Volume 626 Week 92 - Tuesday 14 June 2005(continued on Thursday 16 June 2005) 
Volume 626 Week 92 - Tuesday 14 June 2005(continued on Thursday 16 June 2005) 
[Volume:626;Page:21481] 
Tuesday 14 June 2005 
( 
continued on Thursday 16 June 2005 
) 
Misuse of Drugs Amendment Bill (No 3) 
In Committee 
Debate resumed. 
Part 1Substantive amendments to Misuse of Drugs Act 1975 and consequential amendments  ( 
continued 
)  
Hon JIM ANDERTON (Associate Minister of Health) 
: 
 Last night at about 3 minutes to 12 we started this debate and I just want to recap on it for the benefit of members. There are two amendments in my name and some members I think specifically speaking for the National Party have indicated that they would oppose those amendments—that is the indication I got. I want to point out to the National members and to the Committee that those amendments actually clarify the intention that the Health Committee had. If the amendments are not supported some I think rather bizarre consequences will take place. I am not sure the National members fully appreciate that and I would like to run past them again what this issue is about. 
The first amendment on Supplementary Order Paper 377 in my name deals with the fact that this bill is intended to extend the application of customs and excise powers to investigations under the new importation offences involving precursor substances such as ephedrine and pseudoephedrine. A number of other substances are also covered by the proposed new importation and exportation offences in the bill. If we do not pass the amendment on Supplementary Order Paper 377 to rectify the situation that the bill at the moment evidences then the Customs Service will not be able to deal with illicit drug manufacturers who have shown an ability to exploit legal loopholes and change their modus operandi. So I want the National members to seriously consider that if they do not support that amendment they will restrict the powers of the Customs Service to deal with serious drugs. I hardly think that that is what National intends but if it does not support the amendment it will have to stand accused of doing that. 
The second amendment in my name is intended to ensure that the presumption of supply for a drug could be amended by Order in Council and that the associated affirmative resolution procedure could be amended by Parliament. After hearing submissions the Regulations Review Committee was concerned about the extension of this procedure not involving the full scrutiny of Parliament. The Health Committee—which did excellent work on this bill and I thank the members for that—has recommended the following: “We recommend that the ability to amend the presumption of supply level for a controlled drug by Order in Council as proposed in the bill be limited to two circumstances (clause 5). The first is where the classification of the controlled drug is also being changed. We agree that changing this level in tandem with a classification or reclassification would prevent anomalies such as occurred with methamphetamine where the drug was given a Class A classification by Order in Council but the associated presumption of supply change required this bill.” So we had to go through two procedures and delay it. 
I heard members of the National Party say last night that it would take only 12 months. We are talking about situations where young people are actually dying for goodness sake! Coroners are urging Parliament to take action— 
Dr Paul Hutchison 
: On what? 
Hon JIM ANDERTON 
: On the misuse of drugs on the importation of precursors and all sorts of issues surrounding that. The solvent issue is one that I put forward and the committee has kicked it for touch so I will have to go through another process on it. I suggest to members that the bill as drafted does not reflect the recommendation of the select committee. I urge members to think about this: the select committee has recommended something the bill as drafted does not reflect that properly and the commentary when reporting back the bill to the House states that the amendment to clause 5(2) in my name is necessary to rectify the situation. If we do not do that we will have a problem in terms of getting changes to the default supply amount of controlled drugs such as reducing methamphetamine from 56 grams to 5 grams and so. We will have to go through two elongated procedures in order to achieve that. 
I recommend these amendments to the Committee because I am certain they actually reflect what the select committee itself wanted. We have to change the bill in order to bring that about. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 Thank you Madam Chairperson for the opportunity to speak on Part 1 of the Misuse of Drugs Amendment Bill (No 3). I think it is interesting—and somewhat rich—for the Hon Jim Anderton at this late stage to be asking for the National Party to make changes to its position after he belatedly came into the debate with a poorly prepared Supplementary Order Paper. After all the situation of party pills and the legislation for benzylpiperazine and other such substances have been known about for 9 or 10 years. 
The firm view of all the advisers was that they are at quite a different level from the serious substances such as methamphetamine and their precursors and other class A and class B controlled drugs. The firm view was that the less concerning substances that are getting so much publicity at present need their own well-considered stand-alone bill. Indeed I believe that the select committee was of the view that that would be the optimal situation but instead it has reached a compromise with the Hon Jim Anderton where this less considered situation has been tacked on to the end of the bill. Because of that National is uncomfortable with supporting it. 
Nevertheless I hopefully will get the opportunity to talk about the details with the Hon Jim Anderton to see whether we can come to an arrangement. There is no doubt that National supports the substance of the original intention of this bill which was to look at practical ways to ensure there would be better enforcement powers in New Zealand to stop the proliferation of class A and class B controlled drugs. There is absolutely no doubt that the situation has grown seriously over the last 4 or 5 years. We only have to look at substances like P where we have had the police and the Institute of Environmental Science and Research saying that back in 1999 something like four or five clan-labs had been raided by the police. This has proliferated up into the order of 240 which reflects the enormous expansion of these illicit controlled drugs in New Zealand. 
Certainly we believe that the affirmative resolution procedure which was reluctantly agreed upon by the select committee back in 2001 when the first amendment to the Misuse of Drugs Act came through is a mechanism that should be used with great caution. The Regulations Review Committee has been absolutely clear about the need for this affirmative resolution procedure to be used very very carefully. Because after all this gets to the heart of what democracy is about and to the heart of what parliamentary procedures are about—where there is time to duly consider legislation time for submitters to have their views heard by the select committees and reported back on and then for a bill to be adequately considered in the normal democratic way through our Parliament. 
It seems a great worry to me that the Hon Jim Anderton wants to bypass this procedure which should have limited scope in a Parliament such as ours and where the Regulations Review Committee was crystal-clear that it should not be used other than in exceptional circumstances. I do hope the Minister will indeed explain to the Parliament exactly where he stands. 
PITA PARAONE (NZ First) 
: 
 First of all I want to say that I am standing in for Barbara Stewart on this matter and to indicate that New Zealand First is pleased to support this part of the bill. Before I go on I also want to indicate our support for the Supplementary Order Papers that have been put before the House by the Hon Mr Anderton. We certainly support the arguments that he has put up to substantiate the need for Supplementary Order Paper 377. 
We particularly support the proposed section 12AC which is to be inserted into the Misuse of Drugs Act by clause 11 in Part 1 of the bill where legislation that relates to precursor substances such as ephedrine and pseudoephedrine is strengthened. Both are key substances used in the manufacture of methamphetamine. We understand there is currently no offence relating to the import or export of precursors to the manufacture of methamphetamine. In fact the legislation has not kept up with the trends of the day so to speak. Given the adverse impact that this whole issue has not only in this country but indeed the world it needed to be responded to quickly and we believe that this bill does that. 
The lagging of the required legislation has meant that our law enforcement agencies particularly the Customs Service and the police have been hamstrung under the present law. It has also meant that the lesser charge of possession is the only charge that can be made in a whole lot of instances and as we know the penalties for possession are not as great as the penalties a person would face if charged with other matters related to this drug. In addition it is difficult to make such a charge stick where those substances are sent through the post which has become a regular mode of transfer from one country to another. In that situation we need to ask who is actually in possession. That loophole needs to be closed and I believe that this bill will do that. 
Parliament has a duty to support both the police and the Customs Service in their fight against the use of illicit drugs. This bill will certainly do that particularly in the area of search and seizure requirements and the amendments to that part of the Act are certainly appropriate. 
New Zealand First also supports clause 14 in this part of the bill which shifts the onus of proof for possessing a needle or syringe so that it lies with the prosecution. We all know the importance of the use of needles and syringes and the dangers that second-hand use can cause particularly with reference to the transmission of HIV and related diseases. So I stand on behalf of New Zealand First to say that we support this part of the bill. 
Dr LYNDA SCOTT (National—Kaikoura) 
: 
 Part 1 of this bill relates to substantive amendments to the Misuse of Drugs Act 1975 and National supports this part. This was the original bill that came to the Health Committee after the first reading and it deals with the issue of precursor substances for the manufacture of P methamphetamine. 
When I was at medical school we had to study some drugs that were just given to us and ephedrine was one of the drugs pulled out for me to study. So I did an intensive study on it and found that it had very little use apart from the fact that it dried up one’s nose when one had a cold. At that time we did not realise that it would be used as a precursor for the very dangerous party drug P which has been responsible for a huge amount of harm in this country. That harm has come in the form of addiction and we have seen many a TV programme on people who engage in theft to try to get the money to buy this drug and fuel their habit. Methamphetamine laboratories have been found throughout New Zealand. A large laboratory was found and destroyed in my electorate Marlborough 2 years ago. The people who engaged in that activity are now suffering the consequences because P was able to be expeditiously scheduled under the Misuse of Drugs Act. 
That process was set up by Wyatt Creech and progressed by the Labour Government when it came to office in 1999. It allowed us to act very rapidly to put P methamphetamine on to a schedule which meant that those who were found to be producing that drug could then suffer the most severe consequences in respect of penalties and time in prison. Then we found that there was no restriction on importing the precursor substances. As chemists did more to protect themselves against theft of cold remedies that had ephedrine and pseudoephedrine in them people were found at the border with suitcases and suitcases of those drugs. They were bringing them across the border in order to produce methamphetamine and there was nothing to stop them. 
There was debate within the Health Committee about whether this bill should be used to schedule something like precursor substances but everybody agreed that we should do so because we should be helping the police and the border control authorities to try to improve the situation regarding this drug. But the extension of that form of lawmaking has been of concern to the Regulations Review Committee which said that significant matters of policy and principle should always be dealt with in the primary legislation that comes to this House and that process has stood us in good stead for most of the time that this Parliament has been sitting. The process means all members of Parliament look at a law and examine a bill and the bill is subject to the select committee process where the public have the right to make submissions. Then we bring it back to the House and in the Committee stage we once again see whether we have got it right and try to make good legislation that will achieve the desired effect. So the Regulations Review Committee said that that was what we should do. 
We did make an exception to that with the expeditious scheduling of controlled drugs because everyone here felt that the time it takes to get legislation through the House was too long for things like Ecstasy Fantasy or P plus now the precursor substances. But when it comes to using that process for something that will need regulation—that is benzylpiperazine a drug that the Expert Advisory Committee on Drugs has said is not of high risk of harm—National members have concerns. 
JUDY TURNER (Deputy Leader—United Future) 
: 
 I rise to speak in the Committee stage on Part 1 of this bill and I want to signal now that I have tabled an amendment and will be seeking support from the Committee for it. It is to do with the Order in Council provisions and a recent concern I have about them. 
It is important to state upfront that the Regulations Review Committee information to the Health Committee on the use of Order in Council provisions was very cautious. We know that that is often its approach to this sort of provision. United Future supports the use of Order in Council provisions within this bill where it allows us to respond with urgency to a situation that may develop. When a product comes on the market or the drug scene in New Zealand changes in some circumstance the police want the Government to be able to respond quickly and provide them with the legal framework they need to be able to act. There was some evidence that the methamphetamine situation might not have got away on us quite as quickly as it did if we had been able to respond a little more quickly to that situation historically. We do not want to stifle that opportunity. 
However the problem that has developed with the Order in Council provisions is that as the Act has been designed they can be used in any direction. When one talks about recategorising a drug downwards—softening the impact of the legislation—by Order in Council and that is not born out of a crisis of any kind but out of a policy desire then I think the full scrutiny of Parliament including the public submission process should be considered. 
The concern that we have and that my amendment addresses is in section 4(1B)(b) in clause 5. I will read what it presently states: “(b) the Order in Council increases”—and I think that was the word that some of us had perhaps misunderstood—“the amount level or quantity at and over which the controlled drug is presumed to be for supply.” Well I think some of us read that as meaning it was a tightening measure as we have with methamphetamine. What we are trying to address in this part is that the amount one can have in order to be considered as having a drug for supply was set at too high a level and we are trying to track it backwards so that one can have a smaller amount in one’s possession and be considered to be supplying it. That is extremely appropriate. 
What does the wording here mean when one understands what all the other substances in new schedule 5 of the principal Act are—which is what we are talking about here? Let me give members a hypothetical situation. By Order in Council we could decide to increase the amount of cannabis at which one is considered to have it for supply—I think it is something like 100 cigarettes—to such a level that proving supply would be a complete nonsense. The police would have a huge amount of trouble proving it. My concern is that we could do that by Order in Council with paragraph (b) in existence. As far as I am concerned and United Future is concerned the people we most want to see the law able to ping is those who are supplying our young people. The law must be very clear as to the point at which somebody is considered to have a drug for supply and we must be able to identify those people very very clearly. If we are able by Order in Council to put the amount up then I think a very dangerous situation could develop around that schedule. 
So my amendment removes paragraph (b)—it just deletes it—and I would encourage the Committee to support it. I just remind members that the Health Committee members did agree that the Order in Council must be used only in response to a crisis that the police bring to our attention. It should never be used to implement a policy to liberalise drug law. That was not actually a danger until Supplementary Order Paper 298 was introduced which is now Part 3 of the bill. By introducing Part 3 we have created the opportunity for drugs that are now classified as C grade to be dropped down into a new category. 
Hon MAURICE WILLIAMSON (National—Pakuranga) 
: 
 It has been my experience in this Parliament that one can often get a better picture of legislation and what is intended if one comes to it completely fresh and has not been part of the process. I am happy to say that I have not been part of the process so it was interesting to sit down this morning and freshly read the commentary back from the select committee to read what the issues are and then to make some determination about where I think I certainly would want to stand and hopefully my party would want to stand. 
What struck me very quickly with this was that although the National Party strongly supports the original Misuse of Drugs Amendment Bill (No 3) the party has some very serious concerns about how far one extends the regulatory process to allow the inclusion on the list of banned substances. I can tell members of this House having been here for 18 years that I have had very strong views on something as an initial instinct and then after having been through a very elongated select committee process with public submissions and hearing from a number of officials and not just the one official who may have been getting in one’s ear from one department that the solution has been not quite as simple as it first looked; what finally emerges from the parliamentary process might look quite different and in many cases one’s original instincts have been wrong. 
For that reason I would very very much not like to support a regime that looks about to be put in place here especially with Jim Anderton’s Supplementary Order Paper that will allow a Minister through Order in Council to start adding things to controlled lists and to banned substances lists just at a whim. 
I accept that there is some awful stuff out there. Nobody could want anything that P stands for to be in any way able to be sold including all the precursors—the ingredients that are used to make P. They have all got to be somehow controlled to stop the dreadful process going on. But I have to say that one can soon slip off the straight and narrow with that thinking because there are some party pills and herbal pills around and so on. Now that sounds awful—party pills and things that make people feel better or give them a slight high. But in many cases a lot of those things do not do any more damage than a couple of glasses of wine. They sound like they are addictive and that they are like heroin or cocaine but in fact they are not as serious as that. 
So one immediately comes to a conclusion that there is a whole continuum from things that are almost no damage at all. Maybe they do not do much but the kids think they make them feel good. I remember at Matamata College one of the highs we used to get was putting an Aspro into a glass of Coca Cola and drinking it. That was supposed to give one a high. Well we all pretended we got high but I understand that it makes no difference whatsoever. At the other extreme there are things like the heroins and the cocaines that one wants to ban. 
I see the Regulations Review Committee making a very very good series of recommendations here. We must not give to a particular Minister—not just this Minister but any other Minister—some draconian powers to start getting in and banning stuff that is probably no more insidious or no more addictive than maybe alcohol or tobacco. We should not be allowing the bureaucrats to develop a wish list at a whim and be able to bang that through some form of a regulatory process without the proper scrutiny. 
I think ACT said the right words in its minority report. It said we need a proper legislative process to safeguard against some form of ad hoc hysteria. ACT’s minority report stated: “Regulations Review Committee warnings regarding amendment to primary legislation by Order in Council subject to affirmative resolution have been largely ignored.” I think that is right when I look back at the points that the National Party included in its minority report. It stated: “We are mindful of the Regulations Review Committee’s statement that—the affirmative resolution procedure should not proliferate the affirmative resolution procedure should only be used in limited and exceptional circumstances any extension to the affirmative resolution procedure on the Misuse of Drugs Act 1975 should only be permitted where it is: a necessary adjustment to altering the schedules of controlled drugs; essential in order to achieve the purpose of the Act in dealing with the serious risk of emerging drug threats.” 
I have to tell the Minister that I am sure that when a new drug called “Q” arrives on the scene—the next one on from P whenever it arrives— 
Hon Member 
: It is here already. 
Hon MAURICE WILLIAMSON 
: Well if it is here already and “Q” is known to be a really serious addictive damaging drug like P is I am sure this Parliament would want to almost—no I think it would be unanimously—race to pass some legislation but again with a proper process of consideration so that we did not suddenly ban “Q”. It is for that reason that the National Party will be voting against this. 
Hon JIM ANDERTON (Associate Minister of Health) 
: 
 I just want to make a short intervention because it is good to put the facts in the way of anybody’s ignorance or prejudice. Mr Williamson says he comes to Parliament fresh to the issue. That actually that he does not know anything about it. To get up and say that as though there is an important point he is making is completely erroneous. The affirmative resolution procedure—[ 
Interruption 
] If Mr Williamson wants to deal with the drug issue we will deal with it. This issue is not a party political issue. It is a serious issue that affects the lives and the future of a whole pile of young New Zealanders and here we have Mr Williamson making a few cheap political points. 
 I point out—[ 
Interruption 
] Yes he is still shouting them out. I point out that the affirmative resolution procedure is not a draconian procedure. It is a perfectly reasonable system for Parliament to use. Actually it was one of National’s own members Wyatt Creech who started the process in the first place and I support it. I have discussed the matter with the Clerk of the House to make sure that this process is perfectly reasonable to use. Here is the process and how draconian is this? The Cabinet of New Zealand has to consider an issue that it wants to go to the issuing of Order in Council. The Cabinet is not an outfit of cowboys who have just turned up on the night. Cabinet Ministers were elected to Parliament and then they were elected to Cabinet. Cabinet considers whether the procedure goes to the issuing of an Order in Council. Mr Williamson describes that as some kind of whim of the Minister but it is not. It is the collective decision of Cabinet. The procedure goes to the issuing of an Order in Council and the Governor-General signs it on the advice of Ministers. 
Then what happens? Does the Order in Council automatically become law? No it does not. It goes to the select committee. Did Mr Williamson know that? 
Hon Maurice Williamson 
: Yes. 
Hon JIM ANDERTON 
: Oh he did know that. But he says it is just a whim of the Minister and the select committee does not have anything to do with it. Well it has. The matter goes to the select committee for 28 days and the select committee has to make a recommendation to Parliament—not to Mr Anderton or to any other Minister but to Parliament. Who makes the decision on the recommendation from the Order in Council? Parliament does. So to Mr Williamson Parliament is some kind of whim of the Minister. It may be under a National Government but it is not under this one. 
Parliament decides this matter and the process is determined by the fact that we have to be timely democratic and relevant. How relevant is timeliness for Parliament? Last night we heard that 12 months should be all right to consider some of this stuff—that is what we heard last night. I think there may be a bit of a change in attitude on that but 12 months was mentioned and sometimes 2 or 3 years. It took us about as long as that to reclassify methamphetamine. Is that dangerous enough for someone? It took about 3 years to do that. Is that adequate? No it is not. Should there be a better process than that which makes Parliament relevant? There surely should be. Is there now? Yes. Does most of the Parliament support it? Yes. Does Mr Williamson support it? No. That does not make any difference I do not think. I think that the rest of Parliament is right and Mr Williamson is wrong. Before Mr Williamson comes down to this House and gives us the benefit of his fresh ideas he should inform himself about the process. 
KATHERINE RICH (National) 
: 
 I thought the contribution from the Associate Minister of Health was most unhelpful. If anybody is attempting to score political points on this issue it was quite clear from that last contribution that the Minister was attempting to score political points. He has to look at himself in terms of the amount of hysteria he has created over this issue by making such contributions. Mr Williamson in undertaking a huge amount of constituency work in his electorate sees at the front line the sort of problem that these drugs create. I think his contribution was very well-thought-out and raised some pretty important questions that the Minister did not deal seriously with in his contribution. 
Many of the issues that come to Parliament are incredibly serious but if we have a Minister who reacts to polls public hysteria or a lack of evidence about particular drugs a whole bunch of things that have a normal commonplace use will be banned. Imagine if the Government decided to do a poll on the use of hairspray or some nail polish removers! We get the impression from this Government that if a poll indicated that something was a point of huge concern to the public a Minister would make a change and ban a whole group of products for which there was no evidence of harm. We are saying that knee-jerk reactions can be dangerous. Although the Minister in the chair might have huge confidence in his colleagues around the Cabinet table that confidence is not shared by the rest of the country. We will have instances whereby Ministers for the sake of a poll or for the sake of looking like they are doing something want to ban products that have quite innocuous uses. 
It has been suggested that this measure go back to the select committee. Well we all know that the Government has the numbers on select committees. A select committee will not raise pertinent issues with or point out issues to a Minister who is hell-bent on changing the status of a particular substance. A select committee will not tell the Minister that he is nuts that he should not make those changes and that frankly there is no evidence that certain things should be banned. So the measure would come back to Parliament. Frankly no one will stand in the way of a Minister who wants to react to what he sees as an issue for the public. 
We need to make decisions on banning substances based on scientific evidence. So far when it comes to party pills we have not seen any scientific evidence. We have had a whole host of anecdotal incidents where party pills have been proved to be the problem. It is usually a mixture of substances. Sure those incidents are very concerning to any parent but the role of Parliament and the role of any Minister is to look carefully at the science the evidence and the information before making a considered decision. 
The contribution from United Future is interesting. I think many of that party’s amendments are more to do with a fear that cannabis will be legalised. I do not see that as being an issue. 
One of the things that we are seeing is a bill to raise the legal age for the purchase of liquor and I think people should consider how they will vote on it. Many members in this Parliament will vote for 18-year-olds to be able to buy party pills but then will raise the age at which people can buy alcohol. There is certainly more evidence about alcohol than there is about party pills. 
We cannot have knee-jerk reactions to those sorts of issues. We must act in a timely fashion but with evidence so that hysteria is not the basis for our making decisions about substances; otherwise we will see a whole bunch of wacky decisions being made driven by Ministers who want to react to public concerns about a particular issue that have no evidence to back them up. Yes P has been an issue but I do not think anything the Government could have done would stop it. 
STEVE CHADWICK (Labour—Rotorua) 
: 
 I just want to put a bit of reason into this debate and to point out that a step has been forgotten by the Opposition. With respect Maurice Williamson was a wonderful former Associate Minister of Health in terms of his attitude to the sensible regulation of drugs and management of drug policy and I congratulate him on that. We all need to be reasonable about the way we approach this issue. What has been forgotten is the role of the Expert Advisory Committee on Drugs. 
This was not the result of a decision of the Minister to put pressure on the Ministry of Health to get some evidence quickly on benzylpiperazine. The Expert Advisory Committee on Drugs which is far more reasoned and scientific in its decision on any drug illicit or licit raised concerns to the Minister on this matter. Yes we on the Health Committee—and members have forgotten this— also put a justice official on the Expert Advisory Committee on Drugs. We received evidence from the Ministry of Health about its concerns on benzylpiperazine and it also raised concerns about the use of benzylpiperazine in conjunction with other drugs. The ministry did categorise it as being of “low risk” in the recommendation. It was not the Minister’s recommendation that benzylpiperazine a low-risk substance needed to be monitored very very closely—not politicians to monitor it heaven forbid—but a recommendation of the Expert Advisory Committee on Drugs which is established in statute. The recommendation was not in response to receiving anecdotal evidence as the Opposition members said. Yes there has been a lot of hysteria about benzylpiperazine but we received the ministry’s report. It will be watching this drug very closely and we urged that in our report back to the House. 
I want to put on the record here that this is not a case of the Minister or of Cabinet going around and finding another whacky idea that they think will get a few more votes. This is an issue that we should all take terribly seriously and we should listen to the advice and the scientific evidence we received. Our problem here is what we should do about licit and illicit drugs when we have a drug schedule and a statutory framework that looks only at illicit substances. The select committee made a very wise decision to deal with a substance that we were all very concerned about rather than to tell officials to go away draft more policy consult and come back to us with a restricted substances bill. We were not prepared to take the time for that process. 
MARC ALEXANDER (United Future) 
: 
 I would like to take advantage in speaking to this bill. It is curious to me that we have such reticence about moving ahead with the drugs that this bill deals with—the party pills and all the rest of it. It took 7 years—7 long years—before anybody moved on methamphetamine. We let the cat out of the bag and unfortunately the police are now having to go backwards to try to deal with methamphetamine. What I do not want to see is this bill put aside not dealt with here and party pills and all the rest of it allowed to go on unregulated and unhindered. 
The fact of the matter is that we may be able to assert that these party pills on their own may not cause the kinds of damaging effects that people might ascribe to them—and I would disagree with that statement too—but the fact is that our young kids are using those pills in combination with alcohol and other drugs. We cannot isolate one aspect of it and look at just that. We have to look at the totality of the experience that young kids are putting themselves through which endangers themselves and others and of course it is hugely worrying to parents as a result. 
Members should be going to the police and speaking to them. They should see what the results of these drugs are. They will find a completely different picture from the one we find as we sit in the comfort zone of our own offices. Down on the street where these drugs are actually being abused in combination with other drugs it is a totally different story. Very close to my office in Christchurch there is one of these party pill shops. I see night after night young kids standing around there snorting inhaling and taking pills. There is always a litter of syringes and nose-cans. It is a combinational thing and it has to be attacked that way. It is crazy to imagine that we can simply turn a blind eye to this problem. 
This legislation is much needed. In the absence of anything else we need this in order to protect our kids from themselves. Kids will experiment but the problem is that they put themselves and everybody else at risk. This bill is one answer in terms of dealing with that. We can sit back and wait for all the research we want but in the meantime real damage is done to real people out there and it is time we acted proactively to deal with the scourge of party pills and other related drugs. The reality is that people taking these drugs are doing it in a way not considered in this House. That is a fact. We can sit here and debate until we are blue in the face about what should or should not be done—we could take more time do more research and all the rest of it—but it is the parents out there who look after their kids who are in trouble. Some kids come home worse for wear or have to be taken to hospital and some die. That is the fact of it. 
If people want to be reticent about passing this legislation and hold back and wait for more and more evidence all I can say is that the evidence is already in our hospitals. 
Dr Lynda Scott 
: It’s Part 1 we are debating not Part 2 or 3. 
The CHAIRPERSON (Ann Hartley) 
: Could I just say to members that a lot of members have strayed across the paths and I almost gave up trying to bring them back. 
MARC ALEXANDER 
: That is exactly right. It is quite a wide-ranging debate. 
The CHAIRPERSON (Ann Hartley) 
: Yes. Please continue Mr Alexander. 
Darren Hughes 
: It’s true that National’s position is very unclear though. 
MARC ALEXANDER 
: It is very unclear. My understanding is that National members will end up actually supporting this bill. That strikes me as being strange because they want it both ways. On the one hand they want to bag the Hon Jim Anderton for putting this legislation forward but on the other hand they want to support it. They want a bob each way. That is actually quite disingenuous because it says they want to bag the intention of the bill but they do not want the public to go against them and ask why they have not helped. 
The fact of the matter is that there is a huge public out there that wants something done. All we have to do is pick up the newspapers and read the letters that come in. They talk of doing something about the shops that sell such stuff; and it is not just what they sell—it is the activities that are taking place outside these places of purchase. 
NANDOR TANCZOS (Green) 
: 
 I am quite pleased to take part in this debate. I was going to confine my comments strictly to Part 1 but I feel the need to rebut some of the comments made by previous speakers so I apologise if I stray a little from Part 1. The first thing I want to address is the comment made by Mr Williamson who talked about the provision of the affirmative resolution procedure for classifying drugs under the new schedule. I think the member misunderstands the process. He seems to think that it is a simple Order in Council that will be done by ministerial whim. It is the same mistake that Judy Turner made which led to her particularly distasteful amendment previously. 
The fact is that this is not a simple amendment by way of ministerial whim. It is actually an affirmative resolution procedure. It is a new procedure—maybe the member is unaware of it—and it requires a parliamentary process. It requires the matter to go to the select committee for 28 days and for it to be debated and voted on in this House. I accept that there are problems. I think there should be a requirement to consult the public because there is no requirement at the moment for either the Expert Advisory Committee on Drugs or the select committee to consult the public. The other thing that I think is a problem with the process is that there is no ability for either the select committee or the House to amend the notice of motion. I think that that is a serious problem and I think it is something that the Standing Orders need to address. If a matter comes before the House the majority of members may agree in general with the proposal but think it is not quite right and think a particular drug should be classified as a B2 instead of a B1 or as a D2 instead of a D1 if we get to those kinds of schedules. But the House has no ability to make those kinds of changes and I think that is something that needs to be addressed. 
I would like to address the amendment put forward by Judy Turner. I thought it was quite extraordinary that she got up in the Chamber told us she went through the Health Committee’s process on the bill which was pretty long—we went through the bill in a great deal of detail—and then told us she did not understand the amendment the committee has recommended. She seemed to think it was the opposite of what it was. That is not the kind of admission I would make to the Committee if I had made such a mistake but that is up to the member—she can tell us those things if she likes. And of course it is not the first time that Judy Turner has not understood the way the legislation works but that is fine. 
Judy Turner expressed concern about the use of the affirmative resolution procedure to amend the presumption of supply levels. I was actually the member who raised that issue in the committee. The Regulations Review Committee was quite clear on the matter. It stated that the affirmative resolution procedure should not be used to amend the presumption of supply unless it is in association with the classification of a drug. It stated the procedure should be restricted to those circumstances only. I was the one who reminded the committee that we should listen to that advice. The committee in the end made the decision to put in a provision that allowed the presumption of supply to be amended by affirmative resolution apart from classification in one circumstance: where the amendment was to put the presumption of supply level up. The reason is that officials told us we had a serious situation whereby the presumption of supply level was set too low. People were being convicted on supply charges when actually the drug was just for personal use. That is significant because if the drug is a class A drug the maximum penalty for supply is life imprisonment. It is a very serious thing; the maximum penalty is life imprisonment. The officials said that they needed the ability if there is clear evidence that the supply level is set too low to amend it pretty quickly and that is what the committee agreed to do. 
People say that the supply level is not a problem because if a drug is not for supply that can be proved in court. One of the difficulties with a presumption of supply is that there is a reverse onus. It is a basic undermining of the fundamental principles of justice—of being deemed to be innocent until proven to be guilty—because if a person has a certain amount of a controlled drug and it is over the presumption of supply level then that person has to prove it was for personal use. The prosecution has to provide no evidence to back up the idea that the drug is for supply except simply to state the amount. The defendant has to prove it is for personal use and I just do not understand how he or she does that. How does a person go to a court and prove that the drug he or she has is for personal use? That seems to me to be a very difficult thing to prove. I think that one of the fundamental issues with regard to the Misuse of Drugs Act as a whole is that reverse-onus issue. 
The committee received some advice about the presumption of supply issue. At first it was advised that the presumption of supply was to an evidential level of proof not a legal one which was satisfactory but the correction to that advice was that it was actually to a legal level. The difference is that an evidential burden of proof means that the assumption is that the drug is for supply but if a person can show evidence that it is not then the prosecution has to prove it is. 
MARK PECK (Labour—Invercargill) 
: 
 I move  
That the question be now put 
. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 I think it is of huge concern to Parliament and hopefully to the public of New Zealand when we hear the leader of the Progressive Party the Hon Jim Anderton making light of the affirmative resolution procedure. He said that it was not a draconian procedure. 
Hon Jim Anderton 
: That’s right. 
Dr PAUL HUTCHISON 
: Well he is absolutely wrong. He should remember and be reminded of exactly what the Regulations Review Committee said about the affirmative resolution procedure. It said that the amendment of primary legislation by an Order in Council is commonly referred to as a “Henry VIII” clause and is regarded as undesirable because it allows the executive the power to override Parliament. That is exactly what the Progressive Party under the Hon Jim Anderton would love to do. 
He then said that Wyatt Creech some years ago had no problem bringing it in. Well it was brought in with very careful consideration because of the extreme concern about the proliferation of controlled drugs in New Zealand and the very very important need to make sure that law enforcement agencies had some methods to be able to reduce this proliferation. But here we have the leader of the so-called Progressive Party— 
Dr Lynda Scott 
: The “Jim Anderton Party”. 
Dr PAUL HUTCHISON 
: Yes that is what it should be called. But the very important principle is that the leader of the so-called Progressive Party said that this affirmative resolution procedure is not draconian. It is a very very serious procedure. 
The other point the Regulations Review Committee made was this: “In our view the classification of restricted substances is a matter of significant policy that should be dealt with by primary legislation. If a matter needs to be dealt with urgently there are ways of dealing with primary legislation in an expeditious manner.” That is very very important to remember. The other point— 
Hon Maurice Williamson 
: The Regulations Review Committee said that? 
Dr PAUL HUTCHISON 
: Yes the Regulations Review Committee said that. 
Hon Member 
: Are you going to repeat it? 
Dr PAUL HUTCHISON 
: I will say it again if the member likes because it is absolutely the nub of the matter: if indeed a matter “needs to be dealt with urgently there are ways of dealing with primary legislation in an expeditious manner.” 
Hon Maurice Williamson 
: That was my point. 
Dr PAUL HUTCHISON 
: That is exactly what the Hon Maurice Williamson was saying and it is very very important that Parliament is reminded of it. 
The other practical point that was brought up by the Regulations Review Committee was that the Health Committee could use up all its time on this particular matter. That is of great worry because surely the Health Committee should be spending its time on much more important matters like the proliferation of spending—waste—that has occurred under the Labour regime over the last 5 years. 
But we also had Steve Chadwick the member for Rotorua and chairperson of the Health Committee saying that no this matter of affirmative resolution is actually not all that important because the Government is putting someone from the Ministry of Justice on the Expert Advisory Committee on Drugs. That is great but all the people that one puts on the Expert Advisory Committee on Drugs do not make any difference in terms of the huge importance of the normal parliamentary process being carried out when the leader of the Progressive Party the Hon Jim Anderton says that it does not matter that there is a problem with party pills down in Christchurch that he did not hear about it over the last 10 years but has finally woken up to it so he will defy the normal important democratic process and have a knee-jerk reaction to it. 
I think it is very very important that the people of New Zealand realise the lengths that Jim Anderton and his party will go to in order to defy the normal democratic processes. 
DARREN HUGHES (Junior Whip—Labour) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 90 
New Zealand Labour 51; New Zealand First 13; ACT New Zealand 9; Green Party 7; United Future 8; Progressive 2. 
Noes 26 
New Zealand National 26. 
Motion agreed to. 
The question was put that the following amendment in the name of Nandor Tanczos to clause 5(2) be agreed to: 
to omit subsection (1AA) from section 4. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 17 
ACT New Zealand 9; Green Party 7; Maori Party 1. 
Noes 100 
New Zealand Labour 51; New Zealand National 26; New Zealand First 13; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Judy Turner to clause 5(2) be agreed to: 
to omit paragraph (b) from section 4(1B). 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 109 
New Zealand Labour 51; New Zealand National 26; New Zealand First 13; ACT New Zealand 9; United Future 8; Progressive 2. 
Noes 7 
Green Party 7. 
Amendment agreed to. 
The question was put that the following amendment in the name of Nandor Tanczos to clause 14 be agreed to: 
to omit subclause (1) and substitute the following new subclause: 
(1)Section 13(1) of the principal Act is amended by repealing paragraph (aa). 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 7 
Green Party 7. 
Noes 109 
New Zealand Labour 51; New Zealand National 26; New Zealand First 13; ACT New Zealand 9; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 377 in the name of the Hon Jim Anderton to Part 1 and the following amendments in his name to clause 5(2) be agreed to: 
to omit from paragraph (a) of section 4(1A) the words “specified in clause 1 of Schedule 5”; and 
to omit paragraph (c) from section 4(1A). 
Amendments agreed to and Part 1 as amended agreed to. 
Part 2 Amendments to Misuse of Drugs Amendment Act 1978  
Dr LYNDA SCOTT (National—Kaikoura) 
: 
 This part of the Misuse of Drugs Amendment Bill (No 3) deals with search and seizure. It also deals with the ability of our police to be able to do their jobs at the border. We totally support Part 2. Our police and our border control people try to do a very good job there. They were very hamstrung by the fact that there was no ability to do anything about someone who turned up in New Zealand having come from Asia or other places overseas with case after case full of ephedrine and pseudoephedrine as a precursor drug for the manufacture of P. Obviously if a case is opened and is found to be stuffed full of those pills we know that the pills are not for regular use. But there was no legislation to prevent that from happening. The National Party totally supports being able to use the expeditious scheduling procedure set up by Wyatt Creech to enable those precursor substances to be put into the Misuse of Drugs Act and to allow the police to then prosecute those who act to bring those sorts of precursor substances into New Zealand. 
The people who are bringing the precursor substances in are doing it simply and utterly so that they can manufacture P. P has caused a huge amount of harm in our society. I remember when that first became an issue. A friend of mine who has since died an older man who gave a great deal of community service came to see me one day because he was part of Victim Support. He told me he could not believe what he was seeing. He was seeing men with good jobs who had always been substantial members of the community but who had just taken one of the party drugs because they were out somewhere and someone had offered it to them and they had gone completely off their heads. They had attacked taxi-drivers gone home and attacked their wives and been involved in a huge number of violent episodes. He told me those people had ruined their lives just through taking one pill. 
When pseudoephedrine and ephedrine have become methamphetamine they increase the neurotransmitters in the brain and sometimes that makes people go absolutely crazy. Some horrendously violent crimes have been committed in this country by people who have been high on P. The other day a grandma came into my constituency clinic to talk to me about her grandson who is 15 and is addicted to P. She was bringing her daughter to come and talk to me too but the daughter was at home dealing with the police because the young man had threatened to kill his two sisters. They took it very seriously—and so they should—because the episodes of violent crime and the psychosis that we are seeing with methamphetamine usage are a very serious issue for New Zealand indeed and our young people need to realise the substantial risk involved. But it is not just young people who are affected. As my friend Alan said to me some older people in their 30s and 40s who have been really good and substantial members of the community have also been drawn into taking party pills or methamphetamine as a one-off and are having severe episodes that have absolutely ruined their lives. We need to do everything we can to stop the people in this country who for the sake of making a lot of money engage in producing those drugs of abuse. National supports doing something about that. 
I listened to some of the speeches especially the ones given by United Future members previously. I do not think they understand the issue. We totally support doing what we can to control any drug that the Expert Advisory Committee on Drugs says has a high degree of harm. The issue is the process that is being used to regulate drugs of low harm which is the classification the expert advisory committee gave to benzylpiperazine. The Health Committee had a huge amount of debate on how to do that. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 Part 2 again is one of the very important parts of this bill because it allows our customs agents and other law-enforcement agents to react to the very very extraordinary and special techniques that are being used more and more by some of the criminal gangs that are attempting to smuggle illicit drugs into New Zealand. The methods they are using are becoming more and more sophisticated and therefore it is hugely important to have a mechanism to meet the sorts of things they are doing to feed the drug trade in New Zealand and to control the growing problem that we see here. 
I do absolutely agree with my colleague Dr Lynda Scott who mentioned just how drastic is the seriousness of the risks associated with some of these controlled drugs such as methamphetamine and their precursors. There is no doubt that not only can they be addictive but that the bizarre psychotic reactions associated with their ingestion have led to some of the most horrific crimes that we have seen in New Zealand’s history. Therefore it is important that special legislative circumstances are taken to give the enforcement agents the required teeth necessary to make some difference. 
I think it is important to reiterate once again that that is why the Hon Wyatt Creech brought in the expeditious scheduling of controlled drugs and their precursors. This is a very real and serious problem and it is hugely important to use exceptional techniques for this problem in those unique situations. It is very important to realise that the expeditious scheduling and the affirmative resolution process should be used only for specifically unique circumstances. 
This part of the bill deals with allowing delivery of unlawfully imported drugs for purposes of detection seizure of items found during search warrants and international controlled delivery and liability for offences. I think it is worth pointing out that new section 12D(3) inserted by clause 26 again provides for some exceptional circumstances. It states that a: “… Customs officer or officer of a relevant law enforcement agency … who is involved in an international controlled delivery—(a) does not commit an offence under section 6(1)(a) 12AB or 12AC of the principal Act by reason of taking part in that international controlled delivery; and (b) unless he or she is acting in bad faith is not subject to any criminal or civil liability as a result of taking part in that international controlled delivery.” 
One might say that some of the aspects of this part of the bill including those involved with international controlled deliveries and rub-down searches and strip-searches that are required to occur perhaps are exceptional things that normally we would not want to have other than under extreme circumstances. Well the circumstances are extreme. That is why they are included in the bill. That is why the National Party has no hesitation in supporting this part of the bill. But even then once again it is important to realise that some of the drug importers or smugglers into this country are using methods whereby people ingest packages and try to take them through the border. It is very important to be able to have the powers to confine those people in hotels sometimes for up to 2 or 3 weeks to wait for that package of a controlled substance to finally emerge so that an arrest can take place for that individual. 
Hon MAURICE WILLIAMSON (National—Pakuranga) 
: 
 It is with a certain amount of trepidation that I take another call because when I took what I thought was a reasonably moderate call on Part 1 and said that there were some concerns about giving powers to a Minister—not the Minister in the chair Jim Anderton; I was not trying to be nasty to him—Jim Anderton of the Jim Anderton party who is going to set up a regime that will live for a thousand years got up and savaged me. As members can tell I am quite nervous now because I get worried when people savage me. I kept thinking that I have to pay respect to a man with Jim Anderton’s ability. No one in the history of this world has self-named a party as that man has. There was the Napoleonic era but did Napoleon call his party the “Napoleon Party”? No. The same was true of the Elizabethan era. But we are to have the Andertonian era with a glorious leader and some sort of Kim Il-Sung of North Korea - type equivalent. 
We will even have to change our names. Matt Robson is out there right now changing his name to “Jim Anderton II”. 
The CHAIRPERSON (Hon Clem Simich) 
: Order! 
Hon MAURICE WILLIAMSON 
: No I will come to Part 2. 
The CHAIRPERSON (Hon Clem Simich) 
: That is not the issue.There is a correct name for the party you are referring to. 
Hon MAURICE WILLIAMSON 
: It is the Jim Anderton party. 
The CHAIRPERSON (Hon Clem Simich) 
: No it is not. 
Hon MAURICE WILLIAMSON 
: I am sorry but the party has applied to the Electoral Commission to change its name to Jim Anderton’s Progressive party. 
Hon Jim Anderton 
: Not for parliamentary purposes. 
Hon MAURICE WILLIAMSON 
: It gets even better! The name is not for parliamentary purposes. Calling oneself the Jim Anderton party is something one does in the privacy of one’s own bedroom but not out in public. At any rate the leaders of the past—Fidel Castro Leon Trotsky—never called a party after themselves. The Jim Anderton party told me I was wrong and evil and I apologise to its glorious leader. I hope the regime lasts for a thousand years. 
Hon Jim Anderton 
: You’re easy to savage. 
Hon MAURICE WILLIAMSON 
: I am; I know that. I am such a delicate little flower that I take those things very personally. But I looked up the books and saw that Mao Tse-Tung did not name the Communist Party of China the “Mao Tse-Tung Party”. He was not as arrogant as that. Lee Kuan Yew who took over Singapore and ran it for three decades did not name a “Lee Kuan Yew Party”. But Jim Anderton— 
Hon Jim Anderton 
: Where is this in the bill? 
Hon MAURICE WILLIAMSON 
: It is not in the bill but I am surprised the bill is not called the “Jim Anderton Bill”. Why is it not the “Jim Anderton Bill”? What a silly name the Misuse of Drugs Amendment Bill (No 3) is. The bill should be the “Jim Anderton Promotion Bill (No 3)”— 
Hon Jim Anderton 
: Parliamentary purposes. 
Hon MAURICE WILLIAMSON 
: —for parliamentary purposes only and not to be taken at home. That is what the Jim Anderton party is. 
I make it clear that the National Party does support Part 2 which contains the search and seizure provisions. I know I will get another absolute rogering from the Jim Anderton party and I am sorry about that. 
Katherine Rich 
: Strip-searched! 
Hon MAURICE WILLIAMSON 
: There will be a strip-search by the Jim Anderton party. But I make it clear we support the bill because we do know there are certain things in it. As my colleague Lynda Scott pointed out someone who comes through the border with a suitcase absolutely packed with cold and flu remedies that contain all the precursors one needs to head off to a big cook-up to make P is clearly not carrying it for personal use. That person could not use all those remedies in the thousand years that the Jim Anderton party regime will last for. They could not be used personally. So I am really happy that the National Party is supporting this part. I am sorry I got savaged on the first part. I will wait to take my medicine for the next part when it comes. 
PITA PARAONE (NZ First) 
: 
 New Zealand First is quite clear as to what we are talking about in this part. The bill’s title is the Misuse of Drugs Amendment Bill (No 3) and not the name of a particular party. Of course after the election we will not be worrying about names. The only name that will be prominent will be New Zealand First’s. I stand to support this part. These changes provide the Customs Service and the police with the necessary powers to enable them to effectively detect the presence of controlled drugs and to take appropriate action. I must say that the example my colleague from Pakuranga mentioned about visitors coming to this country loaded down with a whole lot of drugs for medicinal purposes could raise an issue as we witnessed on a recent TV programme that featured a lady who came into the country loaded down with particular drugs that she alleged were for personal medicinal use. 
This part indicates to us that it is absolutely essential in the fight against drugs. What is the point of wanting to eliminate illicit drug use and the consequences of that use if the law does not provide the tools for our law enforcement agencies? This part now means that customs and police officers will be able to carry out personal searches on the basis of believing on reasonable grounds that a person is in possession of the drugs listed in clause 26. In essence this part strengthens the ability of the Customs Service and the police in the fight against the illicit use of drugs. It is a known fact that drug use which this bill is about is a growing and serious problem. The considerable harm that is caused invariably impacts not only on those who are directly involved but also on their families and the wider community in which many members are innocent parties in the whole sad episode. The drug P is a drug that we are hearing more and more about—particularly the consequences of its use which are disastrous. I think that there are enough recent cases to suggest that this law is long overdue. We believe it could be strengthened and we will certainly address that issue in the debate on the next part. However I stand to take a short call to say that we support this part. 
KATHERINE RICH (National) 
: 
 National wholeheartedly supports this part because it will assist Customs Service officials to do their job. When I speak with pharmacists people in the Customs Service and pharmaceutical representatives they tell me that the issue is less to do with problems regulating the products once they get into the country and more to do with border security. People bring in large quantities of ephedrine and pseudoephedrine in order to produce P once they are here and put forward the argument that they are bringing those substances into the country for personal use. 
 Quite clearly if someone turns up to an airport with suitcases full of that stuff they are not using it for personal use. But it has been incredibly difficult for customs officials to prove that and I think we are seeing here some tightening up of their abilities to deal with problems at our borders. We need to get a handle on the amounts of those substances that are imported. Although we can work with pharmacies to ensure that regulated substances are marketed and sold in a managed way we can do more by assisting customs officials to be able to deal with the wide range of problems they face when people try to bring those substances into the country. 
This part clarifies what the Customs Service is able to do. It is quite detailed in that it lays out what can and cannot be done during a strip search or rub-down search and what can be required of a person coming into the country with suitcases full of cough medicine. It makes very clear what the Customs Service can ask a passenger coming into this country to do or not to do. I think that will tidy up some of the problems that have been faced in the past and some of the challenges that have been made when people have come through customs with quite clearly more goods than they would ever possibly use in a lifetime. 
The issue is why there is that level of detail. In the past it has been proven that the level of detail in legislation—when it comes to strip searches as one example—is very important. When the law is not clear people will come in challenge it and get off in many cases on a technicality or because the law does not speak in a very detailed way about a particular incidence. That is why section 13EC “Definition of strip search” inserted by clause 27 goes through in quite some detail what officials may require a person who is being searched to do. It is very clear that it is a very full list. Hopefully we will not see any loopholes and people being able to get off quite serious charges on technicalities. 
Detail is important but I am not sure that we need the level of detail in some aspects of the bill. I draw the Committee’s attention to clause 29 which specifies that the Commissioner of Police and the chief executive of the New Zealand Customs Service must report to Parliament on the number of rub-down searches and strip searches undertaken by members of the police. I just wonder why we need that level of detail when every member of Parliament knows that through a parliamentary question or a question in the House we have access to that information. Why does it need to be specified in law? We live in a country that is increasingly over-regulated and I would like the Associate Minister of Health just to describe and explain I suppose why in that particular provision we need to be quite so specific. It may be something to do with the police and their ability to provide information that perhaps needs to be specified in the law. I am not sure. 
Some good points have been made in this debate by my colleagues particularly about resources for the police. 
JUDY TURNER (Deputy Leader—United Future) 
: 
 I want to take a very brief call on Part 2 in the Committee stage of the Misuse of Drugs Amendment Bill (No 3) just to say that United Future is very supportive of the provisions. We congratulate the Associate Minister of Health Jim Anderton on providing border staff with some additional strengths. I think it is great that the bill defines very clearly the raft of searches that can be done. Because of privacy issues it is good to be very clear so that the power to search is not abused. 
The thing in this part that particularly interests me is the ability for controlled deliveries to occur. Really when we look at all the strategies around drug use and drug abuse in this country we see that we need to be particularly vigilant to cover those people who make a living from the suffering and addictive behaviours of others. For the Customs Service in concert with the police when they know that a delivery is coming to be able to allow it to happen to monitor it to pick up on the whole down-line process and to see often particularly in terms of precursor substances coming in where it is being delivered and who is manufacturing it—to keep track of the whole system—means that the net that officials can throw is much wider and that is an extremely good development. United Future wants to support the police in this work. 
I really want to say just that we are very supportive of these provisions and very glad that the Minister has taken this step. 
The question was put that the amendment set out on Supplementary Order Paper 377 in the name of the Hon Jim Anderton to Part 2 be agreed to. 
Amendment agreed to and Part 2 as amended agreed to. 
Part 3 Restricted substances 
The CHAIRPERSON (Hon Clem Simich) 
: This debate includes debate on schedule 4. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 It is Part 3 of the Misuse of Drugs Amendment Bill (No 3) that National has grave concerns about. We have grave concerns about the knee-jerk way that the Hon Jim Anderton has rushed to bring in a Supplementary Order Paper that has been put as Part 3 when there has been absolutely crystal-clear guidance from the Regulations Review Committee that the affirmative resolution procedure should not be used for substances such as party pills and benzylpiperazine with which it will deal. 
I think it is worthwhile just to look at the evidence regarding benzylpiperazine given to the Minister by the Expert Advisory Committee on Drugs. The executive summary concluded that insufficient information was available on which to base a recommendation to classify those substances in the schedules of the Misuse of Drugs Act 1975. The recommendation was absolutely clear but the Hon Jim Anderton of the new “Jim Anderton Party” which used to be known as the Progressive Coalition is defying the very important process that the Regulations Review Committee warned against. Oh no he will put that resolution procedure into Part 3! It is because of that that the National Party has said it does not agree with this. We have made the commitment to bring through when in Government well-considered legislation that indeed addresses in an appropriate way the very concerning problem of party pills in New Zealand. 
That legislation will allow the proper parliamentary procedure to occur and submissions will be able to be heard not in 28 days but in a time that is appropriate to hear them properly so that we can have well-considered legislation. 
 It is important to point out that we heard some pretty colourful submissions regarding Part 3 of the bill including from members of the Social Tonics Association of New Zealand otherwise known as “STANZ”. They pointed out that members of the Social Tonics Association of New Zealand have sold an estimated 8 million servings of benzylpiperazine and related products in the past 5 years with no credible evidence they say of these products causing significant harm. Indeed this is the nub of the situation: these drugs while they are of great concern to New Zealand—and it is a particularly great concern that many young New Zealanders are taking them—do not fall into the category of the very very worrying controlled substances such as amphetamine P and its precursors. 
I think it is worthwhile to point out what the Expert Advisory Committee on Drugs says about these substances and about benzylpiperazine which is the most commonly used in particular. It states: “They are stimulant type substances that produce effects similar to known amphetamines and hallucinogens.” However the effects are of nowhere near the severity of those of drugs that fall into the controlled A B and C classifications. The advisory committee states: “There is indeed some concern over the increase in supply of these products which are marketed and distributed independently over the internet through counter-culture retailers and more recently in liquor outlets service stations and dairies.” 
That indeed is how Jim Anderton has finally woken up to the fact that they are being sold all around Christchurch where his electorate is. Finally in a truly dinosaur-like reaction after 10 years of the gradually increasing proliferation of these party pills Jim Anderton has woken up and decided to flick in a Supplementary Order Paper to sort the problem out but unfortunately that Supplementary Order Paper has not been well considered. The National Party believes that thoroughly considered legislation should be brought in to address this worrying problem of party pills. 
