on huge quantities of products that we export to Chile and Brunei. As I say we already have a free-trade agreement with Singapore. This bill is about strategic issues which is captured in the title and in fact also in the purpose clause. It asks how New Zealand really has impact in the Asia-Pacific region on liberalising trade because liberalising trade is of crucial importance to New Zealand. 
What I think successive Governments—because this concept commenced under the last National Government—have decided is that we have to move in a strategic way that helps bring some real momentum especially to APEC. Members will note that all four members so far of the Trans-Pacific Strategic Economic Partnership Agreement are members of APEC. The whole idea is to establish a framework such as this that other APEC members in our region can join. If they want to get involved in this trade liberalisation effort this legislation provides for the Governor-General to add by Order in Council other countries to this strategic agreement. That is what is so important about it—it is strategic. We started simply with that little trade agreement with Singapore which built into this strategic development. I hope as we look ahead that other nations will see fit to join this agreement so that APEC members can move towards achievement of the goal of free and open trade for at least the developed countries by 2010. 
The final point I want to make on this legislation is that it is unfortunate that New Zealand’s undertaking in this agreement extends our own elimination of tariffs beyond our APEC commitment of free and open trade by 2010. There was absolutely no need for that. This Government could have agreed to New Zealand’s phase-out of our tariffs. We set leadership in APEC to the effect that we would stick to our commitment to the Bogor goals of free and open trade. We could have had our framework here and got rid of tariffs for countries that join this strategic trade agreement by 2010. There is no reason why we could not have done that. It is a tragedy that the Labour Government has given a signal to the rest of APEC that it does not really care about the Bogor goals in APEC of free and open trade by saying in this agreement that it is prepared to allow tariffs to drag on here in New Zealand beyond 2010. 
I ask the Minister in the chair the Hon Ruth Dyson what sort of signal she thinks it sends when the tariff phase-out schedule has New Zealand going beyond our Bogor commitment when we could easily—because it does not affect any other members of this strategic agreement only New Zealand—have said that we are prepared to stick to a phase-out by 2010. That would be totally consistent with the Bogor goals of APEC New Zealand would be showing leadership and the strategic value of the Trans-Pacific Strategic Economic Partnership Agreement which is what it is all about would be so much greater. I would appreciate the Minister’s response to that. 
ERIC ROY (National—Invercargill) 
: 
 I would like to take a call on this bill and to say that I think the Committee has done a good thing in agreeing to have a wide debate across the whole bill. The bill is after all only five clauses but it is a significant piece of legislation as the speaker before me the Hon Lockwood Smith has pointed out. The issues that he raised about strategic opportunity cannot be understated. I mentioned that the bill is only five clauses but if we look at the commentary it is some 60 pages which gives members some idea of the complexity and the issues that surround putting in place trade agreements. 
In the National Party we believe very clearly that trade is a positive thing. It is the lifeblood of an international community and if we want to continue to live in a world that has a peaceful outlook I point out that it is when we start limiting opportunities through trade that we create the first opportunity for dissension which can escalate into areas that we are not happy about. We are members of planet Earth and we are particularly members of the Pacific. This bill points in two directions. It points into Latin America with the strategic alliances with Chile—the first free-trade agreement with a Latin American country that New Zealand will have had—and it points to Asia cementing in the importance of Asia that we see in the region and the significance of the opportunities for New Zealand. Trade is not a one-way ticket. It is beneficial to both parties. New Zealand is a trading nation. There is no other way to refer to us. We are a trading nation; we produce much more of many goods than we can possibly consume in New Zealand. So it is in our interests not only to create free-trade agreements but also to pick up on the point made by the Hon Lockwood Smith to show leadership and that we are encouraging other companies to knock down the barriers and increase opportunities and we are all winners in that respect. 
I alert the Minister in the chair the Hon Ruth Dyson to something that I would like an explanation on if she is able to. I see that the bill is to come into force on 1 May 2006. I wonder why we have chosen that commencement date. Quite often on these sorts of things we say that it will come into force after the Royal assent. This particular agreement is dependent on signatories. If we look at Appendix B which refers to the date proposed for the binding treaty action it states: “… provided at least two signatories have ratified by that date.” Can the Minister inform us whether that will have happened by 1 May and why 1 May has been chosen as the date for commencement? I am not opposing it but this is a significant issue. We in the National Party are keen to see this measure go ahead and if there is some reason why we are delaying until 1 May I am not sure what signal that sends. Also it is very hard to read what the House business is over the next short while. Although we are in the Committee stage and I would hope we will be through all stages well before 1 May should something intervene I am not sure what the plan for the third reading is. If the Minister could take a call and respond to that I would be grateful. 
I again affirm the importance of this bill. It sets up a framework for dealing with strategic issues. New Zealand can only be a winner as we seek to improve trading relations with our strategic partners both within APEC and the Pacific. This bill sets some very strong planks in place. Good work has been done in order to get to the table with Chile Singapore and Brunei Darussalam to get us to an agreement and to have something that can be ratified. It requires us to affirm it by passing this bill so I commend it to the Committee. The National Party stands solidly behind trade and the opportunities that presents particularly in this area. 
DIANNE YATES (Labour) 
: 
 I thank the previous speaker Eric Roy for his comments and I also look forward to members of the Foreign Affairs Defence and Trade Committee speaking on the bill because some of those questions could be answered by the members of the select committee who realise that it was agreed at the beginning of this year that 1 May would be the day when the Trans-Pacific Strategic Economic Partnership Agreement would be signed by the parties involved. That is why the select committee has been focused on getting the bill back to the House in a timely fashion. 
I point out that the commentary is actually only one paragraph long. The commentary on the national interest analysis is pages long and that is what the previous speaker was talking about as being quite bulky. The national interest analysis was compiled after extensive consultation throughout New Zealand with parties interested in this particular agreement. Because the consultation was so good and held over a considerable period of time the select committee that looked at the national interest analysis could deal with the bill so quickly. I thank the members of the committee for getting the bill back to the House in a timely fashion. 
As we have said the bill is about only two pages long. It amends the Tariff Act of 1988 to enable the Trans-Pacific Strategic Economic Partnership Agreement to come into law. It is the final part of the complete agreement stage that we are now dealing with prior to the final signature. Once again I thank all the parties and members who were involved—those who were involved with the national interest analysis those who were involved with the consultation those who made submissions to the select committee when we looked at that analysis and the select committee members for working together across parties so satisfactorily. 