Dr LYNDA SCOTT (National—Kaikoura) 
: 
 Part 3 deals with a new class of restricted substance. It puts in place the same sorts of regulations that we currently have around tobacco and alcohol: restriction to those aged 18 and over health warnings on products advertising controls and of course penalties if people break the law. And there will be restrictions around what is good manufacturing practice for these pills. 
The Expert Advisory Committee on Drugs said that benzylpiperazine is not a drug that causes serious harm. I think that drug was a cattle drench to start off with; I think that is where it originated. There are people out there who will use all sorts of things. The minute we regulate for it there will be something else. We are not just talking about benzylpiperazine. That is why National has concerns—because in the future other drugs other substances will be used. Because there will be other substances we need a process that we feel is robust and has been well considered. 
I ask members to think about the other things that are used. Datura is something the effect of which I as a doctor dealt with just about every year when young people who had taken it would come in to the accident and emergency department. Datura produces atropine. It makes people slightly crazy makes their eyes dilate and makes them very hot but it gives them a high and every year people poison themselves on this drug. The plant grows around New Zealand and people are sometimes stupid enough to try to manufacture a psychoactive substance from it and take it. I am not sure if there have been deaths from this drug but many people have certainly got very close to dying from it. Then there are magic mushrooms which people go and pick. We hope they do not manage to eat death cap mushrooms and completely ruin their livers so that they need liver transplants. 
People will go and find other substances to use. It would be better if we were looking at the reasons why our young people feel they have to take those sorts of things to have a good time. I guess that is one of the reasons why there is concern about these party pills. Even though the expert advisory committee said these pills carry a low risk of harm they condition our young people into thinking they have to take a pill in order to have a good time. Some of it may just be a placebo effect. We know in medicine that in 30 percent of cases where people take a sugar pill believing it will do something good for them it actually does because of what is called the placebo effect. That young people get into this mindset that they cannot have a good time—that they cannot get a natural high that they cannot enjoy an evening out—without taking something to help them do so is I think of great concern. 
We have to ask ourselves why we have such a high youth suicide rate why we have such poor statistics in relation to our youth. I believe that some of it is to do with their low self-esteem and that that is why they feel they have to use alcohol to loosen up a bit or have to take a pill to make themselves more sociable. Those are some of the issues we need to deal with—along with the breakdown of the family and the social decay that make these children feel that that is what they have to do. 
Although the National Party has concerns about this area and would like to see restrictions we believe that Part 3 should have come in as a separate bill. We could then have called for submissions on it so that we hit the target that we want. We have seen time and time again legislation with good intentions—and I think Part 3 has good intentions—that misses its target and we end up coming back to it to make amendments to change things. That actually makes things more difficult not better. 
Benzylpiperazine does need restriction. This bill will pass today and we will see that restriction put in place. But the minute that substance is restricted there will be something else being used. We need to know whether the process that is being set up by this bill will actually work. All that Part 3 does is restrict advertising restrict the sale of substances to under-18-year-olds and make sure that there is good manufacturing practice. That is another concern. It is not just the main substance in the tablet; it is what gets puts in with it that as we have seen with some health products can cause harm. 
Hon JIM ANDERTON (Associate Minister of Health) 
: 
 I would like to know why the National Party wants to have it both ways on this part. We are told that these drugs have been a problem for the last 10 years. If there has been a problem for the last 10 years then at least on reasonably primitive arithmetic for half of that time the National Party was in Government. What did it do? The answer is “Nothing”. We are now trying to do something and we are told that we should have done it 10 years ago when National was in Government. Oh really? I can see one of those Tui advertisements coming up: “Yeah right.” 
Mr Hutchison said that this a worrying problem. But what did he suggest? He suggested that it was too difficult. This is like the process police. I suggest that he go out and ask the parents in shopping malls in New Zealand what they think. Mr Hutchison thinks this problem exists only in Christchurch. Does he go anywhere else in New Zealand than where he lives? Does he understand what is going on in the hinterland in the regions of New Zealand? No. He should ask the parents of 12-year-olds in shopping malls who actually get proselytised and promoted to by those who are pushing these drugs what they think. 
The National Party’s view is that it is difficult we should think about it and we should wait and see. Is that what parents think? No it is not. It is “make my day” time as far as the rest of New Zealand is concerned in relation to the kind of attitude Mr Hutchison takes. He said that this part is the whim of a Minister. Does he realise that the Expert Advisory Committee on Drugs advised me as Minister to take a precautionary position on this matter and to for example restrict the age of sale—which is exactly what this bill does? Is the National Party for it or against it or has it not made up its mind? Will it repeal the provisions under the affirmative resolution process? I ask National to answer that. It has railed against a process that delivers on time in a timely way changes that address immediate acute issues in New Zealand. 
 National members say that this is a terrible legal process and that it is undemocratic even though it goes through an Order in Council process through the select committee and back to Parliament. They call it a draconian whim. Well there may be one thing worse than a “Jim Anderton Party” and that is a “Don Brash Party”. If Don Brash is the answer there must have been a very silly question in the first place. 
Darren Hughes 
: Would they repeal it? 
Hon JIM ANDERTON 
: Yes they can tell us whether they would repeal it. That would be honest. I can understand that. They can say that it is such a terrible process and that when National becomes the Government—in another 30 years’ time—they would repeal it. I ask them to tell us that so that I can have some respect for their position. But this posturing around the place is ridiculous. 
Licit substances—and benzylpiperazine has been one up until now and still is—are not necessarily without danger. I ask members to read the coroners’ reports on the kids who have died from solvent abuse. Members should read the coroners’ letters to Associate Ministers of Health like me that ask us to do something about this stuff—and then write back to them and to say that it is too hard: “Look I am sorry we are only the Parliament of New Zealand. What do you expect us to do?”! 
Why did I get elected here—to do nothing? Coroners have written to me saying that they have presided over the inquest of five young kids who died from solvent abuse and they have asked whether I could try to do something about it. Well the Opposition would say: “No I am sorry. We are thinking about it. We do not know.” It is ridiculous. 
The Health Committee to its credit addressed the issue did its best on it and referred it back to me and said that it was a bit hard and it would have to be looked at. Well we will look at it and I am getting urgent advice on that. That has been in the too-hard basket for so long that it is ridiculous. In truth more kids die from solvent abuse than from party pills or anything like that so we have to address that. In reality of course not all outlets are irresponsible. Some retail outlets such as The Warehouse have taken off the shelves some of the licit substances like butane which has actually killed kids and they actually sell them responsibly. Unfortunately not everyone is like that. I give credit to them and others who do the same. 
Parliament cannot just say that it is too hard and that we cannot do anything about it. Not all outlets are so responsible. People want to know what Parliament will do about it. This party in Government supported by responsible Opposition and supportive parties in the House is giving support to doing something. I wish the National Party would make it clear whether it was for or against it. We have had so many positions put by the National Party that we would not have a clue whether it is for or against it whether it wants to repeal provisions or whatever else. I am getting very clear messages from most of the Parliament that it is strongly supportive of this. I think the National Party should say yes or no. If it is not supportive of it it should say whether it would repeal the provisions. Let us hear it and then we will know. I think the rest of us want to get on with this bill and get it into law as fast as we can. 
NANDOR TANCZOS (Green) 
: 
 I must say it was quite strange to hear Lynda Scott talking about the other substances that are already available. It is quite true but that was one of the issues the Health Committee addressed quite carefully in the way that “substance” is defined. It includes any mixture preparation or article manufactured for the primary purpose of inducing a psychoactive effect. That is a deliberate attempt to ensure that the category is opened up so that new substances can be added. Let me add once again that it was the Green input that actually got that definition because the committee was looking at restricting it to simply benzylpiperazine alone and it would have been a major mistake if we had gone in that direction. 
I will address three of my amendments. One amendment is to clause 36 “Matters to which Minister must have regard before recommending Order in Council under section 34(1)”. The bill puts forward a number of criteria that the Minister must have regard to that are in addition to the matters already set out in the primary Act in section 4B(2). I made the point in the second reading stage that I do not understand why we would have one set of criteria for controlled drugs classified under A B or C class and a different set of criteria for those under D class. As I said before it suggests that we have already determined what classification we will make before we have even looked at the criteria and the evidence. It makes obvious sense to have one set of criteria incorporating both those sets for all substances and then the recommendation of where they should be classified would drop out of that. 
Why would we not want those criteria to apply to any drug? Let us look at them. In clause 36(2)(b)(v) one of the matters is “the risk of encouraging persons to use more dangerous substitutes in place of the substance:”. I take the example of khat which I understand is a class C drug. It is a bush that Somalian and North African people have been chewing for a long time as a mild stimulant. If we were going through the evidence-based criteria that we now have in place which we did not have when khat was classified would we not want the Minister and the Expert Advisory Committee on Drugs to consider whether making khat illegal might encourage North African people to use a more dangerous stimulant? Would we not want to ask that question? Would we not want to know? Would we not want that to be considered? It is unbelievable to me that we think those criteria do not apply in terms of classifying drugs as A B or C. 
Subparagraph (vi) refers to the matter of “whether alternatives to restrictions or requirements imposed on the substance are available and are likely to be effective in reducing the risks or harm resulting from abuse of the substance.” Surely we would want to ask whether there were alternatives to making people criminals. Surely we would want to consider that to have it in our mind and to make it part of the equation. I hope members will support my amendment to clause 36 in that regard. 
The other amendment is to clause 58. As I have said before the enforcement powers are very draconian. At the moment if an enforcement officer—health officer—or member of the police believes that an offence has been is being or will be committed he or she has the right to go in and seize any restricted substance document or record. That could put someone out of business if there are no safeguards around that. My amendment states that it has to be done by warrant—not just because a police officer or health officer believes that there is an offence. There has to be some evidence some basis for that belief. That is quite appropriate and is like most legislation in this country. 
The other aspect of the amendment is a time limit. If officers seize any substance they may not retain it for any longer than 72 hours unless an information is laid in respect of the relevant serious offence. The situation at the moment is that a health officer could say: “I think you’re going to commit an offence sometime in the future.” and could then go in and seize all the products off a person’s shelf and seize his or her computer records. The officer would never have to charge the person or to give the items back but could just hold on to them forever. That will simply put people out of business; that will destroy businesses. There has to be some safeguard. If people break the law of course they should be punished. But this legislation opens the door to punishing people who are abiding by all the laws and regulations and simply gives unrestricted power. If members look at other kinds of offences they will see that my amendment is quite in line with them. 
KATHERINE RICH (National) 
: 
 I call on the Associate Minister of Health to take another call because there seems to be a glaring inconsistency in his thought processes with regard to this bill and another bill before the House that aims to increase the drinking age. Both of those bills were brought forward to the House by the Progressive Party. I would like the Minister to explain why it is OK for an 18-year-old to buy a party pill yet why according to the Minister that young person is not able to make the decision to buy a beer until he or she is 20 years old. Why does the Minister assume that a New Zealand citizen is responsible enough to make a decision about whether he or she buys benzylpiperazine but not responsible enough to make a decision about whether he or she buys a glass of wine? There is a major glaring inconsistency in the approach of the “Jim Anderton Party” to this issue. It is saying that it is OK for young people to buy party pills at the age of 18 but if they want to buy a beer at the pub they need to be 20. 
The Minister told National members to go into the shopping malls and explain our position to concerned parents. I say to that Minister that he should go into shopping malls and tell parents why it is OK for New Zealand youth to buy party pills when they are 18 when he is going to turn round and vote to raise the drinking age for alcohol. That is not consistent—there is a glaring inconsistency. He is saying that young people are responsible enough to make a decision about one licit substance yet are not responsible enough to make a decision about another licit substance that has been in our community for centuries. I ask the Minister where the logic is that allows him to vote for the regulation of the sale of party pills to 18-year-olds yet also allows him to say that he does not trust young people with the ability to make a decision about whether they share a beer with their parents or friends etc. 
There is no consistency in the two bills the Minister’s party has brought before this House—well Part 3 of the Misuse of Drugs Amendment Bill (No 3) has basically been brought to the House by his party although it is now incorporated into a Government bill. There seems to be no logic in the dual positions the Minister is currently holding about two substances that are legal in this community. I would like him to explain how he will vote to allow New Zealand kids to buy party pills and herbal highs yet will tell them they are not responsible enough to buy a beer or to make a decision about alcohol—which is something the community has had a lot more experience with than some of the herbal highs and substances we have seen proliferate in our communities in the last few years. The Minister has asked us to make his day by explaining our position; I would like him to make our day by explaining that glaring inconsistency. 
There does not seem to be a helluva lot of logic in trying to regulate two different licit substances and saying to New Zealand citizens that they need to be 18 to buy one substance yet 20 to buy another. Although we have all this feigned concern about what is going on in the community it seems to be more about politics and winning votes for the “Jim Anderton Party” as opposed to really dealing with the issues consistently and logically with evidence and science and bringing in laws that are consistent and that make some sense. 
The other point I would like to bring up in relation to Part 3 concerns the definition of “substance”. We all know that people who are involved in drugs will try to work around regulation so why does the bill define “substance” as something that has the primary purpose of inducing a psychoactive response? 
Hon JIM ANDERTON (Associate Minister of Health) 
: 
 I will give just a brief explanation. At least at the end of my explanation people will understand my position; I still do not understand National’s position even after I have heard that speech—and there have been a number of such speeches. The first thing is that this is a Government measure not a member’s bill. The Government and other parties in this Parliament are bringing this bill before the Parliament. The bill concerning the alcohol age limit was a member’s bill that was a conscience issue for Parliament and let me remind the member who raised the issue that plenty of evidence out there plenty of studies nationally and internationally show the serious effect of alcohol on young people. Benzylpiperazine as has been indicated is a new substance in terms of its use by ordinary people. [ 
Interruption 
] 
It was a cattle drench—that is true—and people probably did not have any idea that someone would sell cattle drench as a party pill. But they are now doing that—and guess what? The Government has commissioned studies and research on benzylpiperazine and when that research comes back it may well be that it will show there is no problem whatever. However it may well be that the research will show more problems than we even know about. If there are such problems and if the recommendations of the expert advisory committees and researchers are that we should take further action then we will. So that is the difference between alcohol and benzylpiperazine research. 
The evidence is in on alcohol in my view and in the view of a lot of other members in this Parliament; we are waiting for the other evidence. The Expert Advisory Committee on Drugs advised us to make a precautionary stand and it suggested making that stand for the age of 18. It suggested the age; I did not. We have had the age of 18 for alcohol and in the minds of many people in this Parliament—and in the minds of many people outside it; in fact in the minds of the majority of New Zealanders outside it—that experiment of lowering the drinking age failed. So we are now addressing it and we cannot be blamed for doing that. Seventy percent of New Zealanders actually agree with us so if National members are saying that that is a bad thing they can make my day twice. If they are saying they cannot make up their minds on this bill they can make my day again. 
PITA PARAONE (NZ First) 
: 
 I think it is timely that I enter the debate particularly in terms of what the two previous speakers have spoken about. My colleague Barbara Stewart has put forward a Supplementary Order Paper that suggests that benzylpiperazine party drugs herbal drugs and all other psychoactive substances should be included in the list of drugs prohibited from being available to the general community. Now as the Hon Jim Anderton the Minister in the chair mentioned there is no evidence about benzylpiperazine available at the moment but I would suggest to this Committee that given the impact that the use of illicit drugs has had on our society it would be better to err on the side of caution than to run the risk of waiting in the meantime for research to take place. We do not know how long that research will take and in the meantime benzylpiperazine and other drugs will be available to our young people to use in the way they feel fit. 
New Zealand First believes that all party drugs including benzylpiperazine and other psychoactive substances should be placed on the controlled drugs schedule. Although we are pleased some regulation is being placed around party pills—in relation to their place of sale age limits for use and manufacturing practices—we believe that that does not sufficiently address the problems and possible long-term health effects upon young users. 
I found it very interesting that during the course of the debate on this very important bill we had a group of young people in the Chamber. They would have been listening intently to the respective views and wondering whether some people in this Parliament really have their future as a concern. How can the effects of those drugs be considered low-risk? New Zealand First does not think they are and we are waiting for the Expert Advisory Committee on Drugs to carry out further research into that area. The research as we all know is desperately needed; no one is sure of long-term effects. We do not want to see a whole age group of young New Zealanders harmed from possible toxicity or brain damage from substances that currently are legally available. 
Simon Williamson Manager for Drug Investigations in the Customs Service has said: “These pills are literally pouring into the country in huge quantities and New Zealand seems to be a unique market for them. In my view this is a clear case of the current regulations not keeping pace with the influx of synthetic designer substances that are available.” Further on he says that the people “pushing this stuff” have invariably got a vested interest in its sale: “These people are making a lot of money by arguing that this is a safe alternative to illegal drugs and all I can say to that is its”—I cannot use the word in this Chamber! “The pills are central nervous system stimulants and there is evidence becoming available now which suggests that they are toxic in content and damaging to the brain in high doses.” 
So although we are pleased to see some regulation of those substances we would like to see stronger regulations surrounding their sale. It is particularly noticeable that manufacturing standards cannot be guaranteed under current regulations. One of the most urgent problems is the continued supply of benzylpiperazine in excessive and sometimes dangerous doses by irresponsible operators. As Mr Anderton well knows that is particularly problematic in Christchurch. This is also something that should be addressed in this Committee stage. If we are to hold the manufacturers accountable under this law we need to be sure that justice is seen to be done. 
I refer to a press release put out by my colleague Barbara Stewart which quoted a medical toxicologist from the National Poisons Centre as saying that the adverse effects of these drugs are just beginning to show and that the pills should not be sold in New Zealand without a prescription. That reinforces our view that there should be no softening of drug laws for these new designer drugs. To that extent I hope the Committee will support the Supplementary Order Paper put in by my colleague. 
JUDY TURNER (Deputy Leader—United Future) 
: 
 I stand to talk to Part 3 of the Misuse of Drugs Amendment Bill (No 3) and to Supplementary Order Paper 298 in the name of the Hon Jim Anderton which was tabled when we were already considering the bill in the Health Committee. From the outset when it was first tabled—and the select committee members will remember this—I was extremely cautious about the party pills issue. I know that the Green member thinks that makes me fickle. However I did not want to approach this matter with a sort of arrogant belief that I had a monopoly on the truth. I was very interested to hear the opinions of the various select committee members on this matter. The tension that we worked with was that on the one hand there was a huge call from the community—and I remember particularly a letter from the Christchurch City Council—asking us not to shy away from our responsibilities as legislators and to move to put something in place at least in the short term to deal with the problem that people see on the streets. On the other hand the counterbalancing tension was that it appeared to many of us that putting party pills under the Misuse of Drugs Act was not necessarily the best option. 
The officials gave us some very good advice and it was their advice that tempered my position. They said—and I heard several different lines on this—that 6 to 12 months’ work would need to be done and I have since read that possibly even 2 years’ work would need to be done to get a stand-alone restricted substances bill. We recommended in the commentary on the bill that that work be continued and I would still like it to continue. I think that would ultimately be our preferred outcome. But it did not provide an immediate solution and it would be cowardly of us as members of Parliament not to make some attempt in that regard. I want to thank the chair of the select committee Steve Chadwick for her guidance on this matter and also the officials because I really do think we have to be pragmatic in such situations. 
I appreciate the conservative approach of the New Zealand First amendments. Starting from a position of prohibition is I guess an extremely safe position to take. However we were not— 
Simon Power 
: I raise a point of order Mr Chairperson. The member is obviously in some discomfort. Perhaps I could seek the leave of the House for just a moment for her to collect herself—so that other members do not attempt to take a call or anything—and resume her speech when she is ready. 
The CHAIRPERSON (Hon Clem Simich) 
: Thank you for raising that. We will just bide time for a moment. There is no hurry Judy Turner. 
JUDY TURNER 
: On the New Zealand First amendments I do feel that the Expert Advisory Committee on Drugs has given us some guidelines on the matter of party pills and I think we need to move on those. However I share the concerns of the New Zealand First members. I think we do want to see the role of the expert advisory committee include the opportunity for constant and active review of this decision. My concern with regard to party pills is the cocktail effect when they are combined with alcohol. Part of what we regulate may be that party pills are unable to be sold in a context where alcohol is being sold as well—that may be a good solution. However we did want to support this measure so that something is put in place now to respond to the many requests that certainly came across my desk in that regard. So we are very happy and I want to thank also the Hon Jim Anderton because when I approached him with my concerns he had a very open door on the matter. I appreciate that because I do feel that we need to proceed on all these matters with great caution. 
This problem will not go away. As fast as we put regulations around products new products are coming online. We do need to be extremely vigilant as we monitor those substances and their effect and how they are consumed. I read a media release the other day on party pills which stated that one of the concerns is the quantities in which party pills can be sold. There are recommended dosages on the product but there is strong anecdotal evidence that young people ignore those recommendations and take far more than is recommended. We need to look then at the quantities the product is sold in. To wait for 2 years is absolutely not an option and it is a very irresponsible position to take. 
However let me just reiterate that United Future would challenge whoever is in Government after this election to make this matter a priority to advance the work that does need to be done—to take the 2 years if that is what it will take—and to get up a restricted substances Act. I think there are some long-term problems. I accept—and this will please the Green member—that one of the things I found very difficult in working on this bill was that it was a bit of a dog’s breakfast. I am not sure that Mr Tanczos and I would agree on how it should be improved. However I found it quite difficult at times to get my head around some of the provisions because they have been amended by adding bits on all over the place. I do think that an overall reworking could be done of our drugs legislation. 
NANDOR TANCZOS (Green) 
: 
 To be fair to the previous speaker Judy Turner perhaps I made some uncharitable remarks earlier and it is a very complex and difficult bill. One of the things I think there is widespread agreement on is that there needs to be a major review of the misuse of drugs framework in order to produce some kind of coherent integrated drugs framework. 
I rose though to address the amendments of Barbara Stewart and I do so because the New Zealand First member raised the issue. Unlike Judy Turner I do not think New Zealand First’s amendment is a particularly conservative or safe approach to these substances. Ms Stewart is trying to add party pills herbal drugs and all other psychoactive substances to the schedule as we have done with benzylpiperazine. I have to ask what that would mean. Herbal drugs—does that mean that health food shops selling chamomile tea which is a known relaxant will now have to restrict it make it R18 and have labelling and manufacture restrictions? Does that mean grocers selling lettuce which we know contains an opiate latex will suddenly have to make it R18? Does it mean that nutmeg will be restricted to adults? Will we be raiding Little India franchises to bust them for selling curries to minors? It is just bizarre! Let us get real about what it would actually mean. 
Adding all other psychoactive substances to the schedule would clearly include Coca-Cola because it contains caffeine. The rumour I have heard—I do not know whether it is true; I am a bit younger than many of the members here—is that one of the contributing factors to the horrors of the Pinochet regime in Chile was the nationalisation of Coca-Cola. If that is true imagine what it will do to us if we try to make its product R18! It will not just be a military takeover; it will be lining us all up against the wall. 
 When we start to use those kinds of definitions which are so broad we have to actually understand what they mean. Perhaps I am being a bit light with the member’s amendment but I think it does demonstrate that we have a pretty strange attitude when it comes to psychoactive substances because they are all through our society. Drugs are all though our society and I do not know whether there is a member in this Chamber who does not use drugs in one form or another. I would be highly surprised if that were the case. Very few people use no drugs and I think that situation would probably apply only to strict Mormons. 
Steve Chadwick 
: Nicotine. 
NANDOR TANCZOS 
: Nicotine—exactly! Many members of this Parliament smoke. Drugs are rife in this society. Many members of this Parliament use some of the most dangerous drugs that are available in this country. Tobacco is one of the most addictive drugs and one of the most damaging to the body. Members of this Parliament smoke. 
Bill Gudgeon 
: What about cannabis? 
NANDOR TANCZOS 
: Well actually that is quite incorrect. The member needs to look at the evidence on how many people die from smoking tobacco a year compared with how many people die from smoking cannabis a year which is zero. Then the member might be informed enough to express an opinion on the matter. 
The question was put that the following amendment in the name of Nandor Tanczos to clause 36 be agreed to: 
to insert in subclause (1) after the words “section 34(1) the words “or section 4(1) of the principal Act”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 7 
Green Party 7. 
Noes 109 
New Zealand Labour 51; New Zealand National 26; New Zealand First 13; ACT New Zealand 9; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Nandor Tanczos to clause 58 be agreed to: 
to omit subclause (1) and substitute the following new subclause: 
(1)Any District Court Judge or Justice or Community Magistrate or any Registrar (not being a constable) may issue to a member of the police a warrant to enter a place who on an application in writing made on oath is satisfied that— 
(a)there is a restricted substance in that place; and 
(b)an offence has been is being or will be committed under this Part in relation to that restricted substance in that place. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 7 
Green Party 7. 
Noes 109 
New Zealand Labour 51; New Zealand National 26; New Zealand First 13; ACT New Zealand 9; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Nandor Tanczos to clause 58 be agreed to: 
to omit paragraph (c) from subclause (3) and substitute the following new paragraph: 
(c)seize any restricted substance document or record (of any kind) or other article relating to a restricted substance (for example any advertising or labelling material) and retain for not longer than 72 hours unless an information is laid in respect of a relevant serious offence. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 7 
Green Party 7. 
Noes 109 
New Zealand Labour 51; New Zealand National 26; New Zealand First 13; ACT New Zealand 9; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 377 in the name of the Hon Jim Anderton to clause 32 be agreed to. 
Amendment agreed to. 
A party vote was called for on the question  
That Part 3 as amended be agreed to. 
Ayes 82 
New Zealand Labour 51; New Zealand First 13; Green Party 7; United Future 8; Progressive 2; Maori Party 1. 
Noes 35 
New Zealand National 26; ACT New Zealand 9. 
Part 3 as amended agreed to. 
Schedule 1 
The question was put that the following amendment in the name of Barbara Stewart to schedule 1 be agreed to: 
to add to New Part 3 the following items: 
Benzylpiperazine (BZP) 
Party Drugs 
Herbal Drugs 
All other psychoactive substances. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 13 
New Zealand First 13. 
Noes 103 
New Zealand Labour 51; New Zealand National 26; ACT New Zealand 9; Green Party 7; United Future 8; Progressive 2. 
Amendment not agreed to and schedule 1 agreed to. 
Schedules 2 and 3 agreed to. 
Schedule 4 
A party vote was called for on the question  
That schedule 4 be agreed to. 
Ayes 82 
New Zealand Labour 51; New Zealand First 13; Green Party 7; United Future 8; Progressive 2; Maori Party 1. 
Noes 35 
New Zealand National 26; ACT New Zealand 9. 
Schedule4 agreed to. 
Clauses 1 and 2 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 Thank you for the opportunity to speak on the preliminary clauses of this very important Misuse of Drugs Amendment Bill (No 3). The National Party is indeed supporting these very important parts of the bill because as introduced they amend two main areas of the Misuse of Drugs Act and the Misuse of Drugs Amendment Act 1978. These deal with presumption of supply matters to be amended by Order in Council subject to the affirmative resolution procedure; they also amend the presumption of supply quantity for methamphetamine and add a Ministry of Justice official as a member of the Expert Advisory Committee on Drugs. The National Party certainly believes that all those things are very important in terms of ensuring that the affirmative resolution procedure can be used in the most optimal way possible given that it is a very special procedure. 
I did not get an opportunity when we were discussing Part 1 to talk about the Needle and Syringe Exchange Programme. One of the aspects of Part 1 was indeed the reversal of proof that would be allowed for individuals who were on the programme so that they would not be subject to having to provide proof in the first instance that the needles were not obtained legally. Instead the proof is on the part of the police to do this. I think that is a very useful measure because undoubtedly the Needle and Syringe Exchange Programme in New Zealand has essentially been a very useful process. 
I was approached by the Drug Foundation to support an amendment that might completely remove any form of punishment for needle exchange users whether they had obtained those needles through the programme or through illicit means. I understand that the international evidence has been that where there has been no form of recrimination for those needle users it has meant that they have been able to go about the needle exchange process much more freely than is the case at present. Because as I understand that even with the reversal of proof it still will mean their going to court and going through the process that they find sometimes pretty arduous and pretty difficult when they are actually part of the needle exchange process and are taking at least the responsible action to make sure that the needles that they use are clean and are unlikely to be associated with HIV hepatitis and all the infectious diseases that we are very concerned about for those substantial number of people who do indeed use needles in this country. 
I note that the final report of the Needle and Syringe Exchange Programme recommended that the New Zealand Government and the community recognise the vital role of the exchange programme in preventing HIV infections and I absolutely concur with that. It also said that the New Zealand Parliament should approve the proposed amendment to the Misuse of Drugs Act that would remove the offensive possession of needles and syringes legally obtained through the exchange programme and indeed National supports that. 
It went on to say in its 16th recommendation that the basic training of the New Zealand Police should include a short session on New Zealand’s harm minimisation and the Needle and Syringe Exchange Programme and that that exchange programme should liaise with the police to achieve this goal. I think that is very important and the National Party supports it. 
Dr LYNDA SCOTT (National—Kaikoura) 
: 
 I just want to respond to some of the things that the Minister in the chair Jim Anderton said previously. He talked about these drugs having been around for 10 years. Well no; the drug problem has been around for a long time but he was wrong about the time that Benzylpiperazine and P have been around. What happens is every year people think of something new. Benzylpiperazine has not been around for 10 years. 
He also said that National had done nothing. Well how hypocritical is that? This whole piece of legislation that this Minister is using was devised by Wyatt Creech; the Minister seems to forget that. The expeditious scheduling that has set up the affirmative resolution process was actually developed by the National Government because we had huge concerns about Ecstasy and Fantasy. Of course the use of P methamphetamine is pretty new. It has appeared in the last 5 or 6 years and it has been expeditiously scheduled as well. So the Minister is incorrect in his assertions that National had done nothing. We had done a huge amount and he has used that process as we did to try to ensure safety for our young people. 
But the other thing that was hypocritical about this Minister saying he does not understand National’s position is he has actually said he will look at a stand-alone Act for Part 3 of the Misuse of Drugs Amendment Bill (No 3) that he will look at a separate Act for restricted substances. That is exactly what National was asking for—that there should be a separate Act of Parliament. There was a great deal of debate at the Health Committee about his Supplementary Order Paper 298. That debate was around how on earth we would actually fit it into this bill whether it would achieve the aim that it was set up to do and whether expeditious scheduling should be allowed to be used in this particular way. There was debate week after week. In fact the chair of the Health Committee Steve Chadwick was nearly tearing her hair out at some points. I remember her saying she had just had enough of our going round and round in circles on the issues. The Minister stood up and said: “There’s no problem.” and I am sure he has good intentions but that is not what National members have been debating; we have been debating the process. The Minister agrees that there is a problem. He knows that and that is why he gave us an undertaking to look at setting up a stand-alone Act for this particular part of the legislation. 
National supports the original intention of the Misuse of Drugs Amendment Bill (No 3). That intention was to make the precursor substances for making P methamphetamine—that is ephedrine and pseudoephedrine—illegal. We support that. We support the change of onus of proof for needles to try to improve the Needle and Syringe Exchange Programme. We support having regulations and some controls over party drugs; we have no problem with that at all. It is just the process that was used that we have a problem with. The Minister himself agreed with us. He knows there were problems. He knows that this part was added very rapidly and the select committee had a lot of trouble trying to decide what to do with his Supplementary Order Paper. The debate went round and round the table week after week. I am sure that United Future members can confirm that because they had real concerns about it as well; it was not just ACT and the National Party. We do need to ensure that legislation is properly drafted. 
Even today through the Committee process National members have been making amendments to this bill. Dealing with controlled drugs is something that needs to go through the parliamentary process quickly. There are many ways for it to come through this House and of course the use of urgency is one of those ways. We have always supported the select committee process because it allows the public to have a say—the people at the coalface dealing with these issues; the police customs officers and parents—on these issues so that we can try to get it right and try to make sure that the legislation and the regulations that follow actually deliver what we want. I have seen time and time again in this Parliament—I think the Charities Bill would probably be the best example in recent times—officials not hitting the target when they are deciding on regulations and developing law. It is not that everyone does not have good intentions; it is that people are actually not in touch with those on the ground and the real issues and they miss the target. 
National members certainly support this bill. 
PITA PARAONE (NZ First) 
: 
 I shall talk to both clauses 1 and 2 and I shall deal with clause 2 first. Notwithstanding the technicalities that may prevent my suggestion I believe that this legislation should come into force on the day the royal assent is given rather than on the day after that. 
But having said that I say New Zealand First considers this to be a very important bill. It is important that the title is clearly understood by everyone. Notwithstanding that some legislation in the past has included clauses that lacked definition and of course I refer to clauses regarding the principles of the Treaty of Waitangi New Zealand First is glad to see that those principles are not included in this bill. It just goes to show that we really do not need those principles to be alluded to. It is more difficult to realise from the title that this important legislation relates to the regulation of benzylpiperazine and other party drugs. The manufacturers of those pills need to be able to identify easily and to understand these regulations. We understand that separate legislation for restricted substances is at least 18 months away. We will follow that development with some interest. 
It is pleasing to note that groups like the Social Tonics Association of New Zealand are already taking measures to put into place many of the community-focused measures that are covered in this bill. This legislation will clarify that benzylpiperazine is not a dietary supplement or a food. Since it is included as a restricted substance it is therefore by definition not a food or dietary supplement. That group is therefore taking voluntary steps in anticipation of further regulation under the bill once it is passed—and I am talking about the Social Tonics Association of New Zealand. The association is changing its labels so that products are no longer marketed as dietary supplements. It is also recommending three issues: firstly limiting the amount of benzylpiperazine contained in each pill to 200 milligrams with a limit of 600 milligrams per packet secondly including more explicit warnings on labels that benzylpiperazine is contained in products and they are not to be sold to under 18-year-olds and thirdly developing terms of trade to prevent retailers from selling to persons under 18. It is essential that benzylpiperazine products are manufactured and sold safely. The association remains committed to regulations that will exclude irresponsible and unsafe operators from the industry. 
This bill is an example of an evidence-based approach to policy development and of a strong commitment to harm minimisation. New Zealand First again repeats its support for the Misuse of Drugs Amendment Bill (No 3). 
NANDOR TANCZOS (Green) 
: 
 I was not intending to speak on this part but I did rise to speak because Dr Paul Hutchison raised a very important issue around needle exchange. I did actually move an amendment to remove the possession of needles as an offence. Members may have missed it because it is in a miscellaneous provisions clause and again that comes back to the problem of the bill and the Act as a whole. They are quite difficult things to find one’s way around in. 
There is a concern that even by reversing the onus of proof—as the bill does—people are hindered from using clean needles. The Health Committee heard very strong evidence that police do use the existing law. Generally police do not charge people for possession of needles but they do use it to bully people and extract information. That does hinder intravenous drug users from using clean needles and that is the problem. Perhaps it is not such a big problem with current intravenous drug users because the current intravenous drug using community is well aware of the needle exchange programme how it works and its safeguards. But what is of increasing concern is new intravenous drug users. There is growing anecdotal evidence that some P users are starting to move to intravenous use. The evidence is not very clear it is not very substantial but certainly the anecdotal evidence that is coming off the streets is that as methamphetamine gets more scarce and more expensive some people are starting to move to intravenous drug use. 
Obviously that is extremely worrying in a number of ways and it should concern us all. But I certainly think we would all share the view that if people are starting to move towards intravenous drug use there should be no hindrance to their getting clean needles. Of course there is a simple cost equation as well. There are enormous cost savings to be made in health care. At present there is a 6 percent sharing rate of needles and if that was reduced or eliminated that would produce huge savings for New Zealand health care. An independent valuation found that every dollar spent on New Zealand’s needle exchange programme currently saved an estimated $3.35 in health-care costs. So there is an enormous economic as well as social moral and ethical argument for doing that. 
The committee did address this issue but it was persuaded by the police not to remove it as an offence entirely. The arguments of the police were actually quite spurious. They said that they needed it for drug control and to stop an illegal market in needles. Let us be clear: there is no black market for needles and syringes in New Zealand—that is all needles and syringes used for drug injection are obtained from an authorised supplier. Even if we did remove possession of needles as an offence it would not take away the offence of unauthorised selling. One still has to be an authorised seller so people could still be prosecuted if they were selling needles and they were not authorised to do so. So the law stays in place to allow us to police that. 
In any case let us be real about it: there are no incentives for an illegal market in needles. The concern was raised that there might be a drug dealer who was selling needles as well. First there is no incentive for people to buy needles from a dealer because they can get them free from the needle exchange simply by swapping their old ones. So there is no financial incentive; there is a disincentive to get needles from a dealer. Secondly perhaps dealers could give them away but why would they do that? Why would they incur an extra cost on themselves when there is no benefit in doing that? People would just go to the needle exchange to get one. In any case if dealers were giving away clean needles surely that would be a good thing. I would have thought so. It would be better than allowing their customers to share needles and therefore put themselves at risk of contracting HIV hepatitis or any of the other blood-borne diseases. The third possibility was that drug dealers would give away dirty needles. That just does not make sense. They would lose their customer base pretty quickly if they did that. Customers would know pretty quickly that that was going on and they would not use them. So it just does not make sense. 
The argument is just illogical and it is sad that the Health Committee was persuaded by it because I do not think it holds any water. That is pretty clear from international evaluations and we can look at the report of the Australian National Drug Law Enforcement Research Fund titled:  
The role of police in preventing and minimising illicit drug use and its harm 
 which shows clearly the benefits of needle exchanges and removing the possession of needles as an offence. As I said there are enormous savings in health costs mortality rates morbidity rates and the like. 
JUDY TURNER (Deputy Leader—United Future) 
: 
 I shall take a brief call on the first two clauses of this Misuse of Drugs Amendment Bill (No 3). 
First I shall make a quick reference to the needle exchange business. The police shared their concern that if we removed the full ability for needles to be used evidentially that could encourage needle use over other methods of consumption—that needle use would then become a preferred method because of the legal sanction around it. That was a real concern that some of us shared. 
I want to talk about the title of the bill. What comes to mind is what has been mentioned many times in the Chamber this morning and that is that many of us—and we included it in the commentary on this bill—want to see ongoing work done to set up a restricted substances Act for legal psychoactive substances. I want to take a minute to challenge every party. 
I shall start with National and Labour the two parties that are going into this election campaign with the belief that they can viably be the Government after the election. My challenge to them is whether they are prepared to promise us today in the Chamber that they will continue the work which I understand could take up to 2 years. Will those parties give us a guarantee that if they become the Government they will treat that work as a priority so that a restricted substances Act is established? It requires the will of the Government and I believe that those parties should make that commitment today. 
But beyond that I ask this question of the other parties whose goal is to be a support party after the election and who seek to wield some power in terms of the conditions they put down to the party they are supporting: will they give the same undertaking that after the election they will set as a priority with whichever party they are working with—if they get that opportunity—the advancing of this much-needed work so that a restricted substances Act is put in place? I ask that question of New Zealand First the Greens and ACT. Will they make a commitment and guarantee us today that they would see that as a priority and that it would be part of any agreement they made if they got the chance to make an agreement? I think every party needs to put itself on the line in that regard. 
The question was put that the amendment set out on Supplementary Order Paper 377 in the name of the Hon Jim Anderton to clause 1 be agreed to. 
Amendment agreed to and clause 1 as amended agreed to. 
Clause 2 agreed to. 
Bill reported with amendment. 
Report adopted. 
Third Reading 
Hon JIM ANDERTON (Associate Minister of Health) 
: 
 I move  
That the Misuse of Drugs Amendment Bill (No 3) be now read a third time 
. This bill updates our drug laws and makes them more responsive to licit - drug use trends in New Zealand. I know that all parties in Parliament understand the importance of such a measure. In particular the bill will permit presumption of supply matters to be amended by Order in Council at the same time as a change in classification subject to the normal affirmative resolution procedure by Parliament which of course means that Parliament still gets to decide the issue. 
The bill sets the presumption of supply amount for methamphetamine at 5 grams rather than the present default amount of 56 grams. It removes the ability for the classification level of a controlled drug to be decreased or a classification to be removed by Order in Council and the affirmative resolution procedure. That change to the select committee report was sought by the United Future party. The bill adds a Ministry of Justice official to the Expert Advisory Committee on Drugs. It creates new offences relating to the importing and exporting of precursor substances which are ingredients like ephedrine and pseudoephedrine that are used in the manufacture of methamphetamine. It creates new powers of search and seizure without warrant for ephedrine and pseudoephedrine and it allows controlled deliveries of precursor substances which will deal to some of our drug dealers. 
The bill retains the offence of possessing a needle or a syringe but it puts the defence of where the needle or syringe has been obtained lawfully into the principal Act. Currently this defence is hidden away in regulations where few lawyers with not much experience can find it. It moves the onus of proof from the defendant to the prosecution as recommended by public health experts. 
Finally the bill adds a new restricted substance as part of the legislation and regulates benzylpiperazine the main ingredient found in party pills as the first restricted substance in New Zealand under the terms of the amended legislation and it almost certainly will not be the last. 
Today I would again like to thank all members of the Health Committee for their valuable work on this bill. I know there have been complex matters to deal with. Committee members had to tackle the public health and legal issues within a relatively tight time frame but it is a better time frame than the years it sometimes took previously to get these matters before the House. I know that some members would have liked a great deal more time to consider a number of issues arising from the bill but against that I know that the majority of us here understand the need to move as quickly and practically as possible to respond to changing trends in the drug abuse scene. 
Since I became the Associate Minister of Health and became responsible for the national drug policy 3 years ago the Labour-Progressive Government has put in place a sophisticated strategy to try to turn the tide against the harm caused by drugs in our country. This strategy includes getting very tough on the pedlars of very dangerous drugs like the manufacturers and importers of methamphetamine and its precursors. Our strategy includes increasing the amount of public investment on reducing the demand for drugs through community-based education and action programmes. It also includes investing more in treatment services because there will need to be more if we are to realistically expect significant numbers of former drug users to get back on their feet and live a drug-free lifestyle. 
Our strategy includes investment in empirical research into the medical health and social and economic effects that drug abuse is having on individuals on their families and on communities in New Zealand. 
To effectively turn the tide against the abuse of alcohol and drugs we need to work on all fronts at the same time. I have to say that I think some of the squabbling about whether we should have more stick and less carrot or more carrot and less stick is not very productive. Effectively reducing the harm that drug abuse is causing is not an either/or matter. It is about central government communities local government and families working together on all fronts as appropriate to reduce harm from drug abuse. This bill before the House fits with that multifaceted and balanced strategy. I recommend it to the House. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 The National Party certainly does support the Misuse of Drugs Amendment Bill (No 3) as introduced because it deals with the very concerning area of controlled drugs and the huge need in New Zealand to use every possible method to stop their very worrisome proliferation. I want to remind the House of how that proliferation has occurred. We learn from the Institute of Environmental Science and Research that New Zealand’s first methamphetamine or P clandestine laboratory was discovered in 1996. Since then the number of laboratories has dramatically increased particularly in the last few years. Police found nine laboratories in 2000. In 2001 they found 41 in 2002 147 and in 2003 146 of them were closed. I think that gives us an idea of how dramatically the problem has increased in New Zealand for about 10 years but has particularly escalated over the last 5 years. 
 I wanted to point that out because in the 1997-98 era the Rt Hon Wyatt Creech thought that it was important—at that early stage before the escalation had really occurred—to bring in the affirmative resolution process in order to have a mechanism available to combat the proliferation that he quite rightly saw would occur. The Labour Government sat around for several years before finally bringing in its amendment to the Misuse of Drugs Act in about 2001-02. It certainly took quite some time to do that. So although Jim Anderton said that something should have been done in the 1990s the evidence is that as recently as 2000 only nine clandestine P laboratories had been closed by the police in New Zealand. But that number has escalated logarithmically over the last few years. 
Undoubtedly the reason we are supporting this bill is the inclusion of the main provisions in Parts 1 and 2: the presumption of supply matters to be amended by Order in Council the presumption of supply quantity for methamphetamine the adding of a Ministry of Justice official to the membership of the Expert Advisory Committee on Drugs the creation of new offences of importing and exporting precursor substances the creation of powers of search and seizure without warrant for ephedrine and pseudoephedrine and the measure allowing for the controlled delivery of precursor substances. The National Party is hugely aware of the illicit use of drugs and of their importation by highly sophisticated gangs which are ready to change their methods and formulae in relation to those very dangerous controlled drugs. If a drug appears on the schedules the gangs will come up with another one and therefore it is necessary to use every method we can possibly find to combat the sophisticated nature of illicit drug manufacture and the lengths to which New Zealand and international gangs go in order to bring drugs into this country. That is a hugely serious and worrying concern for us. 
But it is also hugely concerning that the Hon Jim Anderton brought in the amendment that has now become Part 3 of this bill which also covers the affirmative resolution procedure that the Regulations Review Committee has pointed out must be used wisely by the New Zealand Parliament. I reiterate what that committee stated about it: “The amendment of primary legislation by an Order in Council is commonly referred to as the ‘Henry VIII’ clause and is regarded as undesirable because it allows the executive the power to override Parliament. Such powers should be granted by Parliament rarely and with strict controls.” I also point out what the committee further stated: “In our view the classification of restricted substances is a matter of significant policy that should be dealt with by primary legislation.” It is for that reason that the National Party is not supporting Part 3 as brought in somewhat belatedly by the Hon Jim Anderton. The proper consideration it deserves has not been given to it. 
There is no doubt that the National Party recognises the problem of party pills and the use of some substances such as “BZP” or benzylpiperazine as being one of great concern. But we have made a commitment to bring in well-thought-out well-considered legislation within the first 12 months of the new Government that will very likely come into office within the next few months ahead. I think it is also absolutely important to reiterate that the affirmative resolution process should be used with great care as the Regulations Review Committee has recommended. That recommendation has been ignored by the Labour Party and by Jim Anderton and his so-called coalition party the Progressive Party. I think that is very very serious. I also think it is important to point out what the Expert Advisory Committee on Drugs concluded about benzylpiperazine. It stated that there was insufficient information available on which to base a recommendation to classify those substances in the schedules of the Misuse of Drugs Act 1975. 
I again absolutely emphasise the fact that the New Zealand National Party does regard those substances as being a very serious issue. Many of us have children and teenagers who talk continually about the proliferation of party pills herbal pills and related substances and there is no doubt that those substances are becoming logarithmically more available. It is because of the highly explicit nature of how they are being advertised now and of how they appear to be being used by many young people in New Zealand that Jim Anderton has woken up suddenly and said that we must do something about it—and what is being done about it has been brought into Parliament very much against the wise advice of the Regulations Review Committee. 
It is also important to point out that the expert advisory committee did express concern about the increased supply of party pills through a whole variety of mechanisms—over the Internet through countercultural retailers and more recently through liquor outlets service stations and dairies. We want to make sure that well-considered legislation is brought to Parliament regarding that. Time and time again we see the Labour Government bring in hurried legislation under urgency just like today that will undoubtedly have to be re-amended at a later time. That is why we believe it is so important to have well-considered legislation. I was deeply concerned to hear the Hon Jim Anderton make light of the affirmative resolution procedure and say it is not a serious procedure. It is a very serious procedure. Indeed it goes to the heart of our democracy and it is a great worry when we have the Labour Party and the coalition party the Progressive Party making light of that procedure. 
The National Party does support the bill but is very concerned about Part 3. 
STEVE CHADWICK (Labour—Rotorua) 
: 
 That was a rather confused speech made by the National Party spokesperson on health. Partly it shows that there have been a lot of changes to the Health Committee. 
I acknowledge at the beginning of my third reading speech the valuable contribution made by Lynda Scott. I know that this bill will probably be the last bill she is involved in. Lynda Scott was there when Wyatt Creech brought in his first amendment to the Misuse of Drugs Act and she well understood about the Order in Council and the expeditious scheduling. I think it has been a confused issue ever since. Today’s debate by Opposition members has shown me how confused those members are about the value of the Order in Council mechanism. Wyatt Creech brought it in very sensibly. We use it very moderately understanding the need for flexibility and the ability to expeditiously schedule. Yet National has argued against the use of the Order in Council mechanism. It is quite bizarre. 
This bill was a difficult one. It was very very complex actually because of the statutory framework we are working with with legislation on controlled drugs then in came the issue of licit drugs with Supplementary Order Paper 298 which was referred to us in November. It was not a knee-jerk reaction. It was referred to us in November as a result of the Expert Advisory Committee on Drugs not as a result of the Associate Minister of Health panicking and looking for answers out there to please the electorate. 
The Misuse of Drugs Act and subsequent amendments are rather out of date and do require a major overhaul. We do need to look at how we regulate both controlled and licit drugs. I believe that the Order in Council process showed it is still a robust mechanism and very useful in terms of expeditious scheduling. It does involve the House it does involve Cabinet and it does involve the select committee. I find it a rigorous process. It is not lightly used at all. It was sad to see the Opposition therefore voting against Part 3. 
There is a challenge to us about the mix of drugs and we took it very seriously. I believe that members of the Health Committee those who understood the original Misuse of Drugs Act came up with a very sensible solution in terms of where we are in the electoral cycle. They knew that there was no way that our concerns about benzylpiperazine and where it stood in our public health framework would be addressed at this time in Parliament and it was not good enough to say we would develop our own stand-alone bill. I do not think that is a sensible solution because it means yet another drug bill without our looking at the whole drug framework. 
A lot of preparatory work was done. When we look at the way tobacco regulation and tobacco control were brought in in 2003 we see that we have carried over those regulatory provisions into this bill. Members do not seem to have read this bill very closely at all. We have set up a second schedule of criteria that the Expert Advisory Committee on Drugs has to look at and take into account before the Order in Council process is put in motion. We have put in some very sensible issues about the practicalities of enforcement requirements and having the right incentives in place so that we do not push people into using another illicit drug that has come on to the market. We looked at sale and supply issues. Katherine Rich pointed out the very interesting issue that in this bill we are talking about restricting sale to 18-year-olds and not promoting these social herbal highs to under-18-year-olds yet a contradictory piece of legislation about the drinking age has been introduced. This bill allows a voluntary code restrictions on the location of where sales can be made and provisions for advertising labelling and co-packaging as well as manufacturing standards. 
I think we have done very very well with this bill given the complexity of the issues and the timing of the electoral cycle. I am proud to support this bill. 
PITA PARAONE (NZ First) 
: 
 I rise on behalf of New Zealand First to speak to the third reading of the Misuse of Drugs Amendment Bill (No 3). I will say straight off that New Zealand First supports this bill which might surprise some people on the Government benches. However I have been asked on behalf of my caucus to extend our appreciation to the Health Committee and in particular to the officials for the time they spent with the committee ensuring that it was totally informed about the many aspects of this legislation and about the inclusion of legal and illegal substances in the same legislation. 
New Zealand First was disappointed that the Supplementary Order Paper submitted by my colleague Barbara Stewart was not supported. However New Zealand First did recommend that these groups of substances be treated in the same way as all other controlled drugs and included on the appropriate schedule. I note that during the earlier debate in the Committee stage the Green Party member made light of our suggestion particularly in terms of products like Coca-Cola. I say to the Green member and indeed to other members of this House that if warnings were applied to the sale of products like Coca-Cola then the general public would be aware of the dangers of the particular drugs contained in them. We believe that harm minimisation as a strategy does not address the issues and needs of those most at risk from abuse of these substances. 
So while we support the Supplementary Order Paper put in by the honourable member Jim Anderton we view it as a first step only. New Zealand First believes that there should be no softening of drug laws for these new designer drugs. We believe that these party pills should be classified as controlled drugs. 
We would have liked to see these substances guaranteed as harmless. We believe that until this occurs they should not be legally available for sale. We look forward to the Expert Advisory Committee on Drugs completing further research into the potential harms of these psychoactive substances. The manufacturers of these products claim that they are safe and that they are keeping people away from the more dangerous amphetamines. In fact we believe that by creating a culture in our young people that it is acceptable and even desirable to take some pills to get high we are increasing the number of our young people who would dare to try harder drugs. 
The real answer to substance abuse is education against the pill-popping habit that party pills have so dramatically created. We are told that these products are safe if they are taken according to the instructions—that is not to take them with alcohol and to follow the recommended dosage. At best this argument is flawed because a large number of people do not comply with these instructions. Even with prescription medicines where the patient receives verbal instructions from the prescribing doctor and then from the pharmacist compliance is not always guaranteed. 
Add this to the fact that these products are designed and promoted for use at parties where alcohol is mandatory and where there is pressure to take extra doses and it takes a very strong-willed young person to resist. Compliance under these circumstances would be well below the pharmaceutical average. Because of that we may see many more people hospitalised. 
I was pleased to read in a recent letter from the Social Tonics Association that it is recommending limiting the amount of benzylpiperazine contained in each pill. That appears to be a sensible measure. We are aware that a small number of operators have been basically exploiting the unregulated market and producing low-quality products with variable amounts of benzylpiperazine without warnings or labels. The level of benzylpiperazine can be two to three times higher than the dosages outlined as potentially dangerous by the Expert Advisory Committee on Drugs. 
We are also very pleased with the new offences created by this bill. This bill has needed the attention of the House as both the police and customs have needed the support of the law in their fight against the misuse of drugs and this bill provides for that. New offences are created that will close the loopholes that currently exist. Any legislation that helps with the early apprehension of those involved in the misuse of drugs must be good for our country. 