KEITH LOCKE (Green) 
: 
 The Green Party as members probably know already is critical of this bill. We are a bit like Lockwood Smith we do not look at the Trans-Pacific Agreement in isolation just in terms of what is happening to the four countries that are part of the agreement—New Zealand Singapore Chile and Brunei. As Lockwood Smith has rightfully said it is seen as a strategic partnership that other countries can be added to and that is what we are worried about. Lockwood Smith talked about free trade by 2010 for at least a number of players. As we know countries like China are part of APEC. One of the Green Party’s real concerns is that China will come into a free-trade agreement that includes New Zealand that will disadvantage so many New Zealand producers because it is not a level playing field. 
Eric Roy said that everybody wins. The realities in this world of trade and competition mean that not everyone does win particularly when one is up against countries with lower wages. Chile’s wages are a bit lower but of course China’s are a lot lower again. One of the arguments is that New Zealand will compete at the high end and we might have to give away some of the products that are produced by cheap labour in China. The implication is that those products are lower quality and our producers will keep markets at the high end in both domestic and overseas markets. The only problem there is the way countries—China in particular—are developing. They are putting in a greater technological infrastructure than we are at the high end. So if we rely on just high-end products we will not necessarily succeed. 
The other problem with the bill—particularly in the section on Chile—is that it implies that if we remove the tariffs in Chile then somehow the New Zealand producers will get more returns. But it does not necessarily work out that way. We know in New Zealand that when we have taken off tariffs prices have dropped and we have got cheaper products. If the prices in Chile drop equivalent to the drop in tariff then there is no extra money for the New Zealand exporter. It may mean that New Zealand can expand its volume of exports and gain that way but there are no guarantees that just dropping tariffs leads to a good result for New Zealand exporters. 
The other thing that comes through in the national interest analysis and other talk around the bill is that it is largely helping out our dairy companies—and Fonterra within that. But one should be careful about identifying the interests of New Zealand with the interests of Fonterra. Fonterra is becoming a big player and that is admittedly an advantage to New Zealand to shareholders in New Zealand and to dairy farmers but it is getting involved in a lot of strategic partnerships. For example it is involved with Nestlé particularly in Latin America. Those partnerships do not necessarily use New Zealand as the originating source for milk product. We just do not know how that will go. It will not necessarily be totally in the interests of New Zealand. It is not the equivalent to America when they used to say: “What’s good for Ford is good for America.” That was not necessarily true and it is certainly not the same with Fonterra here.  
The other problem when talking about competition—as Lockwood Smith rightly said—is that other countries will be added to the agreement. Looking at it in terms of those four countries one might say that we have a reasonably competitive advantage in certain sectors say with Chile and Singapore although Singapore is not so much a producing nation but rather a trading centre. As more countries are added—and I mentioned the case of China but even other countries in Latin America—it could be disadvantageous to us. It will not necessarily go our way. We must realise that at the moment we have got a record $7 billion trade deficit. We are not necessarily a winner in the way that trade has evolved with New Zealand moving to drop all our barriers. 
CHRIS AUCHINVOLE (National) 
: 
 I rise to speak in support of the bill. It is a Government bill yet it fits well with National Party policy so it deserves our support. Once passed into law the bill will enable the conferral of preferential tariffs in accordance with the Trans-Pacific Strategic Economic Partnership Agreement. 
I was saddened to listen to the previous speaker as he— 
Keith Locke 
: I’d have thought you’d have been delighted. 
CHRIS AUCHINVOLE 
: Well delighted if the member likes but it would have been nice to hear a more enthusiastic encouraging response from someone who has already been on the Foreign Affairs Defence and Trade Committee and who has been party to the discussions. That speech seemed to lack any resilience or hope. Goodness me! Trade does not have to be ugly. Trade does not have to be evil. New Zealand will not get far in the world if we seek perpetually to be sheltered all the time. From my 20 years of exporting experience I know that New Zealanders are actually very good at exporting. Unfortunately I believe that only about 4 percent of our country’s companies are involved in exporting. I say to Mr Locke that the saddening bit for me was that I do not think that anyone would be encouraged to try exporting after listening to his cautious approach. 
Once passed into law the bill will enable the conferral of preferential tariffs in accordance with the partnership agreement. I found an excellent consequence of the purpose and an excellent outcome to the bill in the explained advantages to New Zealand. There will be an immediate elimination of the 6 percent tariff on coal. I am delighted to find that and even more enthused than I would otherwise be owing to my living on the West Coast of the South Island and having a caucus responsibility as associate spokesperson on energy (mining). Ten days ago I was a participant in the induction safety course at Solid Energy’s Spring Creek Mine on the West Coast. The safety aspect of the occasion was not without significance as there had been a recent tragic mining accident in a mine close by. Mining is an old profession and miners have special expressions to describe their work. They talk of “winning” the coal—they “win” it. The bill will enhance the return for coal sent to Chile and could well result in additional export sales. The cost of coal is the cost of extraction. The free trade bill will enhance the efforts of those who bravely work underground to win wealth for our country often at expense to themselves personally. 
Beyond the elimination of the tariff on coal there are other advantages in the bill. Free trade is a benefit to all in that it reduces a huge amount of tedious detail that otherwise clutters international trade. It makes it very complex indeed I say to Mr Roy. During my period of exporting into the Pacific I remember going to Tahiti on one occasion. The people there listed the tariffs duties and costs associated with importing our splendid UHT milk which was actually not Fonterra milk but Dairy Board milk in those days. I do not agree with Mr Locke’s concerns over the dairy industry. We do that very well too. But to reduce the clutter involved in the transaction of goods can only be good for New Zealand and for the other party. Free trade is free and it is free from complications. 
It is fitting that I stand to support the bill in conjunction with my colleague Dr the Hon Lockwood Smith as both of us at one stage worked together in the dairy industry and we were both involved in exporting to various parts of the world. The Opposition side of the House is well equipped with people who have been involved in exporting and in primary production. Speaking for all of the people who have that experience we commend the bill and the way it has been put together. 
JOHN HAYES (National—Wairarapa) 
: 
 I rise in support of the bill despite the fact that it has cost a huge amount of money to negotiate and is really going to deliver very little benefit other than possibly strategic benefit to our community. I have calculated from the national interest statement that there will be less than a 40c return per capita each year from this huge effort. Furthermore unlike the West Coast where the coal industry will benefit my people in the Wairarapa who produce wine and timber products will be exposed to greater competition. 
Nevertheless I am particularly interested in the title of the bill: the Tariff (Trans-Pacific Strategic Economic Partnership) Amendment Bill. The interesting thing is that it does not include any Pacific Island nations. We need to deepen cooperation and integration with our Pacific Island countries and to establish where they and we might gain most through pooling Government resources aligning our policies and allowing our Pacific Island countries to come into our trading arrangements. 
 This sort of endeavour may take us well beyond current levels of regional cooperation and into a new phase of regional integration—a Pacific union perhaps at this time of unknown dimension. We need to transform our Pacific into a dynamic and progressive region capable of meeting the challenges of modernity and we need to do this by creating wealth through free trade. We may not have a common trade and economic base in the way that Europe has nor do we have the same historic context. We are not as compact as the Caribbean either. But as Pacific Island communities we do share certain values which have an important bearing on the way our societies operate and the way we interact with one another when we do interact. We share the world’s biggest ocean—which covers a third of the Earth’s surface—under international law and through our exclusive economic zones. The forum region has stewardship of the living and non-living resources of the Pacific Ocean. 
I think we have a similar outlook across our Pacific Island nations we have strong cultural values that we share and we have strong cultural links to the ocean and the land. I think that there is huge scope for expanding this agreement to include our island people. In the past we have never allowed existing conditions and restrictions to stop us from dreaming or seeking out new horizons. Otherwise we would never have populated the place. 
In terms of a real trans-Pacific agreement I think we could look at the European Union which started on a limited scale through small cooperation before moving to deeper integration. I think that Australia and New Zealand also began the process of closer economic relations by developing free trade in goods. Then we moved to free trade in services and then to a more thorough process of harmonisation and joint activity. It was the second series of steps that gave the trans-Tasman relationship its extra dimensions. I know there are a range of views about just how close and how integrated the relationship should be but the point is that few predicted 30 years ago where we would be today. I think we need to think about this and that the time has come to take the first step and to give serious consideration to broadening this agreement to include our Pacific Island neighbours. I am particularly pleased to note that the amendment proposed to section 7 of the principal Act will allow us to do this with relative ease. National supports this bill. 
TIM GROSER (National) 
: 
 I rise also to support the bill. The mood in the Committee tonight is understandably a little lethargic but I would suggest that that is actually something that from a broader perspective we should welcome because it just reflects the fact that there is broad consensus politically. It is not complete consensus—we have heard the Green Party’s view once again—but it is very broad consensus in New Zealand society on the bill and on the principles and philosophy that underlie it. 
I am sure that many members at least of my generation will know that had we had this debate which envisages comprehensive free trade into New Zealand 25 years ago we would have had anything but a lethargic debate. In fact it would have been a very bitter debate and we might well have found once again the two main parties agreeing with each other but for precisely the opposite reasons for which we stand here tonight. 
I am new to Parliament and I was a little surprised when I got to work this morning to find a message from the whips saying that I was expected to speak on the Trans-Pacific Strategic Economic Partnership Agreement. I thought that maybe they had the date wrong because I gave a speech last night. I thought: “Well I have two options.” One ignores the whip at one’s peril of course. 
Hon Member 
: A terrifying whip. 
TIM GROSER 
: Oh a terrifying whip. One option was to give the same speech which would bore everybody but most important would bore my own self to death. The other option was to try to find a new twist to it. 
I have been provoked. I have just received an anonymous note. I know where it comes from—it is not from my side of the Chamber. It states: “Are you going to subject us to heavy foreign policy thinkers every Wednesday night?”. So I have been provoked into that and if this brief analysis is a little abstract or a little pointy-headed that is my justification—I have been provoked into this. 
I talked about the strategy last night. Tonight I want to talk about the political and economic theory behind the strategy. 
Dianne Yates 
: Oh no! 
TIM GROSER 
: Yes—I have been provoked. The first thing to recognise is that these agreements—there are some 300-plus around the world—are actually a relatively modern phenomenon. If we go back to 1980 we find that essentially there was only one important agreement of this type and it was the European Union. 
We in New Zealand and Australia had another deeply flawed agreement the New Zealand - Australia Free Trade Agreement which I talked about last night but that type of agreement was not the weapon of choice as it is today. The reason for that is that all countries and most important the United States were firmly wedded to the theory that the multilateral option was the best way. There were two underlying principles of political economy behind that calculation which are quite valid in fact. One was the economic theory of trade diversion and the other was the political theory of discrimination. 
Of course New Zealand as a very small country would always want to source its imports from the lowest-cost source which is the issue of trade diversion. And as a small country with very little political leverage internationally we would also be very concerned about this type of mechanism in terms of discrimination because if we were not invited to the party we might not be invited to dance. But in the 1980s that changed abruptly when the United States sick of the lack of progress in the multilateral arena said it would no longer refuse to enter into bilateral agreements. 
The process has accelerated from there and in the meantime the European Union which in its original form I would categorise as having been the most pernicious of all of those agreements is in the process of radically reforming itself into a much more multilateral-friendly policy instrument. When we look at the original community we see that it was a political vision inspired by those two great thinkers Jean Monnet and Robert Schuman who wanted to stop the European tribal wars which had involved this country. We paid twice for those tribal wars. We paid in blood in 1914 and in 1939 and then we paid afterwards in terms of our trade. Although special arrangements were made for New Zealand they were vastly inadequate to protect us from the flaws in an agreement of that type—admittedly a customs union but not a free-trade area. 
We have moved in the last 15 years towards somewhat better alternatives. The bill is an example of those and we very much support it. 
ERIC ROY (National—Invercargill) 
: 
 I was totally enthralled by my colleague Tim Groser’s comments. We are indeed fortunate to have in the House one of the foremost negotiators in the world not just from New Zealand— 
Hon Paul Swain 
: Stop crawling Eric. That won’t get you into Cabinet. 
ERIC ROY 
: I know the member is interested. I can see that he has woken up. I would encourage him to take another call and continue from where he was interrupted by the bell. For myself I am happy for us to get on with this. But I was somewhat incensed I guess or challenged by the comments made by the Green Party member Mr Locke. I took the liberty of reading the Green Party minority report. I assume he wrote it; it is somewhat anonymous. Is this his? 
Keith Locke 
: I was a member of the committee and— 
ERIC ROY 
: I thank the member for his confirmation. I know he is a pacifist but if he were ever in the army someone would say: “Why isn’t everybody marching in step with Mr Locke?” because I am sure he would be out of step with the rest of the battalion. 
In the Green Party minority report Mr Locke says he believes that the Government has not demonstrated an overall benefit to New Zealand. Yet everybody else on the Foreign Affairs Defence and Trade Committee identifies a huge number of benefits some direct and some indirect. The first objective on page 7 of the agreement states: “A fundamental objective of New Zealand’s trade policy is to expand the opportunities available to New Zealand by removing barriers …”. 