One of the other reasons why my caucus colleagues and I support this bill is that we are looking to the future and in particular to the next generation of members of our families. We would like to think that we have been responsible for putting in place legislation that will help to protect the forthcoming generations from the dangers that the misuse of illicit drugs will cause to our young people. In conclusion New Zealand First supports the passing of this bill. 
HEATHER ROY (ACT) 
: 
 I rise on behalf of the ACT party to speak to the third reading of the Misuse of Drugs Amendment Bill (No 3). We will be opposing this bill for a number of reasons which I will come to. This legislation is very untidy. ACT would have liked to be in the position of supporting this bill as it stood in the first instance with just Parts 1 and 2. We agree that there is room for great improvement with the control of possession and supply of dangerous drugs. The bill’s creation of new offences of importing and exporting precursor substances creating powers of search and seizure without warrant for ephedrine and pseudoephedrine and allowing controlled deliveries of precursor substances should in fact occur and we agree with that. But we object strongly to Part 3 which was added at the select committee stage by Supplementary Order Paper. 
It is was interesting to hear some of the comments from the chair of the Health Committee Steve Chadwick when she spoke. She said there was confusion on the Opposition side of the House particularly on the use of the Order in Council and the affirmative resolution process. There is no confusion. We have talked about that long and hard. We had very strong submissions from the Regulations Review Committee which unfortunately have by and large been ignored in the final instance. ACT is very unhappy about that. We thought the advice we received was very good and we were most unhappy that the advice was not followed through. 
As I say we would have liked to support the bill. We did support Parts 1 and 2 through the whole process both at the select committee level and also here in the Committee stage. But we cannot support the overall bill because of the untidiness of the legislation and the time pressure that was put on for it to be passed. Here we are yet again in another period of urgency rushing through legislation that would have been much better much tidier and much more effective in the final outcome had that time pressure not been put on the entire process. 
As I say we would have liked to be in a position to support the bill but in the final instance it promotes draconian powers in relation to substances that may well be little more insidious or addictive than alcohol nicotine or many other harmful but not necessarily catastrophic substances. That should give us pause for thought. I refer to Part 3 which was added at the select committee stage. To be fair to Mr Anderson it was very good that the Supplementary Order Paper came to the select committee in plenty of time so that the full parliamentary process could be gone through and submissions could be made. But I think the fact that it is tacked on to a very rigorous bill when it should have been a stand-alone bill is a retrograde step. I do hope that as time progresses that will in fact happen so that the dangerous substances that as everybody acknowledges cause great harm to society and particularly to our young people can be dealt with properly and the provisions in Part 3 can be dealt with in a proper and efficient manner. 
When the Supplementary Order Paper first came to the select committee it had a blank schedule. There is certainly no historical provision for that to happen and for the committee members to have a blank schedule in front of them with no idea except from guesswork as to what exactly might go on it was unacceptable. To allay the committee’s fears the benzylpiperazine substances were put on that schedule and it did seem as if that was just a ploy to allay the fears of many select committee members. 
As I say the legislation was very untidy. This was acknowledged and has been acknowledged further more informally by many members of the select committee. None of us were really happy with that process and many of us felt that the officials were put under extreme time constraints in coming forward with legislation that would meet the time requirements as opposed to the proper process being gone through and good legislation that is rigorous and that can easily be upheld by the courts where the direction is to be given. That should have been allowed to happen and did not. 
Perhaps our biggest fears were those I referred to with regard to the Regulations Review Committee. The Regulations Review Committee has always given us very rigorous and very good advice but by and large on this occasion this advice has been ignored. That committee said to us that it was unhappy about the use of the affirmative resolution process and it warned that that process should not proliferate—something that at the time all the Health Committee members agreed with. It considered that there should be compelling reasons for applying the affirmative resolution process when primary legislation is being amended in respect of serious offences. The Regulations Review Committee also noted that the affirmative resolution process is justifiable in limited and exceptional circumstances including where there is a need for expeditious change. 
I note that I wrote a letter to the Health Committee in September 2002 outlining problems with particularly the sale and purchase of benzylpiperazine products by many young people some as young as 12 13 or 14 at places like Star Marts. At that time the select committee did not seem to be the least bit worried about those products and my letter was passed on to the Expert Advisory Committee on Drugs. I felt at the time that that was really just to pacify me. Suddenly now there is an Order in Council process in place. The nature of this matter has hardly I would say been expeditious. That is just one example of what can happen when the Order in Council and the affirmative action process is put in place. 
The Regulations Review Committee also noted that although the affirmative resolution procedure allows a truncated legislative process it considers that there are considerable drawbacks. In particular the procedure allows significant matters of policy and principle to be dealt with in delegated legislation rather than in primary legislation. We have heard other parties raise this issue here today. It allows a limited time for select committee scrutiny—not the great time as in the normal process as Steve Chadwick indicated—which may be insufficient for public consultation or for substantial consideration of the policy rationale. In short it should be used in extreme or very limited circumstances only. The legislation now allows for this process to be undergone in many and varied circumstances. 
In particular I mention new section 4(1AA) inserted by clause 5(2). ACT finds it bizarre that people’s liberties will be able to removed by ministerial decree—the Order in Council process—while all the machinery of Parliament will be needed to reduce regulation. There are no historical precedents for this action at all and to allow the extra regulation of substances by Order in Council but to have the downgrading if you like of those same substances or any other substances on a schedule allowed to happen only by the full machinations of the parliamentary process is really quite bizarre. 
Quite how we reached that point is very questionable. We should either have the same process both ways or the full parliamentary process both ways. Anybody who has any knowledge of the legislative process looking from beyond our own battlegrounds here today would find this absolutely extraordinary. 
ACT New Zealand opposes this legislation because of many process matters. As I say we would have liked to support the bill for the benefit that Parts 1 and 2 will bring to the control and supply of serious methamphetamine-type medications that have brought great problems to our society—we all acknowledge that. We think that Part 3 should have been stand-alone legislation and we are very loath to see substances that have yet to be proven to be very harmful lumped in with very dangerous drugs. Most important we worry about the proliferating use of the affirmative action process through Order in Council. For those reasons we oppose this legislation. 
NANDOR TANCZOS (Green) 
: 
 I stand to support the Misuse of Drugs Amendment Bill (No 3) in its third reading debate on behalf of the Green Party because in principle it does go in the direction the Green Party says that drug policy should go. At the same time I acknowledge that it has been laced with a number of toxic adulterants partly at the hands of the “UFO Party” but the honourable Minister has to share some responsibility for the severe problems that remain in the bill. Before I go on to the substance of the bill I would like to quickly address Mr Paraone’s comment about Coca-Cola. I agree that the labelling of Coca-Cola and some sensible restrictions on its use would be beneficial but I am not sure that making it R18 would be particularly useful. However I thank him for those comments. 
We support the bill for a number of reasons. The first one is that it allows control of a range of substances that are currently unregulated. That can include any mixture preparation or article manufactured for the primary purpose of inducing a psychoactive effect. Of course the bill has been introduced with benzylpiperazine specifically in that category but it is open to other substances to be included. The bill addresses the situation of a growing industry that is currently unregulated around which there are growing concerns and that needs some regulations to be put in place. As the Hon Jim Anderton said there is no evidence that benzylpiperazine causes a great deal of problems but it is sensible to take a precautionary approach and put in place some sensible restrictions just to dampen down its use a bit. 
The bill adds a new schedule to the Misuse of Drugs Act. That was originally a Greens’ suggestion and we are very pleased that it has been taken up. It has to be an amendment by way of inserting a new schedule in the Act because otherwise we would need new legislation every time a new substance came to our attention. We already know for a fact that piperazines that are not benzylpiperazines—there are other forms of piperazines—are being sold in shops right now. Those piperazines are not included in this bill currently. We also know that other substances that are not even in the piperazine range of drugs are being sold manufactured and researched now. So we clearly need something that we can put new substances into fairly simply and that is what this bill provides. 
What does the bill do in terms of restrictions? It puts in place things like age limits restrictions on advertising an assurance that there are quality manufacturing standards and an assurance that there is adequate labelling so that people can make properly informed choices. That is all absolutely sensible. The industry which by and large has been responsible in the way it has dealt with the sale and manufacture of its products has been calling for enforceable powers in that regard. There are cowboy operators particularly in Christchurch who have no regard for the voluntary code of the industry and who need to be brought into line. Gangsters are getting involved. That is the problem and it gives us a taste of where the issue would go if we chose to prohibit the industry rather than to restrict it by some sensible regulation. We would see an increase in gangsterism in the industry and we want to avoid that. The Greens remain concerned about the unrestricted enforcement powers. There is no need for a search warrant and there is no time limit in terms of giving stuff back. Businesses could easily be put out of business on the whim of a health officer or police officer and we think that that is a serious issue. 
The Greens support the bill because it introduces some changes to the Expert Advisory Committee on Drugs in particular by adding a Ministry of Justice representative. That is a much-needed change. That person can give advice on the justice implications of the classification of a drug as illegal. It is an area of expertise that has previously been lacking on the committee so we welcome that. We remain concerned at two things. One is the confusion around the different criteria that the Expert Advisory Committee on Drugs applies when considering whether to schedule something as A B or C class as opposed to D class. We think that that makes absolutely no sense. There should be one set of criteria. Substances should be looked at in accordance with all of them and then the recommendations would simply drop out of that. The situation is entirely illogical at the moment. The other concern we have is about the lack of ability for either the Health Committee or the House to recommend amendments to notices of motion under the affirmative resolution procedure. This House needs to address that because it means we must either reject or accept the Minister’s recommendation. For us to reject a recommendation would be a pretty substantial slap in the face for a Minister and members are unwilling to do that without very very good reason. But there may be good reasons to tweak a recommendation by a small amount and there should be provision for that. 
We support the introduction in the bill of a new offence around the import and export of precursors. We support that because the Greens actually said during the reclassification of methamphetamine that the Government needed to focus on precursors. We are pleased to see that happening but once again we are concerned about the enforcement powers and the provision of search without warrant powers around precursors. Search without warrant powers are draconian powers of search and seizure. They should be used very rarely and with real justification. When the Health Committee invited the officials to say why we needed to provide search without warrant powers their explanations just were not convincing. The Greens are concerned about the proliferation of search without warrant powers made by this Parliament. It has happened in a number of Acts including the Local Government Act which has search without warrant powers relating to alcohol prohibition areas. Those things are obviously a breach of New Zealand Bill of Rights Act guarantees to be free from unreasonable search and seizure and the Greens remain unhappy about that. 
So the Greens support the bill with some concerns. Before I finish I will touch on some of the broader issues around the bill. Drug policy like law and order is a fruitful perennial for politicians. I end with a plea really for more evidence-based decision-making when it comes to policy making by this Parliament. I expressed concern already in the Committee stage and at the second reading about the “UFO” amendment that allows the Expert Advisory Committee on Drugs to recommend on evidence the reclassification of a substance if it increases the penalties but not if it decreases them. I thank Heather Roy for her quite clear exposition of the offensiveness of that provision. It is a serious thing—it states that we will pay regard to evidence if it makes punishment more serious but not if it reduces punishment. That is in line with the recently launched drug policy of United Future which states that drug classification should be constantly reviewed and monitored to ensure it complies with the available evidence but that the party will totally ignore any evidence that does not point to harsher penalties. United Future states that quite blatantly. I have never seen a party policy state so blatantly that the party will ignore evidence that does not fit its preconceptions. 
My concern is that that unashamed contempt for evidence and information that does not fit United Future’s preconceptions currently influences drug policy in this Parliament by way of the confidence and supply agreement with the Government. That is a serious issue for this country and this Parliament to think about. I know that United Future will be reduced to irrelevance after the election so I am not really saying this to have a swipe at it. I am saying it more to members of the House and political parties in general. My hope quite genuinely is that political parties and members are genuinely committed to evidence-based decision-making particularly when it comes to drug policy and to supporting policies that work and can be shown to work—policies that reduce the harms associated with drug use. I would have thought that that surely was the goal of us all. I find it hard to believe that anyone at all in this House wants to increase the harms associated with drug use but my worry is that often that is what we do as an unintended consequence of ill-informed policy-making. 
In that regard I end by reinforcing the plea of the Expert Advisory Committee on Drugs of a number of members of the select committee—it was echoed by Judy Turner from United Future—and of a number of members of the drug treatment world that the Misuse of Drugs Act be reviewed and overhauled. Again I thank Steve Chadwick for her comments around the problems of that Act as it stands. It is a mess—an absolute mess. It is confusing inconsistent and fragmented and we need to take that very seriously. The Greens hope that in the next Parliament we may see the development of a drug policy framework that is genuinely integrated consistent and most important based on the evidence about what actually works. 
JUDY TURNER (Deputy Leader—United Future) 
: 
 I rise on behalf of United Future to speak to the third reading of the Misuse of Drugs Amendment Bill (No 3). At this third reading I would like to take some time to reflect on why we are bothering to do this. There are those who believe that prohibition should give way to regulation and that prohibition is a lost cause and a flawed approach to managing drug use and drug abuse in our country. I have been accused of being obsessed with cannabis prohibition—and I suspect that it is true. Maybe I have just spent too long in New Zealand classrooms along with thousands of other teachers and tried to invest my time and energy in helping kids meet their potential. Maybe I have grown tired of seeing some of our brightest become apathetic and throw away good years in favour of risk behaviours that see them cut classes be inattentive when they are in class and achieving at decreasing levels that are well below their ability. 
They become vague late overly egocentric and insensitive to others. Their parents and friends see outbursts and mood swings. At that stage parents often believe they have a difficult teen. To those families we currently recommend harm minimisation. That sort of means that we will teach them how to work out what level of brain damage is right for them. 
 For a percentage of young people the situation will get a lot worse. Clinicians do not refer to this deterioration as addiction; they call it neurotransmitter deficiency syndrome. Authors Tom Scott and Trevor Grice describe it by saying: “If an individual’s vats containing the chemicals responsible for calm and moderation are nearly empty and at the same time the vats containing the chemicals for irritation and rage are full the chances of responding sensibly to a minor setback or a mild confrontation are much more remote.” 
So does the law send a message? Yes it does. Even if one chooses to ignore the message the law establishes a commonly held disapproval of certain behaviours. All law is ignored and flouted by a certain sector of society. That does not make it irrelevant. 
In a famous social experiment that was often referred to when I was at teachers college a group of university students were employed to help with an experiment unaware that their behaviour was the real subject of the experiment. They were put in white laboratory coats and asked to modify the behaviour of some other folk by way of an electric shock. They could not see their subjects but they could hear their responses. Not only were they required to administer the shocks but also they had to increase the voltage for repeated wrong responses—actors were responding appropriately. 
The outcome was that it was discovered that as long as this behaviour was sanctioned they would continue to inflict pain and they would even go to the level of taking somebody’s life. One or two did query whether they should continue but after they received affirming nods they kept going. 
I mention this because legal sanctioning does have consequences in people’s choices and behaviours. We must be very careful about the legislative messages we send. However I want to make it clear that United Future does not believe that prohibition on its own is the total answer or the single strategy that will work. We accept that we need a raft of health and education strategies—and parent education in particular—to address the tragic loss of potential that we currently have in our nation. 
Mr Tanczos claimed that cannabis does not kill. I want to tell members about a friend of mine whose funeral I went to not long ago. He was a very talented young man who did not stay around long enough to discover that he had just got straight As in his course at polytech. He was a talented artist. However with his talent he was mentally unstable and had some potential for mental health problems—very manageable ones if he had stayed off the alcohol and the cannabis. However he chose to ignore the support around him. For him cannabis was a gateway drug and he hanged himself in his parents’ garage. 
The open casket at his funeral gave his friends the opportunity for a bit of a joke. They put a cannabis reefer between his fingers. They were not my kids so I could not take it out but I was angry because they had overlooked the fact that one of the reasons we were there—one of the reasons he was in that casket—was cannabis. For me it is quite a personal issue because I have seen too many young people whom I care about deeply whose lives have been detrimentally affected. We as legislators need to make sure that we send a very strong message. We need to keep the human face of drug abuse before us all the time. 
I do not know whether this has happened to other members but I have talked to parents who were relieved that their child had been arrested—appalled that they had reached the state in which they wanted their child to be arrested. Parents have said to me that their child’s life was saved because he or she went to jail. That is an appalling feeling for a parent and having to sit through that with a parent is pretty appalling. 
So we must make sure that we do not shy away from our responsibilities—that we do all we can in policy and in legislation to make sure that young people who are our country’s future are protected from their own poor choices at times and from the pressure they feel to be part of a group. 
As I have said we support Governments having the opportunity through the Order in Council provisions to respond quickly to a crisis in the drug world and we are very happy about that. But as the Regulations Review Committee recommends we must use that mechanism sparingly. We were very clear that when a crisis is before us those provisions should be used. Downgrading a substance is not a crisis; it is a policy matter. We would like to see the public not just the Expert Advisory Committee on Drugs have a chance to submit on such matters. We do not believe that downgrading a substance constitutes the kind of crisis that would necessitate the use of Order in Council provisions. 
I have looked up the expert advisory committee’s actual advice on party pills because that has been a huge part of this bill. At the time when it made its recommendations the committee believed that there was no suitable schedule in the Misuse of Drugs Act. It believed that the Minister for Food Safety should be requested to consider the appropriateness of permitting the chemical benzylpiperazine to be sold as a dietary supplement. It recommended that the Minister direct the Ministry of Health to conduct further research into the potential harms associated with the use of benzylpiperazine and it recommended that the Minister direct the Ministry of Health to investigate the possibility of gathering prevalence data on benzylpiperazine via the introduction of routine toxicology screening by community laboratories. 
Lots of recommendations came out that need to be followed through on and we would be very supportive of seeing those recommendations followed up very quickly. We are keen to see the end of the legal nonsense that currently forces us through time pressures to regulate legal substances along with illegal substances. We think that this creates a whole lot of legal nonsense that will get us into trouble in the future. We are therefore very keen to see continue the ongoing work that is needed on this but we are happy to support the third reading of the bill. 
Dr LYNDA SCOTT (National—Kaikoura) 
: 
 I rise with a little bit of nostalgia which was created by Steve Chadwick when she mentioned that this bill will probably be the last major piece of legislation I will speak on in this House. I have thoroughly enjoyed being a member of the Health Committee. It has been one of the best parts of the time I have spent in Parliament. I will have my valedictory speech in which to say all these things but I want to say now that working with Steve Chadwick was great. The members of the Health Committee have always tried very hard to work across parties to get good legislation for New Zealand. Of course at times one does not agree with a political part of a bill but most of the time we have worked very well together. I have thoroughly enjoyed that time. 
Steve Chadwick said that National had a confused position on this bill. It is not confused at all. The position has been very clear. We support this bill. We certainly support the affirmative resolution process to be used for class A B and C drugs. What we did not find acceptable was the way the Supplementary Order Paper was included as a new part Part 3 “Restricted substances”. We know that this area has been complex. The select committee and the advisers grappled with it to try to find a way to fit it into the bill. Even the Associate Minister of Health acknowledged that it has not been a good process and that we need a stand-alone bill. So I do not think there is anything unclear about what we have been saying today. It has been very clear indeed. 
What concerns me is the Greens’ contributions to the debate on this bill. I was on the inquiry into cannabis and I remember very clearly what Nandor Tanczos had to say during that inquiry. I see that he is supporting the process to regulate benzylpiperazine. Mr Tanczos was associated with a store in Queen Street where these drugs are sold. He knows a great deal about them. Yes he wants the industry to come under legal auspices whereby it is controlled because that would take other operators out of the business leaving those who are legally selling these drugs to over-18-year-olds to make more money. He wanted cannabis regulated in the same way. He wanted it decriminalised and made available to those over-18-year-olds. 
Nandor Tanczos 
: That’s untrue. 
Dr LYNDA SCOTT 
: I heard that argument many times. What worries me is that the Greens supported Labour during the time of the cannabis inquiry and we know that the Green Party gets some of its vote from the legalise cannabis group. That party will continue to push for a softening of the law around cannabis. 
Mr Tanczos has changed his mind. He has become a dad and I think that does change people. When one becomes a parent one starts seeing the world a little differently— 
Simon Power 
: Through sleepy eyes. 
Dr LYNDA SCOTT 
: Yes but I think he already had those. As parents we start thinking about what the effects would be on our children. There is still a great deal of fear out in the community that a Labour-Green coalition would push to have a slackening of the drug laws. 
Regarding the expeditious scheduling that we see in Part 3 there was concern expressed at the Health Committee that cannabis could be moved from the A B and C classification on to the list of restricted substances—that this legislation would provide a mechanism for that. Mr Tanczos talked about having the experts involved. We have the Expert Advisory Committee on Drugs advising the Minister at this point. The membership of the committee could be changed. The membership could be changed to comprise people who have a much more liberal view of drugs in this country. That would mean that we would see a loosening and a reduction in classification. 
If that happened I would be extremely worried as would most mums and dads in this country. We would not want to see any change to the law around cannabis. I sat on that select committee inquiry. We went from one end of the country to the other it cost a huge amount of money and we came to the conclusion that there should be no change. But that was not the position of the Greens right the way though the inquiry. 
National supports adding a Ministry of Justice member to the Expert Advisory Committee on Drugs. That was an oversight when we debated the first amendment Act. The process was set up by Wyatt Creech and was brought in because of the Ecstasy and Fantasy issues at the time. Those drugs had been introduced into New Zealand and the people who produced them changed the chemical structure just slightly in order to avoid the law. Everybody agreed that we needed a very fast process—we wanted it to be a 1-month process—to be able to put those drugs on to the schedule and to stop those who wished to prey on our young people and cause their deaths all for the sake of money. 
We fully support this bill which provides for the regulation of the precursors of P methamphetamine. People can be prosecuted if they bring in large quantities of cold remedies which have ephedrine and pseudoephedrine in them to try to set up meth labs and produce P. P is the most serious drug issue facing the country at the moment. There has been a lot of effort to crack down on it. Just one tablet can cause significant harm. We saw a similar wave of the use of LSD in the 1970s. People saw too many of their friends end up in psychiatric hospitals due to the use of that medication. Talented young New Zealanders’ lives were ruined. Some survived some committed suicide but many had significant mental damage. Hopefully people will see enough of their friends around them significantly damaged by P to ensure that once again it will not become a drug of choice amongst our young people and they will realise the harm that just one tablet can do to them if they are susceptible. 
The longitudinal studies that are being done on our young people in Christchurch and Dunedin are interesting. The Dunedin study is especially interesting as it shows that genetic precursors mean that some people are much more susceptible to drugs and alcohol abuse when adverse events happen. One has to ask why some people get through them and others do not. It has been shown that the genetic predisposition of some people plus an adverse event—that is nature plus nurture or the environment they are in plus their genetic make-up—are what make some people much much more susceptible. 
We fully support making sure that ephedrine and pseudoephedrine cannot be brought into the country in large supply. We support the change to the onus of proof in terms of people who have needles in their possession to improve the needle exchange programme. We will be voting for the bill in its third reading stage. 
KATHERINE RICH (National) 
: 
 As another National member speaking in this debate I too rise to voice support for the Misuse of Drugs Amendment Bill (No 3). A lot of good changes are being made in the bill that will assist officials in their battle against drugs like P which is surely one of the biggest challenges facing our community at the moment. As many members of the House will have also found when they spoke with the police and looked at the statistics I know the reason that we have had such an increase in violent crime in the country is largely attributable to the use of P. Although the names and ingredients of those drugs will change the issues of how to regulate and put in place legislation to control them will remain the same for successive Governments. The issue for us is to put in place good law that will do its best to control illegal drugs and to put in place a framework that makes it quite clear to people what is right and wrong. 
It was interesting to hear the Minister Jim Anderton talk about the bill because he got himself into a position whereby anybody who voiced any alternative to or concern with a provision was suddenly presented as being pro-drugs. The Minister does not have a monopoly on the concern about drugs in the community. The Minister is not the only member of Parliament who is concerned about what is happening in some of our communities as a result of various drugs. That does not take away our right to speak out about concerns about the law and to put forward some changes that we think will produce better law for the country. The concerns that we have voiced as a party basically related to the use of the affirmative resolution procedure. We totally understand the use of those procedures for illegal drugs that are classified as A B or C but we raised some concerns about the use of similar provisions when it came to substances that were legal. That was the main reason that we voted against Part 3. 
One of the points that the Minister did not address in any part of the debate was the apparent inconsistency in his thinking in bringing Part 3 into the main part of the Government’s bill. Although the Minister kept saying that it was a Government bill we all know that Part 3 was a result of the Minister bringing in Supplementary Order Paper 298 in his name—a large change to the law—and attaching it a bit like a patchwork quilt to another piece of law. On the one hand the Progressives say that we are in a situation where we need to regulate benzylpiperazine—one of those changes is to make it quite clear that those substances can be sold to 18-year-olds—yet on the other hand one of their main thrusts in bringing another bill to the House is to look at raising the age at which young people can purchase alcohol. On the one hand we are saying that 18-year-olds have the ability to make decisions to act responsibly and to apply their thought processes to the purchase of party pills and herbal highs but on the other hand we are saying that they are not responsible and they do not have the ability to make a choice when it comes to making up their minds about whether they want a glass of beer. I think there is a real inconsistency there. 
In my view we see hypocritical thinking and no logic when we look at the two main pieces of legislation the Progressives have brought to this Parliament. Basically they are saying different things about the ability of young people to make up their minds and apply their own thought processes to some decisions they make in their everyday lives. Although I challenged the Minister on that he was not able to get up and explain himself—to say why he was pushing for the age at which one can purchase alcohol to rise to 20 yet remained perfectly happy for people to stroll into a shop and purchase a party pill a herbal high or whatever else at the age of 18. Certainly there is a contradiction there. 
I think there are some great things in this bill. When we talk to customs officials and the police we find that there has been a huge amount of frustration about the inability of officials to be able to nab people who turn up at our borders with caseloads of cough medicines that contain ephedrine and pseudoephedrine. People were able to point to what looked like extraordinarily large quantities of medicines and to say that they were bringing them in for their personal use. Well no one involved believed that but the law did not give customs officials enough tools in their tool-box to be able to deal with those situations with greater clarity. So it is good that this bill lays out some very detailed specifications for how searches can take place and how they may be executed within officials’ daily procedures. We have lists in the legislation for everything from strip-searches to rub-down searches. There seems to be a lot of detail but in fact when we are dealing with people who will do whatever they can to get off a charge or who have lawyers who will do everything they can to get their clients off charges we need to be incredibly specific about the technical parts of this bill. So I am hoping we have done our work on this bill and that there will not be any loopholes when the legislation is fully in place. 
There are some good initiatives to make it easier for people to use needle exchanges and to not be in a position where they feel that the law does not allow them to carry syringes and take part in their own rehabilitation without being nervous about being charged for having or without having to demonstrate proof of why they have particular items in their possession. 
One of the things that is very clear is that we as a Parliament will continue to face these sorts of issues. The types of pills and drugs will change. The next generation and the scientists out there the backroom scientists who try to work out new combinations in order to get around these laws will continue to do so. The challenge for us is to keep ahead of them and to ensure that all parts of the public service do their bit to make sure we minimise the amount of drug use in our community. 
One of the things that this bill does not deal with is the issue of policing. I think it is a real shame that the police put in for additional resources in order to keep on top of methamphetamine laboratories and received only a small portion of the amount of resource they felt they needed to be able to keep on top of the problem. 
We have thrown up some interesting inconsistencies and I look forward to the debate on the second bill brought to this House by the Progressives. I will be asking them why they think it is OK that 18-year-olds can buy party pills and herbal highs but they are not trustworthy enough to buy beer or to make a choice about whether they want to have a glass of wine. It seems to me there is more concern about party pills and herbal highs than the Minister gives the public credit for. So there are some interesting inconsistencies on the part of the Progressives. 
I am glad to stand and support this bill. I think it will go some way towards assisting the Customs Service and the police to ensure they have more tools in their tool-box to deal with those New Zealanders who want to break the law. 
A party vote was called for on the question  
That the Misuse of Drugs Amendment Bill (No 3) be now read a third time. 
Ayes 107 
New Zealand Labour 51; New Zealand National 26; New Zealand First 13; Green Party 6; United Future 8; Progressive 2; Maori Party 1. 
Noes 9 
ACT New Zealand 9. 
Bill read a third time. 
Overseas Investment Bill 
Second Reading 
Hon JUDITH TIZARD (Minister of Consumer Affairs) 
 on behalf of the 
 Minister of Finance 
: I move  
That the Overseas Investment Bill be now read a second time 
. The Overseas Investment Bill balances the need for ensuring sufficient protection for New Zealand - sensitive assets with encouraging foreign investment in New Zealand. This bill does that by ensuring that the screening of foreign investment is focused on sensitive assets encouraging foreign investment that contributes to the New Zealand economy and reducing compliance costs. New Zealand has a welcome and open attitude towards inward foreign direct investment and it has been the Government’s intent to maintain that attitude. 
Submitters on the bill focused on a range of issues that relate to ensuring that foreign investment in New Zealand is of benefit to New Zealand and to ensuring that the potential gains foreign investments can bring to a small country like New Zealand are realised. The Government agrees that those are indeed the critical questions New Zealand faces when determining its foreign investment regime. Some submitters were in favour of New Zealand adopting a more liberal foreign investment regime and others favoured a more restrictive one. Other themes that emerged related to a wish for better information on foreign investment in New Zealand and a wish to ensure that provisions in the bill and conditions placed on an investor’s consent are monitored and effectively enforced. 
The Finance and Expenditure Committee did not suggest any changes to the bill that significantly affected the balance between the restrictiveness and the liberalness of the regime. The Government concurs with that assessment. As a result of the deliberations of the select committee changes to the criteria for the assessment of potential purchases of sensitive land by overseas persons have been suggested. The vast majority of transactions covered by the overseas investment regime are land-related so it was appropriate that the select committee examined that area of the bill in particular detail. The bill specifies a number of factors that may be relevant to the assessment of purchases of sensitive land by overseas persons. As per the first reading of the bill those factors can be summarised as economic development natural and historic heritage walking access and the offer to the Crown of any foreshore and seabed contained within the sensitive land. The select committee has recommended that the relevant Ministers explicitly consider all the factors— 
Madam SPEAKER 
: I am sorry to interrupt the member but the time has come for me to leave the Chair. 
Sitting suspended from 1 p.m. to 2 p.m. 
Hon JUDITH TIZARD 
: The Overseas Investment Bill seeks to ensure sufficient protection for New Zealand’s sensitive assets while encouraging overseas investment in New Zealand. The Finance and Expenditure Committee has recommended that the relevant Ministers explicitly consider all the factors that are specified in the bill. The factors in the assessment of purchases of sensitive land by overseas persons may be summarised as economic development natural and historic heritage walking access and the offer to the Crown of any foreshore and seabed contained within the sensitive land. The Minister must explicitly consider all the specified factors and determine which factors are relevant and how important each is to the overseas investment in question. Having considered the relevant factors the Minister must then determine whether the overseas investment will or is likely to benefit New Zealand. 
The select committee has suggested also changes to the specific factors to be taken into account when assessing potential purchases of sensitive land. It has recommended to the House that the Crown have the right of first refusal to purchase any lake bed of more than 8 hectares any riverbed with an average width of 3 metres or more and any lake included within sensitive land. This welcome addition to the bill ensures that New Zealand has the ability to control whether riverbed and lake bed pass into overseas ownership when they are contained within sensitive land with provisions similar to those already in the bill around foreshore and seabed. 
Furthermore the select committee has recommended that a new factor be added to the bill—a factor relating to the enhancement of the habitats of recreational fisheries and wildlife and walking access to the relevant areas. This addition to the bill is a result of submissions made to the select committee. Other changes relating to land investments are relatively minor. These include allowing potential enhancements—not solely maintenance of existing assets—to areas of historic heritage and improvements to walking access to be taken into account when assessments of sensitive land are made. These are relatively small but important improvements to the bill. 
An investor test is applied to all purchases of sensitive New Zealand assets. This will be standardised across business land and fishing investments and will consist of a good character test a financial commitment test and a business acumen test. The good character test which the select committee recommended be given some definition in the bill applies to all individual overseas persons while the financial commitment and business acumen tests apply to the collective of a company. 
The bill as reported back to the House from the select committee included provision for marginal strips to be set up when sensitive land that adjoins a significant waterway is sold to an overseas person. This provision would have ensured the creation of marginal strips to guarantee that access and conservation objectives around significant waterways were met when sensitive land was being sold to overseas persons. The select committee recommended that no compensation be payable unless the marginal strip is greater than 20 metres in width. A Supplementary Order Paper will be introduced into the House to remove the compulsory acquisition of marginal strips. This will ensure a parliamentary majority for the legislation. 
The bill makes provision for factors such as conservation values and walking access to be taken into account when decisions are made regarding investment in sensitive land. Access and conservation objectives will be dealt with on a case by case basis as part of the consent process rather than as a statutory and automatic provision. The Supplementary Order Paper I mentioned previously contains also a number of technical amendments to the bill. These cover a number of relatively minor technical issues the most important of which is amending the bill so that consent for a transaction will be required only when a property is acquired or a business is established. So it will no longer be necessary to specifically enable contracts to be entered into or given effect to conditional on consent being obtained. 
The bill revises the regulator’s information and guideline functions in clauses 32 and 37 to cover overseas investment rules generally. The select committee has recommended to the House a variety of other changes. The most major of these are as follows. It is recommended that the regulator have a new function: to produce regular statistics. That will assist in ensuring that submitters’ concerns around the information on foreign investment are met. It is recommended that an interest in farmland with a term of 3 years or more must be advertised. It is currently obligatory for all sensitive farmland subject to overseas investment to have been offered and advertised on the open market to New Zealand residents. An exemption currently exists if the interest in the land has a maximum term of less than 21 years. 
It is recommended that when considering a consent application the Minister should have the power to consult as he or she thinks appropriate. It is recommended that the regulator be able to charge an administrative penalty when an overseas person seeks a retrospective consent—that is when that person did not gain a consent when he or she should have. It is recommended that the value threshold of $100 million and the area threshold—0.4 hectares for some sensitive land—be placed in legislation in the future as opposed to being in regulation. This would mean that future changes to the coverage of the regime will have to be endorsed by Parliament. 
No major changes are recommended by the select committee around the definition of “overseas persons” the coverage of the regime or the monitoring and enforcement of the regime. The Government proposes that the House accept the recommendations I have outlined and other more minor recommendations I have not listed from the select committee. The passage of the Overseas Investment Bill is essential in ensuring that New Zealand’s overseas investment regime strikes the correct balance. I thank the select committee for its consideration of the bill and I commend the committee’s report to the House. 
JOHN KEY (National—Helensville) 
: 
 I arise on behalf of the National Party in relation to the Overseas Investment Bill. It is the intention of the National Party to support the bill provided the matter referred to by the Minister in her address in respect of no compensation for marginal strips is removed from the process. 
I want to take a step back and define the issues as I saw them as someone who sat on the Finance and Expenditure Committee. There were a great many submissions. I have to say there were from memory no submissions in favour of the bill and I do understand the reasons for that. I want to run though the dilemma as I see it from the National Party’s perspective. 
On a relative basis there have been very few examples when the Overseas Investment Commission has in fact declined purchases of New Zealand land or foreign purchases of New Zealand companies. It has been a relatively lightly used provision—most applications have been accepted. Secondly there is a genuine concern—and I think a warranted concern from New Zealanders—that we do not want to become tenants in our own country. I think the long-term future of New Zealand is not that of a bunch of people running around serving lattes to foreigners who own our country. We do have a brighter and better future for ourselves than just that. 
There is a relatively good argument to say that most countries have some provisions around who can and cannot purchase their land. Of course the risk in this situation is that New Zealand needs to think about its relative economic position compared with other countries. That is to say the average American income is of quite some magnitude above the average New Zealand income. By definition that means New Zealand can become quite a cheap entity. We face within that a risk around times when the exchange rate is particularly low that New Zealand becomes quite attractive solely from a currency-play perspective. 
That is the dilemma New Zealand faces. We have a global world now where the Internet is playing an interesting role. A large number of people are surfing the Internet looking to buy prime pieces of land around the world and New Zealand is one of those places that is very attractive because—as we know—it is a beautiful nation. Therefore New Zealand is highly attractive because of its price because of the global nature of the world and our free capital markets that allow people to come in and buy land. By definition of course if one thinks about New Zealand in one sense most New Zealanders would recognise that the land that is actually attractive to foreigners—and primarily we are talking about high-country stations and beachfront and lakefront sites—is the land that is likely to be purchased by foreigners when they come to New Zealand. The truth is that they will not come to New Zealand to buy some piece of dirt that is out in the middle of nowhere. Generally speaking they are coming for the choice bits of a great little country. 
So I think we have to consider that element and then contrast it with the reasons why on one level the National Party supports this bill—that is there are issues around property rights and owners wanting to maximise the property’s value when they sell the fact that we do live in a global world and broadly speaking a sort of acceptance that we are part of a world where we do not want to close ourselves off completely on a number of fronts. 
So I will take the first of those matters concerning company investments where the threshold for reference to the Overseas Investment Commission has gone—from memory—from something like $25 million to $100 million. That reflects the fact that it makes sense to do that for companies financed for less than that amount whether it is foreign or domestic capital financing those businesses—in one sense I see that as being largely irrelevant under that sort of measure. 
Above that threshold I am still relatively supportive if foreign capital wants to come to New Zealand but clearly there are national interest reasons why we would want to refer that. But under that level I think it is just a reflection of the growing size of businesses and of what is relevant to the international situation. 
Around the issues of sensitive lands the first important thing to note is that the bill is attempting to tighten up the current situation but it is worth remembering that there have been very few examples where things have been declined. So we have to put it in that context and say that this bill is an example of where we are actually making it more difficult. Young Nicks Head was a great example of a sensitive piece of land. It is a very small acreage but regardless of its cost it is now referred to the Overseas Investment Commission for its review. In that regard I think that should be seen as a very positive step. 
I want to talk for a moment about the marginal strips issue. If we recall the reason for marginal strips it is really an issue that relates to the Queen’s Chain which currently applies to about three-quarters of New Zealand. Most New Zealanders do not understand that situation terribly well. They think the Queen’s Chain is either something that has gone or something that applies all around the country. The truth is that it applies to about three-quarters of the country. But my point is—and I think it was introduced by Mr Parker—that in the event of a sale overseas if the land did not have a marginal strip to which the Queen’s Chain applied then the Queen’s Chain would be drawn up in the agreement in that instance. 
Again on one level I have some sympathy for that and Nick Smith from the National Party proposed having a similar kind of process in his member’s bill. That came from the situation on D’Urville Island where property was sold to foreigners and as I understand the case there was no Queen’s Chain. An offshore owner of an island gave instructions to those looking after the asset indicating—rightly or wrongly—that the owner would not allow anybody else on the island at all. So New Zealanders were effectively stopped from pulling up their dinghy on the beach depending on where the high tide mark was. 
I think on one level that locking New Zealanders out of that access to be able to land their boat alight and walk up a lake edge or whatever seems wrong so in that sense National would be very supportive of protecting that access. 
The issue becomes one where if we are not prepared to require that compensation be paid for allowing for access rights to the Queen’s Chain in private property sales then we are really taking a significant property right from those who are selling because the purchaser will almost certainly pay a bit less. That leaves us with the vexed question of whether the Crown wants to pay for the costs required to acquire the Queen’s Chain. In that respect I take it that the current Minister of Finance potentially shares my view—as a possible Minister of Finance—that it is a cost that we do not necessarily want to pay if I understand that correctly. But National does not think it is fair to demand that the Queen’s Chain be applied on a non-compensation basis. So on the assumption that that provision comes out of the bill we will be supporting it. 
I will digress very slightly to go back to the reason this issue is hugely sensitive which is that there is a feeling that too much is being sold offshore. Again I think pastoral leases are a good example of this. It is essentially correct to say that prior to 1995 pastoral leases could not be sold offshore but now they can be and quite a number of high-profile pastoral leases have moved offshore. So I think that New Zealanders are right to question that trend. On one level I think they are right to say that it is their country and they do not want to become tenants in their own country—but on another level it is also important to weigh the property rights of the owner against that view and to reflect a little on the fact that we now live in a somewhat more global world. 
The definition of what a foreigner is becomes extremely difficult also. As some people know I have spent a considerable amount of time living overseas and under the technical definition I may well have been deemed to be a foreigner when I came back and bought land back in New Zealand. So that situation creates some interesting issues. There is also the argument around someone who lives offshore but who wants to come to New Zealand and does not want to remain a taxpaying resident. That person may well have good grounds to buy here. So National will be supporting the bill assuming the provision relating to marginal strips comes out but we recognise that this is quite a finely balanced debate. 
DAVID PARKER (Labour—Otago) 
: 
 I would like to deal with the issue of marginal strips. Because of the numbers in Parliament we are being forced to drop the marginal strip provisions of this bill. 
Simon Power 
: It’s called democracy. 
DAVID PARKER 
: That is right; it is the effect of democracy. But I want to explain why we in the Labour Government feel that we were right to include them and wish that we had the numbers to put those provisions through. 
The underlying assertion behind Mr Key’s argument that I disagree with is the idea that a property right in land includes the right to sell it to an overseas person without restriction. That fundamental assertion underlies Mr Key’s objection to the compulsory laying off of marginal strips when one sells land to an overseas person. Of course the position at law in New Zealand and in many overseas countries including provinces of Canada parts of Japan and many other countries is that there is not an unrestricted right to sell to an overseas person. Indeed as Mr Key referred in his own speech until 1995 there was a virtual prohibition on the sale of rural lands to overseas persons under a part of the Land Settlement Promotion and Land Acquisition Act 1952 which was not repealed until 1995. So the idea that a Government has to concede that a property right in rural land includes the unrestricted right to sell it to an overseas person is wrong logically I suggest. 
Deborah Coddington 
: It’s not unrestricted now. 
DAVID PARKER 
: I know that it is not completely unrestricted now but it was virtually prohibited until 1995. If it was permissible virtually to prohibit the sale of land to overseas purchasers it must be permissible and not in contravention of the private property right to have a lesser degree of restriction on the sale of overseas land. All that the provisions in the legislation did was to impose a lesser degree of restriction on the sale of rural land to overseas persons than was the case until 1995. It was not expanding upon the position before 1995; it was trying to restore rights of access to our waterways which are sometimes placed at greater threat when land is sold to overseas persons. 
What evidence did the Finance and Expenditure Committee have that there were legitimate concerns on this front? For a start advertisements for Poronui Station were placed before us. Poronui Station was advertised for sale for US$50 million—in US currency—in airline magazines. The advertising material plainly included “private water” as a benefit to those who would acquire the property. That was emphasised in a number of places in the documentation. 
I know that in my electorate I have had complaints from some of my constituents that some of the overseas purchasers of our rural land more rigidly stick to what they assert to be their private property right to exclude people from accessing waterways that pass through their properties. We have the ridiculous situation that the title of some of those properties runs under the river and so although the landowner does not own the water he or she owns the riverbed. People have the right to float down the water but they have not got the right to walk down the riverbed if they are fishing—except with the consent of the landowner. 
One cannot fix all of these problems which have grown up over time through accidents of history I suspect. Mistakes were made in contravention of directions by earlier Governments that marginal strips should always be laid off. Sometimes those instructions were ignored by the relevant ministries particularly in relation to pastoral land where pastoral leases defined just the boundary and really did not have regard to the need to lay off marginal strips alongside some of the rivers that passed through that land. So Labour reached the position that it was appropriate to actually record that a private property right to land does not include the right to sell it to an overseas person without restriction. It never has. 
I would also like to point out what I see as—I am not allowed to use certain words here—absolutely irreconcilable: on the one hand certain political parties deny that Maori should have any rights to the foreshore because we need to protect the rights of all New Zealanders to access the foreshore yet those same political parties including National oppose restrictions on the sale of land to overseas people that would see the compulsory laying off of marginal strips alongside waterways. 
I am one who is sad to see those particular provisions lost from the bill but we are reliant on United Future to pass this legislation and those members would not have supported it with those provisions in it so accordingly we are removing those provisions. 
The balance of the legislation is good legislation. It effectively reflects the status quo in respect of business purchases that are to be permitted as of right without Overseas Investment Commission approval being required. Purchases up to the new limit have in recent decades always gone through anyway so there is no point in further regulating them. With those comments I am pleased to note my support for the bill. 
CRAIG McNAIR (NZ First) 
: 
 In speaking to this Overseas Investment Bill I just remind the House that I think it is quite ironic that we are seeing a bill such as this go through the House today in all its stages under urgency. This was a bit before my time but a few members in the House will probably remember the Allan Wallbank petition to stop land sales to foreigners. It went up and down this country and was signed by New Zealanders in provincial towns and cities all over the place. It was vigorously supported by the Labour Party and was one of Labour’s big campaign issues at one time. Also I think it is ironic and crazy that the National Party is supporting a bill like this. It does not surprise me that National is supporting it because only 6 months ago we saw a policy flip-flop from the National Party when all of a sudden it thought twice about selling State-owned enterprises such as Kiwibank and some other strategic State-owned assets. All of a sudden it had a change of heart on that and developed a passion to keep certain assets in the hands of New Zealanders. 
I do not think that National was passionate about that but it obviously changed its policy because of what the facts tell us which is that New Zealanders are concerned about the issue and do not want more land or businesses to be in the hands of foreign-owned enterprises. I think it is very clear that the people of New Zealand have spoken on that issue. Labour has introduced this bill and National is supporting it when they have a track record together of selling off $16 billion of State-owned assets between 1984 and 1996. After having a culture such as that within those parties it does not surprise one to see this kind of legislation today. It was indeed asset sales such as those in the 1980s and 1990s that saw MMP evolve. One of the main reasons that people were outraged at the Labour and National Governments of the 1980s and 1990s was the fact that people did not feel that they were listened to. People felt that those Governments just railroaded over their beliefs and did what they thought was the best thing for New Zealand without listening to people. That is actually one of the reasons we have MMP today—obviously there are a few other reasons but that was one of the main reasons. 
Another issue that I want to talk about today—and I guess I will be talking about it in a little more depth over the Committee stage—is how the threshold of ownership will be increased as far as business investment is concerned from $50 million to $100 million. Well for a start I think we should have looked at moving it in the other way—taking it from $50 million downwards rather than pushing it up to $100 million. But I just want to highlight and bring to the House’s attention the fact that some businesses that were sold just in the last couple of years will miss out on this threshold and will not be looked at now because of the higher threshold. The Sime Darby Motor Group Ltd of Malaysia paid $61 million - plus with a potential additional consideration of up to $5 million to acquire Truck Investments Ltd. Its businesses include trucks sales companies and a few other things. Skycity Entertainment Group Ltd paid $93 million for Aspinall (NZ) Ltd which owns 40.5 percent of the Christchurch Casino. That obviously would miss the threshold. The AMP New Zealand Office Trust owned 43 percent from Australia paid $71 million for Mobil on the Park down here in Wellington and $75 million for the BNZ Centre. Telecom New Zealand Ltd owned 72 percent from overseas paid $62 million for the information technology services company Gen-i Ltd. 
We have a few other examples which I will skip over because there is such a long list. I think that illustrates my point very clearly. Vero Insurance New Zealand Ltd of Australia—the former Royal and SunAlliance New Zealand—paid $68 million for the motor vehicle and consumer goods warranty and credit insurance business of AutoSure Group Holdings. I will highlight just a couple more examples to the House. The UBS Group timber investors of USA paid $81 million for trees and forestry in the central North Island and then there was a very interesting one that I want to finish off with. There are obviously a lot more purchases that would miss out on the new threshold. But the Brunswick Corporation paid $54 million for 70 percent of Navman New Zealand Ltd with an option to buy the remaining 30 percent by 2005. Navman is a New Zealand - based electronics manufacturer of marine electronics and general navigation products. As I was reading about that I took a few seconds to think about it and it stopped me in my tracks. I remember the Minister for Industry and Regional Development trumpeting that business as one of New Zealand’s greatest successes. It was to be a new export opportunity for New Zealand and it was going to create lots of jobs for New Zealanders and lots of profit for New Zealand. I then noted that Navman was sold to Brunswick Corporation for $54 million which would miss out on that threshold. I think that is a very interesting thing to note and highlight to this House. 
Another issue I want to raise in this House is the definition of “good character”. The test of “good character” is used in a number of places but the term is not defined in the bill. I believe that there needs to be a tightening up of that definition. Actually it is not defined at all. The bill just states “good character”; that is what is there. The Overseas Investment Commission will think that it is all right as long as either a solicitor or even the individuals themselves write a letter to say that they have “good character”. I would think that most people or most corporations would say that they had great character. It should be up to the Overseas Investment Commission in New Zealand to make that decision rather than to just take their word for it. I also think that the Minister should take more responsibility in that decision-making process and I will elaborate more on that in the Committee stage. 
While we are on the definition of “good character” I point out that the Overseas Investment Commission in its 1998 report even stated itself that the term was mentioned numerous times in New Zealand legislation but was not once defined. The law is very ambiguous on that issue which leads to extremely weak enforcement in the present situation. That is added to by the Overseas Investment Commission’s ineffective methods or criteria. The regime is simply ambiguous and needs to be changed. I shall read a recommendation by one of the submitters to the Finance and Expenditure Committee. It is a very interesting recommendation and reads: “The term ‘good character’ should be defined in the bill. Its definition should reflect court interpretation but should be wider than criminal convictions including adherence to common ethical standards and absence of acts that would be illegal in New Zealand or which have given rise to adverse civil court findings.” 
DEBORAH CODDINGTON (ACT) 
: 
 That was an example of why people should take another take on this election. Could the two old parties please consider going into coalition together instead of with New Zealand First because if either of them do heaven help us! 
I am going to be very unpopular. It is easy to take the populist stand on legislation like this and say that we support it. There is a lot of emotion around foreign investment in this country and a lot of that emotional talk is absolutely not founded on reason at all. We have just had an example of it. This country was founded on foreign investment—our insurance companies and our banks. Our banks are still mostly owned by foreigners. If New Zealanders do not like that they do not have to use them. They do not have to use the bank they do not have to use their mobile phones and they do not have to patronise foreign companies. Foreign investment overwhelmingly has been very good for this country. We would not survive without it. 
Interestingly enough those who follow Australian politics might remember Prime Minister Paul Keating saying a while back that the foreign ownership of the Gold Coast must be stopped. He wanted to stop Japanese people from buying up property on the Gold Coast. The reason he came out with that—because in Australia they are a lot more robust than us—was that they did not want those slanty-eyed people buying the Gold Coast. Someone else answered him in the debate by saying that no they were buying it all off New Zealanders. 
That is the problem. There are already restrictions on foreigners buying land in New Zealand and I contend that those restrictions are stringent enough. But if we start to restrict them even further we have to be consistent and consider what that does to New Zealanders who want to buy overseas. 
But I come to the basic principle of this bill which is the issue of private property rights. I strongly believe that people who own property have the right to sell it to somebody who will pay them the highest price. It comes back to emotion again. A lot of people think that they do not want foreigners owning all our prime pieces of land. But if those people owned that prime piece of land they would want to get the best price for it when they sell it. They might want to sell their high-country station and use the money to fund their grandchildren’s tertiary education or put it into a retirement fund. We already have restrictions. 
Mr Parker on the opposite side of the House seemed to imply that parties who opposed this bill want unrestricted access. We are not saying that. We are saying that the restrictions that are already there are stringent. The National member John Key cited D’urville Island. He said that it was sold completely to foreign ownership. He disagreed with that because he said ordinary Kiwis could not pull up their dinghies on the beach. A lot of ordinary Kiwis would like to have a swim in his Parnell swimming pool but they are not allowed to. Why? Because it is his private property and that is respected. People respect that he owns it that he worked hard for the money that went into building and purchasing it and that he has the right to restrict access to any common Kiwi who wants to have a swim in his pool. One cannot equivocate with property rights. 
Mr Key talked about New Zealanders not wanting to be tenants in their own land or not wanting to serve lattes to foreign owners who come to places like Central Otago or Northland. I was one of those waitresses serving lattes to foreigners several years ago and it is a great way for ordinary Kiwis to recapitalise and get some money in their bank balances. Those people bring money to this country—[ 
Interruption 
] He is up there hiding behind the yellow boxes. 
It is a good way to increase ordinary people’s wealth. Is there not something of the drawbridge mentality in this attitude? “I’m here pull up the drawbridge and don’t let anybody else come in.” If we were consistent about this we would say that no white people could buy land in this country. We are all foreigners if we take the tangata whenua attitude and philosophy that Maori were the first people to occupy this land so they are the true tangata whenua. Then all of us could go the whole Fiji way could we not? I am not advocating that; I am just pointing out the inconsistencies in some of those arguments and the fact that it is very dangerous to start going down that road and saying what is good or not good. 