 If we are to thrive as a community then we have to get rid of barriers. Barriers can apply in all sorts of forms. The most visible way is by tariffs where a country we want to access puts on a cost. In this particular case Chile is identified as having a 6 percent tariff on almost everything. That is nowhere nearly as prohibitive as in a lot of other places. Some of our Asian trading partners have 30 percent tariffs and that is a significant barrier. 
But why would we want to prevent trade? I would like the member to take another call and tell me why. Why would he not want New Zealand to have an opportunity? The member said words to the effect—I do not want to take it out of context—that we have a problem with countries that have a wage structure lower than ours. That is the point he made. Several questions can be raised about that. Why do we have a problem? With wage structure normally goes technology and we have some significant advantages in the area of technology. My question to someone as altruistic as Mr Locke is to ask: why lock in people who are in a low-wage structure so that they stay in a low-wage structure by preventing them from partaking in trade? I want him to take a call and explain that because to me it makes no sense. 
In terms of a country where workers are in sweatshops National members are saying they would like those workers to enjoy some of the market opportunity in our country but Mr Locke is saying that those workers cannot do that because their wage structure is lower than ours. I am saying the workers should do that and we should invite them to come in. We want them to grow their opportunities for several reasons. Firstly we do not like where they are at. Secondly when we grow them by sharing trade they will become wealthy and they will become a market for us. So we gain and they gain. 
That is what knocking down barriers is about. It is clearly spelt out in the report—in all parts of it apart from the minority report—that we need to engage with our neighbours. This period that we are in now the last half of the 20th century and the first part of the 21st century is the longest period of global peace for four centuries. Yes there have been skirmishes around the world but in reality that is what is happening. Globally that is the case. 
DARREN HUGHES (Junior Whip—Labour) 
: 
 I move  
That the question be now put 
. 
KEITH LOCKE (Green) 
: 
 I have been challenged to answer a few questions so I thought I should take the call. It is not often that one is the centre of the debate in this way and I welcome the serious questions that have been asked. Of course the Greens are for good trade opportunities and for giving poorer countries the opportunity to trade. The member presents the Green position as being somehow very far out of step but I outline arguments that as Tim Groser rightly put it were popular a few years ago. 
I am not saying necessarily that all the arguments the National Party and Labour Party argued in the 1970s or early 1980s—if that is what Mr Groser was referring to—were correct but there was quite a consensus then that we could have trade expanded trade and expanding trade alongside a level of tariffs. The level of tariffs would be set to suit one’s own society and it would take into account relative advantage and disadvantage with other countries. 
One of the factors for relative disadvantage is the lower wage rates in other countries. In China of course wages are much lower than in New Zealand so a certain tariff imposed on products from China does not necessarily stop an expansion of trade from China to New Zealand particularly as that country becomes more efficient in producing its products as it has done. 
One of the problems is that if tariffs are dropped too rapidly or major free-trade agreements are entered into one starts hollowing out one’s manufacturing base. That has happened in New Zealand and it is one of the reasons why we have a record $7 billion trade deficit. It is why many good New Zealand clothing companies and leisure product companies are now sending their production to China. We are hollowing out our skills base in manufacturing particularly in the clothing textile and footwear industries. So our great fashion designers who are major exporters to the world now—not necessarily in dollar terms yet but they are exporting significantly for a growing industry—sometimes cannot find the skilled people who would have been available years ago to sew up their clothes in the way they would like. The skills base has dropped. 
That is all that the Greens are arguing. It is not a particularly radical position. In some ways it is a conservative position to go back to Tim Groser’s analysis. Rather than having an ideological position—that is the free-trade position where we just wipe the tariffs and everything will be all right and everyone will be winners—our position is a practical one that looks at what can expand our trade and the trade of countries like China in a way that suits the interests of both countries. That is all we are proposing. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 I would like to take up this debate exactly where Keith Locke has left off and remind him of a couple of facts. In the mid-1980s a Labour Government wiped the support around the agriculture industry in New Zealand. It was tough but New Zealand agriculture is many times stronger today because of that. In the mid-1980s the tariff protecting the wine industry in New Zealand was eliminated. The 40 percent tariff was just wiped and New Zealand wine producers had to compete internationally and we can look at where New Zealand wine producers are today. They now command in London the highest average price of any country that produces wines in the world. That is because when a country is no longer competing on the cheapness of the labour supply and when that country goes to the top of the market there is far more profit and future development. I say to Keith Locke that he should open his eyes about what trade liberalisation does for countries. I hear Japan arguing the sort of arguments he is making in relation to why it protects rice. Of course the economic consequences of that are equally as bad for Japan. 
I come to the issue that I put to the Minister earlier on in this debate. This is a strategic agreement and because of that it is important for APEC that it is a model agreement and shows leadership. My question not answered by the Minister asks why when it is such an important strategic agreement New Zealand has chosen—and this is totally New Zealand’s choice—to have our phase-out for the removal of our tariffs for products coming into New Zealand from Chile and Brunei extended beyond 2010. 
New Zealand had made what I believed was a good-faith commitment to the other members of APEC that we as a developed member of APEC—unless under Michael Cullen’s stewardship as treasurer New Zealand has slipped from being a developed member of APEC—would have free and open trade by 2010. I know that the Labour Government is negotiating the Thai free-trade agreement—or closer economic partnership as I think it is called. In that agreement New Zealand’s schedule for eliminating tariffs has been kept beyond 2010 but why has that been done in this important strategic agreement? There is absolutely no need to do that. Why did New Zealand not show leadership on making sure that the schedule for the elimination of our tariffs complied with our commitments? I thought this was a serious commitment—it was when I was the Minister for International Trade. If New Zealand has abandoned that commitment there is no hope of APEC ever achieving free and open trade because we are one of the leaders on trade liberalisation. 
 I would appreciate the Hon Lianne Dalziel the Minister in the chair—if she understands what I am talking about—telling the Committee whether that is so because we deserve to know. If New Zealand is breaching a major commitment like our commitment to the goals of the Bogor declaration of APEC we should know why the Government has chosen to do that. I would appreciate Government members getting on their hind feet and telling us because it must have been a conscious decision by the Government. Why did it not make sure that the phase-out schedule was completed by 2010? Why did it allow the schedule to go beyond that and breach our commitment in an agreement like this that is strategic that shows leadership and that is meant to bring some real life to the trade liberalisation process and APEC—why has New Zealand chickened out? We should know why and we deserve to know why. 