The issue of Young Nicks Head came up. Sure that was something that people felt very strongly about there were protests and it was on television every night but we cannot pass legislation every time some minority group decides it does not want a piece of land sold. There was nothing to stop those people who were protesting about the sale of that land forming a company or a cooperative getting a loan and purchasing the land themselves. They were not barred from owning it. 
We have to look at the issue of the marginal strip which we will obviously deal with further in the Committee stage. If one is a foreigner and buying a piece of land for squillions of dollars it will be a condition of consent that the Minister might say: “Well you give us that marginal strip and you can buy it.”—as I understand it that is how it will be if the Supplementary Order Paper goes through—and if the purchaser is paying a lot of money for it then he or she will probably agree. Why is a foreigner paying a lot of money for that land and protecting that marginal strip any different from a New Zealander paying a lot of money for it? As I understand it a New Zealander will not have to go through that same process. A New Zealander could actually buy it lock stock and barrel. 
Hon Dr Michael Cullen 
: There’s no consent process for New Zealanders at all. 
DEBORAH CODDINGTON 
: There is no consent process at all. 
If the marginal strip is so valuable and is such an asset surely it is an asset regardless of who the purchaser is or what he or she is paying. That is something I do not understand and I hope that someone else can throw some light on that because if we are to have that for a foreign person buying it then surely we have to have it for a New Zealander buying it as well. 
I will get back to the issue of foreign ownership. Someone—I cannot remember who the speaker was—raised the issue of New Zealanders being very opposed to a number of overseas people who are not citizens of this country coming over here and buying our prime real estate. Before I came to the House I read through a number of the submissions. Some of them were extreme like those from the Campaign Against Foreign Control of Aotearoa which I suppose one has to admire. It has been around for a long time. But we have to look at the ethnicity of some of the people who started it; it goes back to the drawbridge mentality. 
In general the people who want to come here and buy land and who put a lot of money into it are people who are attracted to this country because of those Kiwi assets if you like—the wild open spaces the rivers the lakes and the seabed. They are escaping what they came from. There is no evidence that foreign owners are in any way general or otherwise any worse owners of the land. They cannot put it on a ship and take it away with them. They can only keep investing in it. So ACT members are opposed to this bill. I think we are the only party in the House that is opposed to it but none the less we will stand on our strong principle of property rights and we will vote against it. 
ROD DONALD (Co-Leader—Green) 
: 
 It will not surprise anyone in this House least of all Dr Michael Cullen that the Green Party is opposed to this bill. 
Hon Dr Michael Cullen 
: Thank goodness! That’s a relief. 
ROD DONALD 
: I am glad it is a relief. Dr Cullen was worried I was going to turn round on this one. We were tempted to do so at one point actually because we are very keen on the marginal strips provisions that are contained in the bill. We disagree with the ACT party in that we do think it is appropriate for foreign investors to recognise how we do things down here—the fact that we value and treasure access to the outdoors—and that it is appropriate if a foreign investor is allowed to buy a significant piece of sensitive land beside a lake by the beach or adjoining a river to provide a marginal strip giving Kiwis access to that public open space. So at the Finance and Expenditure Committee we were very keen to support the amendments initiated by the Labour member for Otago David Parker. 
Therefore when United Future pulled the plug on those amendments by threatening to withdraw support for the bill if it did not provide for compensation for foreign landowners we gave serious consideration to supporting it at least at the second reading stage just because we think the provision of marginal strips is a positive element. But at the end of the day we decided that the bill is so bad in so many other respects that we could not bring ourselves to back it. We are extremely disappointed that United Future - Outdoor Recreation NZ has put compensation for foreign investors ahead of access to the great outdoors for Kiwi recreationalists. I think there is an inherent contradiction within United Future when it claims to be the sensible environmental party then pulls the rug out from under the very people it claims to represent. 
I turn to the bill in its broadest sense. It is a giant con job. There is no doubt about that. When Dr Cullen announced in November 2003 that he was conducting a first principles review of the Overseas Investment Act everyone knew what lay behind that smokescreen. He said that he wanted to provide greater protection from foreign ownership for iconic sites of historical cultural or environmental interest but it was clear that he would use the facade of providing that protection to sell off the buildings and businesses associated with such iconic pieces of land. That has come to pass with this piece of legislation. It is remarkably cheeky to put in the purpose clause the comment that the legislation is all about acknowledging that it is a privilege for overseas persons to own or control sensitive New Zealand assets then proceed to make it even easier for foreign investors to gobble up more of our economy and to allow not just more of our land but also more of our businesses and central business district buildings to be taken over by foreign investors. 
I would like to spend a couple of minutes pointing out that there are some good provisions in this bill and that the Green Party is grateful for them. We hope we will not see the arrival of a Supplementary Order Paper to remove these good provisions after I highlight them to the Minister. It is good to see a tightening of the monitoring regime in addition to what was already in the bill. That is a positive step. It is good to see an expansion of clause 18 to incorporate introduced wildlife alongside the provisions that are already there for indigenous wildlife. It was good to hear Government members of the select committee recognise that Treasury officials are very much on the side of foreign investors and international organisations like the World Trade Organization rather than batting for Kiwi battlers when it comes to placing appropriate controls on foreign investors. 
But this bill falls way short of the recommendations the Finance and Expenditure Committee came up with back in 2001 when we comprehensively reviewed the Overseas Investment Commission. We looked particularly at the activities of the commission in relation to the Southland Plantation Forest Co. investment and we found that the commission had fallen down badly. At best the commission claimed there would be a net marginal gain in employment as a result of the approvals it gave that led to a lot of farmland in Southland being taken over by a Japanese forestry company. But at worst we have seen a community torn apart which is why Labour members and I recommended jointly that an additional commissioner be appointed to represent the wider community and that the application of the national interest criteria be extended to all proposals not just land proposals. We can see the merit of that when we look at clause 18 of the bill. While that clause is appropriate for land it is even more appropriate for business propositions yet businesses have to pass only a good character test. So it would be sensible to extend the bill to cover all sensitive assets not just land. That will be dealt with in one of a number of amendments that we will put forward. 
We will put forward also an amendment on another issue that was highlighted by the Labour and Green select committee members back in 2001 when we agreed that the current $50 million threshold should be revised downwards. I would like to acknowledge my New Zealand First colleagues at the time for supporting the Green position that the threshold should be reduced to $10 million. That was the threshold just before the 1999 election. Mr Bolger lifted it to $50 million by sleight of hand and this Labour Government has enshrined that in the closer economic partnership agreement with Singapore. The threshold is going in the wrong direction with this bill which lifts it to $100 million. We want to take it back to $10 million. 
We—the Labour and Green select committee members—wanted the Overseas Investment Commission to consider the impact on social well-being environmental sustainability and economic sovereignty when considering an investment in New Zealand and I do not think this bill provides for that. Also we wanted a code of corporate responsibility to be introduced. I concede that the bill does now contain a definition of “good character” which is a step forward but it does not go as far as a code of corporate responsibility. The national interest test should be expanded to ensure that any investment is compatible with Treaty of Waitangi obligations a consideration that is completely absent from this bill. So instead of going forward and adopting in legislation the recommendations of the 2001 review this bill has gone backwards. It has ignored the petition of over 7000 New Zealanders calling for tighter controls on foreign investment. 
I would like to make it clear—particularly to the ACT member who perhaps tried to imply that some of us who oppose this bill are against foreigners—that the Greens are not against foreigners. We are more than happy for people of foreign descent to make New Zealand their home but if they want a slice of heaven they should have to make a commitment to this country. Almost half of our candidates in this year’s election were born overseas so we are not anti-foreigner; what we are is very pro - New Zealand. 
So we say no to land sales to foreign investors whether they are corporate or individual and we say that business investments must be greenfield investments. They must add value to our economy not subtract value from it. That has been the problem. Foreigners have taken over Tranz Rail Telecom Air New Zealand and Powerco. Many former central and local government assets have fallen into foreign hands. We have all seen the results of those takeovers yet this bill is appallingly weak when it comes to scrutinising such investments. 
I will put forward some amendments to strengthen the bill so that it genuinely allows only foreign investments that are in the best interests of New Zealand—because that is what we need. We do not want our net national debt to grow any larger than the $123 billion that it is at the moment. We do not want to be paying any more interest or dividends on foreign investment. For the year to December $8.9 billion was the balance on income because of the high level of foreign investment. We need to make our economy more self-reliant and sustainable. 
GORDON COPELAND (United Future) 
: 
 I rise to speak on the second reading of the Overseas Investment Bill which I think is a good bill. Probably it strikes a fair balance between New Zealand’s need for overseas capital on the one hand and the protection of sensitive land sales to people who have no intention of becoming New Zealand residents on the other hand. However as is well known in the House a degree of controversy arose around the amendments proposed to the original bill by David Parker the member for Otago and a member of the Labour Party. Those amendments aimed to introduce marginal strips alongside rivers and lakes when land is sold to people who are not New Zealanders and who have no plans to become New Zealand residents—in other words to people who are merely part-time or visiting landowners. 
I want to make it clear that United Future supports the creation of marginal strips in those circumstances and I thank David Parker for raising the issue. Unfortunately however there was a fly in the ointment—quite a small fly but a very very important and significant one—and that was the specific provision in the bill that no compensation is payable to any person in exchange for the marginal strips. That is a very very serious departure and from our point of view an unacceptable departure from the common law tradition going right back to Magna Carta that has always held there should be no confiscation without compensation. United Future was not prepared to live with a precedent of that sort in any New Zealand legislation. 
The timing of this bill was extremely interesting because while the Finance and Expenditure Committee was debating the question of no compensation my member’s bill—a bill amending the New Zealand Bill of Rights Act 1990 to provide for property rights in the New Zealand Bill of Rights Act and specifically stating that no one was to be deprived of the use and enjoyment of his or her own property without just compensation—was drawn from the ballot. That was one factor. But there is another factor as well of course and that is that the Government has announced its intention to proceed down the road not only of requiring marginal strips when sensitive land is sold to overseas persons but indeed of requiring marginal strips from other New Zealand owners as well regardless of whether they intend to sell their property to a New Zealander or to an overseas person and regardless of whether they intend to sell their property at all. 
I think the whole nation is aware that this is an enormously controversial matter—so controversial that we have farmers in this country pledging to go to jail if land is to be removed from them without compensation. I have had delegations from Federated Farmers in Marlborough on that issue and they were good enough to read out a statement I sent to their recent regional conference. A huge group of landowners in Waitakere City have approached me and literally hundreds of farmers in the King Country and in the Waikato have all raised this issue with me. So the timing of legislation that has come to the House with a bland statement that no compensation is payable really could not have been worse. 
But in one sense perhaps it is good that it did coincide with those other events that I mentioned because it did—certainly for United Future—give us pause to really consider whether we wanted to support this legislation. I will probably talk a bit more about that in the Committee stage. 
Quite apart from the issue I mentioned on reflection I believe that it was actually unwise and unnecessary for the Government to try to force the issue of no compensation. I think that the situation that has now arisen whereby the Government has signified that it will introduce a Supplementary Order Paper in the Committee to take out the provisions about marginal strips from the bill and rather deal with that matter during the consents process is probably the right answer. I say that because I think that during negotiations on a case by case basis it is likely that many New Zealand landowners selling sensitive land to overseas residents will actually be quite willing to allow the marginal strip to be created because they will be getting a price from the overseas purchaser higher than they can get from a New Zealand purchaser. 
In that situation therefore they have every financial incentive to agree to a marginal strip and so we neatly avoid entirely the question of taking that strip without compensation. It can be done by mutual agreement. United Future believes that that is the preferred way forward so we are very very pleased that the bill has been amended to take into account our considerations in that regard. We will therefore be supporting this bill. 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I am pleased to take a short call in this debate to support my colleague the Hon Judith Tizard who moved the second reading of the bill. I wish to speak on it at just a philosophical level rather than a detailed one and light upon one small matter. 
It seems quite clear to me that we need balance in these matters particularly in relation to sensitive lands. There are concerns about excessive amounts of sensitive land passing into foreign ownership but as soon as one tries to legislate that pretty well all land cannot be taken into foreign ownership or requires some enormously complicated process in order to approve it then we make it almost impossible for a very wide range of economic development to occur within New Zealand. 
This country has always relied upon substantial amounts of foreign capital for its development. Until we lift our savings rates to a very very very much higher level than at present that will remain the case. Certainly I suggest gently to my Green colleagues that if they want to be so much in favour of New Zealand ownership and of the lifting of savings rates then they should at least begin by supporting the New Zealand Superannuation Fund instead of opposing that part of a long-term sustainable policy based upon savings that accumulated from New Zealanders. 
 The second point I would make in that respect is that land does not go away simply because somebody has bought it. In fact it is far easier to buy a factory and remove it from New Zealand than it is to buy a high-country sheep farm and remove it from New Zealand. It is very difficult to move a high-country sheep farm to some foreign country. The land does endure in a way that other economic assets do not endure. So it is important that in this bill we provide mechanisms to consider quite specifically issues around access and so on as part of the consideration of approval for foreign purchase of New Zealand land. 
I might say in that regard that the purchase of Young Nick’s Head for example turned out to be better than if the previous absentee New Zealand owner had remained there. It was a deteriorating farm with no access for New Zealanders no Government ownership of the most sensitive part of the land and a very unclear relationship in terms of the rights of local Maori to look after certain parts of that land. The new owner Mr Griffin has provided a much more satisfactory relationship. The land purchase by Shania Twain caused a great deal of interest in Otago and we were able to gain some important concessions in terms of completing a track through the South Island. 
Peter Brown 
: She’s going to sing at the Labour Party conference. 
Hon Dr MICHAEL CULLEN 
: Of course Mr Brown speaking with that perfect North London accent as he does will stand up for the rights of native New Zealanders in these respects without a single conscious thought that this might involve an “h” word that we are not allowed to say within this Chamber. 
I welcome the fact that the National Party will support this bill after the amendment is moved to remove the marginal strips provisions. [ 
Interruption 
] But I would gently say to Ms Wong before she goes much further that it was her own colleague Dr Nick Smith not to be confused with Young Nick’s Head who introduced a member’s bill to provide for the compulsory acquisition of marginal strips without compensation which the National Party voted for and sent to a select committee. Now the National Party says in this bill that to act in that manner fails to recognise the foundation of our society. It is not something relatively minor; it is the foundation of our society! Ms Wong is telling us that Dr Nick Smith ignores the foundation of our society in terms of his— 
Pansy Wong 
: He does. 
Hon Dr MICHAEL CULLEN 
: He does does he? 
Pansy Wong 
: Who put that in the bill? 
Hon Dr MICHAEL CULLEN 
: I think he put that in the bill. Dr Nick Smith is the person who I think put that in the bill without any doubt at all because it was a bill in his name. The bill states “Dr Nick Smith” at the top of it which is usually a subtle hint for the careful reader that that is the person who put that in the bill. 
I am pleased that the National Party has done a U-turn on this. I predicted it would when Dr Smith’s bill was sent to a select committee. I am grateful for the support of United Future. I recognise that there has been an issue of principle for them in this bill which is why we have removed those provisions. I am grateful for the support of the National Party. I am baffled I have to say by the ACT party’s position on this which seems to be totally open slather but when a party is sitting on a proud 2 percent and going downwards it can be very free and easy with its principles. When one is a retiring member of a party that is sitting on 2 percent and going downwards that member can be even freer and easier with his or her principles because there is not really a lot to lose at that stage in life. 
I look forward to the Committee stage. The Government will be voting against all the amendments moved by Mr Rod Donald and we hope for support from both the National Party and United Future in that respect. 
PANSY WONG (National) 
: 
 I will take up just two points made by Dr Michael Cullen the Minister of Finance of New Zealand. Firstly if Dr Cullen is so concerned about New Zealanders not saving I challenge him to give them a generous tax cut to enable them to save. A tax cut of 67c per week in 3 years’ time will not help most New Zealanders save up to buy even a piece of brick in Auckland—if they live in Auckland. Secondly I fail to see how Dr Nick Smith can be connected to this Overseas Investment Bill which is labelled as a Government bill and into which Labour member David Parker introduced the creation of compulsory marginal strips without compensation. I hope Labour takes some responsibility for that. After all this is a Government bill. 
National supported the Overseas Investment Bill at its first reading and its referral to the Finance and Expenditure Committee because we also believe in striking a balance between the benefits derived from overseas investment and the public’s desire to maintain the long-established New Zealand practice of providing public access for outdoor recreational activities. 
But the vast majority of submissions including the 8000-signature petition that we received and heard during the select committee process were against the bill. This reflects the public perception after a number of high-profile cases of the failure of the Overseas Investment Commission in following up and enforcing the obligations of overseas investors to fulfil their conditions of purchase. This perception of lack of enforcement led to calls from many submitters and signatories to restrict or ban overseas investment. But we should distinguish enforcement and undesirable conduct from banning overseas investment per se. 
The main enforcement agency which has been the Overseas Investment Commission argued that it lacked the tools to take effective enforcement action when some overseas investors failed to meet the purchase conditions. One has to wonder why it has taken this agency so long to seek additional tools to carry out its work effectively. During the select committee process all the members of the committee from all sides of the House shared the sentiment that we are more in touch with the public. All the members of the select committee urged the agencies to be more proactive in monitoring purchase conditions and enforcing the law when those conditions are breached. I imagine that unless a more proactive approach is taken by enforcement agencies to improving negative public perceptions antagonism towards overseas investment will not be lessened. 
National supports the tougher enforcement provisions contained in the bill and we will keep a very watchful eye on the new enforcement agency to ensure that it does enforce the law. The administration of the overseas investment portfolio was undertaken by the Reserve Bank in the past and has now shifted to Land Information New Zealand. We certainly would like to see that as a signal that more proactive enforcement action will be taken. 
We realised that it must be election year when suddenly the largely cooperative atmosphere in the select committee took a new turn. Suddenly we had to take a lot more time because David Parker brought in a change. He must have thought it would be an election year winner for him. His action must have had the endorsement of his Labour colleagues. Mr David Parker insisted that marginal strips must be created on sensitive land adjacent to rivers lakes and the foreshore. 
Brian Connell 
: You could pay compensation for that. 
PANSY WONG 
: No it gets worse. The select committee spent a lot of time investigating whether this late addition was within the scope of the bill whether it was in contravention of New Zealand’s international agreements and whether it was workable. Ten pages were added to this bill. It became worse when we realised that Mr David Parker wanted the marginal strips to be created for no compensation. I do not know where he studied economics or finance. He argued that that provision would not affect the price obtained by the seller. 
Gordon Copeland 
: He’s a lawyer. 
PANSY WONG 
: Ah lawyers! That explains it. Taking land away to create marginal strips would affect the price that sellers could obtain for their land. Any person of sense could tell us that the sale price must be affected. So at that point National changed its stance. Even though we supported the bill at its first reading we could not support it at the deliberation stage of the select committee because the expropriation of property without compensation is a fundamental infringement. 
How could the bill contain such an unacceptable provision but still pass through the select committee and return to the House for a second reading? I think another party has woken up to the fact that this is election year. United Future registered a small protest during the select committee stage to the effect that it found the provision to create marginal strips without compensation bad—but it was not bad enough to make United Future say it would not support the bill. If United Future had decided to oppose it at that stage those provisions would not be contained in the bill we are now debating. 
National gave United Future a hard time. We asked how that party could say it has principles and how it could put up a weak protest but support the bill—and then we suddenly realised that it must be because this is election year. We understood that a closed-door negotiation had been conducted. United Future is the only party that supported Labour in getting the bill through the select committee stage. We can tell it is election year. 
We have a lot of questions to ask David Parker. Will he abstain from voting on the bill? Will he vote against it when the Supplementary Order Paper we have been told about is introduced to remove the marginal strip provision? So I am looking forward to examining this bill in detail to learn what the Otago MP will do. He is facing a stiff challenge from our brilliant Otago candidate. She will give David Parker a hard time. 
Brian Connell 
: He’s gone. 
PANSY WONG 
: His provision is gone and the next thing left is for him to go unless he can show his constituents that he will stand up for their interests. I presume that is why he introduced that provision. He has to explain to them why he is backing off from his amendments to the bill. National is looking forward to that part of the debate and to examining the Supplementary Order Paper that will remove the compulsory acquisition of marginal strips without compensation. 
MARK PECK (Labour—Invercargill) 
: 
 The National whips have played three extraordinarily cruel hoaxes on Pansy Wong. The first is that they forgot to tell her she is voting for the bill. The second is that they forgot to tell her that the tax cuts National is promising will not really be tax cuts. The third escapes me for now. I think it had something to do with whether there is lunch in the box. They were cruel hoaxes indeed and I felt sorry for the member being so badly treated in that respect. 
The Overseas Investment Bill is quite an important bill because it seeks to do a couple of very important things. First of all it seeks to protect the interests of New Zealanders in terms of their access to waterways and their enjoyment of what we see as our birthright the Queen’s Chain. But at the same time it seeks to encourage overseas investment. One of the reasons it does that is that we rely on overseas investment for our economic prosperity. Pansy Wong and others who have expressed such moral outrage in this debate have forgotten that until we get ourselves as a nation into a situation of being good savers we will rely on overseas investment for much of our prosperity. It is as simple as that. For Pansy Wong and others to stand in this House and say that giving people a tax cut will encourage savings is just so much cant. It simply is not true. 
Darren Hughes 
: It’s baloney! 
MARK PECK 
: As the honourable member for Otaki says it is baloney. It just will not happen. Indeed as everybody in this House knows any signalling of major tax cuts will be met by the response of the Governor of the Reserve Bank putting interest rates up in order to dampen down demand so that inflation remains under control. Anybody with a skerrick of economic understanding knows that. Even John Key knows it. He was the one who said to Don Brash that he cannot introduce tax cuts in a mini-Budget after Christmas; it will take 9 years. National has ramped up the expectations of the public that there will be huge tax cuts when we know irrespective of the issues— 
Deborah Coddington 
: I raise a point of order Madam Speaker. I thought we were debating the Overseas Investment Bill. 
Madam SPEAKER 
: Yes that is a good point. Would the member please stick to the bill. 
MARK PECK 
: I think I have made my point about the economic contribution of overseas investment but I do wish to raise another point about the need to do something through this bill to protect the interests of New Zealanders. At the same time as we are doing that we see the orange ribbon campaign going on. I find that quite fascinating. I am getting the wind-up from the whip; I think he wants me to do a better job of this. Those who have raised that issue cannot have it both ways. They cannot say that we cannot provide access over land to the marginal strips and at the same time say that we need overseas investment as well. There are some fascinating issues in this debate but I will take the whip’s advice and let others who wish to contribute to it do so. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I think Labour played a bit of a cruel hoax on that member. It did not advise him which bill was on the Order Paper. New Zealand is a low-wage economy on a worldwide scale. 
Mark Peck 
: I blame the poms for that. 
PETER BROWN 
: The member makes a joke of it. I know the Government thinks it will have addressed the situation by 2008 when it will give low-paid people 67c a week extra but I can tell the member that that is not enough. 
Craig McNair 
: A stick of gum. 
PETER BROWN 
: That is about all it is worth. New Zealand is a low-wage economy. The ACT members and some of the other members who have spoken want to put New Zealand up for sale with a line at the bottom of the advertisement saying: “Going cheaply.” 
Craig McNair 
: Flog it off. 
PETER BROWN 
: They want to flog it off to everybody. I know that Deborah Coddington and the Hon Michael Cullen stated that land sold to overseas investors does not go away—cannot be taken away. I tell honourable members that as far as the average New Zealander is concerned it most certainly can be. It might as well be at the other end of the world because they cannot afford it. If we open this country to buyers worldwide and say that anything and everything is for sale so they should come here with their money then the average New Zealander will never get anywhere. If the members on the Government benches do not understand how difficult it is for people to buy their first home then they should go out and talk to some of the average New Zealanders who are trying to do that. Or if they do not understand how hard it is for a young farmer to get a farm then they should go and talk to some of those guys who are suffering. John Key is a multimillionaire  
Sunday 
 told us. 
John Key 
: Don’t believe everything you saw on that programme. 
PETER BROWN 
: The member has a big flash house in Parnell and a beach house that most of us here would die for. He would not have those assets had he not gone overseas to work for them. He would not have attained them on the pay scales in this country no matter how good he is at his job. Just for the record Mr Key is nodding in total agreement. I cannot think of one profession or one trade in which a person would not be better off working overseas—not one. [ 
Interruption 
] Is the member giving me one? 
John Key 
: Graeme Hart—he’s worth about $1.5 billion. 
PETER BROWN 
: Where is he living? 
John Key 
: He lives in St Heliers. 
PETER BROWN 
: That is the one exception. 
Brian Connell 
: Douglas Myers is another one. 
PETER BROWN 
: Madam Speaker this is difficult enough without these fellows— 
Madam SPEAKER 
: Yes it is difficult enough. Could we please stick to the bill. 
Simon Power 
: I raise a point of order Madam Speaker. I appreciate that we are in urgency and that things move along in a reasonably convivial way but if the New Zealand First member personalises the debate in a way that involves Mr Key’s non-parliamentary life then he can expect some interjection from those in Mr Key’s party who sit around him. 
Madam SPEAKER 
: I take the member’s point. I thought there was an element of camaraderie there—obviously I was mistaken. It was getting out of control. Let us get back to the purpose of the bill. No humour is required at this stage—members should just address the bill. 
PETER BROWN 
: As I recall Mr Key made reference to his own circumstances in his own speech and I think he took what I said with good humour. If we open the door for anybody to come here to buy anything then we encourage young New Zealanders to go overseas to earn the big bikkies needed to come back and buy the country. 
New Zealand First unashamedly believes that there should be some restrictions on overseas investment in this country. We will not get mixed up like ACT members and confuse that with people who come here with their money on a permanent basis determined to settle here invest here and play a positive part in the economic and social well-being of the country. We are not confusing overseas investors with immigrants who come here and make a commitment to this country. The ACT member seemed to get quite confused when illustrating that point. 
The Greens have produced a Supplementary Order Paper much of which on the surface New Zealand First supports. We have not had a chance to examine it in detail or to discuss it in caucus but the Greens make some points that sit comfortably with New Zealand First particularly in respect of the purpose clause. The Supplementary Order Paper enlarges the purpose clause basically by adding clause 3(b): “Any ownership or control must be in the national interest for the long term benefit of New Zealanders.” We think that that is a fairly level-headed approach. The Supplementary Order Paper further adds clause 3(c): “Public participation in decisions about overseas investment will be encouraged.” I tell Mr Donald that New Zealand First will support that also. 
I regret to say that we have not had a chance to examine the rest of the Supplementary Order Paper in detail and therefore have been unable to discuss it as a caucus. I notice that the amendment to insert clause 18(2)(g)(i) relates to: “provisions made for settlements to claims made under the Treaty of Waitangi including return of land;” and that part of that clause refers to the principles of the Treaty of Waitangi. That puts us on our guard. But we will support the amendment to the purpose clause because we think that the Greens have enlarged it to reflect what most New Zealanders feel about overseas investment. 
I conclude by drawing the House’s attention to the fact that very recently a football club in the UK namely Manchester United was sold in large part to some Americans. There was just about uproar in Manchester. Manchester United is still going. The team is still playing soccer as far as I know. It has not been moved out of the country—it is still there. The players still play in red and white. It still has Wayne Rooney and all the stars. But the Manchester United fans created uproar. The Government wants to do something like that to this country. It wants to do to New Zealand what has been done to the Manchester United Football Club. It is saying that it will do that to New Zealand—so does it not expect some passion and concern out there? I say to the Government that it is wrong. Can Government members tell me what gain was obtained for the country and for the average New Zealander by the sale of $16 billion worth of assets under Labour and National in the 1980s and 1990s? They should tell me that. 
Hon David Cunliffe 
: What have the Romans done for us? 
PETER BROWN 
: The member thinks it is a joke. He did not think it was a joke when he had to buy back Air New Zealand a couple of years ago. He did not think it was a joke when the Government had to buy back Tranz Rail after the average New Zealander had been promised a first-class railway system. If the Government has not learnt the lesson of selling things cheaply then it should have done so by now. 
New Zealand First is a political party founded on the principle that first and foremost it will look after New Zealanders and this country. [ 
Interruption 
] The member over there makes a noise but if he thought a little more deeply about what the people in Otaki think about this he might have a different view. Maybe he should go out and ask them whether they want overseas investment. Oh no that would be getting too close to the coalface. The Minister is shaking his head. 
This bill will get through because the good old boys of politics in this country National and Labour will combine. They will put up a sign saying that this country is for sale and going cheaply and that buyers should come and talk to Michael Cullen and John Key. New Zealand First opposes this bill. 
A party vote was called for on the question  
That the amendments recommended by the Finance and Expenditure Committee by majority be agreed to 
. 
Ayes 61 
New Zealand Labour 51; United Future 8; Progressive 2. 
Noes 54 
New Zealand National 26; New Zealand First 13; ACT New Zealand 7; Green Party 7; Maori Party 1. 
Amendments agreed to. 
A party vote was called for on the question  
That the Overseas Investment Bill be now read a second time 
. 
Ayes 61 
New Zealand Labour 51; United Future 8; Progressive 2. 
Noes 54 
New Zealand National 26; New Zealand First 13; ACT New Zealand 7; Green Party 7; Maori Party 1. 
Bill read a second time. 
Instruction to Committee 
Hon PAUL SWAIN (Minister of Labour) 
: 
I move  
That it be an instruction to the Committee of the whole House on the Overseas Investment Bill that it take the bill part by part 
. 
Motion agreed to. 
In Committee 
Part 1Preliminary provisions 
JOHN KEY (National—Helensville) 
: 
 We are up to the interesting bit now the Committee stage debate on the Overseas Investment Bill. We know from the speeches on the second reading where the divisions in Parliament on this bill lie. I want to make particular reference to clause 4 “Overview”. Clause 4(1)(b)(i) talks about subpart 1 of Part 2. At the Finance and Expenditure Committee David Parker on behalf of the Labour Government inserted into this subparagraph the words— 
Simon Power 
: I raise a point of order Madam Chairperson. I am sorry to interrupt my colleague but in the time since we have started this debate the Minister has not been in the chair. He has just returned to it now. I ask that we get some kind of discipline around Ministers’ seating arrangements while we are in Committee. 
The CHAIRPERSON (Ann Hartley) 
: I apologise. The Minister will stay in the chair. 
JOHN KEY 
: Sadly that is the position the Minister feels he will be in regarding the position of Minister of Finance as well—a chair was so close to him but in a few months’ time the opportunity will be gone and never will he manage to position his bottom on the Minister of Finance’s chair. What a tragedy. Let me go back—[ 
Interruption 
] Well it will be anyone— 
Darren Hughes 
: Does he think he will get the job? Don Brash will give that away. 
JOHN KEY 
: If he does and it is for the good of the country I shall welcome and support the incumbent person. I shall support that decision fully because the National Party believes in what is good for the country not what is good for Labour. That is why Darren Hughes will be so firmly rejected when the election takes place. But let me digress no more; I will go back to the Overseas Investment Bill. 
I want to talk about the addition to subpart 1 of Part 2 in clause 4(1)(b)(i) that was imposed by David Parker on behalf of the Labour Government during the select committee process. The additional words state that subpart 1: “imposes a statutory marginal strip condition for certain overseas investments in sensitive land:”. That clause originally included the words following on from those I have just quoted “for adequate and fair compensation”. The National Party would have supported that—[ 
Interruption 
] Well we would have discussed those words—“for adequate and fair compensation”. I suspect that the National Party finance spokesperson may have had some concerns about the costs of that compensation. But putting that to one side we would have supported the inclusion of the words “for adequate and fair compensation”. Those words were not added. One is left with the feeling that that clause is nothing short of a grab of a property right—nothing short of the view of a Government that cannot quite differentiate between— 
The CHAIRPERSON (Ann Hartley) 
: Can I just clarify that we are talking about Part 1. 
JOHN KEY 
: Absolutely—Part 1 clause 4(1). Madam Chair were you not listening to my speech intently? I think it is one of the better ones I have delivered in Parliament so far—and Mr Cunliffe is nodding his head. 
Let me go back to clause 4(1)(b)(i) which talks about imposing a statutory marginal strip condition for certain overseas investments in sensitive land. [ 
Interruption 
] Yes that is right. We know that because the words “for fair and reasonable compensation” were not added this measure will fail. Unlike the Labour Government we understand property rights. We understand the definition as being that if something one owns in one’s own name is taken from one—“involuntarily acquired” is the term—there must be compensation. 
Clearly the Labour caucus voted for the wording that is in the bill. I understand Mr Parker’s reasons for doing so. He had some local reasons. He is under a lot of pressure in his seat of Otago. I understand that. I have been down there. I got the same reaction in Otago as I got when I was in Otaki the other day. In Otaki I asked what people thought of the local member Darren Hughes and they had never heard of the bloke. That is how they put it: “Never heard of the bloke.” I asked whether he was the guy cleaning out the back of the chicken farm that I was visiting and they said: “No I don’t think so; I think he’s in Wellington.” I got the same sort of reaction in Otago. 
I understand that we are in a political environment and that Mr Parker has a lot of high-country stations in his electorate. [ 
Interruption 
] Yes he has to get it pumped up in the  
Otago Daily Times  
that up here in Wellington he is not just sipping lattes served by Deborah Coddington; he has to do something when he is up here. So sure enough he thought that if he put this provision in the bill it would be really popular. I guess it would not be popular with those who are selling but it would be popular with some anyway. That is why Mr Parker did it. We saw the true colours of the Labour Government which really does not believe in anyone’s property rights or anyone’s ability to earn anything in his or her own name when Labour members happily followed the Pied Piper Mr Parker and voted for the inclusion of that provision. That was fair enough except that when they came to Parliament they could not get even the Greens to agree with it. That is how sad it was. [ 
Interruption 
] My friend Mr Donald is looking across and saying “maybe”. The Government is in an unbelievable situation. 
DAVID PARKER (Labour—Otago) 
: 
 The reason we cannot get support to pass this rather moderate provision relating to the compulsory creation of marginal strips as a precondition of the sale of rural land to foreign people is that New Zealand First and the Greens oppose it because they favour a total ban on the sale of rural land to foreigners. So it is not because they disagree with our more limited position that they oppose this provision. 
I say to the member who just spoke that Labour does oppose confiscation of property rights without compensation but the point here is what the property right is. Does a property right in rural land in New Zealand include the unrestricted right to sell to an overseas person? Is it wrong in law for the Government to say that it will not allow rural land adjacent to the foreshore a river or a lake to be sold to an overseas person unless a marginal strip is reserved? It is not. Until 1995 the Land Settlement Promotion and Land Acquisition Act made it absolutely clear that there was an almost total prohibition on the sale of rural land to foreigners—sale of land was not merely subject to a condition about marginal strips; it was totally prohibited. Against that background it is wrong to suggest that a private property right includes the unrestricted right to sell overseas. 
Mr Key is saying that the public’s right to control through the Government the sale of land to overseas persons and to control access to our waterways ought to be transferred from the public to the private. At the moment the position at law is quite clear given our history that private property rights do not include the unrestricted right to sell rural land to overseas people. The argument John Key the National Party and ACT put to the contrary is wrong in principle. 
They are asking the wrong question. They say it is wrong to confiscate a property right. We agree. But the question is what property right is being confiscated here. If a property right in rural land has not historically in New Zealand included the right to sell to overseas people giving people the right to sell to overseas people subject to a precondition of laying off a marginal strip is not confiscating anything. No one is forced to sell to an overseas person. If a person wants to have the privilege of doing so it is within the jurisdiction of this Parliament to say quite properly that as a precondition to that permission we will reserve a marginal strip. 
I make one final point. It is absolutely inconsistent to say that one can control public rights of access across the foreshore vis-à-vis Maori claims to interest in the foreshore and then within 1 year come to Parliament and say: “Notwithstanding our high and mighty principles on the foreshore we will have a different rule when it comes to New Zealanders selling to overseas people.” There is a word for that which I am not allowed to use in this Parliament. 
We cannot get those provisions through. We have other good improvements in the bill relating to controls on sales to overseas people which will go a long way to achieving a similar outcome but it is very important that the underlying principle here be unpicked a little. When people say that private property rights should not be confiscated they are right but people need to take great care in what they define as the private property right. If people do not take care they are in effect changing current baselines to privatise what are existing public rights. To do that in a world of globalisation and of concentrations of wealth in certain parts of our world is to threaten the birthrights of New Zealanders to access waterways. 
ROD DONALD (Co-Leader—Green) 
: 
 I raise a point of order Madam Chairperson. I did not want to interrupt the member particularly because I agreed with most of what he was saying but I suggest that we follow a logical sequence here. Part 1 does not have any reference to the marginal strips as far as I can see. If we can get Part 1 out of the way—because it is a relatively small part and I intend to take only one call—then we can have a much more wide-ranging debate on Part 2 where marginal strips are very much part of the debate. 
DAVID PARKER (Labour—Otago) 
: 
 Clause 4(1)(b)(i) speaks of imposing “statutory marginal strip condition for certain overseas investments in sensitive land:”. 
Simon Power 
: The Supplementary Order Paper refers to it as well. 
DAVID PARKER 
: The Supplementary Order Paper removes that provision. 
The CHAIRPERSON (Ann Hartley) 
: That is where I did get confused before. 
DEBORAH CODDINGTON (ACT) 
: 
 That was a great speech from “Michel Foucault”! The member said that property rights are whatever one decides they are and whatever anyone wants them to be. He is from the party that says: “We’ve got principles; what principles do you want to have today?” as they dive into their bag of all sorts of different principles. 
Property rights are absolute. They are not whatever one wants them to be. When that member goes on about people who have a property right not having the right to sell it to an overseas person that is absolute emotional claptrap because a property right means that a person has the right to sell a property to whomever he or she wants. I remind the member to read his history. Anyone who has read history might be aware of the Australian historian Geoffrey Blainey who wrote that in 1900 New Zealand had the highest standard of living in the world and had no restrictions on foreign investment. So David Parker is absolutely wrong when he goes on about what constitutes a property right and about the fact that it does not include the right to sell to whomever one needs. 
Foreign investors should be subject to the same rules as New Zealand investors. If those rules are wrong or they are being broken we need to look at them and ensure that everybody obeys them rather than tweaking them around to come up with all sorts of different definitions of what a sensitive asset is and who should be buying what. The member for New Zealand First who spoke before was going on about ACT and the National Party wanting to sell the whole of New Zealand to anybody who comes through the door. That is also a total misrepresentation of the truth. When has anybody said that? 
John Key 
: We didn’t say that did we? We were talking about lattes. 
DEBORAH CODDINGTON 
: No I am talking about New Zealand First. 
There are restrictions on anybody purchasing land in New Zealand. For a start one has to have the money to do so or the guarantee of the money from whoever is lending it. There are all sorts of laws and restrictions relating to the sale and purchase of land. The Minister of Finance Dr Cullen implied that legislation like this is necessary because New Zealanders have been led to believe through reading advertisements in an airline magazine for the sale of Poronui Station that the purchaser would have the right to the waterways. If we passed legislation every time some real estate agent came up with an over-hyped description of a piece of land or property that was for sale we would never get out of this place. I am still looking for a piece of Tuscany in Avondale. Are we going to pass laws saying that no New Zealanders should be led to believe that they will be able to buy a piece of land in Avondale? 
I come back also to the issue of overseas investment in significant business assets. Craig McNair dealt with that before when he talked about the fact that we should restrict investment in New Zealand businesses to New Zealanders because they are the only investors of good character. I remind that member of the wine-box inquiry which was brought into the House by his leader. Not one overseas company was involved in the wine-box inquiry and I wonder why that was. Well it is usually because people or companies that invest in a company a business or a corporation in another country are usually—I am not saying always but in the majority of cases—good corporate citizens. The mere fact that they are putting their money where their mouths are means that they will look at obeying the laws. That is what I mean when I say that if people do not obey the laws no matter who they are—whether they are foreigners or New Zealanders—that is when we should deal with it. We should not deal with it on the basis of the country where they live. 
I come back to the principle of property rights. It is all very well for Dr Michael Cullen to sneer at principles and to say that just because I personally am not coming back to Parliament I can afford to be fast and loose with principles. The ACT party is the one party—apart from the National Party—that is standing on principles and is debating this bill on the basis of principles. It comes back to the basic principle which I repeat to David Parker of whose land it is. Whose land is being sold here? What gives that member just because he has been elected to Parliament the right to breach property rights? 
CRAIG McNAIR (NZ First) 
: 
 I want to speak on Part 1 because of the issue that was raised by the Labour Government when it inserted clause 4(1)(b)— 
Brian Connell 
: I think it is termed the “steal clause”. 
CRAIG McNAIR 
: The member on this side of the House terms it the “steal clause”. This Government had a bill that allowed for the blatant flogging of New Zealand ownership to overseas interests. Only a few months out from an election all of a sudden Government members looked at themselves and said: “Oh my goodness! We have to do something that makes it look like we are being tough on foreign investors.” That is what they did; they sat around a table late at night thinking they had to do something about that in order to give people the impression that they were trying to be tough on foreign investors. That is what they did because they knew the sentiment out in the community. They knew that an overwhelming number of people gave submissions to the select committee in opposition to the bill. They knew the public sentiment on this bill so they thought they had to do something. They got their spin machine together they flew Mr Parker up from Otago early on a Monday—instead of having him come in on an early flight on Tuesday—they racked their brains and they thought of a way to spin some sort of explanation to the public to make it look like they were working in the best interests of the people. 
 Some people could call that clause the “David Parker amendment”. I was going to call it the “smokescreen amendment”. Or it could be called the “blatant electioneering clause” as well. The Government wanted to pop in an amendment that basically would allow foreigners to buy whatever they wanted but after they had done that it would take away their riparian rights. The Government would get rid of those rights if it wanted to in certain circumstances. Basically this is a poll-driven Government and if it thinks that the polls are telling it that people are not so approving of what it is doing then—nothing to do with conviction or anything—it will act purely on the polls. Its decision would be based on that alone. I think it is quite disgraceful that the Government has come out with an amendment that as I said is such a blatant electioneering clause. 
The Government has no conviction or passion about it. Labour has turned away from its principles. It signed up to the petition that went up and down New Zealand many years ago to stop foreign ownership of land and then it went totally against its principles which was proved by its $10 billion worth of sales of State-owned assets from 1984 to 1990. Allowing for inflation and the amount of assets those State-owned enterprises owned at the time they would be worth billions of dollars to the economy now. We have $10 billion a year going out of the country now just because of foreign ownership and this Government has allowed that to happen. The Government is obviously not concerned about it because it is letting it happen; it is continuing that kind of regime. It just does not give a stuff! But the Government expects us and the people of New Zealand to believe that it is trying to do something about the foreign ownership issue by popping in a clause like that by flying David Parker up from Otago on a Monday and by getting its spin machine together to spin out a bunch of lies to the public. That is what the Government is doing. 
Hon DAVID CUNLIFFE (Associate Minister of Finance) 
: 
 I am reluctant to take a call but I will take one quickly just to point out some of the inconsistencies in the submission by the previous speaker. He said that this Government lacks principle by bringing in a range of measures that provide some protection for sensitive land that is sought to be held by foreign investors. Well that is a bit rich because there is no lack of principle there. This Government has taken a very sensible moderate and balanced position on the one hand screening negative investment in sensitive and iconic land—and the Finance and Expenditure Committee has further developed the screening factors that will allow that—and on the other hand encouraging foreign investment and lowering compliance costs in areas where that is clearly in the net national interest to do so. That is the appropriate balance. 
Talk about a lack of principle—that member is from a party that when it gets out on the hustings rails against foreign investment and the country being flogged off overseas. Then its members come into this Committee and fail to support a sensible moderate amendment by my colleague that would protect an iconic space around riverbeds and marginal strips. Well they cannot have it both ways. Are they the defenders of the little guy or are they what they proved themselves to be last time—God forbid it happen again—they ever got near the Treasury benches: “… full of sound and fury Signifying nothing.”? 
ROD DONALD (Co-Leader—Green) 
: 
 That was rather an abrupt end to that speech but it was because I think David Cunliffe the Minister in the chair had run out of anything to say. It is very hard to defend this legislation particularly because it is a con job as I said in my second reading speech. It is a con job in a number of respects and I would like to focus particularly on the purpose clause to emphasise my point. 
Clause 3 “Purpose” is very cuddly-feely. It talks about it being “a privilege for overseas persons to own or control sensitive New Zealand assets”. It then states that that privilege will be acknowledged by requiring overseas investments in those assets to meet criteria for consent and by imposing conditions on consent. Then we have to go to the small print to see that while the purpose talks about assets the only real test will apply to sensitive land. There are b-all tests on anyone buying businesses other than a good character test so there is no expectation that a business buy-up will do anything other than tell us whether the person is supposedly of good character and there have been numerous examples of business buy-ups where the foreign purchaser has not been of good character. So as I said in my second reading speech if the Government is serious about overseas persons owning or controlling our sensitive assets being a privilege then it should give some teeth to that purpose. 
It has not; therefore the Green Party will endeavour to do what the Government has failed to do and will propose some amendments to the purpose clause. We will leave what is there as it stands because it goes part-way but we believe that it needs to be strengthened by making clear that any ownership or control must be in the national interest for the long-term benefits of New Zealanders. I ask the Government whether that is too much to expect of foreign investment legislation. If the Government does not support our amendment then in effect it is saying that it is happy for foreign investment not to be in our long-term interest and not to be for the benefit of New Zealanders. That is an indictment on a Labour Government. It is what one would expect of National if that party were in Government. Of course when National was in Government it did make it very easy for foreign investors to gobble up a lot of our strategic assets particularly State-owned assets. But for Labour to make that even easier under the smokescreen of saying that it is a privilege for overseas persons to own or control our sensitive assets is an indictment. 
The Government of course is doing this because it has an agenda and the agenda is very clear. The Government would dearly love a free-trade agreement with the United States of America and we know full well that it is high on the US shopping list that any restrictions on overseas investments be reduced or eliminated. The Government has locked itself into the General Agreement on Trade in Services (GATS) and I have to ask it whether it is just a coincidence that one of the major demands from our trading partners during the current GATS round is for New Zealand to scrap the Overseas Investment Commission. Clearly the Labour Government has done the bidding of our neighbours overseas—to the disadvantage of our own citizens—because the Government is scrapping the Overseas Investment Commission and transferring it to Land Information New Zealand. It will be even easier for foreign firms and individuals to buy up our land our buildings and our businesses and Labour is therefore doing exactly what those Governments representing multinational corporations that already own a fair chunk of New Zealand want it to do. 
So our other amendments to this part will tighten up the scrutiny on foreign investors by reducing the threshold from 25 percent ownership to 10 percent ownership. That actually brings us into line with the IMF the OECD and the United Nations Conference on Trade and Development in using 10 percent as a criterion for the standard international definition of foreign ownership. 
DARREN HUGHES (Junior Whip—Labour) 
: 
 I move  
That the question be now put 
. 
BRIAN CONNELL (National—Rakaia) 
: 
 When I took a call in the debate on the first reading of this bill I said that the National Party has no problem with the concept of foreigners pouring their hard-earned cash into New Zealand subject to certain rules of engagement. I went on to say that everyone wins: overseas investors get to live in Godzone and we get money for education and infrastructure. That is how citizens of New Zealand get to grow their wealth and that is the contribution that foreign capital makes to our economy. 
I was very much of that opinion when I came down to the House to talk on the second reading of this bill until I struck the “Mugabe clause”—the “Parker Pimpernel clause”. That is the clause that says—and this is from a rural member the member for Otago—it is OK to take people’s private property rights and it is OK to take the best part of their land and annex it without even offering compensation. The man’s true socialist agenda came pouring out and he is wearing it on his sleeve. He wonders why he will not be coming back to the House after the next election. Bye-bye Mr Parker. 
We should not be surprised that this is the type of thing the Government is doing. The same Government that is promoting this legislation is suggesting that the public can roam at will across private property. When Michael Cullen was on his feet he slapped a sneaky little left jab into my colleague Nick Smith—below the belt as is Michael Cullen’s way—by suggesting that this is the type of nonsense that the National Party would support. What he conveniently overlooked is that this is a Government bill sponsored by Michael Cullen and this sneaky nasty little clause is in the name of David Parker the soon to be former member of Parliament for Otago. But we should not be surprised because this is— 
Pansy Wong 
: Jacqui Dean is coming here. 
BRIAN CONNELL 
: Jacqui Dean is coming. I know her. She is working hard and knocking on a lot of doors in Otago and she will be here very soon. 
But we should not be surprised that this Government would embark on this type of rhetoric. I was at a public meeting in Timaru where the Minister of Agriculture—a Minister of the Crown—got up and in a public forum said that the annexing of private property can be justified in the public good. That is the sort of thing one would expect to hear from the leaders of some Central African countries. But to hear it from someone in the New Zealand Government who represents the Crown is simply unsatisfactory and not acceptable. 
It is all right for people like Mr Parker to say: “This land is everyone’s. We’ll put a value to it. No one’s going to miss it.” but that is the worst type of interference in the property market that I can think of. The member from the ACT party I thought made this point particularly well. Why is it that we have been seduced by minority groups into thinking that foreign ownership of our land means that New Zealanders will not be able to enjoy it? The facts do not stack up. Of the land that has been sold in the high country around mid-Canterbury six of the 11 stations sold in the last 2 years went to New Zealand interests. So much for the argument that they have been priced out of the hands of Kiwis. Fifty percent of those that were resold over the last 10 years went to New Zealand interests. 
Michael Cullen himself stood in the Chamber a few minutes ago and said: “You can’t take the land with you.” That is right. One cannot. It is always going to stay here. Yet that same Minister is sponsoring a bill that says it is OK to steal other people’s property. That is simply unacceptable. The great shame of all this is that rather than attract capital to New Zealand we are now getting ourselves into a situation where potential investors are starting to become gun-shy. Instead of welcoming those people and instead of using their capital we are losing that opportunity. I can think of an example in mid-Canterbury where a five-star beef block— 
Hon PAUL SWAIN (Minister of Labour) 
: 
 I move  
That the question be now put 
. 
ROD DONALD (Co-Leader—Green) 
: 
 I appreciate having a few more minutes to speak as I had not even got on to supporting my good colleague David Parker on his excellent initiative. But before I go there I want to finish talking about the amendments to the purpose clause that I have proposed on behalf of the Green Party and I am pleased to see that the Minister of Finance is with us to hear those. One of our fundamental concerns with the legislation as it stands is the extent of influence that the Minister has through his letter of direction to the Overseas Investment Commission. Although I have made considerable criticisms of the secretary of the commission in terms of how he has acted I recognise that the ministerial directive has pretty much determined how the commission operates. That has basically been—without quoting the letter in full—to facilitate overseas investment. The scrutiny function has very much taken a second-class position; the thrust has been to making it even easier for foreign investors to buy up our land our businesses and our buildings and we need some balance to that. 
Hence the amendment we are putting up to the purpose clause that public participation in decisions around overseas investment will be encouraged. I believe it is vital that the people of New Zealand have a say in whether overseas investments are appropriate rather than the regulatory authority simply carrying out the wishes of the Minister of the time—although given that the Minister is usually Labour or National there is very little difference between them in terms of their determination to make it even easier for foreign buy-ups. 
I say this not only as a citizen but also with the benefit of information from Mark Dunlop who made a submission to the Finance and Expenditure Committee. I think he was very brave to do so as a former member of the Overseas Investment Commission staff. He said in his submission that the bill is fundamentally flawed and that it does not provide the framework including supporting structures and safeguards necessary to facilitate or ensure only positive and high-quality overseas investment that is beneficial to New Zealanders. He goes on to talk about the role of the regulator and said that it is simply unacceptable that the same body can act as both a compliance and enforcement agency and an advisory and facilitative one. On the one hand the commission is trying to encourage overseas investment as per the directive letter; on the other hand it is meant to be trying to ensure that compliance is maintained. Hence our amendment and hence our criticism of the commission’s job now being handed over to Land Information New Zealand. 
I finish my call by saying that I thought it was an excellent move on the part of David Parker to use this legislation to enable statutory marginal strips to be created when a foreign investor buys up land that adjoins our foreshore our significant lakes and our significant rivers. It is a great step forward for public access in New Zealand. It recognises that the lakes the rivers and the foreshore are public should be open space and therefore should be accessible. I am extremely disappointed that some parties in this House that I thought supported public access and the ability for people who enjoy the great outdoors to get access to that public space are now voting against this provision simply because there is no provision for compensation. 
There is no provision for compensation when a subdivision takes place either. Will United Future now be demanding that landowners be compensated when they proceed with a subdivision? I hope not. I hope that they will see sense. I hope that the outdoor recreation lobby and its party actually get some benefit from having its name attached to United Future and I hope that United Future will change its position on these amendments—that it will not force the Government to move its Supplementary Order Paper and backtrack on what would have been a great step forward for New Zealand and for New Zealanders especially those who enjoy the great outdoors. I am very sorry to see Dr Cullen have to back down on these provisions. They were successfully negotiated by the Labour member for Otago in the best interests of not only his constituents but also people throughout New Zealand. 
LUAMANUVAO WINNIE LABAN (Labour—Mana) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 61 
New Zealand Labour 51; United Future 8; Progressive 2. 