The Minister in the chair is doing her best to ignore everything I am saying and she is taking absolutely no notice of the debate. I suspect that is because the Minister in the chair knows absolutely nothing about this legislation and nothing about— 
Darren Hughes 
: It is just personal. She does not like you much. We’ll listen to the next speaker—you’re an old man. 
Dr the Hon LOCKWOOD SMITH 
: I am relaxed about that. The junior whip reckons it is personal and she does not like me. If she does not like me that is no problem but she owes this Parliament and New Zealand an explanation as to why New Zealand is abandoning its commitments to those Bogor goals. 
Hon Lianne Dalziel 
: We haven’t. 
Dr the Hon LOCKWOOD SMITH 
: Well can she explain to me why tariffs under this legislation will continue beyond 2010? 
Hon Lianne Dalziel 
: We haven’t decided that yet. 
Dr the Hon LOCKWOOD SMITH 
: I thought the information from the Ministry of Foreign Affairs and Trade itself pointed out that for certain phase-outs tariffs will continue beyond 2010. 
TIM GROSER (National) 
: 
 I was unaware until recently of course that there was a brand new procedure when we moved into the Committee stage whereby one could take a second call—I am like a kid with a new toy. I was explaining before that I was goaded into making a presentation on the strategy and on the intellectual foundations of the theory behind the strategy. When I saw Michael Cullen come into the Chamber a distinguished New Zealand economic historian I was goaded for the second time to want to take the floor and carry on in that theme. 
In respect of the first of the landmark departures from the multilateral process the European Union used a customs union rather than a free-trade area approach. The European Union set the whole strategic concept off on the wrong footing from the very start for precisely the reason that it incorporated the concept of the community preference as the very foundation stone of the European Union. If one goes back to the mid-1980s the period when Margaret Thatcher would arrive in Europe waving her handbag and demanding her money back— 
Darren Hughes 
: Why don’t you ask for your handbag back? 
TIM GROSER 
: No I never ask for my handbag back. I am quite comfortable in the space I am in actually. 
One must remember that in the mid-1980s the European Union was not much more than a shonky system of agricultural subsidies. Approximately 70 percent of the entire budget for the European Commission was spent on agricultural subsidies. I recall very well that at that point the Europeans would ask people like me what else we could expect and say the subsidies were the glue that kept Europe together. In a sense they were correct. Twenty years ago that was all that the European Union was. It depended entirely upon a shonky system of agricultural subsidies to hold together a fledgling European Union. 
The main point is that it has moved on from that point. From about 1988 and 1989 when the European Union moved into the European economic space when it came across the concept of the single economic market and when it adopted the euro and put aside the German mark and the French franc—monetary instruments that had stood for 1000 years or more—it was in a position to move forward with the economic agenda in a far more comprehensive way than previously. Therefore it was not nearly as dependent on what I said before was “a shonky system of agricultural subsidies”. The reform of the Common Agricultural Policy which was initiated in its first serious form by Fritz Gundelach and followed through by a series of commissioners subsequently was in fact made possible by those broader shifts. 
So now we are now seeing—and this is a very important strategic function of agreements of this type—the most important agreement of them all the European Union return to its original political origins which were to be an instrument for peace and democracy. As the union spreads from the original six to nine 12 15 and now to 25 members I see that as being a very positive force for New Zealand. I think we will see in the future an environment that will suit New Zealand’s interests both politically and culturally— 
Eric Roy 
: Take another call. 
TIM GROSER 
: I am being encouraged to take yet another call which I will certainly try to get away with. The future that lies ahead of us in terms of our relationship with the European Union will be a very much happier one than it was in the past quarter of a century. What does that mean for the whole concept of free-trade areas and customs unions? Well I wish to run the clock down here so I will try to be as extensive as I can. The main point is that the United States started to shift its policy into those reciprocal free-trade agreements and closer economic partnerships. 
I have a small problem with the term “closer economic partnership”; it is a Labour concept that is politically correct. We are not allowed to have wives—we have partners—so we are not allowed to have free-trade areas. 
Darren Hughes 
: That is not what the member’s biography states. 
TIM GROSER 
: I have specialised a little in that area myself and I think one or two Government members have not been far from me in it. The point is that there is a substantive point behind the term “partnership”. It is not just about frontier policies that we are trying to harmonise and move forward together; it is also about a series of policies that lie behind the frontier. The new-model trade agreements—and this is a reasonably good example of one—are very well suited to exploiting further advantage from those economic cooperation agreements. 
Hon MARK BURTON (Deputy Leader of the House) 
: 
 I move  
That the question be now put 
. 
Motion agreed to. 
A party vote was called for on the question  
That clauses 1 to 5 be agreed to. 
Ayes 109 
New Zealand Labour 50; New Zealand National 48; New Zealand First 7; United Future 3; Progressive 1. 
Noes 10 
Green Party 6; Maori Party 4. 
Clauses 1 to 5 agreed to. 
Legal Services Amendment Bill (No 2) 
In Committee 
Debate resumed from 21 March. 
Part 1 Amendments to principal Act 
Dr RICHARD WORTH (National) 
: 
 This is a continuation of an important debate on the Legal Services Amendment Bill (No 2). I start by observing that one of the things the Government has done in what I regard as an overly sneaky gesture is to issue instructions to parliamentary counsel so there are minimal parts to debate. That is a clumsy attempt to stifle debate on what is clearly important legislation. 
In earlier parts of the process National made it clear that it has been really concerned about two aspects of the bill. Although it acknowledges the importance of legal aid and its importance in a system that must work for the provision of legal aid to both offenders and people involved in the civil process we have nevertheless been truly concerned about two aspects of the bill. Those two aspects are related to the way the bill was drafted—first with those discretionary aspects that make it so unclear as to eligibility for legal aid and second in respect of what we think is a glaring gap in the bill related to protecting the position of lawyers who are asked to undertake legal aid work. 
I am conscious in making those last few comments that there will be those on the other side of the House who have no sympathy for lawyers who undertake legal aid work at rates that are way below the benchmark. I remind those members opposite that legal aid rates were set in 1996. The salaries of judges have moved on in an overly dramatic way and the salaries of other professions have moved on so it is surprising that the salaries of lawyers remain static. 
I am comforted by the presence of the Attorney-General in the Chamber. I am sure that the background Dr Cullen brings to the legal profession and the obligations he owes to advance and protect its interests will be followed through faithfully in support of what we have judged to be a gap in the legislation. Certainly it is appropriate to welcome him back to the role of Attorney-General. 