Noes 51 
New Zealand National 26; New Zealand First 13; ACT New Zealand 5; Green Party 7. 
Motion agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 3 be agreed to: 
to omit this clause and substitute the following clause: 
3Purpose 
The purpose of this Act is to acknowledge that: 
(a)It is a privilege for overseas persons to own or control sensitive New Zealand assets by— 
(i)requiring overseas investments in those assets before being made to meet criteria for consent; and 
(ii)imposing conditions on those overseas investments. 
(b)Any ownership or control must be in the national interest for the long term benefit of New Zealanders. 
(c)Public participation in decisions about overseas investment will be encouraged. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 20 
New Zealand First 13; Green Party 7. 
Noes 92 
New Zealand Labour 51; New Zealand National 26; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 6 be agreed to: 
to omit from subclause (1) the expression “25” in both places where it occurs and substitute the expression “10”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 7 
Green Party 7. 
Noes 105 
New Zealand Labour 51; New Zealand National 26; New Zealand First 13; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 6 be agreed to: 
to omit from subclause (4) the expression “25” and substitute the expression “10”. 
Amendment not agreed to. 
The CHAIRPERSON (Ann Hartley) 
: Rod Donald’s amendments to clause 6 to omit and substitute an expression in paragraphs (a) (b) and (c) of subclause (4) are now out of order as they are inconsistent with a previous decision. 
The question was put that the following amendment in the name of Rod Donald to clause 6 be agreed to: 
to omit from subclause (5) the expression “25” and substitute the expression “10”. 
Amendment not agreed to. 
The CHAIRPERSON (Ann Hartley) 
: The next amendments to clause 6 in the name of Rod Donald to omit and substitute an expression in paragraphs (b) and (c) of subclause (5) are out of order as they are inconsistent with a previous decision. 
The question was put that the following amendment in the name of Rod Donald to clause 7 be agreed to: 
to omit from subclause (1) the expression “25” and substitute the expression “10”. 
Amendment not agreed to. 
The CHAIRPERSON (Ann Hartley) 
: The next amendments to clause 7 in the name of Rod Donald to omit and substitute an expression where it occurs several times in subclause (2) are out of order as they are inconsistent with a previous decision. 
The question was put that the amendments set out on Supplementary Order Paper 376 in the name of the Hon Dr Michael Cullen to Part 1 and the following amendment in his name to clause 6 be agreed to: 
to omit from subclause (1) the definition of  
computer register 
. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 100 
New Zealand Labour 51; New Zealand National 26; New Zealand First 13; United Future 8; Progressive 2. 
Noes 12 
ACT New Zealand 5; Green Party 7. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 1 as amended be agreed to. 
Ayes 87 
New Zealand Labour 51; New Zealand National 26; United Future 8; Progressive 2. 
Noes 26 
New Zealand First 13; ACT New Zealand 5; Green Party 7; Maori Party 1. 
Part 1 as amended agreed to. 
Part 2 Consent and conditions regime 
The CHAIRPERSON (Ann Hartley) 
: The debate on Part 2 clauses 10 to 79 includes debate on schedules 1 and 2. 
PANSY WONG (National) 
: 
 Madam Chair I hope that you will be very generous about accepting many calls because Part 2 is basically the bulk of this legislation. 
First of all I would like to raise some questions for the Minister in the chair Michael Cullen to answer because I really really want to get some assurances from him. As I pointed out in my second reading speech a lot of the resentment and negative public perception towards overseas investors particularly those purchasing buildings or investing in business is a result of some high-profile cases. There was some disproportionately bad publicity about some company that was supposed to move in and start mining or carry out some other operation and after many years nothing came of it. Officials came before the Finance and Expenditure Committee and said their hands were tied because the previous enforcement monitoring regime did not provide enough tools for them to be able to carry out their task. 
Part 2 Subpart 4 “Monitoring” talks about the role of the regulator. The select committee as a whole was quite concerned about the wording and the use of “may” as in clause 39 “Regulator may require consent holder to provide information for monitoring purposes” and clause 40 “Regulator may require any person to provide information for statistical or monitoring purposes”. I would like the Minister to take a call and explain to us whether it is really true in the past that the regulator found it difficult to obtain information or to actually monitor or to just pick up the phone to see why some of those investors’ plans had lapsed or whether the conditions had changed and what the reasons were. I think that created a lot of negative perceptions for the public which has not been helpful. 
So if the Minister can assure us that the word “may” in the legislation will be interpreted as an encouragement now that the regulator will be placed under Land Information New Zealand and that he or she will carry out the monitoring and enforcements that will relieve a lot of the negative perception towards overseas investors. In some cases the failure to fulfil the original conditions could be beyond the investors’ capabilities or circumstances could have changed. 
The select committee also requested that there be action on additional information and activities such as starting the collation of statistical information and the release of that for the public. Sometimes it is a fact that when information is not available people tend to have suspicions about what is happening. If information is available for public inspection that would be helpful for the public perception towards overseas investors. 
Of course the other thing I noticed was that 10 pages have been struck out of the bill— 
Brian Connell 
: The “Mugabe clause”! 
PANSY WONG 
: My colleague the very very learned hard-working and robust representative for Ashburton says it is the “Mugabe clause”. 
David Parker 
: I raise a point of order Madam Chairperson. Some people here have had relatives murdered by the Mugabe regime. That is true. I take offence at having a clause that is being associated with that despotic regime and would ask that you bring the member to order. 
The CHAIRPERSON (Ann Hartley) 
: Would the member withdraw reference to that please? 
PANSY WONG 
: I withdraw. Suddenly this bill will become a lot skinnier. Ten pages of it will be struck out. They relate to clause 21 which is entirely the effort of the member for Otago David Parker who is soon to be replaced by National’s Jacqui Dean. He put in 10 pages of legislation to create marginal strips without compensation. I could not believe it. The member explained this to us in the select committee. He said that it did not matter and would not affect the value of the property just because a marginal strip had been created. 
That is very very strange and I think the member might like to take a few calls. He seemed to be quite anxious to explain this himself and I invite him to do so. This is the Committee stage and all members are invited to explain and defend their position. So I invite the member to do that. 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 The provisions relating to the marginal strip of course will be removed by Supplementary Order Paper. That is the condition of United Future’s support for the bill. It also enables the National Party to vote for it. 
But I have to say I think Pansy Wong should not push her luck too far in terms of her moral outrage on the provisions that the Finance and Expenditure Committee put in. First she voted for Nick Smith’s member’s bill which did exactly the same thing and that was only last year; and second the current provision for a marginal strip after subdivision on coastal property was put in place in 1991 under the previous National Government. So Ms Wong’s “shock-horror” reaction lacks a certain amount of “probe” at the end of it I think one could say! Her whispering in Brian Connell’s ear is not going to help the matter in that respect; it will just confuse him I think more than he is already confused on most of these matters. 
The substantive issue that she raises is important. It is fair to say that under the current legislation the Overseas Investment Commission has insufficient capacity to follow up in terms of monitoring but more important the current Act which this legislation completely replaces is quite inadequate in terms of the penalties and enforcement regime. This legislation will provide for a much more effective penalties and enforcement regime should a purchaser fail to fulfil the conditions of consent. At the moment what one ends up doing is forcing such purchasers to sell. That is actually at the extreme end of the spectrum in terms of the appropriate solution that ought to be followed through. 
Although I think that has been part of the cause of public concern I think there are wider issues of public concern. There is a widely held belief which is not actually true that foreign purchase leads to greater restriction on access over and through property. For some peculiar reason people think foreign purchase means land is not subject to other laws around planning etc. and is outside the New Zealand legal framework. That is completely untrue. I am always opposed to any move to import into this legislation attempts to impose regulatory procedures if one likes in terms of planning etc. What we are doing quite consciously in this bill is providing mechanisms whereby as part of the consideration we can take into account national-interest considerations around access conservation etc. and we have already begun to do some of that. The Young Nick’s Head agreement was exactly one of those. The Shania Twain agreement was another one of those kinds of agreements. We were able to get public gains in terms of access in terms of conservation and in terms of historical protection which could not have presented themselves if the sale had occurred to a New Zealand citizen or to a New Zealand resident person. 
I think we are engaged in an important balancing act. Naturally enough my colleague from Otago is concerned about the proportion of high-country land in the Queenstown Lakes District that is owned by overseas owners. 
Brian Connell 
: Quite high. 
Hon Dr MICHAEL CULLEN 
: It is quite high. Even the member for Rakaia when he raised the issue told us that 50 percent of land transferred in mid-Canterbury was transferred to foreign ownership. But there is actually quite a high— 
Brian Connell 
: I raise a point of order Madam Chairperson. If the Minister is going to refer to what I said at least I expect it to be reported accurately. I said that 50 percent of the land that had been resold went back into New Zealanders’ hands. 
The CHAIRPERSON (Ann Hartley) 
: That is not a point of order. It is a debating point. 
Hon Dr MICHAEL CULLEN 
: If I could be more precise the figure was slightly less than 50 percent. The member said that of the 11 properties sold six were bought by New Zealanders which by a very simple piece of arithmetic that is not beyond the member means that five were not. That is pretty close to 50 percent of the total being passed into foreign hands in a relatively brief space of time. 
There are some countries in the world where that could not happen at all—where foreigners are not allowed to buy land. In Australia for example there are still some pretty strange rules about non-Australian citizens buying urban property and they would apply to some of the most senior chief executives in Australia. I think we have to bear in mind that balance is required in this respect so that there is public confidence. The fact I think that the so-called two tired old parties are combined against the fringe elements in this House on this matter is not one that gives me great cause for concern. It gives me some degree of confidence that probably there is a sustainable consensus that will be reasonably stable moving forward into the future. 
GORDON COPELAND (United Future) 
: 
 I want to take a call on clauses 21O and 21T of Part 2 of this bill because I want to make United Future’s position on the matter of marginal strips etc. very very clear indeed to the Committee. I do so firstly to clarify what the Minister Dr Michael Cullen has just advised the Committee and secondly to completely rebut and debunk the comments that the co-leader of the Green Party Rod Donald has made to this Committee about our position. It is amazing how other people in other parties think they know more about United Future’s position than we do. 
 I go first to the Minister’s comments. It is not true that United Future asked the Government to remove marginal strips from this bill—we did not. We said to the Government that we could not agree to clause 21T and the provision that no compensation would be payable to any person. My specific suggestion in that regard was that the bill should provide for an appropriate access fee to be paid to the New Zealand land seller. United Future’s position in relation to this matter was very very clearly set out in the commentary on the bill that came back from the Finance and Expenditure Committee which stated: “United Future although supporting the creation of marginal strips next to rivers lakes and foreshores does not agree that private land should be acquired for this purpose without the payment of just compensation. If the creation of such marginal strips is seen to be of value to the people of New Zealand then the Crown on behalf of its citizens is duty bound to pay compensation.” I advise the Committee that the decision to remove marginal strips in their entirety from this bill was the decision of the Government but one that we acceded to. I think that is a slightly different story from the one given to the Committee by the Minister. 
I now turn to the Greens’ comments. Clause 21O states that a marginal strip put aside under this legislation is to be put aside until the end of time. It is a permanent alienation of the use and enjoyment of a piece of private land currently owned by a New Zealander. It is State interference in use and enjoyment if it forces people to share something that they may not necessarily want to share. Clause 21T then states—and I want to get this very clear because it is quite obvious to me that Rod Donald has the wrong end of the stick completely—that no compensation will be paid to New Zealanders who own private land if they are selling it to a foreigner. Mr Donald has told the Committee that we think that compensation should be paid to foreign purchasers. Obviously he has never read a sale and purchase agreement. He has no idea how they work because that is a ludicrous comment. That has never been our position and in fact it is a total misrepresentation of everything we stand for and believe. We are not as stupid as that. 
I shall talk also about our affiliation partner Outdoor Recreation NZ. I advise the Committee and particularly Mr Donald that Outdoor Recreation NZ’s position in regard to access strips in general which it is strongly in favour of as is United Future is that they should not be created at the expense of property rights. That is the point of difference is it not between Outdoor Recreation NZ the common-sense Greens—the practical Greens the intelligent Greens the logical Greens—and the party in this House called the Green Party which masquerades in that colour when in fact we all know it is just like a watermelon inside. The Greens are as red as it gets just like a watermelon. I am not at all surprised that the Greens are quite comfortable with the no-compensation clause. They back it to the hilt. The Green member Mike Ward spoke in this House on my member’s bill. His attitude was this: if he Mike Ward personally or any of the Greens disagreed with what someone was doing on his or her property they reserve to themselves the right to stop the person from doing it and to force him or her to do something else. That is what Mike Ward of the Greens told the House in respect of my private property bill and that is the Greens’ attitude. That is outrageous. It will not be tolerated by New Zealanders. Really when New Zealanders understand that that is the Greens’ agenda they will make sure that they disappear from Parliament. Such views override the Magna Carta and all the rights we have worked for over about 1000 years in terms of private property. To have those rights overridden by such ridiculous nonsense and sheer arrogance is unacceptable. 
ROD DONALD (Co-Leader—Green) 
: 
 I appreciate the opportunity to take a call or two on this part because it is the substance of the bill. As I said in my second reading speech I would like to give the Government some credit for some improvements to this part of the bill and to thank the officials for their assistance in achieving those improvements—particularly such things as adding a definition of “good character” and so forth. In our view the bill is still remiss and therefore we have put up a number of significant amendments that I would like colleagues in the House to give some serious consideration to. 
The first amendment is to clause 10 where it refers to “an overseas investment in significant business assets”. We want to make it very clear that in our view significant business assets should include aquaculture. Aquaculture is an increasing business on our coastline. In fact it is a business that in our view involves people in businesses being able to make a private profit from an activity conducted on and in the public commons. Therefore the coastal marine environment in our view is just as sensitive as the offshore islands the high country the lake fronts and the riverbanks that have particular restrictions placed on them under this legislation. 
We believe that aquaculture should be covered by this legislation and it is not. That is a significant deficiency in the legislation so we want clause 10 amended to extend to aquaculture. I have proposed that amendment because this concern was reinforced by the Royal Forest and Bird Protection Society in its submission that stated the bill failed to protect public open space in the coastal marine area and because there was no screening of purchases by overseas persons of their resource consents or application for resource consent to use the coastal space for aquaculture. We think that it is absolutely vital that any foreign investor who cannot prove that such an investment is in the national interest should be disallowed from investing in applications for coastal permits and associated resource consents. 
Therefore we would like to see this bill include some weighty environmental criteria to ensure that those wanting to use our public commons our coastal marine space which is scarce and is sensitive need to pass a hurdle as least as high as the hurdle that is required of those wanting to buy the high country or an offshore island. 
But we are well aware why the Government is opposed to that amendment. It is because successive Governments have given away this Parliament’s right to protect our coastal environment. They have given it away through their negotiations on the General Agreement on Trade in Services. Way back in 1994 a National Government basically gave away our power to protect our coastal space and then the Labour Government made it even worse through the Singapore free-trade agreement where it basically did not exclude aquaculture from that agreement. Therefore it is included and it would be regarded as a breach of that agreement if the current Government or the current Parliament were going to protect our coastal marine environment. I think that that is extraordinarily sad and it is outrageous that one Government has chosen to bind all future Parliaments in this way. 
I contrast that with the fact that even what the Government has signed up to with the OECD has at least left the door open by reserving commercial fishing. Commercial fishing could be interpreted as aquaculture but because of the Singapore closer economic partnership Labour signed up to I think without due consideration we are locked into forever in the future allowing more and more of our coastal areas—areas that New Zealanders value as a place to go fishing for themselves a place to just potter around in their boats—to be taken up by marine farms of one sort or another to the detriment of our ability to enjoy our great outdoors. 
 The next amendment we will be putting forward to this part relates to the threshold at which an overseas investment should be scrutinised. As I said during the second reading debate Jim Bolger in the dead of the night lifted it from $10 million to $50 million and then this Labour Government reinforced the $50 million threshold in the Singapore closer economic partnership and they want to multiply it up to $100 million whereas we want to cut it back to $10 million. I am hoping we will get some support from New Zealand First on that at least because they supported a figure of $10 million at the select committee review in 2002. 
We also have an amendment that would require all pastoral leases to go through a tenure review process before any of the high country can be sold. That was another recommendation from the Royal Forest and Bird Protection Society which we believe has a lot of merit and therefore we are putting forward an amendment to achieve that goal. 
But the most significant change we want to see in this part and the one I hope I have the chance to elaborate on is that we want to see clause 18 applied to significant business assets. Clause 18 as far as it goes is quite a good clause. It does require somebody wanting to purchase land to demonstrate that he or she will achieve a number of things such as the creation of new job opportunities the introduction of new technology and business skills and an increase in export receipts for New Zealand and that in the process there will be adequate mechanisms to protect or enhance existing areas of significant indigenous vegetation. I appreciate that the Government has added at my request on behalf of Fish and Game New Zealand that exotic species will also be covered in terms of taking account of or protecting or enhancing them in the case of trout salmon and gamebirds but also that public access will be enhanced. 
But these provisions do not apply to business purchases and that is ridiculous. Why apply them only to land? Why not extend them to significant business assets? So we have put forward amendments that say clause 18 should apply to business buy-ups. It is actually business buy-ups that are having much greater impact on our economy than land purchases by foreign investors. It is not enough that those businesses only have to meet a “good character” test. They should have to demonstrate that buying a business is going to lead to more job opportunities bring new technology to New Zealand and will look after the environment. We would add by way of an amendment that they should increase domestic substitution of imports into New Zealand to balance the export receipts the Government has put in. 
It is absolutely vital that business buy-ups are greenfield investments not asset stripping which so many business buy-ups have been in past. Tranz Rail was a classic example of foreign investment leading to this Government having to bail out the rail network in New Zealand because it was stripped of any worth and left in a very dangerous state. So the Government ought to back extending clause 18 to include significant business assets. Without that this bill has no substance. It is completely gutless. It will not achieve the intent the Government claims it will achieve and it will certainly not meet the expectations of New Zealanders for tighter scrutiny of applications for foreign investment let alone scrutiny of their activities when they come to New Zealand. 
It is also remiss of the Government not to have any reference in this part to the Treaty of Waitangi and we have suggested an amendment to clause 18(2) so that there are adequate mechanisms in place to ensure that any decision is made with reference to the principles of the treaty. We think that the Government should not back off its commitment to the principles of the treaty and therefore we seek that amendment to this part. 
We also want to pick up on the submissions that came from many people that any regulatory agency should be keeping a full and correct record of all land business and building sales to foreign investors. Something that came through and was I think virtually unanimous around the table was that we do not know the extent of foreign ownership in this country and even if the scrutiny threshold is higher than zero the monitoring should be set at a base level. 
DEBORAH CODDINGTON (ACT) 
: 
 That is one of the nuttiest proposals I have ever heard. How could the principles of the Treaty of Waitangi be applied to an overseas investor who is seeking to purchase a business in New Zealand? I thought I had heard everything! We have heard a lot of things today. We have heard about assets and about how foreigners are gobbling up New Zealanders’ land. We have heard that the Labour Government has brought in this bill to suck up to the Americans so that we can have a free-trade agreement. I have heard so much racist and xenophobic claptrap that I am getting to stage where I wonder why any foreign investor would want to come here in the first place. We are very unwelcoming. People in the Green Party think that the Berlin Wall was built to keep the Westerners out. 
I come back to Part 2 and specifically to clause 18 and the tests that need to be passed before foreign investors can purchase and invest in a business—in particular in land with assets or important assets. May I just remind the member from New Zealand First that no assets were sold. No State assets have ever been sold in this country. They were all liabilities. If that party is to be consistent in its constant raving about the selling of the New Zealand post offices and Telecom etc. why does it not put its money where its mouth is? Why does it not buy them all back take away everybody’s cellphones put everybody back on a waiting list where they had to wait for 6 months to get a new phone connection have the New Zealand post office own all sorts of workshops etc. have $90 million of taxpayers’ money going into it every year and stop bleating on about the downside of selling to foreign owners things that were liabilities to the taxpayer? One could put up a good argument for the railway by the way that it was the New Zealand owners who stripped it and the foreign owners who at least tried to do something with it. 
Rod Donald 
: Ha ha! 
DEBORAH CODDINGTON 
: I just remind the member of the wine-box inquiry. How many foreign investors were involved in that? Not one. 
I come back to clause 18. 
Rod Donald 
: How many of them gave money to ACT? 
DEBORAH CODDINGTON 
: None. How can we force people to share? That is what the Green Party says we should do. It says that everybody should share and it wants to force them to share. We will regret going down this path. What right do we have to force somebody who is purchasing a piece of land to put in walkways? What right do we have to force people to support the registration of historic places wahi tapu or historic areas under the Historic Places Act? 
Rod Donald 
: Demolish the lot then. 
DEBORAH CODDINGTON 
: That member has very little faith in human nature—no faith at all. Why does he think that just because he would demolish the lot everybody else every other private landowner in New Zealand would cut down every piece of bush and destroy every archaeological site? Just because he has the view that he would do so that is no reason to believe that every landowner in New Zealand will do so. If we have public walkways set aside and if we allow access for people to go trout fishing and salmon fishing how long will it be before the Department of Conservation with its current philosophy of “humans bad no humans good” bars all public access to those areas? I predict that it will not be very long at all. 
It is bad enough that anybody in New Zealand has to go through the tortured Resource Management Act process to get anything done without foreign investors having to be subject to all the conditions and tests set out in the bill. And what happens then? We have seen what happens when they do pass the tests. We have seen what happened with regard to Motutapu Station where the Minister of Finance Dr Cullen talked about the agreement the Government was able to get there with walkways etc. What have those purchasers got out of that? We can look at the tortured process Elaine Lange otherwise known as Shania Twain is going through in order to get her house built even though she has agreed to put in walkways and register significant sites. We should subject everyone to the same process. 
BRIAN CONNELL (National—Rakaia) 
: 
 I have to start by responding to Michael Cullen. He is turning into a sensitive wimp. I do not know what is causing it but I suspect that the political tide is going out and his true character is emerging. 
Simon Power 
: He’s brittle. 
BRIAN CONNELL 
: He is brittle that is for sure and it is starting to show. If he is going to quote me I expect him to do it accurately. What I said was that there had been 11 high-country sales. Six of those had been sold into Kiwi hands and five had gone to international interests. The five international owners have subsequently turned over those properties. Fifty percent of them—actually three of them—were sold back into Kiwi hands. My maths are much better than Michael Cullen’s because I know that that does not add up to 50 percent of the 11 original sales. That probably explains why today the Government announced a monumental cock-up to the tune of $1 billion over what are now New Zealand’s carbon liabilities instead of the $500 million positive position it tried to tell New Zealanders their country would be in when it ratified the Kyoto Protocol. 
Mr Cullen then took a cheap shot at my colleague Pansy Wong when he said that it was a National Government that drove subdivision legislation. Well there is a huge difference in driving subdivisions. Subdivisions actually add value because people want them. Then he took another cheap shot—it was a threat really—at my colleague Pansy Wong when he said that she should be very careful with her moral outrage because of something Nick Smith had done. 
Pansy Wong 
: He tried to intimidate me. 
BRIAN CONNELL 
: He tried to be intimidating. Well one does not intimidate Pansy Wong as easily as that. In fact one does not intimidate anyone from the National Party as easily as that. If the Minister is so sensitive and if he is so sure in regard to the 10 pages of provisions the member for Otago put into the bill that state one can compulsorily take private property from New Zealand citizens without any compensation then will he please explain why he is moving a Supplementary Order Paper to take them out? Will the Minister take a call and explain that fact? I bet he will not. What he will do is to rage on about Pansy Wong and Nick Smith take cheap shots and try to deflect from the fact that it is his bill—a Government bill that he is sponsoring—that proposed the clause in the first place. 
It was only when he had to bow to public pressure because the tide was going out for the Labour Party and the rest of his cronies who are associated with it that he thought: “Oops I’d better try to do something.” 
But for that Supplementary Order Paper the National Party could not have supported this bill and that would have been a shame because the essence of overseas ownership of New Zealand lands subject to reasonable conditions is something I strongly support. 
I have to ask where the negative sentiment comes from that says that overseas investment is bad that it is hurting New Zealand. Overseas investors wanting to invest in New Zealand’s economy is a vote of confidence in our economy. It is not a negative sign. For goodness’ sake we are now a multicultural society! We cannot build a wall around us to try to keep the rest of the world out. It simply does not work like that. We are all immigrants starting with Kupe. Let us not forget that fact. 
I am a strong believer that investors coming to New Zealand with their hard-earned cash and wanting to invest here is something we should welcome with open arms. Arguments to the contrary are simply arguments from people with their heads in the sand who hope the world will pass them by. 
I can think of some practical examples to share with members of this Committee. I can think of a Japanese investor who bought a farm near the foothills of Rakaia who spent $600000 buying it and who everyone thought was mad— 
The CHAIRPERSON (Hon Clem Simich) 
: I call Craig McNair. 
SIMON POWER (Senior Whip—National) 
: 
 I raise a point of order Mr Chairperson. The point the National Party would like you to clarify is about Mr Connell being obviously interrupted in mid-sentence by the bell. That exact same set of circumstances occurred when Mr Donald was speaking and the Chair granted him an immediate second call despite the fact that other members of Parliament were seeking the call. Mr Connell was interrupted in mid-sentence. He sought a second call but he was not given it. I guess that what members on this side of the Chamber are now asking themselves is this: under what circumstances are second calls being granted back-to-back to some parties and not to others? 
DAIL JONES (Junior Whip—NZ First) 
: 
 New Zealand First has the utmost faith in your decisions on these matters Mr Chairman and would not want to question them at all. But I presume there is a practice that where there is a spokesperson he or she is entitled to get a second call. I think it was part of the Standing Orders some time ago that spokespersons were supposed to get a second call if possible. I am sure that Mr Rod Donald is the spokesperson for the Green Party on this issue but I do not think Mr Connell is the spokesperson for National on it. In any event I am sure you are working out the proper apportionments and New Zealand First has every faith in your decision to give the call to Mr McNair. 
BRIAN CONNELL (National—Rakaia) 
: 
 Perhaps Mr Jones could point to the Standing Orders that state that only spokespersons get back-to-back calls. 
The CHAIRPERSON (Hon Clem Simich) 
: I thank members for that. It is entirely up to the Chair. Yes Brian Connell was in mid-sentence. There are quite a few calls to come yet and I have no doubt the member will get some of those. I tried not to cut him off. Mr Donald was given consecutive calls because he has a great number of amendments. I think it will be fair all round. I did not want National to sneak too far ahead of New Zealand First at this stage. 
CRAIG McNAIR (NZ First) 
: 
 This afternoon I want to focus on clause 21T “No compensation for marginal strip” and to get my case clear on this issue. Either we let overseas owners have the land or we do not. It does not really matter what side of the argument we are on—whether we are for this bill or against it whether we are for foreign ownership or against it—at the end of the day what this clause and David Parker’s amendment were about was taking something away from somebody. They are saying: “We’re going to let you have it but once we’ve let you have it we’re going to take some of it away from you.” We should make up our minds at the beginning. Either we let the person have it or we do not let the person have it. That is the deal and that always should be the deal. That is the problem New Zealand First had with the clause and with David Parker’s amendment—the smokescreen amendment. I think it is outrageous that the Government was even considering that clause and still to this day Government members get up and passionately advocate for it. 
We all know the reason why the Government is pushing this issue. An election is on its way in the next 1 2 or 3 months. Government members looked at each other and said: “What are we going to do? We have to do something to make it look like we are the true Labour Party of the old days.”—and by that I mean the Labour Party before 1984; the same Labour Party that went up and down this country signing a petition pledging that it would— 
Jill Pettis 
: Where was that member in 1984? 
CRAIG McNAIR 
: Admittedly I was quite young. This is not from memory; this is from learning a bit of political history. The facts are that the Labour Party of old would not have supported this bill. 
New Zealand First says: “Make up your mind. Either let them have it or not.” New Zealand First says that at the end of the day this bill is wrong it is fundamentally flawed and it is not putting New Zealand and New Zealanders first. This bill allows foreign investors to come here flog off our country’s assets in a huge way and have no regard for New Zealand and New Zealanders whatsoever. That is what New Zealand First says. There is $12 billion going out of this country every year because of the dealings of Labour and National in the 1980s and 1990s. 
There is another point on this issue that I want to talk about before I move on. Who will be next? That is the question I want to ask. Labour Party members put their heads together thinking that here is a situation whereby they can make it look like they are being tough and looking after New Zealand’s interests and put in an amendment to say that they will allow foreign investors to buy land in this country but then they will take some of that land away from them. That is what Labour members did. They put their heads together and said: “Let’s do that.” and then they said: “We will push this little part for now and in the future we will start taking New Zealand - owned land off New Zealanders once we have got this amendment through.” So who will be next? 
Labour is very very disappointed. David Parker was almost devastated by the fact that his amendment could not be rammed through today. He was devastated. Labour has a hidden agenda on many issues and on this issue those members jacked it up. They thought they had it all ready set to go but they were not able to do it. That is why they are devastated—because they have a hidden agenda on this issue. They want Kiwis to be next. They want to start taking Kiwis’ land off them. They want to start initiating the “Mugabe clause” right through our legislation. 
BRIAN CONNELL (National—Rakaia) 
: 
 When I was speaking previously I was about to share with the Committee the story of a Japanese investor who bought property in the Rakaia Gorge back in the 1990s. He paid $600000 for a property and everyone concluded he was absolutely mad. The locals were laughing out of the sides of their mouths. They could not give the land to him quickly enough. They thought they had caught themselves a mug. This investor has subsequently turned that farm into one of the pristine golfing environments in this country. It is now referred to as Terrace Downs. Terrace Downs is favoured by people on the golf circuit as one of the three best golf courses in this country. That investor has gone on to spend $80 million and his initial investment was $600000. 
People from Christchurch have invested in Terrace Downs in their droves. The subdivision legislation that was introduced by National which Dr Cullen took umbrage with has enabled Christchurch investors to invest in Terrace Downs in their droves. Some of the houses there are outstanding. The landscape is outstanding and the golf lodge is also on the circuit of “must visit” places for people who are holding a function of any sort. The number of tourists who come through Terrace Downs on any given day is contributing huge amounts of capital to the local community as well as to New Zealand more broadly. 
But—and there is a but—one or two of the holes I can think of go down to the water’s edge. We were told by the member for Otago to accept that that investor having contributed something like $80 million to this iconic location should have that value taken from him. He should have that land taken from him so that people could no longer play the 10th hole on the Terrace Downs golf course. That is what he implied. That is what he was trying to do. 
Michael Cullen can take all the moral high ground he likes. This is a bill that he is sponsoring. But he got the nod from the New Zealand public to say: “Hey the tide’s on the way out. You had better pull your horns in.” That is what Dr Cullen and David Parker were trying to foist on this House and on the people of this country specifically. 
I can think of another example but before I go there I just want to say that this country needs people like that investor. We need people who are visionary who are prepared to take risks and who are prepared to have the courage of their convictions and come to New Zealand and invest. But I fear that a lot of the anti - overseas investor sentiments which are driving some of the debates I am hearing today are simply based on racial grounds. We have to accept now that we are a multicultural society and we need people like that to come here and invest. 
I said I could think of some other examples and I can. Another example which also includes Japanese capital is Five Star Beef Ltd in Ashburton. It houses 18000 cattle which are destined for high-value restaurants in Tokyo. That investment has about $30 million of Japanese capital and without that capital it would not have happened. It would not be sustainable. That beef lot example underpins three local transport companies underpins the local barley price supports two freezing works in the district and employs I do not know how many people but it runs into hundreds. If we listened to the arguments that have been put forward those investors would not be welcome in this country and that is an absolute nonsense. 
GORDON COPELAND (United Future) 
: 
 I want to speak a little further to the substance of the Supplementary Order Paper amendment that withdraws the marginal strips provision. I think it is very important to explain to the Committee that the Supplementary Order Paper amendment will not bring to an end the possibility that marginal strips alongside rivers and lakes will be set aside when a New Zealander decides to sell land adjoining lakes and rivers to non-residents. 
 I say that because in clause 18 “Factors for assessing benefit of overseas investments in sensitive land” subclause (2)(ba)(ii) states that one of the things the Minister will do in deciding whether to approve such a sale is to look at “providing protecting and improving walking access to those habitats” of indigenous vegetation and indigenous fauna. Paragraph (d) of the same subclause states that the Minister will also ensure that adequate mechanisms are in place for walking access over the relevant land or a relevant part of the land by the public or any section of the public. Notwithstanding the Supplementary Order Paper amendment the Minister will still in deciding whether to approve the sale of sensitive land to an overseas buyer take into account the whole question of walking access along rivers and lakes. 
Here is what will happen. If the New Zealand seller decides that he or she can get a better price for the land by selling it to an overseas person and both the seller and the purchaser know that that is a condition of the sale then of course the New Zealand owner will agree to allow access. On the other hand if the overseas buyer would not pay any more than a New Zealand buyer would then the question will not even arise and walking access will not be given. In substance notwithstanding the Supplementary Order Paper amendment I believe that marginal strips will still be created in the great majority of cases and it will all be done without breaching the important principle that compensation should be paid when land is confiscated. We have a win-win situation. 
I go back for a moment to a remark that Rod Donald made about the Ruby Bay cliffs. I am very familiar with the situation of the Ruby Bay cliffs. For those who do not know Ruby Bay it is on Tasman Bay in the province of Nelson. It involves a piece of land known as the Copeland block because it is the place where I was blessed to grow up when I was kid and a beautiful piece of land it is. That block has now been sold to a family who have built a multimillion-dollar house on the land and it is now the subject of great controversy. Why is it controversial? It is controversial only to a group of Greens really. It is controversial because the people who now live there who are New Zealand residents were born in California. Guess what they have had the audacity to do? They have cut down a whole lot of  
Pinus radiata 
 trees that were growing along the top of the cliff.  
Pinus radiata 
 happens to be a native of California but this particular Californian family who have come here who have decided to quit California and want to become Kiwis are cutting the pine trees down and are spending thousands of dollars on planting thousands of native plants on those cliffs. There will be indigenous plants on the cliffs. 
Rod Donald 
: The cliffs are falling down. 
GORDON COPELAND 
: They will not fall down once the growth starts I say to the member. When I look at that with any objectivity I conclude—as any reasonable person has to—that there are two things happening. One of them is xenophobia because the people happened to be born outside this country and the other one is just sheer envy. End of story. 
MAHARA OKEROA (Labour—Te Tai Tonga) 
: 
 I move  
That the question be now put 
. 
JOHN KEY (National—Helensville) 
: 
 I rise to take part in the debate on Part 2 of the Overseas Investment Bill. I want to reflect on the issue around the size of companies and the reasons for which the current threshold for a company to be required to give notice of an intention to acquire a New Zealand company which is around about $25 million will be extended up to $100 million. 
Rod Donald 
: Shocking! 
JOHN KEY 
: No it is a wonderful thing. I want to talk about why it would not make sense for acquisitions involving amounts of less than that to be referred to the Overseas Investment Commission. As members will probably be aware there has not been a situation where the commission has turned down an application from those companies. 
I want to put a slightly different spin from that of the Green Party on what takes place when foreigners make an acquisition here in New Zealand. In particular it relates to the criteria and factors that will be considered. They are the issues around job creation business skills development of export receipts market competition and additional investment and development. I say that because last Friday I met with a group of investors who have invested about $50 million so far in New Zealand but who have ambitions to invest a further $150 to $200 million over the next 2 to 3 years. It was interesting to talk to them about the role they have been playing in the companies they have been acquiring in New Zealand. It has been a role of quite active management which is slightly different from the normal venture capital situation in which a lot of the investors will come along and supply some finance but essentially leave the status quo in place—the companies concerned are left to get on with it. 
In fact the investors I met have done something a lot of commentators have argued is a real benefit of overseas investment. They have come to New Zealand and invested not only their capital but also—maybe this is more important—their time and their contacts in their international networks. In many respects that is quite similar to the situation that operates domestically in New Zealand with “angel investors” who are involved I guess more in the infancy of the development of a company. They may not put in very much capital at all but it is very often the case that they agree to lend their experience skills know-how and knowledge to small companies that are looking to develop. 
What was interesting about the investors I met with last Friday was that they told me that in the case of a number of New Zealand companies that they have bought into with a significant investment they have managed to double and treble the size of the exports of those companies in a very short space of time—within months of acquisition. Members may ask themselves why it is that a foreigner is able to come to New Zealand and supply something that is more than just capital which we accept is reasonably freely available here in New Zealand. The answer is that the companies that are being acquired often operate here in New Zealand in a niche area. They are built on the backs of entrepreneurial New Zealanders who have developed some good ideas technical know-how and skills. But those people lack the ability to have access to the marketplace and to other suppliers along the food chain who may buy their products. So what is hugely valuable about those investments is not so much the ability of the company to get access to capital but its ability to get access to those vertical chains. 
Navman New Zealand is quite an interesting example. At one level I was concerned about Navman being sold offshore because I think it is producing fantastic technology and I do not want to see that company picked up relocated to Los Angeles and lost to New Zealand. The real challenge for New Zealand is to prove that it is an incubator and also a developer of great companies. It has been quite interesting to see that Navman has at this stage at least managed to take the foreign capital that has come out of the Brunswick Corporation and develop the company on by building greater market access and penetration of its goods—by building a world-class company with world-class products on the back of that technical know-how. 
Gerry Brownlee 
: That’s right. 
JOHN KEY 
: That is right. For those who stand up to speak on this bill and say that foreign investment is bad— 
Gerry Brownlee 
: Who are they? 
JOHN KEY 
: The Green members for one and the New Zealand First members as well. They do not want a bar of anyone from overseas. They actually forget the other things those people may bring outside of capital which are much more important than capital. I refer to things like knowledge and know-how and access to markets. 
TIM BARNETT (Labour—Christchurch Central) 
: 
 I move  
That the question be now put 
. 
DAIL JONES (NZ First) 
: 
 I think this bill highlights what is happening in New Zealand to a large extent. Once again we are in danger of drifting back to the situation we had between 1984 and 1990 when Labour came into office and sold off New Zealand and between 1990 and 1999 when National came in and sold off New Zealand. Now we see Labour and National once again combining forces to establish a situation whereby they can once again sell off what little is left. 
I think the preceding speaker could quite easily have been speaking about the wine industry in New Zealand. Small vineyards have been developing in New Zealand. For example Sauvignon Blanc is grown in the Matua Valley area which is where Sauvignon Blanc started in New Zealand. The Matua Valley Wines company is the result of wonderful work done by the Spence brothers. Of course people can reach a certain point at which they ask where they go to from here and inevitably if their family do not want to stay on in the business they ask themselves who will give them the best deal. The best deal may come from an overseas company. 
Deborah Coddington 
: What’s wrong with that? 
DAIL JONES 
: The company loses its New Zealand feel; what is “New Zealand” about it is being sold off. [ 
Interruption 
] What is the name of the company now? We are gradually selling off New Zealand in that sort of way. In the first instance it sounds good but if people think those big international companies are here for the benefit of New Zealand they really have another think coming. People are so naive. Deborah Coddington and Gordon Copeland are so naive. If they think those big overseas companies are here for the benefit of New Zealand they are dreaming. It is absolute dreamtime. They should be with Michael Jackson in never-never land. They are never-never land people if they believe that the big overseas companies are here to help New Zealand. Those wine companies are here only to help their shareholders get all they can out of the New Zealand wine industry. If necessary they would move on tomorrow if there was no more profit and it would be to heck with New Zealand. 
I give members that as an example. I think it is so appropriate to the Helensville electorate and to the sort of thing that happened in West Auckland in the past. We are losing the New Zealand person being involved in and running the business. Those companies are now run not by New Zealanders but by foreign people. Foreign people come to New Zealand and run the companies now and New Zealand jobs go begging. It may be that a New Zealander can get into the company and work his or her way up to the top somewhere in New York or wherever but we have to ask ourselves if we are New Zealanders where is New Zealand in all of that? I raise that as an issue. It is a classic example that I have come across. 
Brian Connell 
: Where’s Ralph Norris going? 
DAIL JONES 
: He is gone; he is lost to New Zealand. He is not here for New Zealand any more. It is a culture thing of course. The National Party member talked about foreigners coming in and it being a racial thing. It is not; it is a pro - New Zealand thing. That is something the National Party does not understand. Those members are here only to talk to the big boys who want $50 million or $150 million deals. We wonder what else can flow on from that to a particular political party. 
New Zealand First does not want a bar of that type of thing. We are here for New Zealand first. We do not want that situation created which is the danger we see in this legislation. Deborah Coddington does not want to stay in Parliament any more and does not have any regard for trying to protect the interests of New Zealand any more. She is going; she is gone. But New Zealand First is here. We make the point that we should not pretend that any of these big companies are here for New Zealand. They are big internationals; they are in New Zealand today and in Chile tomorrow. If the Chilean wine industry booms they will be in Chile tomorrow and in Argentina the next day if they can. That is the way it goes. They would be in South-east Asia if they could grow wine there but it is very very difficult to grow wine from grapes in South-east Asia. 
All the ideas that some of these people come up with sound great but I say to Mr Copeland that I am afraid that he is really out of touch with what big business is about. I am sure that when he was with the oil company it was not working for New Zealand. It was working for its shareholders and its big interests. New Zealand First says we do not want to fall into the trap once again of National and Labour doing a deal and taking turns to sell off New Zealand. That is where New Zealand First comes in. We are in the middle. We want to make sure that everything is straight and fair and that New Zealanders in any deal that is done are protected. New Zealand First’s role is to look after New Zealanders first. 
Hon MITA RIRINUI (Minister of State) 
: 
 I move  
That the question be now put 
. 
ROD DONALD (Co-Leader—Green) 
: 
 I say to those members who like Mr Power are concerned about the extent of time the Chairperson has given me that this will be my last call. I am grateful for that time because apart from New Zealand First the Greens are the only party opposing the liberalisation of foreign investment in New Zealand. I know that ACT would like absolutely no rules on foreign investment but at least it holds no sway in this debate. 
As far as wanting to introduce tighter controls on foreign investment—something we think most New Zealanders support—I have a few more amendments that I would like to explain to the Committee and to the people of New Zealand who are listening. The first is to clause 32. It relates to the whole issue of compiling and maintaining a full and correct record of all land business and building sales to foreign investors—something that I think is absolutely vital and should be a responsibility of the regulator to do and to report on annually to Parliament. 
I am pleased to say that most of the members of the Finance and Expenditure Committee recognised that there is a paucity of information about the extent of foreign investment in New Zealand. The Government officially acknowledges that somewhere around 1 million hectares of land is foreign owned that a certain amount of our coastline is in foreign ownership—approximately 57 kilometres—and that around 2720 hectares of offshore islands and around 150000 hectares of high country are in foreign ownership. But absolutely no records are kept of land that is owned offshore that falls below the various thresholds contained in the schedules. All the members of the select committee acknowledged that there is some concern in the community about the extent of land purchases in particular areas by foreign buyers even when most of the individual purchases are below the threshold. 
I was pleased that the whole committee agreed with this statement in the commentary on the bill: “High demand by overseas persons increases house prices and can make it unaffordable for some New Zealanders to own property in such areas. There is currently no means for determining the extent of overseas ownership where the properties purchased are below the applicable threshold”. The majority of the committee went on to state: “… the collection of information regarding the residency status of property owners would be valuable.” I am pleased that that recommendation is in the commentary along with an encouragement to the Government to consider implementing a pilot programme to collect that information. 
That is good as far as it goes but we simply say it should go further and be obligatory. The Greens are concerned about two matters. One matter was raised by the whole committee and that is the fact that foreign investors are outbidding Kiwis. We are not just talking about the bach at the beach or the family farm both of which we think Kiwis should be able to buy; we are talking about that first home which is so vital in order for Kiwi families to get the start in life they deserve. The dream of owning one’s own home is now turned into a nightmare because so much foreign capital is coming into New Zealand particularly from Australia. Investors are buying up cheap residential properties and making it impossible for young Kiwi families to buy their own homes. So much for National’s property-owning democracy or Labour’s ownership society! The fact is foreign investors are allowed to outbid Kiwis when it comes to buying that first home. 
We have evidence of that. We have anecdotal evidence from around the country—from Kaitaia to Invercargill. In terms of specific evidence when I was on a select committee exchange to Australia last year we met a New South Wales Labor MP who was coming to New Zealand to buy up properties in Huntly and Ngaruawahia. 
GERRY BROWNLEE (Deputy Leader—National) 
: 
 I want to take a brief call to rebut some of the nonsense New Zealand First decided to inject into the debate and in particular its criticism of the National Party. We know that New Zealand First is one of this Parliament’s parasites— 
Dail Jones 
: I raise a point of order Mr Chairperson. A member cannot call another member a parasite surely. 
The CHAIRPERSON (Hon Clem Simich) 
: Not even a party no. 
Dail Jones 
: Thank you. I ask the member to withdraw and apologise. 
GERRY BROWNLEE 
: I withdraw and apologise. Some will notice the parasitic behaviour of New Zealand First in the constant comments of its members about the National Party. Although I use the term “parasitic” one may say also that that behaviour is somewhat symbiotic because without the National Party there would be no New Zealand First. It is quite galling to find the New Zealand First politicians— 
The CHAIRPERSON (Hon Clem Simich) 
: Order! 
GERRY BROWNLEE 
: I was just coming to the bill. If I had not been disturbed by the point of order I would have been in only my first minute or so of rebutting the issue at hand: the misrepresentation New Zealand First chooses to put on National’s support for this bill. 
Although we have reservations about the bill in essence we recognise that facilitating overseas investment in a country like this is important. That does not mean selling everything off I say to Mr Jones. It does not mean entering into the sorts of shonky lease-type arrangements that the Government has entered into over the Transpower assets. 
Pansy Wong 
: What is that about? 
GERRY BROWNLEE 
: Members ask what that is all about. We would all like to know what it is all about. It would be helpful to Parliament if Dr Michael Cullen were to come down here and explain exactly how it is that this Government which is so committed to keeping State assets in the hands of the State has allowed such a transparently shonky deal to be put together. It is transparently shonky but is not transparent as a deal. Although we know that the assets are now in someone else’s hands and that the various parties in this Parliament who support the Labour Party have allowed that type of investment we do not know exactly the nature and structure of that deal. 
Brian Connell 
: Why don’t we know? 
GERRY BROWNLEE 
: Dr Cullen will not tell us. I have to surmise that that is probably because Dr Cullen himself does not know what has been done under his nose. Dr Cullen himself probably does not know what has been slipped into the pile of papers on his desk and what he himself has signed off on or exactly how much the New Zealand tax base has been rorted as a result of that particular transaction. 
Brian Connell 
: What did Treasury say? 
GERRY BROWNLEE 
: It would not matter what Treasury said because the Labour Government simply rubbishes everything that comes out of Treasury. It does not treat Treasury at all seriously. 
One of the most interesting points in this bill is the matter of the investor tests. It is good to see that we are making sure that those who choose to invest in this country are well qualified to do so and that locals will not pay the price for their inability to get together the capital they need. I ask the New Zealand First members to tell us what is so wrong with having foreign investment in this country. Has there ever been a time in our post-1840 history when we have not been heavily reliant on foreign investment? There has probably never been such a time. Certainly the places of origin of the capital that is invested in this country have changed dramatically. There was a time when New Zealand was largely owned by British insurance companies and British banks. That of course has substantially changed. Many New Zealanders now through international share portfolios share in overseas investment in this country. 
JILL PETTIS (Senior Whip—Labour) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put 
. 
Ayes 61 
New Zealand Labour 51; United Future 8; Progressive 2. 
Noes 50 
New Zealand National 25; New Zealand First 13; Green Party 7; ACT New Zealand 5. 
Motion agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 10 be agreed to: 
to insert in paragraph (b) of subclause (1) after the words “business assets” the words “including aquaculture”. 
A party vote was called for on the question  
That the amendment be agreed to 
. 
Ayes 7 
Green Party 7. 
Noes 104 
New Zealand Labour 51; New Zealand National 25; New Zealand First 13; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The CHAIRPERSON (Hon Clem Simich) 
: The next amendments are to clause 14 in the name of Rod Donald and are to omit the expression “25” and substitute the expression “10” in subclause (1)(a)(i) and (ii). These amendments are inconsistent with decisions already taken and are therefore out of order. 
The question was put that the following amendment in the name of Rod Donald to clause 14 be agreed to: 
to omit from subparagraph (ii) of subclause (1)(a) the expression “100” and substitute the expression “10”. 
A party vote was called for on the question  
That the amendment be agreed to 
. 
Ayes 7 
Green Party 7. 
Noes 104 
New Zealand Labour 51; New Zealand National 25; New Zealand First 13; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 14 be agreed to: 
to omit from subparagraph (ii) of subclause (1)(b) the expression “100” and substitute the expression “10”. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 14 be agreed to: 
to omit from paragraph (c) of subclause (1) the expression “100” and substitute the expression “10”. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 17 be agreed to: 
to omit from paragraph (e) of subclause (1) the words “either subparagraph (i) is met or subparagraph (ii)” and substitute the words “subparagraph (i) and subparagraph (ii) are met”. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 17 be agreed to: 
to insert after subparagraph (iv)(e) in subclause (1) the following new paragraph: 
(f)the relevant land includes pastoral lease land and a tenure review must be completed. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 7 
Green Party 7. 
Noes 104 
New Zealand Labour 51; New Zealand National 25; New Zealand First 13; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 18 be agreed to: 
to insert in the heading to this clause after the words “sensitive land” the words “and significant business assets”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 7 
Green Party 7. 
Noes 104 
New Zealand Labour 51; New Zealand National 25; New Zealand First 13; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 18 be agreed to: 
to add to paragraph (a) of subclause (2) the following new subparagraph: 
(vii)increased domestic substitution of imports into New Zealand. 
A party vote was called for on the question  
That the amendment be agreed to 
Ayes 7 
Green Party 7. 
Noes 104 
New Zealand Labour 51; New Zealand National 25; New Zealand First 13; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to 18 be agreed to: 
to add to subclause (2) the following new paragraph: 
(g)whether there are or will be adequate mechanisms in place to ensure that any decision made is consistent with the principles of the Treaty of Waitangi including: 
(i)provision made for settlements to claims made under the of Waitangi including return of land; 
(ii)capacity retained for the establishment of Maori and Crown resource co-management structures. 
(iii)protection of the right to benefit from enjoy and exercise authority over Maori taonga. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 15 
Green Party 7; United Future 8. 
Noes 96 
New Zealand Labour 51; New Zealand National 25; New Zealand First 13; ACT New Zealand 5; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 19 be agreed to: 
to add to subclause (1) the following new paragraphs: 
(e)the relevant overseas person or (if that person is not an individual) all the individuals with control of the relevant overseas person are New Zealand citizens ordinarily resident in New Zealand or intending to reside in New Zealand indefinitely; and 
(f)the overseas investment will or is likely to benefit New Zealand (or any part of it) or group of New Zealanders as determined by the relevant Ministers under section 18; and 
(g)if the relevant investment involves aquaculture the relevant Ministers determine that that benefit will be or is likely to be identifiable and substantial. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 7 
Green Party 7. 
Noes 104 
New Zealand Labour 51; New Zealand National 25; New Zealand First 13; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The CHAIRPERSON (Hon Clem Simich) 
: An amendment in the name of Rod Donald to clause 20 to omit and substitute an expression in subclause (1)(a) is out of order because it is inconsistent with decisions that have already been made. 
The question was put that the following amendment in the name of Rod Donald to clause 32 be agreed to: 
to add the following new paragraphs: 
(i)compile and maintain a full and correct record of all land business and building sales to foreign investors. 
(j)report annually on the extent of foreign ownership in New Zealand. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 7 
Green Party 7. 
Noes 104 
New Zealand Labour 51; New Zealand National 25; New Zealand First 13; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 35 be agreed to: 
to add to subclause (3) the following new paragraph: 
(f)the content of any Code of Responsibility for Foreign Investors. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 7 
Green Party 7. 
Noes 104 
New Zealand Labour 51; New Zealand National 25; New Zealand First 13; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 43 be agreed to: 
to add to paragraph (a) of subclause (2) after the expression “$300000” the words “or 10% of the value of the asset whichever is greater”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 7 
Green Party 7. 
Noes 104 
New Zealand Labour 51; New Zealand National 25; New Zealand First 13; ACT New Zealand 5; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 43 be agreed to: 
to add to paragraph (b) of subclause (2) after the expression “$300000” the words “or 10% of the value of the asset whichever is greater”. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 44 be agreed to: 
to add to paragraph (a) of subclause (2) after the expression “$300000” the words “or 10% of the value of the asset whichever is greater”. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 44 be agreed to: 
to add to paragraph (b) of subclause (2) after the expression “$300000” the words “or 10% of the value of the asset whichever is greater”. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 45 be agreed to: 
to add to paragraph (a) of subclause (2) after the expression “$300000” the words “or 10% of the value of the asset whichever is greater”. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 45 be agreed to: 
to add to paragraph (b) of subclause (2) after the expression “$300000” the words “or 10% of the value of the asset whichever is greater”. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 47 be agreed to: 
to add to subclause (3) after the expression “$300000” the words “or 10% of the value of the asset whichever is greater”. 
Amendment not agreed to. 
SIMON POWER (Senior Whip—National) 
: 
 I raise a point of order Mr Chairperson. I seek your advice in respect of Standing Order 120 which reads: “An amendment must be put into writing signed by the mover and delivered to the Clerk at the Table.” I have just noted that the amendments we voted on in Mr Donald’s name that were moved by Mr Donald have not been signed by Mr Donald. In fact they were signed by Mr Locke. That places us in an unusual position unless the Standing Orders can give us further elucidation on the application of Standing Order 120. I would appreciate that advice. You would see the difficulty which at face value is that the amendments have not been signed by the mover as required by Standing Order 120. 
The CHAIRPERSON (Hon Clem Simich) 
: Yes thank you for raising that. That would be the impression one would get. But the explanation is that the amendments were all submitted in writing and all signed on behalf of Mr Donald by Keith Locke and that signature is on the original submission of the amendments. 
SIMON POWER 
: I want to be clear about that Mr Chairperson. The Standing Order very clearly states that the amendment is to be signed by the mover. In this case we have several amendments and the amendments we have just voted on begin: “Rod Donald in Committee to move …”. That makes Rod Donald the mover of those amendments. Mr Donald has not signed those amendments; Mr Locke has. What is the standing of those amendments? 
Rod Donald 
: I think that Mr Power has raised a very interesting point and had the Clerk pointed that out to us at the time the amendments were submitted then we would have taken them off the Table and a member such as Mr Power would not have had the benefit of seeing our amendments in advance of the Committee stage debate. I could have signed them after 2 o’clock when I returned to the House from Dunedin this morning. So perhaps the Chair would like to consider whether the Standing Order intends that it be required that the actual mover sign an amendment or whether another member can sign it. 
In the same way I understand the procedure at the moment is that other members can sign for example the cover sheet for a member’s bill without the actual mover of that bill needing to sign it. For that matter another member can sign off an oral question without the actual member asking the question being needed to sign it. I think the liberal interpretation has been such that other members of one’s own party can sign on one’s behalf and if we change that interpretation for this purpose I think it would create some problems for parties having to find members to sign their own oral questions and other documents when they are not necessarily available to do so. 
SIMON POWER 
: I accept the points made by Mr Donald. I also accept the practicalities of having to deal with the tabling of oral questions and members’ bills when proposing members—I guess that is the right phrase—are not available to annex their signatures. The difficulty we find ourselves in here is that a specific Standing Order relates directly to amendments. It is my submission—and this is not a difficulty for Mr Donald in the sense that it is probably more a difficulty for the Clerk that the matter has got to this point—that it seems on the surface that Standing Order 120 has been breached because the amendments have not been signed by the mover. There is no reference to “the mover or his or her nominee” “his or her appointed person” or “his or her substitute”. The Standing Order is very clear that it is the mover of the amendment who must sign the document. Now I seek guidance from you as to whether we have just wasted 25 minutes of the Committee’s time in voting on amendments that are out of order—in fact that probably breach the Standing Orders by the fact that we even considered them in the first place given that as I say on the face of it Standing Order 120 has been directly breached. 
The CHAIRPERSON (Hon Clem Simich) 
: I thank the member. I need no further assistance; the matter has been very clearly laid out by the person who raised the point of order. Yes on a literal reading of the Standing Orders it would appear to be correct. However it is a very longstanding practice in the Committee and in the House that with consent a member can sign on behalf of another member. That is what has happened this time and it is for the convenience of members. But I think it is an issue that needs to be looked at and I will get a proper ruling from the Speaker as to this practice. 
GORDON COPELAND (Whip—United Future) 
: 
 I raise a point of order Mr Chairperson. I fully accept your ruling in that regard but I would like to say that I have checked Standing Order 365 which relates to the lodging of oral questions. It specifically states that such a question must be “signed by the member or by another member on the member’s behalf”. So there is a distinction between Standing Order 120 and Standing Order 365 which is contrary to what Rod Donald advised. 
The CHAIRPERSON (Hon Clem Simich) 
: Yes. Thank you for pointing that out. That was not part of my ruling. 
SIMON POWER (Senior Whip—National) 
: 
 I raise a point of order Mr Chairperson. Thank you for your ruling. I do think that it would be worth the Speaker clarifying the difference between Standing Orders 365 and 120. I concur with my friend from United Future on that point and I thank you Mr Chairperson for your guidance on it. But that still leaves us in a difficult position and I think we owe it to the Committee to determine now what status is to be accorded the amendments we have just spent 25 minutes voting on. 
The CHAIRPERSON (Hon Clem Simich) 
: No I do not need any assistance on that. I have accepted those amendments based on the longstanding practice of doing it in just that way. All the amendments were put and they were dealt with. Decisions were made and the votes were all lost. So other than to urge the Speaker to give a clear ruling on that—as I am sure the Speaker will—so that we can incorporate that longstanding practice through the Standing Orders I cannot take it any further. 
DAIL JONES (Junior Whip—NZ First) 
: 
 I raise a point of order Mr Chairperson. With regard to the Minister’s amendments I presume they will be put en bloc so that we cannot say just have a vote on the amendment to omit clauses 21A to 21V and the heading above clause 21A as a separate vote? Some of us want to support that amendment but oppose everything else. We have supported the omission of the clauses dealing with marginal strips but here we will seem to be voting against their omission. Is it the practice that there will be just one vote and that we have no choice in the situation? 
The CHAIRPERSON (Hon Clem Simich) 
: That is a good point. 
DAIL JONES 
: Do I have to seek leave to have that done separately? 
The CHAIRPERSON (Hon Clem Simich) 
: That is the normal practice. 
DAIL JONES 
: In that case I seek leave that we first vote separately on the provision in relation to clauses 21A to 21V and the heading above clause 21A. 
The CHAIRPERSON (Hon Clem Simich) 
: Leave has been sought for that course to be followed. Is there any objection? There appears to be objection. 
The question was put that the amendments set out on Supplementary Order Paper 376 in the name of the Hon Dr Michael Cullen to Part 2 and the following amendments in his name to Part 2 be agreed to: 
to omit from paragraph (b) of clause 42(1) the words “produce to the regulator” and substitute the words: “provide the regulator with”; and 
to omit from subclause (1) of clause 70 the expression “2004” and substitute the expression “2005”; and 
to omit from section 57(1)(b) in clause 73 the expression “57H” and substitute the expression “57HA”; and 
to omit from section 57F(2)(c) in clause 73 the words “Minister or”; and 
to omit from section 57G(1)(b) in clause 73 the words “the relevant overseas person is or (if that person is not an individual) all the individuals with control of the relevant overseas person are” and substitute the words “all the individuals with control of the relevant overseas person are”; 
to omit from section 57HA(1) in clause 73 the words “Minister or”; and 
to insert in subclause (1) of clause 78 after the words “exemptions granted under” the words “the 1973 Act or”. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 86 
New Zealand Labour 51; New Zealand National 20; ACT New Zealand 5; United Future 8; Progressive 2. 
Noes 20 
New Zealand First 13; Green Party 7. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 2 as amended be agreed to. 
Ayes 81 
New Zealand Labour 51; New Zealand National 20; United Future 8; Progressive 2. 
Noes 26 
New Zealand First 13; ACT New Zealand 5; Green Party 7; Maori Party 1. 
Part 2 as amended agreed to. 
SIMON POWER (Senior Whip—National) 
: 
 I raise a point of order Madam Chairperson. Prior to the dinner break the Chairperson went through with members the concerns we had regarding amendments and Standing Order 120. That Standing Order refers to the fact that an amendment must be put into writing signed by the mover and delivered to the Table. Prior to the dinner break we discussed the fact that Mr Donald had moved amendments but they had been signed by Mr Locke. We had a discussion about whether that affected the validity of the amendments and what would become of them in terms of their standing now that the vote had been taken on them. The Chairperson prior to the dinner break indicated that he would get a ruling from the Speaker and I am asking at this point whether that ruling is forthcoming. 
ROD DONALD (Co-Leader—Green) 
: 
 Mr Power is right to the extent that the Chairperson said he would seek advice from the Speaker on the issue but the Chairperson also clearly ruled that he accepted the amendments. There was no doubt about that. So that particular issue is resolved as far as I am concerned. 
The CHAIRPERSON (Ann Hartley) 
: What did he say then Mr Donald? 
ROD DONALD 
: Mr Simich accepted the amendments. 
The CHAIRPERSON (Ann Hartley) 
: The ruling is that a member can sign on behalf of another member if the member had that member’s permission. So I ask Mr Donald whether he had given his permission to Mr Locke to sign on his behalf. 
ROD DONALD (Co-Leader—Green) 
: 
 I did indeed give my permission to Mr Locke to sign those amendments. 
The CHAIRPERSON (Ann Hartley) 
: That is the end of the matter. 
SIMON POWER (Senior Whip—National) 
: 
 I raise a point of order Madam Chairperson. During the points of order about this matter Mr Copeland raised a very interesting point which was that the matter raised by Mr Donald by way of comparison was to draw an analogy with oral questions being signed by another member of Parliament. Mr Copeland’s contribution to the debate was quite right when he referred to Standing Order 365 which specifically makes provision at 365(1)(a) for oral questions to be signed by a member or by another member on that member’s behalf. In other words there is an express an explicit authorisation for another member with the consent of the member lodging the question or the moving member to do that on his or her behalf. No such explicit reference to another member signing on behalf of a mover in respect of an amendment exists under Standing Order 120. One of those Standing Orders relating to oral questions clearly makes provision for another member to sign on behalf of a member; Standing Order 120 makes no such allowance expressly or impliedly. Although I certainly do not want to question your ruling is it now the case that Standing Order 120 is amended by a Speaker’s ruling so that a member with another member’s consent may actually sign an amendment moved by the original member? 
The CHAIRPERSON (Ann Hartley) 
: No that is not correct. It is a longstanding practice that a member may sign amendments on behalf of another member if he or she has that member’s permission. That is the ruling. 
Schedule 1 
The question was put that the following amendment in the name of the Hon Dr Michael Cullen to schedule 1 be agreed to: 
to insert in the second column of Table 2 in Part 1 for the item relating to any regional park created under the Local Government Act 1974 and for the item relating to land that is listed or in a class listed as a reserve a public park or other sensitive area by the regulator under section 38 the words “0.4 hectares” in each case. 
A party vote was called for on the question T 
hat the amendment be agreed to. 
Ayes 81 
New Zealand Labour 51; New Zealand National 20; United Future 8; Progressive 2. 
Noes 26 
New Zealand First 13; ACT New Zealand 5; Green Party 8. 
Amendment agreed to. 
A party vote was called for on the question  
That schedule 1 as amended be agreed to 
. 
Ayes 81 
New Zealand Labour 51; New Zealand National 20; United Future 8; Progressive 2. 
Noes 27 
New Zealand First 13; ACT New Zealand 5; Green Party 8;.Maori Party 1. 
Schedule 1 as amended agreed to. 
Hon RICHARD PREBBLE (ACT) 
: 
 I raise a point of order Madam Chairperson. I apologise. I was looking at the voting instructions for the evening and forgot of course that the House resumed at 7 p.m. not 7.30 p.m. I ask to correct the ACT vote from six to five. 
The CHAIRPERSON (Ann Hartley) 
: Leave is sought for that purpose. Is there any objection? There is not. Thank you. The vote will be corrected. 
Schedule 2 
The question was put that the amendments set out on Supplementary Order Paper 376 in the name of Hon Dr Michael Cullen to schedule 2 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 81 
New Zealand Labour 51; New Zealand National 20; United Future 8; Progressive 2. 
Noes 27 
New Zealand First 13; ACT New Zealand 5; Green Party 8; Maori Party 1. 
Amendments agreed to. 
A party vote was called for on the question  
That schedule 2 as amended be agreed to. 
Ayes 81 
New Zealand Labour 51; New Zealand National 20; United Future 8; Progressive 2. 
Noes 27 
New Zealand First 13; ACT New Zealand 5; Green Party 8; Maori Party 1. 
Schedule 2 as amended agreed to. 
Clauses 1 and 2 
JOHN KEY (National—Helensville) 
: 
 I am happy to rise on behalf of the National Party to address this part of the Overseas Investment Bill. If commentators on this bill take nothing else out of it they will know one thing—that is the tide is going out for this very tired Labour Government. It is on the way out big time when its coalition partner United Future will not even support its tired old Labour policy. Even if Labour does not think that people with property rights should be respected and rewarded at least United Future was smart enough to understand the issue and left the Government on its own—on its tod—with nobody else in the entire Parliament supporting it. The Government could not convince the Greens who are opposed to everything and it could not convince New Zealand First members who are opposed to everything in this field. The Government did not get support from United Future members who could at least see it National’s way. It did not really care about the Progressives and ACT would not support it on this measure also for some very good reasons. Labour members were “Johnny-no-mates” and they have come to Parliament in the incredibly embarrassing position that they cannot even pass their own legislation. 
David Parker was quoted in the  
Otago Daily Times 
 telling the people of Otago that he had a victory. He said that he had won and declared victory. That reminds me of Michael Cullen and Helen Clark declaring victory a few months ago—well they are not smiling quite so readily tonight. David Parker will be looking for a new job post - election day 17 September. He will be looking for a new job but it will not be in this sort of area. No wonder Government members look a downtrodden and disheartened lot; they cannot even pass their legislation. 
I want to refer to one thing that Mr Parker said in the Chamber recently. He took offence that National wanted people who owned something to be paid for it when it was taken off them. Then he said our position was inconsistent because when it came to the foreshore and seabed issue we were not prepared to give Maori anything for taking it off them and that inconsistency was the problem with our position. I hate to tell Mr Parker but he may not be aware that in National’s view Maori did not own the foreshore and seabed in an exclusive situation. They owned it along with all other New Zealanders and they have not had anything taken off them. They are in the same position that they were in beforehand regarding the foreshore and seabed legislation. 
So Mr Parker might be a bit confused about National members’ position on marginal strips but we are not confused and we do not intend to send the message to anybody who invests in New Zealand—a domestic person or someone from offshore—that we will somehow legislate to have that person’s property rights taken off him or her anytime we like just because the people in power think it is a really good idea on the day. We have seen that system operating in various other regimes. It has not worked tremendously well in Zimbabwe and I doubt that it would work terribly well here in New Zealand. So we will not be supporting that notion. [ 
Interruption 
] That is right. 
I do want to refer to the investment in companies that come here from offshore and I think lifting the threshold does make sense. There are some very sound and credible reasons why foreigners who invest in New Zealand companies can actually add some real value beyond just the capital they invest in those companies. They can bring knowledge and skills and more importantly they can bring a gateway to take those New Zealand products and really grow them in offshore markets. I think we sometimes look with far too much scepticism at companies that come to New Zealand and invest. New Zealand is a country born out of entrepreneurs and people with a number eight fencing wire mentality of doing things and we want to encourage that. 
The last point I want to make—if I can make it in the 37 seconds that I have available—is about the purpose of the bill. I think it makes sense. The purpose clause of the bill states that it is a privilege for someone from overseas to buy land in New Zealand and that when they do so they should meet and honour some criteria. One of the other things I heard when I sat on the Finance and Expenditure Committee was that all foreigners who invested in land in New Zealand were bad and all New Zealanders who invested in land were good. That is not true; plenty of New Zealanders actually stop access in any form to their land. But foreigners who come here do have to recognise that they are playing in our playground and that New Zealanders have a right regarding that situation. 
ROD DONALD (Co-Leader—Green) 
: 
 It is with some sadness that I speak to the title of this bill because the bill has gone in the wrong direction in the Green Party’s point of view and it has even gone in the wrong direction from the point of view of the Labour members who were on the 2001 select committee inquiry into the activities of the Overseas Investment Commission. In that inquiry the Labour members and the New Zealand First member backed a number of Green Party recommendations that would have tightened up the control on foreign investment in New Zealand whereas instead this bill actually liberalises the foreign investment regime. Yes there is the smokescreen that so-called iconic sites will be more difficult to buy but nothing in this bill will actually stop them from being purchased by overseas investors and there is now every encouragement in this bill for foreign investors to come in and buy up more of our land buildings and businesses. 
I think the complete removal of any land threshold in central business districts is extraordinary. It means that there will now be absolutely no control on land and buildings being purchased in the central business districts of Auckland Wellington and Christchurch. Dr Cullen has realised his dream which is to make New Zealand one of the most liberal foreign investment regimes in the world. This legislation makes us consistent with the United States’ requirements for a free-trade agreement with it and it brings us into line with what the multinational corporations have been pushing for under the General Agreement on Trade in Services. So the title of this bill really ought to be the “Overseas Investment Liberalisation Bill” because it does nothing to achieve the stated purpose which—as the previous speaker acknowledged—is to provide that it should be a privilege for overseas persons to own or control sensitive New Zealand assets. 
I have moved one amendment to clause 2 “Commencement” to ensure that no commencement date appointed by the Governor-General by Order in Council can take effect before 30 June 2006. That is to provide a cooling-off period if you like for the Government to think about the merits of this legislation or perhaps to give an incoming Government that is more progressive in its outlook than this Government the chance to amend this legislation. I think it would be entirely consistent for the Government to support that amendment because it dragged the chain over the amendments that Winston Peters managed to negotiate some time ago. They were not gazetted during the life of the National - New Zealand First Government nor during the balance of the period of National-led Government after New Zealand First left that coalition. To give some credit to Dr Cullen he did finally gazette those changes which have at least required farmland to be publicly advertised for sale in New Zealand before it is flogged off overseas—never mind how small the advertisement is. 
It is quite consistent with overseas investment legislation for the Act or regulations not to come into force straight after the Governor-General has signed them. So I would urge other parties to support delaying this legislation until at least 30 June 2006 to provide something of a cooling-off period—a buyer-beware period—so that the people of New Zealand do have the chance to vote on this issue at the election without the country being locked into a foreign investments regime that means basically that we are like the Wild West but with a sheriff who is working hand in hand with the outlaws rather than on behalf of the good citizens of this country. 
Hon RICHARD PREBBLE (ACT) 
: 
 I rise to speak to clause 1 of the Overseas Investment Bill on behalf of the ACT party and I think that the bill is incorrectly named. It should be called the “Attack on Private Property Rights Bill” because one of the fundamental rights one has when one owns property is to be able to sell it but here the Government is claiming the right to dictate to citizens about who they can sell it to. 
 They have not actually given any reasons. Most of the speeches have been incoherent like Mr Donald’s speech in which he was talking about the good citizens of New Zealand versus the outlaws. What an amazing statement! He is prepared to claim that anyone who is not a New Zealander is an outlaw. If statements like that were being made overseas he would immediately condemn that as xenophobic but then with no shame at all he is prepared to make xenophobic statements himself and also demonstrate a complete lack of history. This country was actually built with overseas investment. This country was built by people who came and invested in this nation and we still need their capital and expertise today. 
I listened also with some confusion to Mr John Key’s speech because while he was attacking the Government in the Committee stage it appeared to me that the two old parties were voting together for this piece of socialist— 
Hon Member 
: The great coalition! 
Hon RICHARD PREBBLE 
: Maybe I misunderstood or maybe Mr Key did not know how his party was voting but it appeared to me that the two old parties were voting together for this legislation which is clearly a nonsense. Intellectually it does not stand up. It is correct as Mr Donald said that there are some clauses in the bill that will in fact result in some liberalisation. But there are other measures for which there is no intellectual or moral basis. If a person selling his or her land is required to provide a walkway for citizens and if that is desirable why are only foreigners required to provide that walkway and not people born in New Zealand? That is a complete nonsense. 
Dail Jones 
: That is the next step. 
Hon RICHARD PREBBLE 
: Maybe it is the next step. From the ACT party’s point of view if the community wants to own a piece of land then the community should pay for it. To just take it is communism. That is socialism. I am amazed—well actually I am not amazed. I would like to think that one should be amazed that the National Party is voting for such a measure but I am not because the National Party members were going around the country today saying they were opposed to attempts to take farmers’ land and then we have Nick Smith’s bill—and Nick Smith should actually be in the Alliance—which is a socialist measure. That was being put forward. 
The party that has been—and I think it would be fair enough to say this in the House—consistently in favour of private property rights does not believe in this type of intervention and says that it is morally wrong that this Parliament has no moral right to be placing restrictions on citizens’ private property rights— 
Gordon Copeland 
: That’s United Future 
Hon RICHARD PREBBLE 
: Well I have not actually noticed United Future being consistent on that matter. I think in fact the only party that has been consistent on that question has been the ACT party. I have looked at the minority reports and I do not see a minority report from United Future making a strong stand on behalf of private property rights. Indeed I have not been hearing such speeches on behalf of them. I hear Mr Peter Dunne making speeches on behalf of some sort of outdoor group that claims to have the right to trample over people’s private property rights. Am I right there Mr Copeland? 
Gordon Copeland 
: Fourth paragraph page 11. 
Hon RICHARD PREBBLE 
: Fourth paragraph page 11. 
Rod Donald 
: No heading. 
Hon RICHARD PREBBLE 
: Fourth paragraph no heading. What does it say Mr Copeland? 
Gordon Copeland 
: I have read it out to the House. 
Hon RICHARD PREBBLE 
: Oh the member has read it out to the House. Does the member want me to read it again? All I can say is that it is so pathetic I cannot even find it. What I am interested to know is and given all these speeches how is this bill going through? The National Party is opposed to it. The Greens are opposed to it. The United Party— 
Brian Connell 
: National is for it. 
Hon RICHARD PREBBLE 
: I heard Mr Key say he was opposed to it. Now if he is going to vote the way that he says he believes how can this bill be passing? There must be some extraordinary mathematics going on. 
BRIAN CONNELL (National—Rakaia) 
: 
 Thank you for a call on the title clause of this bill. One knows when one looks around this Chamber that a Government is on its way out when it is relying on people like the Greens who want to stop all investment in this country to come not into caucus but into Cabinet with it. Then it wants the same Cabinet to coalesce with the Maori Party which wants to send everyone out of New Zealand. The Government expects that it will then have the support of a nation and wonders why the tide is going out for it. 
Mr Prebble said he was confused. I cannot speak for Mr Prebble’s state of mind but what I can say is that if Mr Prebble had been here throughout the course of the debate he would have known that National was strongly opposed to the bill before Supplementary Order Paper 376 was tabled which precludes the Government annexing private property without even offering compensation. So with that cleared up I am sure that Mr Prebble will accept that investment in this country through foreign capital is what this country needs and to send signals that that is not important as the Green Party is doing supported by the New Zealand First Party would be totally unacceptable. 
Now we have some Luddites here who are trying to turn the clock back. After years of market reform through the 1980s and 1990s we now have a strong-performing economy that people want to invest in. That is a vote of confidence in this economy and we should embrace people who want to come to this country and invest here. Capital creates jobs prosperity and confidence. I tell Mr Donald and others that if we want to share wealth then first we have to create it and creating it depends on getting capital and on getting people to invest their hard-earned dollars in things like infrastructure and property. 
Dail Jones mounted an argument earlier in the debate that all investors coming to New Zealand are large companies and they are going to suck every bit of goodness out of this country. They are here just to rape and pillage. Well I have to say to Mr Jones that the vast majority of foreign investors in this country are not— 
Peter Brown 
: The member admits that there are some people of that view. 
BRIAN CONNELL 
: Well yes New Zealand First members are of that view. We are in agreement. 
The majority of investors who come to this country are small investors who come here to live and to invest their time and their money—they have kids—exactly the same as Mr Jones and Mr Brown did not so long ago. It is good enough for them but they want to chase everybody else away. Reasonable people know that in order for New Zealand to continue to prosper we need capital. Throughout the course of this debate I have given numerous examples where foreign capital has created infrastructure and jobs for hard-working New Zealanders. I do not think that people listening to Mr Jones talk about the people who have risked their capital to create jobs will agree with his argument that foreign investors do not create any value in New Zealand. That is an absolute nonsense. I know that when Mr Jones was saying it he had a smile on his face but unfortunately people listening across New Zealand cannot see the smile on his face and some—a very small number admittedly—might in fact take him seriously which would be a travesty. 
The other thing that has been noted throughout the course of the debate is that a number of investors have come here and bought high-country stations. Well that is a crime is it not? That is an absolute crime. The hysteria is that they will close all the roads up. 
DAIL JONES (NZ First) 
: 
 Having been drawn into the debate I could not resist a call and if I have a smile on my face it is because really the National Party just cannot understand what happens when people invest $50 or $100 million in New Zealand as the previous National speaker mentioned this afternoon. They invest that much money in New Zealand to take control of companies for the benefit of their overseas shareholders. They may export goods but they also export the profits. The profits do not stay in New Zealand. The profits go overseas. [ 
Interruption 
] Mr Carter and Mr Connell can laugh. Overseas shareholders want their money sent to them overseas. It is elementary. It is as simple as that but the National Party just cannot understand that situation at all. 
The National Party says “What about investment in New Zealand?”. New Zealand First supports New Zealanders investing in New Zealand products. The way we say that should be done of course is through the New Zealand Superannuation Fund—something the National Party opposed constantly and vigorously until it did one of its flip-flops and now supports it. But if we want New Zealanders to invest they have to save and one of the ways in which they save is through the superannuation fund. That is how one gets New Zealand investment in New Zealand businesses and how the profits are kept in New Zealand. What is bleeding New Zealand to death and will bleed New Zealand to death is that if the world economy changes all the money goes overseas in profits and does not stay here. We have seen it before in New Zealand on many many occasions in New Zealand’s fiscal history but the National Party just cannot see it at all. 
What we have here tonight is a clear example of the two old parties as Mr Prebble was saying searching for a coalition partner. When one thinks about it one realises that Labour’s best coalition partner on tonight’s performance is the National Party. I do not know why the commentators have not woken up to that. Mr Connell talked about the market reforms of the 1980s and the 1990s with the greatest enthusiasm. Those were the Labour reforms of the 1980s and the National reforms of the 1990s and now he wants to get in bed with the Labour Party. The polls show—and that is what he was looking at—that that is the only way the two of them can get into Government. One has to add up the two parties’ totals. If one adds either of them to any one total of the other parties neither of them can do it. Members know how much the Labour Party loves power and how much the National Party loves power and boy they will do just about anything to share that power or to have that power. 
Some of the commentators should look more closely at what is happening in this House especially on bills like this when members of each party talk about how successful the reforms of the 1980s and the 1990s were. Those parties are positioning themselves as they look at the way in which the leadership poll results change. Some people go up all the time and some people come down all the time. It is interesting to see how the National Party and the Labour Party are positioning themselves for a situation that might arise after the election. It is so important for the people of New Zealand to realise that if those two parties got together again as they did with the 1980s and 1990s reforms New Zealand will be in trouble. As I said the only way that can be prevented is by New Zealand First being two or three times stronger in this House after the next election. We were founded on the mistakes of the National Party and the Labour Party in the 1980s and the 1990s and I think that Mr Connell has given away the game tonight. 
PANSY WONG (National) 
: 
 Chairman Mao of former Communist China would have been proud to have Dail Jones as a member because in those times China closed its door to foreigners absolutely. Chairman Mao would have been proud to hear that speech from Dail Jones. I wonder whether Mr Dail Jones is also telling the public that New Zealand First does not want to be in power—as he has apparently just declared. New Zealand First has already declared itself to be in a permanent Opposition position. That is interesting. 
As a member of the Finance and Expenditure Committee I would like to share the views of some of the submissioners who came before that select committee who believe that this bill has gone too far. I particularly want people to hear from a very important group—and my learned colleague the Hon David Carter would agree—Federated Farmers. I think they put a very credible counter-balance to the overwhelming submissions opposing the bill that came before the select committee. They were very very anxious about the lack of overseas investment. Federated Farmers shared that with us. They are a very reputable group that we all know. 
Farming is the backbone of the New Zealand economy. They were saying that people build up a business in a farm through their lives so do we want to deprive them when they reach the well-earned retirement stage in their life of getting the best price for their hard work of building up their business? The Greens would Labour would and New Zealand First would because they want to shut out people’s options. Any New Zealand - owned businesses and landowners can sell to anybody. They do not have to sell to foreign investors. They have the absolute freedom to choose who they sell to. 
It is wrong for the Government to restrict that right—to artificially put in legislation and say that people should not be allowed to sell their hard-earned businesses that they have built up over a long period of time to the best offer. But what the Government does need to do is to introduce legislation that puts down criteria so that if overseas—or even domestic—investors want to purchase properties and businesses they will be subject to legislation and will have to conform to conditions. I think it is fair that people who enter a transaction should give an undertaking and be held to fulfil those conditions. That is why National has supported this legislation after the sensible Supplementary Order Paper to remove the creation of marginal strips without compensation was tabled during the Committee stage. 
I hope I have shared with the members of the Committee and also the public who are listening to this debate that it is a matter of striking a balance. No Government has the right to restrict New Zealanders who have built up a business or who own a piece of property from accepting the best offer given that the purchaser will have to fulfil a set of conditions. That is a pretty balanced outcome. 
It is a very emotive issue. A large number of submissioners came before the Finance and Expenditure Committee. I emphasise once again that a lot of those negative feelings were generated because they felt that the law was not being enforced. 
Hon DAVID CARTER (National) 
: 
 I rise to support the bill and to follow from Pansy Wong’s good contribution with another rationale before other members—particularly Dail Jones—speak as to why National supports this legislation now it has been amended. I refer to the process by which foreigners have the opportunity to buy land in New Zealand—[ 
Interruption 
]—and that for the benefit of Craig McNair is an absolute privilege. Having been lucky enough to invest in New Zealand they do so on the conditions imposed by New Zealand law and by the rules at the time of the Overseas Investment Commission. 
What I have found particularly galling are the many cases in which foreigners have been allowed to purchase in New Zealand under conditions imposed by the Overseas Investment Commission and then have completely thumbed their noses at the impositions imposed on them at the time they were given permission. I understand that this legislation significantly tightens the enforcement provisions. That is necessary because some foreign investors coming to this country have not been prepared to abide by the rules and the legislation that existed previously meant that it was difficult for New Zealand to do much about that. 
My second point is particularly in response to the very interesting commentary from Dail Jones when he argued that we do not need foreign investment and that there is suitable capital in New Zealand to provide all the investment capital that this country needs. I suggest to that man that he should get real. Capital in this world is in very short supply and New Zealand must develop by attracting capital. We know that New Zealanders have historically not been good savers and I do not see that in the foreseeable future they would ever be in a position to provide enough capital by themselves. In other words if we are to progress this economy foreign investment becomes essential. 
I refer now to some of the papers tabled before the Finance and Expenditure Committee which show that over the last 3 years the number of people interested in applying to invest in New Zealand has continually declined. That is something the Minister at present in the chair the Hon Dr Michael Cullen—the Minister of Finance—should take particular note of. He accepted my argument a minute ago that this country was in need of foreign capital. Therefore questions need to be asked as to why there was considerably more interest in foreign investment in New Zealand in 2002 than there was in 2003 while there was considerably more interest in 2003 than there was in the last year for which we have figures—2004. I suggest to Dr Cullen as the Minister of Finance that an issue associated with declining confidence in overseas investment is the legislative framework imposed by this country not only on foreign investors but also on New Zealand investors. I refer to issues such as the ratification of the Kyoto Protocol which we now find to be a miscalculation by Pete Hodgson of somewhere between $1 billion and $3 billion. 
Brian Connell 
: That’s good maths! 
Hon DAVID CARTER 
: The maths are fascinating in themselves but the really interesting thing is the risk that it now puts this economy in for future generations. I happened to see Pete Hodgson rambling on in a TV interview tonight saying that the reason the Government had ratified was for future generations of New Zealanders. He has now saddled New Zealand with such a huge international commitment that he is risking the very standard of living not only of future generations of New Zealanders but also of current New Zealanders. 
The other point I want to comment on is the fascinating provision that has been completely removed from the bill following its process through the select committee. It is the issue whereby the bill had suggested we should take the opportunity as part of the approval process for foreigners purchasing land of ensuring that public access is guaranteed by the creation of marginal strips. I have some sympathy for doing that. Provided it is upfront and explained to investors before they purchase in New Zealand it could become part of the rules that they fulfil for the privilege of being a landowner in this country. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 We have had three speeches from National Party spokespeople and I can say that I do not think any of them understand what they are talking about—not one. I listened very carefully to all three members and they advocate an open-door policy to anybody coming here with a suitcase full of money which will enable such people to buy anything they want. That is effectively what those members said. [ 
Interruption 
] Does the member disagree with that? 
Hon David Carter 
: Absolutely. 
PETER BROWN 
: Thank you. Then what— 
Brian Connell 
: Read the  
Hansard 
. 
PETER BROWN 
: I have read the member’s  
Hansard 
—well I listened to his speech. Let those members answer this question: are they prepared to put any restrictions on foreign capital coming in? 
Hon David Carter 
: That’s what this bill does. 
PETER BROWN 
: I know what it does. What those members are saying is that because we do not accept this bill and we are not drawing the line in the same place as they are then we are—what did the member call us? Was it “Mao Tse-Tungites” or something? The fact is that we are not drawing the line where those guys are drawing the line. Of the three speeches made by the members who are sitting there in sanctimonious glory Brian Connell was the winner. He made the most stupid speech of all of those members. He said effectively that people could come here buy the land and live anywhere else in the world. I say to members that if we go back a few years this was a high-wage economy in which one could afford to sell land knowing that New Zealanders could compete for it. But they are prepared to put land on the world market knowing that New Zealanders cannot compete for it. 
Brian Connell 
: Oh poppycock. 
PETER BROWN 
: By and large they cannot compete for it. There are a few who can compete for it but by and large the average New Zealander cannot buy a house or a farm in some areas of New Zealand if they are put on the world market and those members well know that. 
Brian Connell 
: Build a wall. 
PETER BROWN 
: I tell my good friend that we are not building a wall. He has already admitted that he wants some restrictions. We are just telling him that he has not worked out where the restrictions should be. 
Brian Connell 
: Build a wall! Keep them in. 
PETER BROWN 
: If the member says during the election campaign that he wants to enable anybody to come to this country and buy anything from anybody I will say to him that he has got it totally wrong and the average New Zealander will say to him that he has got it totally wrong. 
New Zealand First stands for restrictions and controls on people who want to invest here. We say that unashamedly. We have seen this country sold to the lowest bidder—let alone the highest bidder—and members opposite were part of it. That crowd—despite saying that no ifs buts no maybes they would change the lot—carried on. In 1984 $16 billion worth was sold in this country. Can members tell me one benefit that we have got from that? We have had to buy back our airline and our railways. 
Hon Richard Prebble 
: No we didn’t. We didn’t have to buy it back. 
PETER BROWN 
: At least one member realises that we did not have to buy it back but if we wanted it we had to buy it back. 
We could have let Air New Zealand go to the dogs. We could have let Tranz Rail go to the dogs. It might be too late—it might have already gone to the dogs. The crowd sitting behind me here are saying: “Let ’em come in. They’ve got a suitcase of money let ’em come in and they can buy anything we have for sale.” I had thought that the Labour Government had learnt from its experiences. Clayton Cosgrove puts his hands up. He may treat this as a joke but I can tell him that there are many people in his electorate who will agree totally with New Zealand First. They are sick and tired of someone planting a for sale notice in the land of New Zealand and saying: “Come here and buy it.” 
It may not have been Richard Prebble but I have certainly heard ACT members say that the land cannot go away. Dr Cullen said that the land cannot go away but for the average New Zealander in many cases that is just what happens. It goes away. It might as well be 12000 miles away as average New Zealanders will not be able to afford to compete on the open market. 
Hon Dr Michael Cullen 
: When did the average Kiwi own a high-country farm? Ha ha! 
PETER BROWN 
: The member laughs. He might laugh a little bit later when he gives the low-paid people their 67c and tells them to go and buy the land they want and have saved up for when foreigners come in and buy it at some exorbitant sum. I can tell the Committee about a situation where a house was sold on the Internet at three times its value. 
Hon PAUL SWAIN (Minister of Labour) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 61 
New Zealand Labour 51; United Future 8; Progressive 2. 
Noes 46 
New Zealand National 19; New Zealand First 13; ACT New Zealand 6; Green Party 8. 
Motion agreed to. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 81 
New Zealand Labour 51; New Zealand National 20; United Future 8; Progressive 2. 
Noes 28 
New Zealand First 13; ACT New Zealand 6; Green Party 8; Maori Party 1. 
Clause 1 agreed to. 
The question was put that the following amendment in the name of Rod Donald to clause 2 be agreed to: 
to insert in subclause (1) after the words “Order in Council” the words “but not before 30 June 2006”. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 27 
New Zealand First 13; ACT New Zealand 6; Green Party 8. 
Noes 81 
New Zealand Labour 51; New Zealand National 20; United Future 8; Progressive 2. 
Amendment not agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 81 
New Zealand Labour 51; New Zealand National 20; United Future 8; Progressive 2. 
Noes 28 
New Zealand First 13; ACT New Zealand 6; Green Party 8; Maori Party 1. 
Clause 2 agreed to. 
Bill reported with amendment. 
Report adopted. 
Third Reading 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 I move  
That the Overseas Investment Bill be now read a third time 
. The Overseas Investment Act has not undergone a thorough review since it passed in 1973 and I thank members of the House for their cooperation in progressing this important bill through the House. I particularly want to thank the members from ACT the Green Party and New Zealand First who demonstrated how powerful the arguments in favour of this bill are. 
At the commencement of this long-overdue review two objectives were identified as being of paramount importance. These were to ensure the regime focused on sensitive assets of critical interest and to further reduce compliance costs in areas where that is feasible. The bill does that. Indeed the second part of that has not been focused on at all during this debate. 
I want to say quite clearly that it is critical for the future of this country and for our social and cultural development that we have a welcoming and open attitude towards inwards foreign direct investment. Indeed I have to point out that today the Government announced new rules for the entrepreneur category and it was attacked by the New Zealand First leader in his first press statement as being an attack upon inward-bound investment by foreigners. It is true that 45 minutes later he put out another press statement saying we were simply pinching New Zealand First’s policy but nevertheless his first statement showed that party’s confusion on the issue of inward-bound investment. If this country relied on its own capital resources alone we would not just not grow; this economy would shrink because our investment levels would be insufficient to maintain our current level of economic activity. It is a bit like Arsenal which had to bring in a Frenchman to be a decent coach because it could not find anybody from its home area—I remind Peter Brown. 
The second point I want to make is about this issue of reducing compliance costs. Today I have been going through as usual some Overseas Investment Commission recommendations on purchases. What the members opposite who voted against this bill might need to know is that the largest single category of investment that I have to approve at the moment under the law relates to for example—today—the purchase by a supermarket chain which is foreign-owned of 1¼ hectares of land for a new supermarket in a small North Island town simply because the land backs on to a drainage reserve or something similar. 
Clayton Cosgrove 
: Iconic drainage area! 
Hon Dr MICHAEL CULLEN 
: Yes an iconic drainage reserve no doubt—in Dargaville if one could imagine such a thing being possible. That requirement is stupid. It is stupid that we have a Government agency going through such stuff and Ministers’ time being consumed in approving things of that sort. This bill wipes out the requirement for approval in that kind of case. I have to approve time after time redevelopments in terms of urban subdivisions because the initial purchaser of the land for subdivision is a Singaporean company and again if it is a large subdivision the chances are that it backs on to a recreation reserve or a drainage reserve. And those subdivisions are going to be sold off to New Zealanders at the end of the day but we have to have Overseas Investment Commission approval for that to go through. It is a nonsensical piece of compliance cost and business cost which we need to strip out of the system. 
I make no apology for driving this measure through the policy process and driving it through Parliament. I thank those parties that have supported it for their sanity in that respect because bluntly I have to read through all the pages of these reports—although having read the first page I have pretty much come to a conclusion—before I go any further. I am grateful that Ministers in the future will not have to do that kind of silly stuff. 
Simon Power 
: We’re here to help. 
Hon Dr MICHAEL CULLEN 
: Indeed and we appreciate that help when it comes rarely from the National Party; a party of course that celebrates the fact that it is only 4 percent behind in the opinion polls which is a sort of interesting commentary on the modern National Party. 
Then we come to the issues of sensitive land. What Peter Brown tells us—from that vast North London farming experience he comes from; those broad acres of high-country sheep farms in Highgate which are actually his background or in Baskerville Hill or wherever it was that he comes from—is that somehow or other because foreigners have been allowed to purchase New Zealand land the ordinary average Kiwi bloke can no longer buy a high-country farm. As we all know in that good dim distant golden age of the 1950s good average Kiwis down there in Sydenham could go down to the good old Post Office get the 3 percent loan and go off and buy themselves a decent property somewhere around Cromwell or Queenstown or wherever it might be and sadly that is no longer true. 
 It is a bit like those people who write in the  
Listener 
—the true magazine for those with memories of the 1950s that are somewhat rose-coloured—that no longer can the average person own a seaside bach. Well actually in the 1950s it was always the middle class that owned the seaside baches; it is just that the seaside baches have become a lot bigger and more posh in the last 50 years than they used to be and cost a lot more to buy. I grew up in Burwood and people there did not have seaside baches. It was the people in Fendalton and Cashmere who had them. So let us not weep for a golden past that never was which has always been the basic foodstuff of populist parties. 
This bill gives us the capacity when considering those applications to ensure that we can address a range of important issues such as access conservation values historic values and so on and that is very very good indeed. It can turn into a win-win situation. 
Let me also make this point because I am sick and tired of both the Green Party and articles in the  
Listener 
 getting a fundamental point wrong. When foreigners purchase New Zealand land they are subject to New Zealand law in every respect just like a New Zealander is. They do not have a separate Resource Management Act regime. They do not have a separate regime in any other sense. The people who are fighting improved land access up sensitive waterways for recreational purposes are not a bunch of foreigners; they are fifth-generation Kiwi farmers most of whom inherited their properties. Let us be clear about where the problems are in that particular respect. I have no time at all for this golden age rubbish and this strange xenophobia that insist that a New Zealand - born landowner is somehow kinder to New Zealanders than an American a Canadian or some other landowner might be. We have a damn sight more chance of tramping our way across Shania Twain’s property than we have of tramping across those owned by New Zealanders in that particular area. What is more she can sing a damn sight better than most New Zealand landowners can and if I am allowed to say so in these PC days she looks a damn sight better than most New Zealand owners. [ 
Interruption 
] 
I knew that would upset New Zealand First. It is not for me to mention that Craig McNair that great New Zealand nationalist worked for United Airlines flying the friendly skies on behalf of Americans and is an American citizen. It is not for me to mention these facts about our comrades opposite—Peter Brown that well-known North Londoner like myself; Dail Jones who was born in Pakistan. My friend opposite is still trying to be quite sure about where he came from in the first place. We have all these sorts of things going on from these latter-day converted Anabaptist New Zealanders over there. 
The final point I want to make is that the bill transfers the administration of this very strange Overseas Investment Commission which has a board comprising four people and about five employees into Land Information New Zealand which will have the capacity to do the follow-up work. The bill improves enormously the penalties regime so that we can actually enforce the conditions that are imposed which we have had great trouble doing in the past. I think this is very good balanced legislation. I thank those members who have supported it with coherent arguments. I thank those members who have opposed it with incoherent arguments. 
PANSY WONG (National) 
: 
 The Minister of Finance is certainly enjoying himself! I invite him to treasure the dying moments of his role as Minister of Finance because our good member John Key is waiting in the wings to take over. 
As a member of the Finance and Expenditure Committee let me share with the House some of the proceedings at the select committee. [ 
Interruption 
] The chairman calls out; I hope Clayton Cosgrove is going to take a call because we have not heard enough from him. He must be falling short of being a favourite member over there. I have to share with the public that overseas investment is a very sensitive topic. Many many submissioners came before the Finance and Expenditure Committee showing signs of anguish and insecurity at the loss of control of New Zealand business particularly farmland and scenic icons. Part of that unfortunately was brought about because of a few very high-profile cases; the public perceived that the enforcement agent did not do its job did not hold the overseas investors to fulfil their purchase conditions. I think some genuine grievances have been caused by the enforcement agent the Overseas Investment Commission not enforcing the law. 
The enforcement agent assured the Finance and Expenditure Committee that that was due to the fact that it does not have a set of effective tools to monitor the situation. I raised this issue in the Committee stage with the Minister of Finance. I am still not happy with some of the wording in the legislation: the regulator “may” require information to enable it to monitor those investments; it “may” ask for information. I am assured by the Minister of Finance that the Overseas Investment Commission or the regulator—which from now on is to be transferred from the Reserve Bank to Land Information New Zealand—will use this legislation to enforce the conditions that the investors agreed to. 
To say that some of the arguments offered by New Zealand First were entertaining is to be charitable. The New Zealand First member seemed not to understand that successful people who invest in business do not want to dismantle the business do not want to lock up the business. They want to expand it. If they make an investment they want a return. When overseas investors purchase a business in New Zealand they employ people they use consultants and they purchase supplies from New Zealand. If the business makes a loss they have to take that loss. If it makes a profit—why not? I do not think New Zealand wants to be known as a country where every investment will return a loss. Of course we want to show New Zealand as a country where people who invest will find it profitable. They will pay their fair share of tax because we have tax legislation; we have legislation that all businesses have to comply with. 
But there is another issue that we have to think about. I am sure that Peter Brown would take another call in this third reading. What if the Government passed a law to say that Mr Brown is allowed to sell his property to a certain sector only or is not allowed to sell his property to anybody— 
Ron Mark 
: What does China do now? 
PANSY WONG 
: Well actually I have just complimented Dail Jones. He would have been a proud member of Communist China under Chairman Mao. Chairman Mao would have been proud of Dail Jones and the New Zealand First members’ speeches. 
Ron Mark 
: What does China do now? 
PANSY WONG 
: I am not too sure why that member keeps asking me about Chinese legislation. I can answer that I know New Zealand law much better. The member consistently has a problem. That member of Parliament apparently is not interested in what is going on in New Zealand. I feel really happy that New Zealand First takes so much interest in China and is pro-Chinese and pro-China. What a wonderful thing to discover tonight. One can always discover something. New Zealand First is pro - Chairman Mao and pro-Chinese. I think that is a wonderful discovery. 
The only complication in the passage of this bill was self-imposed by David Parker. At the select committee David Parker had this great idea about how to lose his seat of Otago to National’s Jacqui Dean. Jacqui Dean will be a great member in the next parliamentary term. David Parker introduced a provision to create marginal strips around sensitive land such as lakes and rivers. But there is a problem. Labour wanted to create a marginal strip and give no compensation. Members should just imagine that a New Zealand landowner is trying to sell a piece of land from his or her farm to an overseas investor when suddenly a marginal strip is imposed on the property. How would that affect the selling price? David Parker seemed to think it does not matter. And I was told he is a lawyer! That is when I thought that maybe the next Parliament should welcome in more accountants and economists. Maybe they would understand the issue better. 
At this stage I acknowledge that at least United Future woke up to that even if belatedly. Its members said in the select committee that they did not like it but they were not prepared to stand up for their principles at that point in time and they let the bill go through the select committee. But belatedly they did closed-door negotiations with Labour and Labour has backed off from the provisions to take a marginal strip without compensation. 
I finish by sharing why National can see some point in marginal strips being imposed on land purchased by overseas investors. My good colleague the Hon David Carter said that overseas investors might not understand that under New Zealand culture landowners allow access by the public particularly to iconic sites. Marginal strips can be justified on that basis but imposing them without compensation is simply not acceptable. 
We welcome the introduction of the Supplementary Order Paper amendment that removes that draconian provision of creating marginal strips without compensation and now National will support the passage of this bill. 
CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I rise to meet the challenge of Mr Simon Power and to support the bill as the chair of the Finance and Expenditure Committee which considered the bill. I draw on a couple of points. This is a good bill because as Dr Cullen said it tightens the enforcement regime in respect of the purchase by foreigners of New Zealand lands and other assets and investments. 
I want to touch on one thing which is that the Overseas Investment Commission will now be absorbed into Land Information New Zealand. This is a good thing because as the Minister pointed out the commission has a staff of about five. Once it goes into Land Information New Zealand of course there will be a greater resource of personnel who will be able to enforce the provisions in the agreements that are put in place for overseas investors. 
One of the biggest concerns from submitters to the Finance and Expenditure Committee was that when overseas purchasers come to do the deal to build the lodge or whatever to employ X number of people and to create economic growth and wealth those commitments are not necessarily met. I think that concern has historically been quite valid. One of the committee members Janet Mackey pointed out that there was an investment in her patch where those commitments as written in the agreements had not been met. I think even the odd member of New Zealand First—or one member—would agree with that. Historically overseas investors have come over and invested said they will employ people and said they will create jobs. They have done the deal if you will but have not lived up to the obligations. The feedback we got from a lot of the Kiwis who came to the committee was that they do not mind overseas investment but if overseas investors are obligated to do certain things then they should do them. So this bill seeks to tighten up that enforcement mechanism. 
I see that the Greens are opposed in their minority report to the Overseas Investment Commission being absorbed within Land Information New Zealand. I have to ask why. Land Information New Zealand has more people more resources and more specialists to enforce agreements—to stomp the country if necessary and ensure that investors have lived up to and are meeting their obligations such as employing people building the lodge creating some jobs and creating some wealth for the country. I would have thought it was difficult to argue against those tighter enforcement measures. 
Then we have New Zealand First which is opposed to any purchase by any foreigner of any asset investment or land in New Zealand. As the Minister pointed out that is totally illogical. The last one out switches the lights off if we call a halt to any international investment in land in this country. The New Zealand First members say no. Again I think most Kiwis would not agree with them. 
This bill in total seeks to lessen the bureaucracy. It seeks to lessen day-to-day ministerial intervention in minor land purchases—over whether someone can purchase a piece of land to put a supermarket on as the Minister said. I think this is a good bill. The Finance and Expenditure Committee members on both sides worked very very hard to try to meet some of the concerns that New Zealanders put up. I think citizens in this country do not mind foreign investment if obligations are met by the investor. One of the things the committee has been at pains to do is to ensure that there are mechanisms in the bill that will meet that. 
I conclude on one other point. There was a bizarre occasion at the committee when the Green member Rod Donald put up the following proposition. Say a foreign investor bought a flour mill—I think that was the example Mr Donald used—and then the market for flour went belly up. That investor was obligated to employ people to grind and produce flour but could not meet those obligations because the market had gone belly up. Mr Donald said that if the foreign investor wanted to close the factory down and turn it into a different business—a shoe-making factory for example—it should not be allowed. I have a couple of colleagues here who were on the committee and I have to say that we found that proposition rather bizarre. 
This is a good bill. It meets a lot of the concerns that New Zealanders have and I support it. 
CRAIG McNAIR (NZ First) 
: 
 In speaking in the third reading debate of the Overseas Investment Bill I point out to the House that apart from the Government which has to keep its numbers up New Zealand First is the only Opposition party that has been keeping its numbers up and it is the only Opposition party that is truly passionate about fighting against the Government on this bill. The National Party has been voting at about 19 or 20 all day long. The Greens ACT and United Future are voting down at about five. It is just ridiculous that they get up in this House and say how passionately they are against this bill in so many ways. The National Party which has been saying how bad the bill is went and voted for it. What they are doing—and my colleague Dail Jones alluded to this earlier—is positioning themselves for a coalition. The National and Labour parties are showing New Zealand that they really are together on these issues and that they really are in unison as far as foreign ownership is concerned. The chairman of the Finance and Expenditure Committee Mr Clayton Cosgrove has not been here all day as we have been speaking to this bill. He is in the same boat as the other parties and is just as bad as the other parties that were voting down— 
Simon Power 
: I raise a point of order Madam Speaker. I know that Mr Cosgrove does not need my assistance on these matters but it is completely contrary to the Standing Orders for a member to refer at any time to the absence of any member from this Chamber. The member should be reminded of that. 
Madam SPEAKER 
: I thank the member. He is quite right on that. Perhaps the member would like to address the bill. 
CRAIG McNAIR 
: I appreciate your ruling Madam Speaker as far as that is concerned but I felt I was addressing the bill in the sense that New Zealand First is the only party that has voted consistently with its full numbers all day long. It has been putting its money where its mouth is. 
Gordon Copeland 
: I raise a point of order Madam Speaker. I know that in this Chamber the convention is that we cannot question a member’s word but it will clearly be recorded in  
Hansard 
 of course that United Future has consistently voted 8 which is our number of members all day. 
Madam SPEAKER 
: That was not a point of order but it was an interesting point of information. Maybe we could get to the substance of the bill if the member would like to continue. 
Peter Brown 
: Speaking to the point of order— 
Madam SPEAKER 
: I have ruled on the point of order but if it is a new point of order— 
Peter Brown 
: I raise a point of order Madam Speaker. I just draw the House’s attention to the fact that the honourable member is not in the Opposition—he actually supports the bill. 
Madam SPEAKER 
: I am sorry; this is getting a little silly. Let us get on with the substance of the debate please. 