The absence in the bill of an appropriate provision to fix legal aid rates—to advance that particular cause—breaches fairness and equity. At an earlier stage I had an opportunity to talk about one aspect that is known under the tag line of the equality of arms principle. That is all about the fact that the Crown has huge resources in a criminal context particularly to prosecute offenders. So it is only reasonable in a just and fair democracy that those who are tasked to defend people accused of crime have a similar degree of protection and resource. It is quite right to say that criminal legal aid remuneration rates are too low to the extent that they breach that principle of equality of arms. The principle is that the defence counsel should have the opportunity to prepare and present his or her case on a footing equal to that of the prosecution. 
I ask tonight why the Government did not take up the proposal that the bill should have further provisions in it related to Part 1 which we are now debating in the Committee stage to deal with that issue of legal aid. It is scarcely satisfactory and I ask the Minister of Justice the Minister in the chair who is ready willing and eager to take a call why an opportunity was not taken to deal with that significant issue. 
I also say that the provision of adequate representation to people accused of crime is a principle that has been recognised in New Zealand case law as an essential facet of a fair trial and as a fundamental human right that the Government must uphold. 
CHRISTOPHER FINLAYSON (National) 
: 
 Last night in the Committee stage of the bill we had a powerful address from Mr Fairbrother that showed just what a fine criminal lawyer he is. He said and I agree that service to the public is the hallmark of a profession. He said and I agree also that it is essential for young lawyers to understand their professional responsibilities. He said and again I agree that young lawyers need to enter the arena get on their feet and argue cases rather than just push paper—as too many do in the large law firms. 
But what a shame it was that that was all irrelevant to the critical issue facing the Committee last night which was the issue of access to justice for the poor. He accused me of delivering a generalised rant and said that I provided no evidence of the problem of the increasing disparity between the legal aid fund for criminal barristers and what Crown solicitors are paid. But I put it to the Committee that the evidence is overwhelming. Mr Fairbrother read as indeed I did the New Zealand Law Society submission on the topic. He read the submission of the community law centres. He read and I pointed out to him John Rowan’s article in this month’s  
New Zealand Law Journal 
 on the issue. 
Mr Fairbrother’s speech was a very impressive speech but it was not at all persuasive. Mr Mark on the other hand raised a very fair question. He gave National back-benchers an elocution lesson which was probably rude and unnecessary but as I said he asked a fair question: what will the cost be of increasing criminal legal aid rates? He is entitled to an answer and I give him an answer directly now. National says that the way to address the inadequacy of criminal legal aid rates is first to institute regular—that is annual—reviews of the legal aid rates using the methodology set out in the Crown solicitor’s regulations and second to have a good look at the market-based reforms that are planned for legal aid services in England. 
It is one of the great tragedies of New Zealand that when New Zealanders elect Labour Governments they tend to be left-wing Labour Governments looking for inspiration to Sweden and other parts of Scandinavia. But if they looked at their brothers and sisters in England they would find that the Lord Chancellor and Secretary of State for Constitutional Affairs is actually coming up with proposals to reform legal aid that are market-based reforms. 
I refer the Minister in the chair Mark Burton to the February 2006 report—and I will get him a copy; I took it off the Internet last night—of Lord Carter on legal aid procurement. Essentially in a criminal context what Lord Carter is recommending and what will happen in England by 2009 is fixed pricing for all criminal legal aid work including work provided in police stations Magistrates’ Courts and Crown courts. It will be a managed market awarding contracts to efficient and good-quality suppliers that can take on more cases—either individual firms or collections of firms formed to deliver the benefits of scale. 
And the third way to address the issue is by managed price competition between efficient good-quality suppliers with safeguards to protect standards of quality coverage in rural areas and diversity. 
So members can see there are answers to this problem that do not necessarily result in a blow-out of legal aid rates or the legal aid budget. We have to be able to be creative and at the same time develop a system that will achieve what National has been going on about since last night—that is ensuring access to justice for the poor. 
Mr Harawira hit the nail on the head last night when he said that he had appeared in court on a number of occasions and after one occasion when he had a lawyer who was not up to the mark he had given up and represented himself. He could do that because he is a very bright and eloquent individual. But many people are simply not able to do that. They require the services of a lawyer and too often they get duds. That is the concern of National. It is not being addressed by the legislation and that is why we are opposing it. 
KATE WILKINSON (National) 
: 
 I too would like to refer to some of the comments made yesterday albeit without notes by the honourable member Ron Mark. I have to say I am in total awe of his ability to speak without notes. Last night Mr Mark seemed to be fixated on how much money lawyers want. He said if we on this side of the Chamber could let him know how much we thought lawyers doing legal aid should get then we might get the support of New Zealand First. How much do we want to pay lawyers? What do we expect them to be paid? 
I see Mr Mark is here with his notes tonight. I repeat that the Legal Services Amendment Bill (No 2) is not about lawyers; it is about access to justice. If the environment of legal aid is correctly pitched by this House then the market will determine what the rate of legal aid remuneration should be. If the environment of legal aid is correctly pitched the exodus of lawyers declining legal aid work may be halted. But in this bill it is not correctly pitched. When prosecuting counsel have significant advantages in terms of time preparation resources and remuneration—when the prosecuting counsel are at such an advantage over the defence counsel—it is not a level playing field and it is not fair access to justice. 
We seem to have a fundamental difference of opinion in this debate. We on this side of the Chamber are concerned very much with the wider and more vital issue of access to justice. Those on the other side of the Chamber seem to be talking with envy about lawyers. I suggest that the wider issue of access to justice is the far more important issue that we should be debating in this House. 
A legal aid system that is financially disadvantageous to legal providers and thereby discourages acceptance of legal aid assignments by experienced practitioners will undermine that access to justice in two key ways. It will affect the principle of counsel of choice. Insufficient remuneration rates will hamper that choice as more and more lawyers are forced to exit from the system. It is not uncommon for eligible members of the public to have to contact several practitioners before finding one who will be available to act for them. A system that is financially disadvantageous to legal providers will encourage the likelihood of less experienced counsel undertaking legal aid work with greater risk of errors miscarriage of justice and less skilled judgments and consequently more appeals at even greater cost. 
At present there are huge financial disincentives for lawyers to undertake legal aid work. There are also huge bureaucratic disincentives for lawyers to undertake legal aid work. The bill is deficient in that area. For example the bureaucratic disincentives include a multiplicity of forms prescribed by the Legal Services Agency that correspond to each stage and each type of proceeding. Lawyers normally fill out those forms on behalf of their clients—a task that is both time-consuming and largely unpaid. Legal aid grants unduly restrict the hours allowed for in each step of the proceedings. Preparation time is limited yet it is significantly shorter for the accused than it is for the prosecuting counsels. Disbursements relating to a legal aid matter must be paid for by the lawyer in advance then claimed back after the matter is disposed of. Why should the lawyer have to cover those disbursements in advance? A complicated comprehensive scheme for prior approval of estimates examination of invoices and auditing of completed work also adds to the bureaucracy that is imposed by the bill. 
All of those additional regimes create greater compliance costs for legal aid providers and are further disincentives to undertake legal aid work. 
Hon MARK BURTON (Minister of Justice) 
: 
 Because I am sure the debate on Part 1 is coming to a close given the amount of repetition we are hearing a brief wrapping-up statement from me is perhaps appropriate. 
Notwithstanding the numerous speeches we have heard from members opposite what they all amount to is that overall they think the bill contains a number of useful and positive measures dealing with the redesign of the financial eligibility criteria and a range of other details.  
The one thing we have heard members opposite tell us repeatedly ad nauseam that they are unhappy with is the $165 an hour maximum rate. I draw that to the attention of Opposition members because—as Mr Mark invited them to do last night—if we are to have any useful debate on that point they should at least introduce into the debate their alternative rate so that we can understand what the consequences would be of what they are saying. Otherwise it is pointless rhetoric. 
I invite Dr Worth to look back at what the National Government did when it was given the opportunity. In 1998 it put the rates up and in 1999 it put them back down to where they had been. So when that member comes here and sheds crocodile tears about the rates it is a bit difficult to take. 
I simply say that this bill will progress. The question is whether members opposite will join us in advancing worthwhile positive legislation and accept that there will be further opportunities to discuss the issue of rates of reimbursement. I suggest to them that it would be far more useful to get on with this and enact the legislation. I am happy to engage with them later about the issue. 
Dr Wayne Mapp 
: What does later mean? 
Hon MARK BURTON 
: Once we have this legislation in place and bedded in we can look at its implications and consequences. Then it will be appropriate to review a range of matters to do with the legislation including reimbursement and hourly rates. 
CHESTER BORROWS (National—Whanganui) 
: 
 I rise to address the issues the Minister has just talked about that were raised last night. I will preface my remarks by drawing some analogies. For a medical specialist the hourly rate for working in a public hospital is lower than the hourly rate for working in a private hospital. For instance in Taranaki it would take 55 minutes to get a knee replacement in a private hospital and 1½ hours in a public hospital because the hourly rate in a public hospital is lower. An accountant who gives budget advice or a psychologist who sees Accident Compensation Corporation clients does so for reasons other than money—to meet a social need—and has to make a judgment sooner or later as to how much time to allocate to doing such work at a lower rate. 
The fact that a lawyer may make such a judgment does not mean he or she is as tight as a snapper’s arse or is only self-interested. That seems a reasonably fair point to make. Talking about lawyers’ wages or hourly rates is a bit like talking about the same thing with regard to MPs—one does not talk about it because everyone has already made an assessment. Sooner or later people engaged in activities such as legal aid work need to balance their needs and the needs of the community they serve. I wonder how keen this Government would be—or any Government would be for that matter—to allow children in low-decile schools to be taught by teachers who are paid about a third less than we pay teachers in high-decile schools. That is the sort of argument we get into. 
Let us look at the Crown Solicitors Regulations 1994 and make a few comparisons. For instance the Minister keeps quoting an hourly rate for legal aid of $165. I must tell the Minister that that figure relates to what a Queen’s Counsel receives for doing a murder trial. 
A question was raised last night by our good friend “Mini-Me” or whatever his latest nickname is. I have done my best to do some research and give him the answers. Let us just wander through that. As a brand new wet-behind-the-ears junior legal aid counsel I got $95 an hour—or my firm was paid $95 an hour and I got $20 an hour. In fact during the 2½ years I worked as a lawyer I was never paid what I was paid as a cop and I have to say that I worked a damn sight harder as a lawyer. So the top hourly rate on legal aid is $165 an hour. The top rate for a Crown solicitor is $216 an hour. 
Let us look at other provisions lawyers are given too—for instance the preparation time for sentencing. A senior counsel who might be earning anywhere between $130 and $160 an hour gets say $450 for preparing a sentencing but a Crown solicitor gets 7 hours’ preparation time. The legal aid counsel gets 3 hours’ preparation time but the Crown solicitor gets 7 hours. We should not forget that the Crown solicitor has the police officer who prepared the file handing it to him or her on a plate and the Crown solicitor prepares the sentencing notes from that. The question was asked last night and I am trying my best to address it so I hope members will give me a little bit of indulgence. 
The next point though is that the legal aid solicitor gets say $450 for a sentencing. What does the Crown solicitor get? The Crown solicitor gets $1512 because he gets extra time. Let us have a look at travelling time—this is interesting. A legal aid solicitor gets half the hourly rate or pretty much a flat $70 an hour for travel if travel time is granted. But travel time is not granted for instance if the legal aid solicitor is working in a court that is away from his or her own patch. 
I have just come off the phone after talking to a bloke who happens to work in Wanganui. He has been asked by the Bar in Auckland to look after a particularly difficult murder trial. He will fly to Auckland and he will get a rental car but none of that will be paid for by the Legal Services Agency and his rate will be $165 an hour. He will not have his air fares paid or any travel time paid because he is working out of his own patch. But for instance if he was a Crown counsel and it was decided that he would go and move out of his patch all his expenses would be paid for including his accommodation his vehicle travel and his air travel. 
Dr Richard Worth 
: What does the Minister say to that? 
CHESTER BORROWS 
: I am answering some of the questions that the Minister asked last night. 
Hon PAUL SWAIN (Labour—Rimutaka) 
: 
 I move  
That the question be now put 
. 
DAVID BENNETT (National—Hamilton East) 
: 
 This bill extends the criteria for people who can apply for legal aid but at the same time it does not adequately provide for an enhanced funding regime for legal practitioners. That is the problem National has seen in this bill because there is a crisis for legal aid practitioners. They are suffering from having low payment rates and high administration costs. The implication of this lower standard and lower level of representation falls on our most vulnerable people. 
New Zealand First has argued two things. First that National should specify the amount. That is simply not good law. The law needs to be flexible to recognise changes in the future. The answer is that we review the process and the legislation should contain a process. Secondly New Zealand First members say that National is trying to feather the nests of rich lawyers. That argument fails on two counts. First wealthy lawyers will not even do this work because legal aid returns are insufficient. Second historic cases set a precedent. 