CRAIG McNAIR 
: In terms of National and Labour—Tweedledumb and Tweedledumber—being the same and joining together in coalition on this issue I have to say they are not voting together just on this bill. The Hon Dr Nick Smith from the National Party has put up a member’s bill—it is in the Local Government and Environment Committee at the moment—that basically makes the same amendment that David Parker has tried to implement into this bill. David Parker probably agrees with me on that. It is basically the same issue. That was one issue in this bill that National said it would vote against but a member of National has put up a bill which National has voted for that makes basically the exact same amendment that David Parker has put up. [ 
Interruption 
] I say to Mr Parker that New Zealand First voted against that. New Zealand First does not change its position for political expediency. We do not do those kinds of things. Mr Parker put forward the amendment probably after the call-up from Michael Cullen and the spin doctors up on the ninth floor. They would have said that Labour was in trouble on this bill and that they needed to put their heads together to make it at least look as though they were trying to be tough on foreign ownership and trying to protect New Zealanders and New Zealand’s interests. They decided to have a look at Nick Smith’s bill. David Parker thought he would tweak it a little bit and tinker with it so that it could be slightly different then Labour chucked that in this bill. It is quite ironic that National and Labour—Tweedledum and Tweedledee—are joining together and doing the same thing they did in the 1980s and 1990s. It is just like when they jointly sold $16 billion worth of State-owned assets and $10 billion per year in profits went overseas. The National and Labour members think that that was a great thing for New Zealand. 
I want to say one other thing about David Parker’s amendment. Whether or not one agrees with the amendment—Richard Prebble will probably agree with me; he can tell me whether he does or whether he does not—the fact is that Labour should have decided whether it would let foreign investors into our economy or buy certain pieces of land. It should have made up its mind and decided—yes or no. But it did not. It has tried to find this halfway house—this kind of “Mugabe amendment”—and say to foreigners that they can come in and buy our land but that the Government will take a little bit of it back. It should decide—yes or no. That is what I am saying. That is what this Government has tried to do. That is what the National Party is trying to do with Nick Smith’s bill. National members are trying to say that they do not agree with this but they do because they have shown their true colours in Nick Smith’s bill. 
I want to highlight another issue. It takes us back to the first reading debate when the Labour member Dover Samuels the member for Te Tai Tokerau talked about this great utopia this great amazing thing that is going on in Northland. Foreigners are coming in and buying golf courses up in the far north. He was saying how great it is because they are employing Maori to mow the lawns and cut the trees and hedges. He thought that that was a great thing. As I was hearing that I could not believe it. Labour wants to make New Zealand a little Mexico. That is what this Government wants to do. This Government along with the National Party and other parties in this House want to subject the people of the far north—the people whom Dover Samuels represents—to being just the hired help. That is what they want to do. That is just what happens in Mexico City. 
I flew into Mexico City myself quite a few times a few years ago. We saw Mexicans running around in their little Coca-Cola vans and big beautiful Coke signs were all around the place. Those Mexicans were earning 50c an hour—and where did the money go? It went straight back to the United States where the wealth is. That is what this Labour Government and the National Party—Tweedledumb and Tweedledumber—want to do. That is what they are proving with this bill. They are showing it to the people of New Zealand. The Government has come up with some stupid amendment—some “Mugabe clause”. It is in the name of Michael Cullen but we know that David Parker pushed it. It is some kind of “Mugabe clause”— 
Madam SPEAKER 
: I am sorry; I must intervene here. I understand that offence has already been taken at a reference to Mugabe in a previous speech in the debate. I ask the member to withdraw that. 
CRAIG McNAIR 
: I withdraw. I am trying to say without using the exact name of that person that Labour is basically trying to— 
Hon Richard Prebble 
: I raise a point of order Madam Speaker. I am sorry but I am having great difficulty understanding that particular ruling. The member said that the amendment was a “Mugabe clause”. Are we protecting Mr Mugabe by not using that phrase because he is another member of the Commonwealth? Is that the reason for the ruling? 
Madam SPEAKER 
: No the reason for the ruling is that previously in this debate offence was taken by a member at a reference to Mugabe and the member who made that other reference was asked to withdraw it. So in the interests of consistency it seemed to me that that was appropriate. 
Hon Richard Prebble 
: I raise a point of order Madam Speaker. It is a new point of order. I would really like you to think about it because it appears to me that one can describe a clause of a bill in the strongest possible terms. It seems to me that a member could describe a clause as being a “Mugabe clause” and that it would not be out of order to say that an honourable member is supporting a “Mugabe clause”. What would be out of order is to say that an honourable member is a Mr Mugabe or is a Nazi or something. But to say that the clause is a “Mugabe clause” appears to me to be valid. I raise this because I think it is quite important to be able to do that. In fact I disagree with nearly all of Mr McNair’s speech except the statement that the clause is a “Mugabe clause” and I think the honourable member should be allowed to say that it is. 
Madam SPEAKER 
: I thank the member for that comment. If Mr McNair had just left it at that it would have been fine. But he linked the remark with a specific member and that member had previously objected to that reference. If Mr McNair had just left it at that you would be quite right and I would not have intervened. I ask the member to continue. 
CRAIG McNAIR 
: This is the kind of outrageous bill we are talking about. I want to finish up with what United Future and Labour voted for in the commentary on this bill which states: “The majority does not consider it necessary that all of the overseas investors involved in a particular transaction have relevant business experience and acumen.” Further down it states: “Such an appointment may be made to recognise local customary roles and traditions”. This is the kind of craziness that we find in this bill. There are no rules. The Government does not care who comes in. They will find any excuse to let whomever in. That is what this Government is all about. That is what this Government and the National Party—the coalition parties Labour and National—are doing with this bill. New Zealand First says it is outrageous. 
DAVID PARKER (Labour—Otago) 
: 
 It will take less than 30 seconds to show the illogicality of the previous speaker’s statements. He criticised amendments to the bill that would have imposed preconditions on eventually permitted sales to overseas parties as being improper but he backs the total prohibition of the same sales. New Zealand First backs the total prohibition of sales of rural land to foreigners yet it opposes the imposition of conditions relating to access. The two positions are irreconcilable. That took 30 seconds. I support the bill. 
Hon RICHARD PREBBLE (ACT) 
: 
 I am sorry that Mr Parker did not take longer. It is not often that one gets an opportunity to speak at one’s own funeral and I think he should have taken it. 
Jill Pettis 
: Oh! 
Hon RICHARD PREBBLE 
: Oh this bill most certainly is Mr Parker’s funeral. Here is a member who is so ideological he does not understand what is in the best interests of his own constituents. I do not know whether Mr Copeland would like me to quote him so perhaps I will not but I will say that other members have questioned whether Mr Parker is aware of the fact that property values in his electorate have gone up because people have been able to sell their land to whomever they want. The passage of this bill will damage not just one person who was unable to put through a property sale; it will damage the value of every property in Central Otago. We need to ask on whose behalf Mr Parker thought he was acting. That is his first problem. 
His second difficulty is that he was prepared to support an amendment whereby the State would take away property without paying compensation. That is one of the criticisms that is made of Mr Mugabe. Indeed I am sure Mr Parker is aware of that and I am certain that when it comes to Zimbabwe he is strongly opposed to the actions of Mr Mugabe. That is the contradiction that has been drawn to his attention. He has managed with this bill to offend every single constituency. He has offended the liberals the conservatives and those who own property—he has managed to offend everyone. I understand that the National Party has a rather good candidate in his electorate. I cannot remember her name but I am told she is pretty good. 
Brian Connell 
: Jacqui Dean. 
Hon RICHARD PREBBLE 
: Her name is Jacqui Dean. I am sure she would not take just 30 seconds. Then again given Mr Parker’s position 30 seconds was probably the longest he could speak without making a further fool of himself. 
David Parker 
: 1.8 percent. 
Hon RICHARD PREBBLE 
: The member thinks that the truth of a proposition is in its polling numbers. If that is so then he will accept his defeat with grace will he not? 
Let me turn to the bill itself. Firstly the Minister of Finance is correct in saying that some provisions in the bill bring about some liberalisation. The law at present requires Ministers to plough through proposals that everyone knows will be agreed to. Who thinks a supermarket in Dargaville is a bad thing? Only someone who does not live in Dargaville or in another area without a supermarket would think that not having one was a good thing. 
Brian Connell 
: Woolworths did. 
Hon RICHARD PREBBLE 
: The supermarket operator’s opponents may object but apart from another supermarket operator everyone would agree that such a proposal is desirable. It is desirable to have a law that does not involve that sort of nonsense. But having said that I must say that a great deal of this bill is completely irrational. The ACT party finds itself opposing the bill not for the reasons given by New Zealand First which are frankly xenophobic— 
Rod Donald 
: I’m not. 
Hon RICHARD PREBBLE 
: The Green member interjects—and I am not objecting to that—to say that he is not xenophobic. I hate to break it to him but in fact the Green Party has expressed exactly those sorts of sentiments. I join with Mr Trotter in saying that it is a great disappointment to see that a party that was elected to this Parliament as a green party on environmental issues has decided that it wants to keep itself here by making ridiculous xenophobic statements against foreigners and suggesting that foreigners and foreigners alone are somehow an attack on the New Zealand environment. 
I say to Mr Donald that overseas investors actually have a better record than New Zealanders on a whole range of things. Let me give just one example which New Zealand First may identify with. We had a case known as the wine-box case in which a number of companies entered into a number of interesting arrangements to get out of paying taxes. Not one of those companies was an overseas company. All of them were New Zealand companies. 
Gordon Copeland 
: Including State-owned enterprises. 
Hon RICHARD PREBBLE 
: Of course—State-owned enterprises are well known for trying to avoid tax. When I was the Minister for State-owned Enterprises I discovered that a number of State-owned enterprises had gone into the sorts of tax arrangements that made the wine box look like nothing at all. 
The point I am making is that overseas investors tend to be much more careful about obeying the law. There are some quite logical reasons why they should be. Just because a large number of submitters came before the Finance and Expenditure Committee and said that overseas investors do not obey the law does not make it true. Repeating a lie does not make it true. The evidence shows that overseas investors follow our laws. The evidence shows also that New Zealand is a much wealthier country today as a result of overseas investment. Dr Cullen is absolutely right—New Zealanders do not save enough. If we were to follow the logic of New Zealand First and the Green Party this country would be much much poorer today. I tell Mr Donald that there is no doubt about that at all. 
Rod Donald 
: I agree. 
Hon RICHARD PREBBLE 
: Mr Donald now says we should save more. He thinks that by preventing overseas investment coming here somehow we will be able to pull ourselves up by our own bootstraps. That is nonsense. 
Firstly the ACT party is opposed to restrictions on private property. If one owns a property one ought to be able to sell it to whomever one chooses not just to those to whom Mr Donald and Mr Peters think it should be sold. 
The second thing is this. We already have in this country a Securities Commission monopolies laws and a Companies Act. We have no shortage of regulations and controls that exist on investment. No case has been put up by any member including those from the Government or the National Party as to why there should be extra restrictions on people just because of their passport. No such argument has been raised and that is why the ACT party is totally opposed to the bill. 
We can see absolutely no reason for it and it is a matter of regret that the bill can go through only because the two old parties support it—for electoral reasons I think not because they believe it. Dr Cullen does not believe in the bill and John Key certainly does not believe in it. The bill will go through because the two old parties looked at the polls and saw how well Mr Peters does in his anti-foreigner rants—helped by the Green Party which is disgraceful in the case of that party because at least it is a party that claims to represent principle; Mr Peters never hides the fact that he is a straight-out populist. The two old parties are pandering to the fact that there are many people in the country who have an irrational fear of foreigners. Shame on both those parties. 
That is the reason why the ACT party is voting against the measure. We do not actually need it. 
ROD DONALD (Co-Leader—Green) 
: 
 The Green Party is opposed to the plans of Labour and National to make it even easier for foreign investors to buy up our land our buildings and our businesses. We are not alone. Most New Zealanders remain opposed to the sell-off of businesses like Telecom New Zealand and Contact Energy to foreign investors. Most New Zealanders can see what a mess our rail network ended up in after foreign investors milked it dry. Most New Zealanders are not happy that more and more iconic land such as Young Nicks Head is being bought up by foreign investors who treat our country as a plaything. Young farmers are upset that the dream of owning their own farm is receding because increasing overseas investment means farmland is being priced out of reach and beyond its agricultural earning capacity. Holidaymakers are finding that their favourite camping spots at the beach are no longer there because foreign investors have bought them up and built their mansions where Kiwis used to play. First home buyers are being deprived of their dream of owning their own home because foreign investors are outbidding Kiwis at the bottom end of the property market as well as at the top. 
So much for Labour’s ownership society. Any assistance the Government provides first home buyers fades into insignificance when one considers that property purchasing power which is measured in terms of average house price versus average wage is half what it was 25 years ago. That is because foreign capital has artificially inflated house prices and that foreign capital has also driven up New Zealand’s current account deficit which has made mortgage interest rates 1 to 2 percent higher than they otherwise would be. This double whammy is a direct result of the liberal foreign investment regime of National and Labour. 
It is extraordinary that this Labour Government is proud that New Zealand has such a liberal regime. Dr Cullen said so in New York last November. That position is in stark contrast with the statement of Labour leader Helen Clark on 4 June 1995. Then she said: “Labour would be strongly opposing the National Government’s efforts to liberalise restrictions on the foreign purchases of New Zealand land.” She also said that the Government of the time—a National Government—was completely out of touch with the strong views of the overwhelming majority of New Zealanders who considered that encouraging more foreign purchases was unacceptable. As far as the Green Party is aware—and that is backed up by the 7000 people who signed our petition calling for tighter rules on foreign investment—New Zealanders are just as opposed to increasing land sales to foreign buyers as they were 10 years ago. Now it is the Labour Government—not a National Government—that is out of touch and is pushing an unacceptable agenda on to the public. 
We can only speculate—and I will in a minute—as to what has induced Miss Clark to change her mind so radically on this matter. In the Green Party’s view she was right then and she is wrong now. Indeed there is even more reason to be opposed to increasing foreign ownership as the last 10 years’ bitter experience can attest. Only yesterday Dr Cullen admitted to the Finance and Expenditure Committee that it would cost the taxpayer much more than the $200 million already allocated to fix the rail network which was left in a decrepit state by its former foreign owners who ran down the network milked all the profits they could and took the money and ran. Surely that costly experience should be enough for Labour to understand that New Zealand’s foreign investment rules are not tight enough. 
The so-called good-character test is a sham. Foreign buyers of businesses should have to meet at least the same national interest test that foreign land buyers need to pass. If companies like Juken Nissho had to sit even the weak national interest test we have now they would fail. Juken Nissho operates wood-processing plants in Kaitaia Masterton and Gisborne. It has a horrifying health and safety record. It had 269 serious harm notifications from 1995 to 2003 and 11 convictions under the Health and Safety Act with fines ranging from $6000 to $10000. In 1997 Juken Nissho was prosecuted for exceeding permitted emissions at its Kaitaia plant. There are numerous complaints from neighbours about the effect on their health. An analysis of Juken Nissho’s New Zealand accounts from 1999 to 2003 shows that it reported losses and paid no tax. It was totally debt-financed and under normal circumstances it would be insolvent. Many of the company’s transactions appear to occur through related parties and may provide a way to shift profits offshore and to avoid tax. 
So why does Labour want more investment from companies that behave so badly? Why does Labour refuse to introduce a code of corporate responsibility that would hold the Juken Nisshos of this world to account? A responsibility code for foreign investors is neither a radical idea nor a new one. New Zealand is already a signatory to the OECD guidelines for multinational enterprises. Indeed our Government has undertaken to promote the guidelines although there has been little noticeable activity. This is unfortunate because the June 2000 revisions contain in the words of Australian Treasurer Peter Costello who was chairman of the ministerial committee “far-reaching changes that reinforce the economic social and environmental elements of the sustainable development agenda.” Given that the Government endorsed those OECD guidelines at the time the Greens believe that the Government should incorporate them into even more explicit legislation that must also include penalties—and not the light-handed ones in this bill—for corporations that do not meet their responsibilities. Those penalties should be serious so that corporations that do not meet their responsibilities are held to account. 
Labour will not do what most of its own supporters want because it wants to keep onside with the big boys’ club rather than with the citizens of New Zealand. That is clear because we know from the General Agreement on Trade in Services negotiations that a major demand of our trading partners is for us to scrap the Overseas Investment Commission. That is exactly what the bill does and it will allow foreign firms and individuals almost unrestricted access to New Zealand property and businesses. So the big boys’ club will be happy as will the United States which made it clear in its free-trade negotiations with Australia that it wanted to reduce or eliminate restrictions on overseas investment. If the United States wanted it for there it will want it for here as well which means that Labour is in a better position to do a deal with George Bush and to cuddle up to the Americans for a free-trade deal. 
In the meantime we should not forget that foreign investors already control half of the New Zealand sharemarket that 41 of the top 100 companies operating in New Zealand are 100 percent foreign-owned that over 1 million hectares of land is already foreign-owned including at least 157000 hectares of high-country leasehold 2720 hectares of offshore islands and 57 kilometres of coastline. Those figures do not disclose ownership below the threshold or undeclared purchases. As a former Overseas Investment Commission staff member Mark Dunlop said in his submission his experience has left him “with the distinct impression that there is widespread evasion of our overseas investment rules relating to land.” That revelation highlights the need for a proper monitoring regime so that the true extent of foreign ownership is disclosed. We know from Statistics New Zealand that foreign investment in New Zealand now exceeds $208 billion and that the cost of that investment in the form of interest and dividends reached $8.9 billion for the 2004 calendar year. It is no wonder that New Zealand’s current account deficit was $9.3 billion for the same period. That is unsustainable. 
I do agree with Dr Cullen on one thing—we Kiwis need to increase our savings rate if we are ever going to reverse that appalling situation and get our economy out of the red and back in the black. 
In closing I have to say that for all New Zealand First members’ bluff and bluster they acted like lambs when it came to this bill. They did not put up any of their own amendments and they did not support the majority of my amendments. The Green Party proposed improving the scrutiny on foreign investment by changing the rule from 25 percent ownership to 10 percent; New Zealand First opposed that. We wanted to extend the coverage to aquaculture; New Zealand First opposed that. We wanted to reduce the threshold from $100 million to $10 million; New Zealand First opposed that. We wanted to bring in Crown pastoral leases; New Zealand First opposed that. We wanted to extend the national interest test to significant business assets; New Zealand First opposed that. We wanted to bring in import substitution as a criterion; New Zealand First opposed that. All in all New Zealand First is all bluff and bluster. 
GORDON COPELAND (United Future) 
: 
 I would like to use my third reading speech on the Overseas Investment Bill just to tie up a few loose ends from my point of view. 
The first I would like to mention is that during the Finance and Expenditure Committee’s consideration of this bill I spent quite some time wrestling with the good character test set out in the bill—namely that one of the criteria that has to be satisfied is that foreign people who are buying business assets of more than $100 million in this country are of good character. I wanted to explore the possibility of putting something in the bill that would actually stop a repeat of the disastrous New Zealand Rail sale. In other words I wanted to think of a way whereby we could maybe safeguard ourselves to ensure that we would not sell our large companies again to investors who were merely asset-strippers. 
The officials working on the bill were very patient in that regard. They went away and got a lot of information. They came back and they told us about our World Trade Organization obligations our various free-trade obligations and so on and so forth. But the clincher for me in the end of course was just to realise as the Hon Richard Prebble pointed out that the problem with the New Zealand Rail sale was not that it was made to overseas buyers or foreign investors but that it was made to a consortium that included Fay Richwhite—New Zealanders. It was Fay Richwhite—and I say this under the privilege of this House—that then led the charge disgracefully to strip out every single dollar that New Zealand Rail had and to leave our rail system in disarray to the great detriment of New Zealand and its citizens. It was a disgraceful action but it was actually perpetrated on New Zealanders by other New Zealanders who had given in to unbridled greed and who were quite prepared to make money at the expense of their fellow citizens. I believe that that was a disgraceful episode in New Zealand’s history. It was the unacceptable face of capitalism yet it was not done by foreigners but by New Zealanders. 
Rod Donald mentioned that 41 of our top 100 corporations in this country are foreign-owned— 
Rod Donald 
: 100 percent foreign-owned. 
GORDON COPELAND 
:—100 percent foreign-owned and I would like to ask him whether there is any problem with that. Are any of those companies asset-stripping? I think most of them are doing a very very good job. They are good corporate citizens and they are making a huge contribution to this country. We do not need in any way to restrict their operations. 
I want the New Zealand First members to think this through for a moment. Why do they conclude that people born in this nation somehow have superior characters and business ethics to people from overseas? Really when I analyse it I tell those members that the bottom line is that it is xenophobia—it is xenophobia pure and simple and they cannot escape that conclusion. 
Ron Mark 
: I raise a point of order Madam Speaker. Given that the member has just specifically addressed his question to New Zealand First could I ask through you that he yield the floor and allow me to answer that question? 
Madam SPEAKER 
: There will be an opportunity for New Zealand First to respond. That is not a point of order; it is a debating matter. 
GORDON COPELAND 
: As we all know in life sometimes the truth hurts. The other thing I really want to recognise though as a New Zealander is that one of the great things about growing up in this country and being a New Zealand citizen is the freedom we have. We have the freedom to leave this country at any time. I have the freedom to leave here if I want to to go overseas and live there and hopefully to buy a home there and so on and so forth. That is something we value when it comes to us but we do not seem prepared to extend the same freedom to other people. 
When we think about it we realise that a restriction on freedom like that in any part of the world is a danger to world freedom world democracy and basic fundamental human rights. We saw that kind of thing existing in the world under communism where those countries built walls to keep their people in. It exists in Cuba today. Cubans cannot go overseas and until quite recent times most Chinese could not go overseas. That is actually what we are talking about here—the basic fundamental human right for people to be able to travel freely invest freely and interconnect as equal human beings with equal dignity and I resist very very strongly any attempt in this House or in New Zealand outside this House to categorise people on the basis of nationality origin race colour or language. Such categorisation is seriously wrong and needs to stop. I hope one day that more of our fellow citizens will come to that simple conclusion and will start to treat all people in the world with the dignity and respect that is their inherent God-given right. 
I want to make another point too which I think was unconsciously made by Rod Donald. He said this bill is such a terrible animal that the day could come when people from overseas could buy up all the assets New Zealand has. It just showed me how much he misunderstands the process of buying and selling assets. Because of course if that were to happen the net result would be that we New Zealanders would be the wealthiest people on the face of the earth. We would have sold our assets at top dollar to other people and would have greater wealth and huge assets. I make that point because people seem to misunderstand that if we try to stop foreign investment at the same time we deny New Zealanders the right to get a decent price for their properties. There are two sides to the equation and it is time I think that the Greens in particular and New Zealand First woke up to the fact that when one buys and sells there are two parties to the process. It is mutually beneficial which is why people buy and sell by agreement and the funds that swap hands are going from out of the pockets of foreigners into the pockets of New Zealanders. How that can be bad for this country is beyond me to understand. It simply leaves me to say that the analysis and understanding that go into that opposition are shallow in the extreme. 
One other loose end I would like to mention is to do with the Hon Nick Smith’s Overseas Investment (Queen’s Chain Extension) Amendment Bill which arose out of the unsatisfactory situation on D’Urville Island. As Clayton Cosgrove has pointed out this bill ensures that that unsatisfactory situation will not be repeated in the future. It brings in a very very strong enforcement regime with powers given to the court powers to set aside contracts etc. to ensure that non-resident New Zealanders who buy sensitive land in this country will be forced to carry through with the conditions that apply to that privilege. I think that is a very very good move and I think that the situation that arose in D’Urville Island was totally satisfactory. We did not have legislation previously with enough teeth to ensure that people who undertook obligations were forced to actually carry them through. There were no consequences of departing from the terms of the approval given and that has now been fixed in this bill. If we really think it through we know that it makes Nick Smith’s member’s bill redundant so we should bring it back to the House and discharge it. The problem he identified—quite correctly by the way—has now been fixed. 
BRIAN CONNELL (National—Rakaia) 
: 
 Here we are on “14 June” at 9 o’clock and I thank the Government for taking us into urgency because it enables the National Party to build the collegial spirit that is so important when a party is about to go into Government. National members are very appreciative of that opportunity. We support this bill for the reasons I am about to outline. I cannot understand the attack that was made upon me by Gordon Brown. 
Hon Maurice Williamson 
: He’s the Deputy Prime Minister of Britain. 
BRIAN CONNELL 
: Mr Brown I apologise—Peter Brown. Members can see how badly he has wounded me; I cannot even remember the member’s name. However I said I could not understand that attack and I still struggle with that. 
Peter Brown said I had built an argument that anyone can come to New Zealand regardless of any criteria invest in this country and then take those resources out of this country and suck the country dry. I refer the member to my  
Hansard 
 record which will specifically state that I welcome foreign investment into this country subject to it meeting strict criteria and those criteria were set down in this bill. That is why National agrees with the thrust of this bill. It was not lost on me that Peter Brown was building an argument that there should be no foreigners or foreign capital coming into New Zealand. There he was espousing that in his strong English accent. The irony of that might have been lost on the members of New Zealand First but it certainly was not lost on me. I notice that Dail Jones has not jumped up to make an argument either given that he was born in Pakistan as I recall. Of course members of the National Party are not as difficult to deal with as some members of New Zealand First. We welcome the New Zealand First members to New Zealand and to Parliament because their diversity adds to our rich tapestry. 
Some of the arguments I have heard from members who are opposed to this bill remind me of Luddites who would like to turn the clock back. People who want to come to New Zealand to invest— 
Peter Brown 
: I raise a point of order Madam Speaker. The honourable member opened his speech by attacking Gordon Brown I think it was the Chancellor of the Exchequer in Britain but he then went on to say that in very short order he would explain why National supports this bill. He is running out of time and we are sitting here keenly waiting to hear that. 
Madam SPEAKER 
: No that is not a point of order. I do not need any assistance with this. [ 
Interruption 
] That is not a point of order either but I am sure the member is about to get to the bill. 
BRIAN CONNELL 
: I will now turn my attention to the bill. The bill will guarantee that New Zealand’s assets will be protected not just for the benefit of the current generation but also for future generations because it will continue to build on New Zealand’s reputation for encouraging foreign investment in this country. Those members who would build the argument that foreign investment is not important or that it has not made a contribution to New Zealand really do not have a very good understanding of economics. 
Arguments were built that New Zealanders were missing out on the ability to buy high-country stations. As Dr Cullen pointed out—and I do not find myself agreeing with him very often but he was right on this occasion—how many ordinary blokes can run down to the South Island and buy a high-country station? Very few ordinary blokes can. A few people get together form syndicates and buy high-country stations but very few ordinary people can do that. There are some clear exceptions and they were detailed in my earlier calls when I spoke on this bill. 
Ron Mark 
: The Hon Lockwood Smith could buy one! 
BRIAN CONNELL 
: I would not say he is an ordinary bloke. He is a strong contributing member of the National Party which does not make him ordinary—it makes him outstanding. The point I want to make is that despite who was buying high-country stations in New Zealand before foreign capital took over some of them the stations were underperforming. They were hardly economic units. In short they were undercapitalised. I say to Mr Mark that he and I know very well that a farm cannot be turned into a productive unit unless there is sufficient capital. As a result of foreign capital being introduced to some of the high-country stations they are now strong contributors to the local community. They are employing not just one or two people but significant numbers of people and are contributing to not only the farming economy but also the tourism economy of the area because they have been able to diversify. That is what foreign capital does for the high-country farming areas around Canterbury for example. 
I ask this question of members: where has the hysteria come from that says it does us harm when people come from overseas and buy our land? If one looks at most examples— 
Craig McNair 
: $10 billion a year going out of New Zealand. 
BRIAN CONNELL 
: We have listened to the member make a fool of himself so he should just be quiet for a while. If one looks at most of the examples of land purchases one sees the very converse of that takes place. Foreign investors come into New Zealand risk their capital and as a consequence jobs are created infrastructure is developed and no harm is done. The arguments presented by some members tonight are xenophobic. I am afraid that knowing some of those members as well as I do I find it difficult to say that about them but in this case I think it is very very true. 
Let us also talk about the idea that people are coming to this country and closing up high-country properties. The very converse of that is happening in fact. The people who close the gates in high-country stations are members of the Department of Conservation not foreign investors. Another example that Michael Cullen furnished was that of the singer Shania Twain. What has she done for access to the environment for people around Cromwell? She has created walkways and opened up that environment so people have more access to that countryside than they ever had before. 
I just want to finish by drawing the House’s attention to the “Mugabe clause”. I termed it that and I will not back off that one iota. That clause ran to 10 pages in this bill and it suggested that the Government would annex private property from New Zealanders. I am not joking; that is what was being suggested. That in itself was bad but even worse was that no compensation would have been offered at all. I ask members of this House to run the rule of fairness over that. Which Kiwi voters would have said that was fair? Very few. I do not hear barracking from the New Zealand First members now because they know they could not get on to the hustings and say that they were defending that. It is simply not fair. Michael Cullen had to come to the rescue and introduce Supplementary Order Paper 376 in his name which took right out of the legislation the “Mugabe clause” that his colleagues in the Finance and Expenditure Committee were trying to foist on to the people of New Zealand. That is why the New Zealand National Party was strongly opposed to the bill in the first instance. Only when that clause was removed did National say it would lend support to what was otherwise a very sensible and well-argued bill. 
Madam SPEAKER 
: Before I call the next speaker I would ask members to keep the level of chatter down a bit please. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I have to say that I do not know where that honourable member has been during this debate because New Zealand First opposed that clause as strongly and as strenuously as the National Party did. 
Hon David Carter 
: And you opposed everything else. 
PETER BROWN 
: We did but we certainly were not having that bill put through with that clause in it. 
A few speeches ago Clayton Cosgrove said that the average New Zealander does not mind foreign investment as long as there are obligations. 
Clayton Cosgrove 
: And they’re enforced. 
PETER BROWN 
: Actually he did not say that but he is adding to it—and they are enforced. That is exactly New Zealand First’s position. We do not mind people coming here with suitcases of money as long as they make a permanent commitment to this country to participate both economically and socially. 
Hon Maurice Williamson 
: Did the member have suitcases of money when he came in? 
PETER BROWN 
: No I probably did not—I had a trunkful. We live in a world where investment does advance the country but there are many organisations in this country. Let me name a few that have taken their money offshore—thanks in large part to the difficulties this Government imposes on them. Electricity lines companies cannot invest in electricity in this country except in a modest way. So what are they looking at doing? They are investing in Australia—as are some of our power companies. Maori corporations—and my colleague Ron Mark will tell people more about this matter in some detail at some other time—are looking at investing offshore because of the difficulties in investing here. Private fishing companies are looking at investing offshore. These are New Zealand entities that are keen to invest in this country yet this Government—helped by its old buddy the National Party—wants to open the door and let in anybody with any amount of money and they can then move out. They can leave the money and move out. The ACT member Deborah Coddington said this afternoon that she did not mind being a waitress in a cafe and that it would do us all good. 
New Zealand First stands for controls and restrictions on foreign investment. We oppose making it easier for foreigners to come into this country leave their money buy the businesses buy our homes and buy our land. 
Hon Maurice Williamson 
: Tell them to leave the suitcases and go. 
PETER BROWN 
: The member might make light of it but this is a serious issue and it will be an issue that the average New Zealander will show his or her support for come the next election. In the next few weeks average New Zealanders will show just where their thoughts are. 
Dr Cullen was so hard up in his attempt to substantiate his facts that he had to refer to the French manager of the Arsenal Football Club as a poor example. He had to refer to Arsene Wenger the manager of Arsenal as a poor example. Arsene Wenger has made an absolutely fabulous commitment to Britain. He lives there he has put his life on the line and he is doing a fantastic job for a major football club. I thought that that was actually a poor example to give when one is trying to illustrate where things are going wrong because in fact they have not gone wrong in that instance. [ 
Interruption 
] The members muttering away behind me have confused foreigners coming here with their money with people coming here who want to stay and invest in the country. New Zealand First has no problem at all with anybody coming here— 
Hon Ruth Dyson 
: What did you bring with you to New Zealand? 
PETER BROWN 
: The member has asked a question that would take me too long to answer. [ 
Interruption 
] 
Madam SPEAKER 
: Let the member continue. 
Hon Member 
: The member should answer the Minister for Disability Issues. 
Hon Member 
: Did the member ship the money out of the country? 
PETER BROWN 
: I will answer the member with a disability. Never have I shipped money out of the country for any ulterior motive. This is a serious issue and New Zealand First is very strong on having restrictions on just anybody coming here to take over our businesses and our homes. It raises the cost of business in this country the cost of homes and the cost of land and puts them beyond the reach of the average New Zealander. I think that much has been said in the debate on this bill but after this bill goes through it will make it harder for New Zealanders to buy land homes and farms—and it is hard enough now. [ 
Interruption 
] The member disagrees but I can tell him that he has got it wrong. New Zealand First opposes this bill. 
A party vote was called for on the question  
That the Overseas Investment Bill be now read a third time. 
Ayes 84 
New Zealand Labour 51; New Zealand National 23; United Future 8; Progressive 2. 
Noes 27 
New Zealand First 13; ACT New Zealand 6; Green Party 7; Maori Party 1. 
Bill read a third time. 
Terrorism Suppression Amendment Bill (No 2) 
Second Reading 
Hon RICK BARKER (Associate Minister of Justice) 
 on behalf of the 
 Minister of Justice 
: I move  
That the Terrorism Suppression Amendment Bill (No 2) be now read a second time 
. The Foreign Affairs Defence and Trade Committee has recommended that the bill be passed with no amendments. The bill is necessary to ensure that the status of terrorist entities designated as such under the Act does not expire. That would have placed New Zealand in violation of United Nations Security Council resolutions. Not to pass this bill would be to leave no legal sanction against those who might support organisations such as al-Qaeda. 
The Terrorism Suppression Act 2002 was passed in the wake of the horrific events of 11 September 2001. At the time the nature and the extent of the terrorism phenomenon was still unclear as was how the international obligations emerging from the UN Security Council in response to those events might be interpreted and implemented. The Act was an appropriate response at the time. 
 But equally it was recognised that the provisions in the Act would need to be kept under review and amended where necessary in the light of experience and the rapidly evolving international environment. As a result this is the second amendment bill to be put before the House since the Terrorism Suppression Act 2002 was enacted. 
There is also provision for the Act to be reviewed by a select committee and reported back by 1 December 2005. The Foreign Affairs Defence and Trade Committee has already begun its review and I look forward to its report by the end of this year. Notwithstanding that review the current bill introduces measures that are needed before the completion of the review. In particular two measures in the bill need to be implemented in order for New Zealand to comply fully with its international obligations. These are the creation of a specific terrorist financing offence relating to the funding of terrorist entities and the extension of the current terrorist designations made pursuant to the Act. 
Clause 4 creates a new offence of directly or indirectly financing terrorist entities as opposed to terrorist acts. The creation of this offence will make New Zealand more compliant with United Nations Security Council Resolution 1373 as well as the Financial Action Task Force Special Recommendation II. Compliance with these internationally agreed measures is critical to ensuring that New Zealand does not become and cannot be seen to become a country through which funding support for terrorist groups can be channelled. 
The committee expressed some concern regarding the scope of this offence. Some concerns were expressed that the scope could capture an offence or be used maliciously to allege an offence of funding a terrorist entity when the donor in fact believed he or she was funding or intended to fund legitimate human rights or humanitarian or democratic rights groups. Having given serious consideration to these concerns the committee was satisfied as I am that neither the intent nor the wording of the offence would catch persons who provide or collect funds for groups with no connection to terrorist activity. Nor will it risk criminalising the unwitting donation of funds to terrorist entities for example via a terrorist group’s apparently legitimate front organisation. 
To be captured by the new offence a person must intend that the money provided or raised will directly or indirectly benefit an entity that he or she knows carries out terrorist acts. This is a significant burden for the prosecution to satisfy in any particular case. In addition any prosecution for the offence as with all offences under the Act will require the consent of the Attorney-General. Together these factors ensure that only those who it can be proved have knowingly and wilfully supported terrorists will be captured by the offence. Such people of course should have their actions criminalised and that is what this bill does. 
The committee also discussed the application of the “avoidance of doubt” provision contained in section 8 of the Terrorism Suppression Act 2002. It is arguable that the effect of this provision needs further consideration but the issues involved in that consideration are somewhat wider than the limited matters being addressed immediately through this bill. The committee’s broader view of the Act provides a more suitable forum for that consideration and any recommendations arising from it. 
The second substantive amendment in the bill extends the October 2005 expiry date applying to 318 terrorist entities as designated under the Act. When the Act was originally passed it was not known for how long the initial designations of terrorist groups made by the United Nations Security Council would remain current. For that reason the initial designations were given an expiry date and a process for review and extension of individual designations was established. Nearly 3 years on all the entities are still United Nations Security Council designations—none have been removed from its list. However the Act does not presently allow us to bring one application to the High Court for all of the UN designations to be extended. This means that 318 individual applications for review and extension would be needed. The time and resource implications for the High Court in such an exercise would be enormous. 
It is clear that there is simply insufficient time to extend so many designations in this way. Allowing the designations of groups such as al-Qaeda as terrorist entities to expire and New Zealand to become non-compliant with the United Nations Security Council resolution is not an option. Instead the bill extends the expiration date for the current terrorist designations for a period of 2 years following the report of the select committee on its broader review of the Act. This time frame will provide the committee with the time needed to fully examine the issue of terrorist designations and the review and extension process and allow the Government sufficient time to examine and respond to any committee recommendations arising from its review. I commend this bill to the House. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 This is quite a small bill in some ways yet it is a very important one. The reason as the Minister has just said is that it amends the Terrorism Suppression Act of 2002 passed by this Parliament in order that New Zealand might implement United Nations Security Council Resolution 1373 to combat global terrorism. 
While the Foreign Affairs Defence and Trade Committee was examining this bill some very interesting issues arose and I think the debate in this House tonight will be interesting because the practice of what is usual in this House in terms of support or opposition differed on this bill in the select committee from being down the middle to I guess across the parties. The record will show that on this occasion both Labour and National supported this bill at the select committee while New Zealand First and the Greens opposed it. It is unusual for New Zealand First to align itself with the Greens but that is what happened. 
Let me try to explain more clearly than the Minister did exactly what this bill does. The principal Act makes it illegal to give money to finance terrorism. Section 8(1) of the principal Act states: “A person commits an offence who directly or indirectly wilfully and without lawful justification or reasonable excuse provides or collects funds intending that they be used or knowing that they be used in full or in part in order to carry out 1 or more acts of a kind that if they were carried out would be 1 or more terrorist acts.” The problem with that section is that although it outlaws giving money that is to be used specifically for a terrorist act it does not outlaw giving money to an organisation that is directly involved in terrorism—and knowing that the organisation was involved in terrorism. I think it is a clear omission that we missed when this Parliament passed the Act in 2002. Quite clearly one could have a situation where the prosecution for someone who was caught financing a terrorist organisation could claim that the person was directly financing a terrorist act. It would seem that a defence could be mounted whereby under the principal Act the person could claim: “Oh no I wasn’t. I was simply giving finance to an organisation that you claim is involved in terrorist activities but I certainly wasn’t directly financing a terrorist act.” 
It is important that such defence—any defence of that nature—is not possible. That is why clause 4 in Part 1 of this amendment bill broadens the provisions in section 8 of the principal Act to make it very clear that it will be a criminal offence not only to directly finance a terrorist act but also to knowingly finance an organisation involved in terrorism. I think that most members of this House would agree that that is a very important amendment because it is fairly clear that we left a loophole in the principal Act when we passed it in 2002. 
When considering this provision a very interesting issue arose in relation to extending the criminality to knowingly financing a terrorist organisation—an extension beyond financing a terrorist act directly. Section 8(2) of the principal Act provides what could be called an out clause. It was inserted by the select committee considering the principal legislation back in 2002 because there was concern about someone collecting funds where it might be understood that those funds would be used for democratic purposes or the protection the promotion of human rights. The committee was concerned that if someone was involved in financing that kind of activity then it wanted to make it very clear that that was very different from directly financing a terrorist act. So an out clause was inserted that is now section 8(2) in the principal Act. 
What became very interesting in the consideration of the select committee this time round was that a number of submissions argued that the new section 8(2A) that clause 4 is bringing into the principal Act should also have the same out clause that section 8(1) of the principal Act has. Section 8(1) of the principal Act outlaws directly financing a terrorist act. New section 8(2A) would outlaw financing a terrorist organisation. Section 8(2) has the out clause that states: “To avoid doubt nothing in subsection (1) makes it an offence to provide or collect funds intending they be used or knowing that they are to be used for the purpose of advocating democratic government or the protection of human rights.” A number of submissions argued that that out clause should also be applied to new section 8(2A) in clause 4 of this amendment bill. The select committee decided on advice from officials not to have that out clause—section 8(2) in the principal Act—apply to new section 8(2A) in this amendment bill. That is a very significant decision by the select committee. It means that as the select committee goes on to review the principal Act which it has to do under section 70 of the principal Act and is in fact doing right now it will have to give a lot more thought to that out clause—that is section 8(2) currently in the principal Act. 
But the important thing in respect of this amendment bill we are debating tonight is that the out clause does not apply to new section 8(2A). I guess that is why New Zealand First when it contributes to this debate will argue against clause 4 inserting section 8(2A) into the principal Act. It will probably express the concern that the out clause should apply to it. The advice from officials to the select committee was very clear—namely that there was a genuine concern that the effect of the out clause as we call it was not clear in law. It had not been tested and there was a concern that someone involved in terrorist financing could get off the hook given the out clause we put in the principal Act back in 2002. For that reason it was decided not to apply it to new section 8(2A) in clause 4 of the amendment bill we are debating tonight. That is something that will be much debated this evening. It is an important issue. What we balance up are the issues around protecting New Zealanders and playing our part in protecting the world from terrorism versus concerns about individual human rights. That is the balance that this out clause sought to address in 2002. For very good reasons both Labour and National members of the select committee and the United Future chair believed that the out clause should not be applied to new section 8(2A). 
I shall cover the other major issue in this amendment bill and it is an important issue. Part 2 extends the designation of terrorist entities. That is where I would be critical of the Government. My contribution to the equivalent debate of the principal legislation in 2002 pointed out the stupidity of having that 3-year limitation on the designations. Here tonight we are having to extend it. We put into the principal Act that the High Court had to review all those designations. That is a ridiculously bureaucratic procedure as I pointed out back in 2002 and as I said this is where I would be critical of the Labour Government. It was a foolish inclusion in the principal Act. Now we are having to extend those designations and we still do not have a sensible way of reviewing them. All that we have done is to extend the time before the High Court has to do it. That is where I would be critical of the Government. It is a foolish measure that needs to be changed because it is clearly unworkable. Those are the two major issues that we will be debating this evening. 
Hon PETER DUNNE (Leader—United Future) 
: 
 I raise a point of order Madam Speaker. I did not want to interrupt the member who was speaking because he was making some very good points. But I have to say and he is not someone with a quiet voice over the murmur of conversation in this Chamber it was actually very hard to hear him. I seek your assistance in ensuring that the debate that proceeds does proceed with a modicum of quiet in this place because it is important. If members such as the member who has just spoken who is not normally quiet are hard to hear then we have a problem. 
Madam DEPUTY SPEAKER 
: Thank you. I agree with the member. Would those who wish to conduct a conversation please go outside. 
LUAMANUVAO WINNIE LABAN (Labour—Mana) 
: 
 Kia ora talofa lava and warm Pacific greetings. As a proud member of this Labour-led Government and as deputy chair of our Foreign Affairs Defence and Trade Committee it is indeed my pleasure to participate in the second reading of the Terrorism Suppression Amendment Bill (No 2). 
Before I address the contents of the bill I want to provide a context for this very important legislation. The events of 11 September 2001 have been a big wake-up call for the international and global community to take collective responsibility and action to stop terrorism and the activities that support it. Our collective responsibility and action locally nationally regionally and internationally are critical to stopping terrorism and all forms of abuse and the action or inaction that supports it. 
We can all learn from history and indeed history is in the making today. This Terrorism Suppression Amendment Bill (No 2) is one contribution that our Government and Parliament can make to stamping out terrorism. The bill amends the Terrorism Suppression Act 2002 which states that a designation as a terrorist organisation expires after 3 years unless it is renewed by order of the High Court. That has created the unintended need for each designation to be renewed individually but it will be impossible to renew all 318 United Nations Security Council - listed designations before they expire next October. 
That means that New Zealand would be breaching United Nations Security Council Resolution 1373 and related resolutions. So this bill will extend the expiry date by 2 years to 2007 and the extension will allow our select committee review of the Act—provided for as Dr Lockwood Smith said in section 70 of the principal Act—to consider fully what changes if any should be made to the renewal process in order for any resulting changes to be implemented. The bill also extends two sections of the Act that prohibit the financing of terrorist acts and designated terrorist entities so that the provisions also cover the international financing of non-designated terrorist organisations. 
The Foreign Affairs Defence and Trade Committee has recommended that the bill be passed with no amendments. That is very necessary to ensure that terrorist entities designated as such under the Act do not expire. 
This is the second amendment bill to be put before the House since the Terrorism Suppression Act of 2002 was enacted. There was also provision for the Act as I said before to be reviewed by our select committee and in fact we are already conducting that review and heard a submission from the human rights commissioner this afternoon. 
The two measures in the bill that need to be implemented in order for New Zealand to comply fully with its international obligations are the creation of a specific terrorist financing offence relating to the funding of terrorist entities and the extension of the current terrorist designations that were made pursuant to the Act. Clause 4 also creates the new offence of the direct or indirect financing of terrorist entities as opposed to terrorist acts. Of course the creation of that offence will make New Zealand fully compliant with United Nations Security Council Resolution 1373 as well as the Financial Action Task Force’s special recommendation. Compliance is critical to ensuring that New Zealand is not and cannot be seen to become a country through which funding support for terrorist groups can be channelled. 
 Dr Lockwood Smith alluded to the fact that the committee as well as submitters expressed some concern regarding the scope of the offence. Concern was also expressed that the scope could be used maliciously to allege an offence of funding a terrorist entity when donors in fact believed or intended that they were funding legitimate humanitarian or democratic rights groups. 
The committee gave very serious consideration to those concerns. With the great legal advice we received from the Ministry of Foreign Affairs and Trade and the Ministry of Justice we were satisfied that neither the intent nor the wording of the offence would catch persons who provided or collected funds for groups with no connection to terrorist activity. 
The committee also discussed the application of the “avoidance of doubt” provision contained in section 8(2) of the Terrorism Suppression Act 2002. In response to that provision the committee’s broader review of the Act which I referred to at the beginning of my speech has provided a more suitable forum and time frame for us to give it serious consideration and to address some of its complexities. 
Nearly 3 years on all the entities are still United Nations security designations; none have been removed from that list. The time and resource implications for the High Court in such an exercise would be enormous. It is clear there is simply insufficient time to extend so many designations in that way. Allowing the designations of groups like al-Qaeda as terrorist entities to expire so that New Zealand becomes non-compliant with the security resolution is not an option. Instead the bill extends the expiry date for current terrorist designations for a period of 2 years following the report of our select committee on its broader review of the Act. 
I will end how I began. The events of 11 September 2001 have been a big wake-up call for the international and global community to take collective responsibility and action to stop terrorism and the activities that support it. Our collective responsibility and action locally nationally regionally and internationally are critical to stopping terrorism and all forms of abuse and the action or inaction that support it. We can all learn from history and indeed history is in the making today. This Terrorism Suppression Amendment Bill (No 2) is a contribution that our Government and Parliament can make to stopping all forms of terrorism. 
DAIL JONES (NZ First) 
: 
 Perhaps I could begin where the previous speaker began and ended. She made one oversight as to the Labour Government’s reaction to 11 September 2001. I think as we all remember one of the Labour Government’s first responses to 11 September 2001 and the air attacks in the United States was to disband the RNZAF’s strike force. That is a very strange response to September 11 but that is the Labour Party. The member forgot that altogether. September 11 involved planes flying across the United States and attempts to shoot them down but the Labour Government disbanded our strike air force. 
I congratulate Dr the Hon Lockwood Smith. If he were presenting this case before the Bar he could not have done a better job of explaining section 8(1) and (2). I was very appreciative of the clear and disinterested way in which he presented those facts and explained how section 8(2) came into the original legislation. We do try to keep things at a reasonable level at the Foreign Affairs Defence and Trade Committee although from time to time some of us break ranks. 
New Zealand First is concerned about the effect of new section 8(2A) in clause 4 remembering of course that the protection provision of section 8(2) does not apply to new section 8(2A). That is one of its defects. 
I heard the Minister’s speech and I would have liked him to hear this comment from me. The Minister said that the new section requires that someone must intend to do something. The words “must intend” do not appear in the new section 8(2A). They are a figment of the Minister’s imagination and if he relied on them any subsequent person perhaps from the judiciary listening to the Minister’s second reading speech would realise that the Minister was absolutely wrong in the words he used and one wonders what a court might then do. 
New Zealand First is concerned at the implications of new section 8(2A). For example we believe that this amendment could have the effect of making criminals of people who make a contribution to the tsunami-affected areas in the part of Sri Lanka controlled by the Tamil Tigers or in Aceh Indonesia. It is currently illegal to make a donation to a terrorist entity itself but this amendment goes further and creates a new crime of benefiting people who live in an area controlled by such an entity. New Zealand First believes that it is bad legislation—[ 
Interruption 
] 
Madam DEPUTY SPEAKER 
: I apologise Mr Jones. Could members please be seated and could they all keep the chat down. It is very disconcerting. 
DAIL JONES 
: As I was saying New Zealand First believes that this amendment could have the effect of making criminals of people who make a contribution to the tsunami-affected areas in the part of Sri Lanka controlled by the Tamil Tigers or in Aceh Indonesia. 
It is currently illegal to make a donation to a terrorist entity itself—section 8(1)—but this amendment goes further and creates a new crime of benefiting people who live in an area controlled by such an entity. New Zealand First believes it is bad legislation that would have made criminals of the hundreds of thousands of New Zealanders including the New Zealand Government who made donations knowing they would benefit people living within the area of Sri Lanka controlled by the Tamil Tigers or in Aceh Indonesia. That means that every member of this Government and of this House who will vote for aid money being made available to people who live in the Tamil Tigers’ area of Sri Lanka— 
Dr the Hon Lockwood Smith 
: Who would prosecute for that? 
DAIL JONES 
: That is not our role as a Parliament. Our role is to make sure that there is no opportunity to prosecute for that. We do not pass legislation in the hope that no one will prosecute. We pass legislation so that no one can prosecute and that is the difference. That is obviously what Dr Lockwood Smith does not understand and where the National Party New Zealand First and the Government disagree. We should have legislation that does not give one the opportunity to prosecute rather than saying: “Hey don’t worry about it. We’ll pass this but no one can ever prosecute.” That is where the nonsense arises. 
New Zealand First is not satisfied with the officials’ interpretation of the proposed new section 8(2A). It believes that even more uncertainty will be created if the new section is passed into law. Of course at the moment the Foreign Affairs Defence and Trade Committee is reviewing this entire legislation. The review has already commenced and we in New Zealand First prefer to see this issue more thoroughly and clearly canvassed in the review. That is why I have proposed an amendment to delete clause 4. 
What did the officials actually say to the committee and how does the report read? It was very clear from reading the first page of the report on new section 8(2A) that the committee was concerned. As Dr the Hon Lockwood Smith has pointed out many submitters criticised the scope of proposed section 8(2A) which criminalises the provision of general financial support to all terrorist organisations whether or not they are designated and said that it could potentially catch legitimate funding activities for democratic rights or human rights movements. That is referred to in the committee’s report as a whole which states: “We were concerned about the effect of this section on someone donating money to a street collector collecting for an organisation that unbeknownst to them is involved in or contributes to terrorist activities and that under this section a person simply donating money could be prosecuted for funding terrorist activities.” Those are the words of the majority—the Labour Party the National Party and I presume United Future and ACT. The majority of the committee expressed that concern. 
The majority was also concerned that groups collecting money and those donating to them might be falsely accused of knowingly supporting terrorism. That is New Zealand First’s concern. We do not want to see bad law going into our books especially when there is a review of the whole legislation taking place. 
 The committee went on to state: “However we are now satisfied that neither the intent nor wording of the provision catches the funding of legitimate human rights humanitarian or democratic rights groups acting solely in this way.” If the committee was so certain that is where its view should have ended. But the commentary continues: “We seek the Government’s confirmation that this is indeed its intent.” Well that is no way to pass a law. The committee is virtually saying: “We don’t really know but can the Government confirm to us that this is not its intent?”. But a judge is not going to say: “I’ve read the law. I’m trying to make up my mind. Minister could you come in and tell me this wasn’t your intent?”. What a ridiculous way of passing legislation. The legislation should be clear on the face of it; and the committee’s report if it is read by any judge will indicate that the committee was uncertain as to the intent of the legislation. That is not on in New Zealand. 