The biggest historical case involved a member of this House and he is the Rt Hon Winston Peters. One of the greatest legal expenses ever paid by this Government to an individual was to the leader of New Zealand First. That is true. It was also for the benefit of Mr Mark and his party; they are still here in the Chamber because of the money the Government paid for legal services. Do members know what it was called? It was called the wine-box inquiry. Members remember the wine-box inquiry—it was money paid to New Zealand First to keep its members in this Chamber. The  
Press 
 in 1999 stated that $1.45 million was paid and $1.44 million of that was paid in legal fees to Mr Mark’s leader. Mr Peters was reported as saying it was a good investment. 
 I find it extremely rich and unconscionable for members of New Zealand First to deride National’s arguments. National has stood and argued for the interests of justice and that there needs to be a funded legal aid system. It is really rich and unconscionable for the likes of Mr Mark to argue against the availability of competitive legal services when his very position in Parliament is based on having Government funding for New Zealand First legal fees. It is rich and unconscionable for Mr Mark to argue against ordinary New Zealanders getting the level of representation that he enjoyed to keep him in this Parliament. It is rich and unconscionable for Mr Mark to make disparaging comments about National’s intentions when he himself was the beneficiary of Government money that keeps him in the Chamber. At the time of the wine-box inquiry Mr Mark and other members of New Zealand First were willing to put out their hands and take the best legal advice available. They were afraid to fight a case under-resourced; they wanted everything they could get. 
The CHAIRPERSON (Ann Hartley) 
: Order! The member needs to come back to the bill. 
DAVID BENNETT 
: OK. Under section 92 we are arguing that there is not the level of representation because legal aid is not being funded. Why then is it good enough for New Zealand First members but not for ordinary New Zealanders to have an adequate level of representation? That is the key. Why is it good enough for them but not for ordinary New Zealanders who could be going to jail to get that adequate level of representation? That shows the double standard of that party—a party that takes with one hand and is not willing to give to the ordinary people. Those are the people that we are here to represent. We should be delivering for them not just keeping people in Parliament through legal costs. 
DARREN HUGHES (Junior Whip—Labour) 
: 
 I move  
That the question be now put 
. 
RON MARK (NZ First) 
: 
 Interesting. It is an interesting notion that this Committee should consider paying lawyers— 
Dr Richard Worth 
: I raise a point of order Madam Chairperson. You would know that points of order should be put tersely. They do not start with “interesting” pause “interesting”. It is for the member if he has a point of order to raise the point of order. 
The CHAIRPERSON (Ann Hartley) 
: Mr Mark has the call. 
RON MARK 
: Even more interesting is that that is the quality of legal representation the National Party is defending—a man who is so out in fairyland that he does not even know where the debate is and cannot tell that the member on his feet is not raising a point of order but has actually been awarded the call and that man stands up and dares to ask the nation to pay him $400 an hour to do legal aid work. At least that was the figure put up by his colleague Chester Borrows. That man wants to be paid more for legal aid services for the quality of his representation and he cannot even keep track of where the heck the debate is in the Committee. What sort of a legal representative would he be for the fine men and women of the Road Knights gang when they seek representation for their criminal activities? 
The claims that David Bennett has just made in this Chamber border on contempt and defamation and contain so much in the way of inaccuracies that I am sure of one thing: New Zealand First will go through his words in  
Hansard 
 with a fine-tooth comb and I have no doubt that if he dares to say those things outside this Chamber he will be seeking legal aid to defend himself against defamation. But of course that is the whole trick. What he would do is defend himself and hopefully get paid more than just his MP’s salary in which he has just had a massive increase—because not being satisfied with that huge leap in his income he now stands in this House and bays for more money for his professional services. We have seen an example of those services tonight and they can only be described in the most charitable terms as somewhat lacking. I have sat in the House and listened to the debate go far off the mark— 
David Bennett 
: I raise a point of order Madam Chairperson. It took Ron Mark about a minute tonight to utter more than the word “interesting” which is quite unusual for someone of his oratory ability. That just shows that he was stunned. So comments like he is making now are inconsistent with the approach he is taking. 
The CHAIRPERSON (Ann Hartley) 
: That is not a point of order. 
RON MARK 
: Again I ask: how deep does one have to dig the hole to prove to the nation on air how lacking one is in skills and ability to articulate one’s case and to justify what one seeks? If anything convinces me that there is a need to look at this issue a little more closely—and I do note that this bill extends the amount of legal aid or the opportunity for legal aid—it is that we are talking about 1.2 million people being eligible for legal aid. That is an increase of about 450000 or 500000 people. If we now add on top of the current legal aid bill the cost brought about by another 400000 people being eligible for legal aid and if we then compound on top of that the increases in fees that the honourable Chester Borrows is suggesting—$400 an hour—I come back to the same question. What cost this policy and how can one afford such a huge increase in the budget whilst one is at the same time espousing the need for tax breaks? 
Why should we expect the average New Zealander—the hard-working businessman or woman—who is out there grafting to pay these fees for the Road Knights the Epitaph Riders the Mongrel Mob or the Hells Angels who have been plaguing the streets of Wanganui and every other city peddling their evil through methamphetamine? Now learned scholars and competent lawyers such as the honourable Mr Finlayson here would probably have a good argument. It would be based on equality of justice for all no matter how big a scumbag that person is. Those arguments I can listen to. But the plain baying for money with incoherent arguments that simply do not actually flatter the person who makes the argument bear no weight for New Zealand First. I would much rather hear from National: how much money and over what period. Then we could get to the chase. 
Hon LIANNE DALZIEL (Minister of Commerce) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 67 
New Zealand Labour 50; New Zealand First 7; Green Party 6; United Future 3; Progressive 1. 
Noes 52 
New Zealand National 48; Maori Party 4. 
Motion agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 20 in the name of the Hon Mark Burton to Part 1 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 67 
New Zealand Labour 50; New Zealand First 7; Green Party 6; United Future 3; Progressive 1. 
Noes 52 
New Zealand National 48; Maori Party 4. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 1 as amended be agreed to. 
Ayes 67 
New Zealand Labour 50; New Zealand First 7; Green Party 6; United Future 3; Progressive 1. 
Noes 52 
New Zealand National 48; Maori Party 4. 
Part 1 as amended agreed to. 
Voting 
Correction 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Earlier I forgot to record a couple of votes for the ACT party. I seek leave to have those votes recorded. It was for the third reading of the Taxation (Depreciation Payment Dates Alignment FBT and Miscellaneous Provisions) Bill and it was two votes opposed. 
Mr DEPUTY SPEAKER 
: Leave has been sought for that course to be followed. Is there any objection? There appears to be none. The new result on that vote is Ayes 109 Noes 2 and there were 10 abstentions. 
The House adjourned at 9.58 p.m.