The committee believed that: “To commit the offence a person must know that the money raised will benefit an entity that carries out terrorist acts.” How does one get money from New Zealand to the area in Sri Lanka controlled by the Tamil Tigers? There is only one way and that is through the Tamil Tigers. Therefore all those Sri Lankans who raised money for people living in the area controlled by the Tamil Tigers and the people who raised money for Aceh in Indonesia knowing that it had to go through groups that are terrorist organisations because that is the only way people in the area can get the money are made criminals in terms of this bill. For example what about the young people who held stalls raising money for flood relief for the tsunami-hit areas? 
Dr the Hon Lockwood Smith 
: Rubbish! 
DAIL JONES 
: It does that because they know the money will be disposed of through the Tamil Tigers. Who else will do it? It will not be the Sri Lankan Government because the Government is not allowed into that area. 
Are Labour and National saying that no money can go to the areas controlled by the Tamil Tigers because obviously that breaches what they say the United Nations wants? At the very least the Government could have allowed section 8(2) to apply to this as well but no Government members were so mean in the select committee trying to race this bill through they would not agree to that being the situation. 
The commentary continues: “This is an extremely high threshold for the Crown”. New Zealand First does not believe in high thresholds or low thresholds; the standard is beyond reasonable doubt as a rule. If one wants to make it a high threshold one puts it in the Act. There is only one way of interpreting criminal law and that is according to the well-known principles of statutory interpretation and proof. 
I have spent my time on this issue. I understand there will be just the one vote at the end of this; there will not be two votes because there are no amendments before the select committee. New Zealand First will vote for the select committee report but when we come to the Committee stage I will be voting for my amendment and hoping that it will get through. New Zealand First is strongly committed to fighting terrorism—more committed than the Government is because we want a strike air force and the Government does not. We wish to make sure that the views of those ordinary New Zealanders who wanted to give money to tsunami-affected areas to the Aceh areas and to anything else are represented. 
Hon RICHARD PREBBLE (ACT) 
: 
 I rise on behalf of the ACT party to speak to the Terrorism Suppression Amendment Bill (No 2). Let me say immediately that the Foreign Affairs Defence and Trade Committee is one of the select committees that the ACT party is not on; being a party of nine members we are not able to be on every committee. Therefore we are forced to listen to the debate and to make up our minds. 
Let me just make a few observations to the House. The first is that we have to decide as a country whether we are supporting the United Nations resolutions on terrorism. It is my understanding that New Zealand First and the Green Party are strong supporters of the United Nations. I suspect that the ACT party probably has the most doubts about that organisation but it appears to me looking at the issue as it faces the world that one is forced to line up and support the United Nations. It is interesting when one makes that observation— 
Dail Jones 
: If there is such a resolution. 
Hon RICHARD PREBBLE 
: Is the member suggesting that the Security Council has somehow produced this list—[ 
Interruption 
] A submission has come to us from the Ministry of Foreign Affairs and Trade. I quote from the report of the member’s own select committee: “Proposed section 8(2A) implements NZ’s international legal obligations under United Nations Security Council Resolution 1373.” We need to meet those obligations. That is the statement that the select committee has made to the House and I have no reason to suppose that it is not correct. 
It is interesting to note—[ 
Interruption 
] The member is interjecting on me and I am trying to debate the matter seriously. It is interesting to note that the range of nations that have supported this matter is extraordinarily wide. Countries at the United Nations that one would expect to support terrorism have in fact supported Resolution 1373 and that is because I think most nations actually realise that terrorism is a very evil thing and that we need to take international action against it. From that point of view it would appear to me that this House really has no choice but to support the United Nations resolution. 
The next question we come to is whether we should because somebody might want to give money to the Tamil Tigers for very laudable reasons decide not to support a clause that states that it is now an offence to give money to a terrorist organisation. I am staggered that New Zealand First has come up with opposition to that clause. Indeed it is interesting to know what goes on in New Zealand First caucus meetings because New Zealand First on a previous bill—I will not go into it—just made a general rave against foreigners and now apparently it is making a general rave against foreigners except the Tamil Tigers. I find that really quite extraordinary. This clause is saying that one cannot give money to an organisation that supports terrorism just because it also does charitable actions. That is a well-known characteristic of many terrorist organisations—that on the one hand they do terrorism and on the other hand they carry out good works because of course they are trying to win public support. But that is not a reason for this House to agree to people giving money to them. 
Let me then turn to the matter of substance that I think the honourable member was raising and that is the fear that ordinary New Zealanders who give money to street collections somehow will be caught up by this clause. Well I was not on the select committee so I am looking at it slightly more objectively. I say “Get real!”. To get a prosecution under new section 8(2A) in clause 4—and Mr Jones must know this; he was a reasonably competent lawyer—will be very very difficult. Indeed one could put up an argument that it is a show clause and I am afraid I actually do believe that. It is a clause to show the rest of the world that we are doing our bit but who seriously thinks anyone will get home on it in court? 
Let me read new section 8(2A) because that is what I have been forced to do: “A person commits an offence who directly or indirectly wilfully”—that means the person actually meant to do it—“and without lawful justification”—we got that out—“or reasonable excuse”—we have two more reasons to give the court—“provides or collects funds intending that they benefit or knowing that they will benefit an entity that the person knows is an entity that carries out or participates in the carrying out of 1 or more terrorist acts.” Realistically to get home on that in court one needs someone to put an advertisement in the newspaper saying: “Support the Tamil Tigers. They are a worthy cause. Send money to Box …”. One would have to do something almost as blatant as that. 
Then we have to ask ourselves whether it is worth passing such a provision. It probably is because if we did not have such a law there would be some people who would organise collections of that sort. But all we are going to do is stop those people who openly collect for terrorist organisations. Under this clause we certainly will not be able to stop those people who are secretly collecting. 
I say to the New Zealand First Party and to the Greens that there may be some political advantage in their opposing this clause but I am not sure whether I can see it. I cannot see the point in criticising the Government for not going any further because although the world has a problem when I look realistically at New Zealand I have some difficulty in believing we have. I will give just one simple example. We all at least twice a week go through the security checks at our domestic airports. They cost New Zealand multimillions of dollars. Tens of thousands of Swiss army knives have been lost and other bits and pieces of jewellery. We have not found a single terrorist and we cannot really be serious about it because a suicide bomber could put his or her luggage—which is not checked—on the aeroplane and fly off to whatever oblivion he or she wants to go to. Why are we doing it? We are doing it to play our part in the international fight against terrorism. 
So having expressed my scepticism that this measure will do much good and having looked at it as a responsible parliamentarian it appears to me we really do not have any choice except to pass it. It is certainly not helpful to suggest that innocent New Zealanders will be caught up in this measure. Let us get real. I think we have no choice but to pass this measure. The ACT party accordingly will vote for it. 
KEITH LOCKE (Green) 
: 
 This is a shameful bill that shows the inconsistency in the Government’s talk about human rights. The Foreign Affairs Defence and Trade Committee is in the middle of a review of the Terrorism Suppression Act. Submitters to that review are repeating what is being said all around the world—that the legislation brought in soon after the September 11 atrocity was often rushed and often did not take full account of human rights. Traditional civil liberty safeguards have been challenged by anti-terrorism legislation on a number of fronts. The determination of criminality when it is put in the terrorist basket has been taken out of the hands of the judiciary in many cases and put into the hands of politicians and their officials. 
In our Terrorism Suppression Act it is the Prime Minister who does the designating. There are some appeal processes but several places around the world such as Guantanamo Bay show that there is no guaranteed due process. The same lack of due process applies in countries like Pakistan the President of which Purvez Musharraf is arriving in New Zealand tonight. 
In our Terrorism Suppression Act there is a right of appeal to the court but this is highly constrained. Information against those labelled as terrorists is commonly classified and under the original Act can be withheld from them when they take their appeals to the High Court. The standards whereby the State has to prove criminality are lowered when crime usually potential crime is defined as terrorism. New Zealanders can be imprisoned under our Terrorism Suppression Act for giving some form of support to an organisation initially only suspected of being terrorist. This suspicion can be based not on the fact that they have committed a terrorist act but that they might do so. 
Another critical problem is the loose definition of what is or is not a terrorist organisation. Since September 11 the United Nations has come to no agreement on any definition basically because one country’s terrorist is another country’s freedom fighter. The definitions of terrorism are often so loose that even normal protest groups get caught. We have seen this in Denmark this month with Greenpeace being put on trial under anti-terrorist legislation for entering an agricultural ministry building in a protest against GE. Similar prosecutions could take place under our anti-terrorist legislation if a more right-wing Government wanting to clamp down on protest groups came to power. 
Under the existing definition of terrorism protest groups involved in civil disobedience or serious disruption of an infrastructure facility—to use the terms in the present Act—do not need to intend to harm anyone. They need only do something deemed by the authorities as likely to endanger human life to be caught under this Act. It is disgraceful that rather than waiting for the present review of the Terrorism Suppression Act to be completed the Government is making the original bill even more draconian. To put it bluntly the amendment bill is in this House today not for any good reason but to please the Bush administration and its allies in their so-called “war against terrorism”. 
This bill makes the Terrorism Suppression Act worse in three respects. Firstly it extends criminality from financial support for carrying out a terrorist act to financing an allegedly terrorist group as such for any purpose even if that purpose has nothing to do with terrorism. In the explanatory note of the bill even “the payment of general routine expenses such as rent” is criminalised. It was this provision that received the most attention from submitters to the select committee. Several pointed out that thousands of New Zealanders could have been convicted under this provision if it had been in place at the time they were digging deep to give tsunami relief to Sri Lanka. As was pointed out by submitters much of the aid that New Zealanders gave went to the Tamil-controlled area in the north and east of Sri Lanka. Some of those who donated would have known that their aid would be going via organisations controlled by the Tamil Tigers who are designated as terrorists by the Governments of America Britain and Australia and are treated as terrorists by some agencies in New Zealand particularly the Security Intelligence Service which I have direct evidence interrogates members of the Sri Lankan Tamil community in regard to their connections in Sri Lanka. Let me be clear. Under the Terrorism Suppression Act an organisation does not have to be officially designated as terrorist for donors to it to be criminalised by this new provision. 
The Government told the select committee that the submitters were right—the law did apply to ordinary New Zealand aid donors if the Tamil Tigers were considered terrorist. The only reassurance to us was that if we were intending the money to be used only for charitable purposes that would be a good court defence and such New Zealanders would be unlikely to be convicted. But why should we have a law that requires New Zealanders to mount such a defence in such cases? The outcome would be a lottery according to the political mood at the time. A New Zealand donor to one of the purely charitable Hamas agencies in Palestine of which there are several might not be so lucky in court in a political climate following a particularly despicable Hamas suicide bombing. 
New Zealanders’ chances of winning any such court battles will become worse if another part of the amendment bill passes. In the original Act there is a qualifying section 8(2) after the subsection that makes it illegal to give money for carrying out a terrorist act. The qualifying section 8(2) states: “To avoid doubt nothing in subsection (1) makes it an offence to provide or collect funds intending that they be used or knowing that they are to be used for the purpose of advocating democratic government or the protection of human rights.” 
Common sense would dictate that the newly inserted provision for the lesser offence of funding a terrorist organisation rather than funding a terrorist act would carry the same qualification particularly in the climate of 2005 when people are more conscious of not having terrorist legislation restrict civil liberties than they were when the original Act was passed. 
But no the Government has made it clear that it wants to knock this “avoidance of doubt” provision where it is a defence to aid democratic government or the protection of human rights right out of the original Act. Its first step towards this is not to have it apply to the new provision for the financing of a terrorist organisation. This is a betrayal of the original political contract which led to the Terrorism Suppression Act passing through this House in 2002 as expressed in speeches from people like the Labour chair of the Foreign Affairs Defence and Trade Committee Graham Kelly. They repeatedly reassured those submitters who were critical of the bill and there were about 130 of them with the “avoidance of doubt” clause and another comfort clause about engaging in protest being by itself not sufficient basis for implying that a person was carrying out a terrorist act. The Green Party will be moving an amendment in the Committee stage to at least have the “avoidance of doubt” qualifying provision apply to donations to an allegedly terrorist organisation. 
The third way in which this amendment bill makes the original Act worse is by extending New Zealand’s terrorist designations which expire this year for 2 further years until late 2007 2 years after the Foreign Affairs Defence and Trade Committee presents its review on the Terrorism Suppression Act. That is particularly bad given that we know that the designations are not always accurate. The present ones all come from the United Nations and there are many admissions now that its processes are not up to standard and that it does not build into its processes the right to due process for all those designated as terrorists now or in the past. Extending designations when we know that in all likelihood some of them are wrong is unconscionable. 
The last amendment to the Act we passed—which is why this bill is the No 2 bill—was in fact to enable the Government to remove organisations where errors had been made. So that legislation accepted the fact that errors could be made. It is argued that it would be hard or time consuming for the High Court to check designations as the Act at present prescribes. But if we are to apply justice to those who are so designated and to anyone who supports them there must be a checking process and officials responsible to the court can do that checking just as easily as officials responsible to politicians. As the Human Rights Commission pointed out the Government has not gone to the trouble of applying to the court with any of these expiring designations to give it time to initiate that process. 
Basically this amendment shows disrespect for the judiciary and puts politicians above them in determining the future of designations. The concept of putting politicians above the judiciary is a basic problem of anti-terrorist legislation around the world. 
Hon PETER DUNNE (Leader—United Future) 
: 
 At the outset as the chair of the Foreign Affairs Defence and Trade Committee I express to the officials who advised us and served us so faithfully our appreciation for their professionalism their advice and their assistance as we dealt with these issues. 
I come back to section 8(2A) inserted by clause 4 because that is really the most important part of the bill. I want to pick up a couple of the arguments that have been raised so far. It is certainly true that during the select committee’s examination of the bill we received a large number of submissions from people concerned about the possible criminalising of their generous donation to some charitable concern for humanitarian reasons. I want to take that analogy and then test it alongside what the provision actually states. Let us imagine someone in the wake of the tsunami disaster deciding to support Tamil relief or other relief causes collecting on the streets of Wellington. The fear expressed to us was that unwittingly those people might be exposing themselves to prosecution if it was discovered subsequently that the organisations to which they were donating were in fact terrorist organisations. The provision actually states that that person would commit an offence if he or she “directly or indirectly wilfully and without lawful justification or reasonable excuse provides or collects … knowing that they will benefit”. So short of someone actually carrying a placard or a banner indicating where the funding will go a person making that donation can hardly be said to be doing it wilfully without lawful justification or reasonable excuse or providing funding knowing that terrorist organisations will benefit. 
The test is a very high one. The select committee was certainly concerned to ensure that no innocent parties were adversely affected by this provision. We looked very closely at the wording and the intent. I pick up the point that Mr Prebble raised. There are so many qualifications in here in terms of hurdles to be crossed that one could say that the section has been dressed up rather grandly. Far more likely what the clause does is put in place so many hurdles a prospective offender has to cross to make it almost impossible that the innocent would be trapped by it. The test is a remarkably high one. 
After a lot of consideration the select committee came to the conclusion that that was a fair and reasonable amendment to make. It would not capture the innocent and it would not give rise to the concern expressed in some of the submissions. In response to a point made earlier by Mr Jones I say that that was why the committee inserted in its report the comment: “We seek the Government’s confirmation that this is indeed its intent.” It was certainly the conclusion of the select committee that the intent of the provision was as described to us and as reported in our report. We are seeking an explicit statement from the Government made in the course of this debate that that is exactly what it had in mind because that is what we believe the Government had in mind all along. 
This is not a question of second-guessing or saying that the law is not clear enough. It is saying that the only way in which we as a group of reasonable people were able to interpret the provision was in that way. We expect that was the Government’s intention as well. We therefore think that that should now be stated explicitly in the light of this consideration and in the light of the concern that was expressed to us. This is not a way of trying to second-guess or rewrite the law. It is simply a way of reinforcing what we thought and took to be the obvious. It does come down to being a very high threshold for any prospective offender to cross. 
Reference has already been made to the fact that we should not be making these amendments at this time in view of the fact that we are undertaking as provided for under section 70 of the principal Act a wider review of that legislation. That is a very erroneous conclusion to draw. Firstly we have the practical problems of the designations that have been referred to. When members in this House rightly express concern about the speed of court processes and the fact that justice is often being delayed I invite them to consider the consequence of not passing the particular provision relating to designations. Our courts would become in effect nothing more than outlets to process terrorism designations. Vicious murderers killers thugs and other violent offenders—property thieves drug dealers and the lot—would have to take their place in an ever-lengthening queue because the court system would be clogged. I would then invite those members who have expressed concern about justice being delayed to come back to this House and say that that is an acceptable position because clearly it is not. 
There was no alternative but to act. It may well have been in retrospect an unwise provision to have included in the first place in terms of the duration of the time. But the reality is that we have to act now and we are through this bill. It does not cut across the provisions of the wider review. I say to the House that in fact that review is well advanced. As of today I think we have heard from all of those who wished to make submissions to us on that review. An interesting commentary both on this bill and on the wider review which is at variance with some of the arguments we hear about the level of wider concern is the number of submissions we have received. This bill received 13 submissions. An earlier speaker referred to the principal Act receiving 130 submissions. The substantive review has received a similar small number of submissions. That is indicative of a general acceptance in the population that there are now matters that require us to act in the way we are acting that some of the assumptions we might have had in our naivety 3 or 4 years ago no longer apply because of an international situation we could not have imagined those few short years ago and that therefore some compromises—unfortunately perhaps—have to be made to some of our accepted norms of freedom and the way in which we move around. 
 I do not get a sense—and it did not come through at the Foreign Affairs Defence and Trade Committee hearing either—that there is great unease. I was struck by the similarity of origin of many of the submissions. Many people who have a certain predictability about them were the ones who chose to appear before us on this matter. I do not diminish the points they made but I simply make the observation that there was a sameness about the submitters and about what they had to say. 
We are dealing here with a bill that is essentially procedural. The issue of the designations has to be resolved. The question of the refinement of section 8 of the principal Act by the insertion of this new clause will not compromise good citizens’ rights at all. The innocent genuine well-intentioned person who supports international humanitarian relief organisations will not be adversely affected by these provisions simply because of the way in which they are designed. The test is a deliberately high one. Short of the public advertisement of terrorist intent or public knowledge that an organisation is a well-known front for terrorist activities the individual donor or supporter has nothing to fear from these provisions. The sooner we can proceed to pass them and then later in the year deal with the outcome of the substantive review and if necessary make changes to the principal Act in the light of that review the better for all concerned. 
MARTIN GALLAGHER (Labour—Hamilton West) 
: 
 I address this bill also as a member of the Foreign Affairs Defence and Trade Committee. Obviously I endorse the main points made by the chair of that committee and also by the deputy chair. I realise that there were some genuine concerns certainly from some of the submitters in terms of this bill. But I make the point that in our view it is very clear on consideration of this bill along with others that this bill will in no way compromise the rights of decent genuine citizens in terms of their various activities on behalf of and contributions to various relief agencies that have been mentioned. I certainly want to assure members of this House about that. Someone has talked about the groups that have been collecting for for example the recent tsunami relief appeal and has said that perhaps some of that money may have unwittingly ended up in inappropriate hands. However the people who have more to fear—and much to fear as should be the case—are those who deliberately mislead genuine members of the general public and then use their offices to channel money to terrorist organisations. In my view and as has been said by previous speakers there is a very high threshold in terms of determining those terrorist organisations. 
I along with other members of this Parliament look forward to the substantive review. Any sovereign Parliament must always be vigilant that any legislation in this particular area does not lead to unintended consequences. In terms of our scrutiny of the actions of the court and even of the actions of the executive of the day that is a very important function of Parliament. I heard a previous speaker allude to Guantanamo Bay and to some of the abuses that have apparently been going on there. Of course we should be very concerned about that. Of course we should ensure that such actions and processes are open to the harsh glare of scrutiny. However as the Hon Peter Dunne very aptly pointed out the world as we knew it has dramatically changed. The nature of international conflict has dramatically changed and the way in which we respond to that also needs to change. We have to strike the appropriate balance and sometimes it is possibly difficult between individual rights and liberties—the right of people to get together within a democracy—versus the rights of people who would in my view blatantly mislead and corrupt the innocent and channel funding and support to terrorist organisations. 
I look forward to the substantive review. I think it is very very important that we go through that whole process with great care and consideration. Notwithstanding some of the reservations expressed by some submitters at the select committee which we all listened to very carefully I commend this bill. 
Dr WAYNE MAPP (National—North Shore) 
: 
 Thank you Madam Speaker for the opportunity to speak on this bill. I guess the first thing one has to recollect is that just 2 weeks ago New Zealand SAS troops were deployed from Whenuapai to Afghanistan. Somewhat unusually firstly they were transported there courtesy of US aircraft—two C17s—and secondly the Prime Minister made the very clear statement that they would be engaged in long-range reconnaissance and direct action. As was noted in the  
New Zealand Herald 
 that is in fact combat. Today’s  
network politics 
 also dealt with that issue. It noted that the troops have been deployed at this stage and in those numbers because they are part of the intensified campaign to capture Osama bin Laden or perhaps to deal to him in some other way. 
I guess that is the real point. We—the nations of like mind—are still having to struggle to deal with the reality of terrorism and with the very people who organised the attacks in September 2001. In essence that is why we are here today debating this bill. There is a reality out there and it requires very focused and demanding action by our soldiers. We should acknowledge that. 
When I hear the Green Party members and surprisingly New Zealand First members in some kind of unusual alliance saying that it is not necessary to pass legislation that deals with that I wonder whether they have taken any notice at all— 
Dail Jones 
: That’s not what I said. The member is lying again. 
Dr WAYNE MAPP 
: Madam Deputy Speaker— 
Madam DEPUTY SPEAKER 
: Would the member please withdraw that remark. 
Dail Jones 
: I withdraw that remark. 
Dr WAYNE MAPP 
: This legislation is crucial. I note that —unlike I might add New Zealand First—the Green Party has voted against every single security measure put forward in this Parliament. It has been oblivious to the challenge facing the world in terms of the problems of terrorism. 
I want to deal specifically with the concerns raised by both New Zealand First and the Green Party. Both parties raised a similar concern around section 8(2) of the Act. They cannot deny that reality. For some reason New Zealand First has argued that a person who innocently makes a contribution to aid the victims of the tsunami in Sri Lanka would be caught by clause 4 which inserts subsection (2A) into section 8 of the Act. 
 That is wrong. The reasons it is wrong are this. Firstly the activity itself must be made wilfully. Secondly it has to be without lawful justification or reasonable excuse. I would have thought that aiding victims of the tsunami constitutes a lawful justification or a reasonable excuse. So I believe that the basic argument put forward particularly by New Zealand First is fundamentally flawed. It is just extraordinary that New Zealand First has chosen to ally itself with the Green Party on this issue. One would have thought it would be careful not to do that given its record. 
I appreciate that we will have the opportunity later to debate the Supplementary Order Paper put forward by New Zealand First but I note that New Zealand First—and specifically Mr Dail Jones—seeks the complete deletion of that provision. It does not seek to amend it in any way. It does not seek to clarify it in order to deal with a concern; it seeks just to remove it completely. If Mr Dail Jones has a concern he ought at the very least to have put forward an amendment that addressed his concern directly rather than seeking a simple deletion. Seeking a simple deletion has the consequence that a person who donates money to an entity that he or she knows will carry out terrorist acts will not be subject to the law. That surely cannot be the intent of— 
Dail Jones 
: It’s an offence—page 1. 
Dr WAYNE MAPP 
: No I am talking about donating to the entity. That surely cannot be the intent of New Zealand First. It probably is the intent of the Green Party but it surely cannot be the intent of New Zealand First. I believe that New Zealand First has not put sufficient thought into achieving its intention. I can appreciate its motivation but I do not believe that it has cast its position on this issue correctly. 
The second point I want to discuss was more specifically dealt with I think by Mr Locke. There is a fundamental flaw in his thinking around the role of the courts and of the executive in designating terrorist groups. As my colleague Dr the Hon Lockwood Smith indicated he warned this Parliament some 2 years ago of the problems this provision would raise unless it was renewed. As has been noted particularly by the chair of the Foreign Affairs Defence and Trade Committee Mr Dunne that provision in hindsight has proven to be a mistake. 
In reality the Government has no choice but to take the path it has taken. The reason is this. I ask members to imagine what would happen if we took the Green approach. The Green approach would be to have the courts deal with each and every designation. Literally hundreds of entities are designated by the UN as terrorist organisations. Terrorism is like an octopus or a spider; it has numerous tentacles sub-branches and the like each of which has to be designated. It is simply not the role of the courts to examine that kind of material. The courts have not been established for that purpose. Let us get that right. Dealing with national security is always a matter for the executive and that is how it should be. The law has to reflect the reality. 
I understand that the select committee is in the process of conducting a review of the Terrorism Suppression Act. Frankly it will have to modify the legislation substantially to reduce the role of the court because the court cannot assume what is in effect an executive power. Only the executive has the full range of information necessary. Much of this is obviously confidential information gathered through the SIS and the like—information provided by friends and allies—and cannot be disclosed in court. One need only look at all the problems surrounding the Ahmed Zaoui case to see the truth of that yet that is where the Green Party would take New Zealand. It would essentially turn our Government on its head and that would ruin the effectiveness of our democracy. It would make it extremely difficult for this country’s Government—of whatever stripe—to look after the security safety and protection of New Zealanders. 
I will look with interest at the work the select committee undertakes in its review. It is important. There were undoubtedly aspects of the original legislation that needed to be improved—that has been acknowledged in the past—and a review of those aspects is necessary. It is noteworthy that the United States is undertaking some modifications to the Patriot Act to deal with issues that time enables people to deal with. 
Hon DAVID CARTER (National) 
: 
 I rise with pleasure to speak on the Terrorism Suppression Amendment Bill (No 2). The National Party will be working with the Labour Party to see that this legislation is passed and passed quickly for reasons I will outline shortly. This bill brings back memories—for me anyway—of the morning of September 11 2001 when we all woke and watched on our TV screens images of that disaster unfolding in New York. I am reminded of the words uttered by the then Prime Minister Helen Clark a couple of months before when she described New Zealand as being in a benign strategic environment. Those words have proven to be particularly foolish as the events of September 11 showed us in very graphic fashion. September 11 showed that the threat of terrorism is now with us forever and therefore it has become incumbent on countries like New Zealand to pass legislation and pass it quickly to cope with those sorts of issues. 
I want to comment first of all on Part 2. The reason we are here now debating this legislation under urgency is that the principal Act apparently and for a reason unknown to me listed the various terrorist organisations and then left that list to expire 3 years after the passing of the principal Act. It expires apparently in October this year so there is clearly some urgency to make sure that that list is continued and extended beyond October this year. I take the opportunity to thank the Government for getting this legislation out of the way before the general election so that the incoming National Government will have one less piece of legislation to deal with immediately after the election—which I now pick to take place about the middle of September. We will be busy tidying up a lot of the other messes created by the Labour Government and we do not want to have to deal with the Terrorism Suppression Amendment Bill (No 2) at that stage. So in that regard we completely support the legislation. 
I have been fascinated in this debate having sat here for the last couple of hours to find that on this occasion the New Zealand First Party is siding with the Greens in criticising the legislation. But if I understand Dail Jones correctly he is saying that having criticised the legislation and having tabled in the House a minority report on it New Zealand First will vote for the legislation. 
Dail Jones 
: That’s correct. 
Hon DAVID CARTER 
: I am pleased I have got that right because the logic did mystify me to say the least. New Zealand First is railing against migrants mainly because of their colour and suggesting that most of them are terrorists but when we have legislation aimed at making sure we protect New Zealand from terrorists Winston Peters and his bunch of merry men come into the House and criticise that legislation. New Zealand First has presented a minority report criticising legislation that deals with terrorism and terrorist groups. Then at the end of the day it decides to vote for that legislation. As I said that attitude by New Zealand First on this particular occasion—not on every occasion—is certainly mystifying to say the least. 
I turn to the comments of the Green member Keith Locke. In going back through the records to when the principal Act was passed I note that the Greens also voted against the legislation on that occasion. Once again we have terrorism suppression legislation—the Terrorism Suppression Amendment Bill (No 2)—and again the Green member Keith Locke tells the House that he will vote against legislation that is designed to protect New Zealand against terrorism. Again I listened with great interest to his explanation. I am one of those members who is quite prepared to give Keith Locke the time in the House to quietly explain his point of view. To summarise his argument—and I will attempt to do this fairly—he said that he cannot support the bill because it does not deliver due process to people who may be accused of terrorism. I ask Mr Keith Locke to think about the people in the twin towers and what due process was ever given to them. I say to Mr Locke that 3000 absolutely innocent people died in that event. They never had a chance to be given any due process by those wicked wicked terrorists. In supporting this legislation I say to Mr Locke that it is that event I recall. 
Hon Steve Maharey 
: You trivialise it by the way you talk about it. 
Hon DAVID CARTER 
: Steve Maharey says I trivialise it but I say to him that I do not. It was the most dramatic event that I have ever witnessed in my life. Mr Maharey might find that funny but I do not. 
Hon Steve Maharey 
: You’re pathetic. 
Hon DAVID CARTER 
: I did not enjoy seeing those people leap to their deaths just because that was the most likely decision that they could take. Yet Mr Maharey has the audacity to say today that I trivialised that event. 
Hon Steve Maharey 
: You trivialise it. 
Hon DAVID CARTER 
: That is a shocking thing for Mr Maharey to say. He has made some rather silly comments in his time in the House but that would probably be the most insulting one. It probably has something to do with his explanation of the third way. 
Hon Steve Maharey 
: There he goes again—trivialising everything. 
Hon DAVID CARTER 
: I trivialise that member for sure. I do not hesitate to do so. But I say to Mr Maharey that I do not trivialise that event. That is one reason why I have no hesitation in supporting legislation like this. I accept that the Government has to move— 
Hon Steve Maharey 
: Well sit down and vote it through. 
Hon DAVID CARTER 
: Now Mr Maharey says that I should sit down and that I do not have the right to come into this House and make my 10-minute speech. I say to Mr Maharey that if Labour puts the House into urgency we on this side of the House will take every opportunity to debate the legislation and we do not apologise for it. If members of the Government want to sit there right throughout the Committee stage and refuse to take calls and if they then want to take the odd 1-minute call in a Labour slot then they have every right to do that. But Mr Maharey should not criticise National members of Parliament who come here intent on doing their job and delivering their contributions in a debate as important as this one. 
This is critical legislation and as I explained earlier it needs to be passed with some urgency because the principal Act put in an expiry date of 3 years. I have no idea why that happened. I was not involved in the select committee. It would be very interesting if a Labour member took a call about that. 
Dr the Hon Lockwood Smith 
: It was a Labour mistake. 
Hon DAVID CARTER 
: It probably was a Labour mistake. But I say to Mr Maharey that I am very keen to support the legislation. I just take the opportunity to point out that I find it odd that there are two political parties in the House tonight that do not take the same attitude as the majority of us. 
DARREN HUGHES (Labour—Otaki) 
: 
 The speech that was just given to the House by David Carter really was a pathetic contribution and here is the reason for that. He oscillated from being totally sympathetic towards the victims of the terrorist attacks of September 11 to going straight back into raw political attacks on the Prime Minister on Steve Maharey on New Zealand First and on the Greens. Then he returned once again to his almost tear-jerking soft voice and his Oprah Winfrey - style attempts at connecting with the victims of terrorism all around the world. 
David Carter should have given one speech or the other. He should have either got up and talked about how terrible the different political parties in this House were and gone ruthlessly political or given a speech in which he would supposedly give his genuine views on the bill. But he tried to do both and he showed himself to be a silly silly member in that regard. That was a silly contribution from a man who was beaten three times by Ruth Dyson because he always mixes the politics in. David Carter should have focused on the bill. I am attacking him only because I cannot believe how silly that speech was. It came from somebody who has been in Parliament for 11 years—and he could well be gone shortly. David Carter engaged in pathetic theatrics and melodrama and the next thing we would have expected to see from him was a tear-jerking performance because that was how immature and juvenile he was about it. That was the silliness of that speech. 
The Terrorism Suppression Amendment Bill (No 2) extends the requirements of the law until 2007 and gives the Foreign Affairs Defence and Trade Committee the chance to consider it. I hope when the committee does that it takes the matter seriously and puts in place a proper process for Parliament to debate rather than listening to pathetic political partisan attacks that are mixed up with  
School Journal 
 plays. That did not do the member any service at all. He is a disgrace. 
Hon STEVE MAHAREY (Minister for Social Development and Employment) 
: 
 I have been stirred into action by the keen words of Labour’s junior whip. 
Gerry Brownlee 
: I raise a point of order Madam Speaker. Are you able to explain how the Government managed to get two calls in a row? If the Government chose not to speak earlier there is no obligation on the part of the Chair or the Speaker to even things up at all. I was on my feet well before Mr Maharey. 
Madam DEPUTY SPEAKER 
: No the calls have been given correctly Mr Brownlee. Calls are taken out of order many times. We just had two consecutive ones from the National Party too. 
Hon David Carter 
: Only because they got the call. 
Madam DEPUTY SPEAKER 
: Would you like to stand and apologise please Mr Carter? 
Hon David Carter 
: Yes I apologise. 
Madam DEPUTY SPEAKER 
: I tell Mr Brownlee that the calls have been given correctly. That often happens. 
Gerry Brownlee 
: I seek the leave of the House to table Standing Order 162. 
Madam DEPUTY SPEAKER 
: Leave is sought to table Standing Order 162. Is there any objection? There is objection. 
Gerry Brownlee 
: I seek the leave of the House to table Standing Order 163. 
Madam DEPUTY SPEAKER 
: Leave is sought to table Standing Order 163. Is there any objection? There is objection. 
Gerry Brownlee 
: I seek the leave of the House to table Standing Order 164. 
Madam DEPUTY SPEAKER 
: Leave is sought to table Standing Order 164. Is there any objection? There is objection. 
Hon STEVE MAHAREY 
: I raise a point of order Madam Speaker. We have just heard one of the more tear-jerking speeches in the House from Mr Carter about how serious this bill is. He invoked the Kurds and 9/11 and here we have Mr Brownlee—right after Mr Carter’s trivialising speech finished—trivialising this debate yet again. 
Gerry Brownlee 
: I do notice the deafness that you appear to have to a number of comments that came from the Government benches during a previous exchange. So to continue I seek the leave of the House to table Standing Order 165. 
Madam DEPUTY SPEAKER 
: The member will be seated. I am going to rule on that point of order. There were interjections from both sides of the House Mr Brownlee as there had been for a quite a while—for quite a while before you came in too. The point is— 
Gerry Brownlee 
: Are you referring to my absence now? 
Madam DEPUTY SPEAKER 
: Mr Brownlee I am on my feet ruling on a point of order. You will stand withdraw and apologise for that. 
Gerry Brownlee 
: I withdraw and apologise. 
Madam DEPUTY SPEAKER 
: I was ruling on the point of order. There had been interjections but there was certainly no need for the point of order. 
Gerry Brownlee 
: I seek the leave of the House to table Standing Order 166. 
Madam DEPUTY SPEAKER 
: Leave has been sought to table Standing Order 166. Is there any objection? There is objection. 
Hon Richard Prebble 
: I raise a point of order Madam Speaker. I raise it because a member cannot by innuendo make allegations against members. I am intrigued. Maybe the member is just calling out Standing Orders arbitrarily but I decided to look up the one he called out and I saw Standing Order 165 is actually about pecuniary interest. The implication I take from that is that you Madam Speaker in making the calls had some pecuniary interest in calling a Government member. Well that is bribery. The member cannot make that implication. If he wants to suggest tabling some Standing Orders he should do it with more care. If he is just being careless that is one thing but if he was seeking to table that particular Standing Order for some purpose then he is asking us to consider that there was a pecuniary interest. 
The member then asked to table Standing Order 166 which relates to the Speaker deciding whether a pecuniary interest is held. I would actually require you Madam Speaker to ask the honourable member whether he was making an implication that another member—and in particular the Speaker—has a pecuniary interest. If the member is doing so then he should say what it is because under the Standing Orders he is required to. If he is not making that implication he should withdraw and apologise for having made such an implication against the Speakership. That seems to me to be going nuclear on an issue and I really think he ought to come back a little bit. 
Madam DEPUTY SPEAKER 
: I thank the member. I will ask Mr Brownlee whether he was making such an implication. 
Gerry Brownlee 
: No Madam Deputy Speaker. By way of explanation I say that I just think there is such a reckless disregard for the Standing Orders and for the precedents of the operation of the House that I felt it necessary to table all the Standing Orders in order that we may get some better decorum around the place. 
Madam DEPUTY SPEAKER 
: Mr Brownlee it is quite out of order for you to make that allegation against the Speaker and I think you know that very well. I will give you a final warning about that. You will stand withdraw and apologise. 
Gerry Brownlee 
: I withdraw and apologise. I seek the leave of the House to table Standing Order 173. 
Madam DEPUTY SPEAKER 
: Leave is sought to table Standing Order 173. Is there any objection? There is objection. 
Gerry Brownlee 
: I seek the leave of the House to table Standing Order 169. 
Madam DEPUTY SPEAKER 
: Leave is sought to table Standing Order 169. Is there any objection? There is objection. 
Gerry Brownlee 
: I seek the leave of the House to table Standing Order 179. 
Madam DEPUTY SPEAKER 
: The member has asked for leave to table Standing Order 179. Is there any objection? There is objection. 
Hon Dr Michael Cullen 
: I raise a point of order Madam Speaker. I wonder whether I could get some sense of what is going on here. My understanding is that a call was due to be taken by a Labour member and a Labour member sought it. Mr Brownlee seems to have taken some strange offence at the fact that the standard rules for the allocation of speakers in the debate have been followed. Now if we are to have this performance then that is perfectly all right and it explains why the Opposition did not want to take leave to have question time. But perhaps it may be easier and it may help matters if we simply seek leave for Mr Brownlee to take a call. I am sure we would all be fascinated to hear what he has to say. 
Gerry Brownlee 
: That wasn’t the issue. 
Hon Dr Michael Cullen 
: Well what is the issue? [ 
Interruption 
] Well come on. 
Madam DEPUTY SPEAKER 
: I will call the member who was speaking the Hon Steve Maharey— 
Hon Dr Michael Cullen 
: Madam Deputy Speaker I asked for some guidance; I have not had a response. The House has a problem and if we have this kind of irrational behaviour in the House usually there is a reason for it and usually we can sort it out. If Mr Brownlee would explain what he has taken offence at then we can respond. 
Madam DEPUTY SPEAKER 
: All I can say is that I have given several rulings to Mr Brownlee. I have no idea what his problem is. 
Hon Dr Michael Cullen 
: Perhaps Madam Deputy Speaker you could invite Mr Brownlee to tell us because this behaviour is not seemly in Parliament even under urgency. I simply want to know what the problem is. I am perfectly happy to try to sort it out. 
Madam DEPUTY SPEAKER 
: That seems to be a reasonable request. If Mr Brownlee wants to respond he obviously can. 
Gerry Brownlee 
: The difficulty is of course that having made one explanation already I have been required to withdraw and apologise for that explanation. That leaves us in a difficult position. It is all very well for the Leader of the House to talk about seemly behaviour but there were numerous comments—two in particular that came from the Government side of the House and one in particular that came from the Minister of Education—that I have taken grave offence to. I have attempted through the Speaker to sort the matter out but she has not been able to see the point I was making. So if the Government wants to behave in that unseemly manner then the Government can lose time over it. 
Hon Dr Michael Cullen 
: I have consulted my colleagues and listened to the member. My understanding is that under Business Committee rulings there is an agreed order of speakers in a second reading debate. Now the member seems to have taken offence because he was not called and then he responded to that. He does not seem able to explain to us what the problem is beyond that fact. If that is the origin of the problem I am perfectly happy to seek leave for the member to take the final call or an extra call in the debate. 
Gerry Brownlee 
: In order to help the House it would be useful for the Deputy Prime Minister to know that in the exchange that resulted from the question over who should get the call—I fully accept the Speaker’s ruling on that and understand the convention and although I find it a little strange that Labour members were not taking calls earlier but decided to take them later that is by the by—a comment was made by the Minister of Education which the Speaker apparently did not hear. I find that amazing because almost a whisper from the Opposition side of the House is only too readily heard. Indeed three withdrawals and apologies have been required from me. 
Madam DEPUTY SPEAKER 
: I still have no idea of the issue because Mr Brownlee did not raise a point of order at the time. If there was a concern about another member and it had been raised I would obviously have dealt with it. 
Hon Richard Prebble 
: I raise a point of order Madam Speaker. The first thing is that I just wanted to check the calls because I thought maybe my maths might be wrong. I realise the member has moved on from this issue but the rest of the House thought that what he was objecting to was a limited time debate with a number of speakers. In fact when the calls are added up we see that the Speaker had added them up correctly. There was only one slot left and it was a Government slot. Those are the numbers; I have just checked that my maths is correct. So the suggestion made by Dr Cullen is actually not an answer because in fact only the Labour Party is now entitled to speak. Everyone else has spoken. The numbers are fair. But I think Mr Brownlee’s objection relates to a different matter. An interjection was made that he has taken very great exception to. I do point out that it has taken a long time to find that out because there has been no point of order to say what that interjection was. I did hear Mr Brownlee say that he thought there was some deafness. Well perhaps I share that because I did not hear the interjection. It appears to me that a nice way of proceeding would actually be for Mr Maharey to rise withdraw and apologise for whatever remark he made. The House could then hear what Mr Maharey thinks about terrorism. 
Madam DEPUTY SPEAKER 
: Obviously that is a sensible suggestion. I was concentrating on the issue before the House and I still am not aware that there was a point of order as Mr Prebble says on that matter. 
Hon Dr Michael Cullen 
: Remarks were made by both Mr Maharey and Mr Mallard to which exception is being taken so it may be appropriate if they were called upon to withdraw and apologise. 
Madam DEPUTY SPEAKER 
: If any member made an unparliamentary remark—I certainly did not hear it—I ask that member to withdraw and apologise. 
Hon Trevor Mallard 
: I am advised that I made an unparliamentary remark and if I did I withdraw and apologise. 
Hon STEVE MAHAREY 
: I am advised that I made an unparliamentary remark and if I did so I make an unqualified withdrawal and apology. The wind has been drawn from my sails slightly but the outrage remains. That is why I have decided to follow on from the speech of the junior whip who himself felt towards the end of this debate that it was very important to rise and comment on the fact that we have had two speeches in recent times from National Party members. One was from Mr Wayne Mapp known on the Government side of the House as the Captain Mainwaring of the National Party and the other was from David Carter who has no nickname because no one can remember him from one speech to another. Both speeches agreed with the Government’s position on the Terrorism Suppression Amendment Bill (No 2). Both speeches took a full 20 minutes—I correct myself; they were 10-minute speeches and they just feel like 20-minute speeches—but both speeches also ruthlessly exploited the underlying issues. 
That was what so outraged my friend Darren Hughes from the Otaki seat who sat through those speeches with enormous discipline. He is a young man. He has not been in the House a long time. Darren Hughes is not used to the kind of cynicism that has been on display here this evening as the National Party members spoke. He has not seen that kind of display of exploitation of the fundamental issues before because he is young. But as a result of sitting here today even he could finally take it no longer. Darren Hughes rose to his feet and pointed out the sheer cynicism of the speeches. On the one hand the speeches agreed with the Labour-led Government and said how urgent this issue is how we must pass this legislation now and how we must deal with these issues now. On the other hand in quavering voices those members tried to rehearse the kinds of terrorist acts that have led to such outrage around the world. That is what led to my young friend having to rise to his feet this evening. People who are listening at home would I think have got the message from Darren Hughes that the National Party actually agrees with this legislation. But we are here in the dead of night at 5 past 11 listening to that kind of rehearsed speech from National members as they say that they fully agree with the legislation that they want to pass it that they see it as urgent and that they believe we should be voting on it. I will sit down now knowing that the National Party will now want to move to a vote. 
A party vote was called for on the question  
That the Terrorism Suppression Amendment Bill (No 2) be now read a second time. 
Ayes 103 
New Zealand Labour 51; New Zealand National 23; New Zealand First 13; ACT New Zealand 6; United Future 8; Progressive 2. 
Noes 8 
Green Party 7; Maori Party 1. 
Bill read a second time. 
Instruction to Committee 
Hon RICK BARKER (Associate Minister of Justice) 
: I move  
That it be an instruction to the Committee of the whole House on the Terrorism Suppression Amendment Bill (No 2) that it take the bill part by part 
. 
Motion agreed to. 
In Committee 
Part 1 Amendments to principal Act 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 I think it was somewhat unfortunate that the Minister for Social Development and Employment made very light of serious legislation because the big issue in Part 1 that really troubled a lot of people making submissions on this bill is the need to balance the genuine concern of a nation to make sure it plays its part in combating terrorism with the concerns which are also genuine of a lot of people to make sure our legislation does not become too intrusive in respect of individuals’ human rights. There are issues of judgment here and I think the Minister displayed a lack of understanding of the bill in that last contribution. 
The Committee should look very carefully at clause 4 in Part 1 which introduces a new criminal offence into the principal Act. The reason why we should look at it carefully is that a sensible member of the House from New Zealand First Dail Jones has argued that it is not necessary. He in fact proposes a Supplementary Order Paper that would delete clause 4. As I understand New Zealand First’s argument—and I invite the member to correct me if I am wrong—section 8(1) of the principal Act already covers that concern of New Zealand First. I would argue that that is not the case. If we look carefully at section 8(1) of the principal Act we see that the funding there refers specifically to funding acts. A person commits an offence who “… collects funds intending that they be used or knowing that they are to be used … in order to carry out 1 or more terrorist acts.” The key word in section 8(1) is “used”. 
The gap that section 8(1) leaves is that money could be provided to a terrorist organisation without knowing that it will necessarily be used for any specific purpose when that organisation could be involved in all manner of terrorist activities. The concern about section 8 on its own—it is a perfectly OK section as far as it goes—is that it is incomplete. It requires a person to know that the funds he or she provides will be used for a terrorist act. All that new section 8(2A) inserted by clause 4 requires a person to know is that he or she is funding a terrorist entity. A person still has to know that and must not have a reasonable excuse for doing it so new section 8(2A) sets the bar quite high. 
But I think it is worth the House giving careful thought to the challenge that New Zealand First has put in front of us as to whether this new subsection is required. I would argue that it is required because section 8(1) in the principal Act requires that one needs to intend to use the funds or know that the funds are to be used in order to carry out one or more acts of a kind that if they were carried out would be terrorist acts. 
I think National would argue that if we do not insert section 8(2A) as included in clause 4 of the bill into the principal Act we leave a grave gap in our law. I know the member has concerns about certain organisations that may be involved in activities that are not all terrorist activities. But putting that aside for the moment if we delete clause 4 altogether I think we leave a grave gap in our law because a defence could then so easily be that someone financing a terrorist organisation who knows that he or she is financing a terrorist organisation could argue that the money was not intended to be used for any particular terrorist act and therefore maybe find a reasonable defence against the existing section 8(1). 
I think that it is worth hearing from New Zealand First to make sure that the Committee of the whole House understands Dail Jones’ and New Zealand First’s arguments but I have tried to put them reasonably. If we do delete clause 4 I think we will leave a serious gap in our law which is why National would argue that clause 4 must be carried by this Parliament in order to insert new section 8(2A). 
DAIL JONES (NZ First) 
: 
 The chairman of the Foreign Affairs Defence and Trade Committee made a very good point amongst others in his speech. I direct this question to the Minister and I did not hear him raise the matter in his speech. [ 
Interruption 
] I did not hear it; I missed it. Could the Minister confirm what the select committee has stated in its report at the bottom of the first page: “However we are now satisfied that neither the intent nor wording of the provision catches the funding of legitimate human rights humanitarian or democratic rights groups acting solely in this way. We seek the Government’s confirmation that this is indeed its intent.” So I would ask the Minister to confirm whether that is the case. 
Hon Rick Barker 
: Yes. 
DAIL JONES 
: The Minister says “Yes” so that is the Government’s intention. 
Hon Rick Barker 
: It’s in my second reading speech. 
DAIL JONES 
: Well we know what second reading speeches are like sometimes—Phar Lap would not be able to keep up with some Ministers! I am pleased to hear that. The second question I would ask is when was United Nations Security Council Resolution 1373 actually passed? 
Hon Rick Barker 
: On 28 September 2001. 
DAIL JONES 
: So we have waited almost 4 years to give effect to that part of the resolution in this legislation. 
Hon Dr Michael Cullen 
: And we are taking urgency now. 
DAIL JONES 
: —and they are taking urgency now. Well maybe that is a good ground but we have been told how urgent all of this is yet we have waited 4 years to do it. That is the point I was trying to make earlier on as well. So we are finally getting around to doing that one. 
Members have expressed interest in what happened in September 2001. They may be interested to know that I have a half-brother living in New York who worked very close to the World Trade Center. I was very concerned about his safety and I even rang the New Zealand telephone line that was made available for that purpose. So when people talk about terrorist activities and how they affect people they affect me perhaps as much as anyone else here if not more. So New Zealand First and I are very concerned to make sure there are no loopholes. 
The Minister has confirmed that that is the bill’s intent. That will go on the record because it is already in the record and I have said it already. I will withdraw my amendment because I have received that confirmation from the Minister. But I want to ask the Minister what happens to a Sri Lankan living in New Zealand who has a mother father three brothers and four sisters which is not unusual living in Sri Lanka in the tsunami area controlled by the Tamil Tigers—[ 
Interruption 
] No I did not live in Sri Lanka; everyone who lives in Sri Lanka should be very proud of that country even though the National Party wants to make a racist joke about it—whose mud hut has been wrecked and who are starving. How does that Sri Lankan get money to them? Is there any way of getting money to them other than through the Tamil Tigers? 
Dr Wayne Mapp 
: I raise a point of order Mr Chairperson. I realise I should have raised this point of order a bit earlier but referring to what Mr Dail Jones said about jokes I am sure he would consider on reflection that he probably should not have said that. I take offence at what he said about racist jokes. 
DAIL JONES 
: Speaking to the point of order I thought I heard some National Party member saying when I was referring to the suffering of the people of Sri Lanka that I already come from there and trying to suggest that in some way. So I responded to that. If members want to interject they must take what they get in reply. That is in the rules of the House. 
The CHAIRPERSON (Hon Clem Simich) 
: Mr Mapp has raised that issue. I was listening and I thought it was a perfectly reasonable response from Mr Jones. 
DAIL JONES 
: So you have ruled on it then—thank you very much Mr Chairperson. I am just asking what one does if one is a Sri Lankan or an Indonesian in that situation. One’s family overseas is starving they do not have a roof over their heads and the only way to get money through to them is by making a contribution to a group like the Tamil Tigers. Will that be a criminal offence? As I have said New Zealand First has totally supported any action taken against terrorism; we always have and we always will. Sometimes one wants to have a little discussion on a point that is raised in a select committee. I made it clear in my second reading speech that we would be supporting the legislation. Dr Mapp did not quite grasp that I suspect; otherwise he would not have made some of the comments he made earlier. 
So how would we resolve that situation for a New Zealand family with those links in Sri Lanka in that situation who want to get some aid to their family? Does that family not give it to the only group that could possibly get it to them? I am sure that if we were in that situation in New Zealand we would deliberately do everything possible knowingly wilfully etc. to try to get aid to our family in Sri Lanka or wherever. 
I have lived in Pakistan and I know how poor people can be. When we talk about poverty levels in New Zealand we just do not even know what poverty is. We are talking now about people in Sri Lanka who are below even that level after the tsunami. What do people do to keep their families alive when they know they are in a Tamil Tigers - controlled area? I would be interested to hear the Minister comment. But I repeat I will withdraw my amendment. It has caused a good discussion which is what I intended it to do and I think all the submitters would have liked that to happen. 
Hon RICK BARKER (Associate Minister of Justice) 
: 
 I will respond to two points raised by Dail Jones. I want to repeat if people will bear with me the comments I made in my second reading speech which I think cover the point precisely for the member. I said: “Having given serious consideration to these concerns the committee was satisfied as I am that neither the intent nor wording of the offence will catch persons who provide or collect funds for groups with no connection to terrorist activity. Nor will it risk criminalising the unwitting donation of funds to terrorist entities for example via a terrorist group’s apparently legitimate front organisation. To be captured by the new offence a person must intend that the money provided or raised will directly or indirectly benefit an entity which they know carries out terrorist acts: this is a significant burden for the prosecution to satisfy in any particular case.” So a person must intend and know. 
The second point I want to come back to—and I am pleased to hear that the member is withdrawing his amendment but I think I can just confirm for him the wisdom of doing so—is that if we look at schedule 4 of the Terrorism Suppression Act 2002 we see the reproduction of United Nations Security Council Resolution 1373. In clause 1(d) there is a very clear obligation on signatories to take actions that: “Prohibit their nationals or any persons and entities within their territories from making any funds financial assets or economic resources or financial or other related services available directly or indirectly for the benefit of persons who commit or attempt to commit or facilitate or participate in the commission of terrorist acts of entities owned or controlled directly or indirectly by such persons and of persons and entities acting on behalf of or at the direction of such persons;”. So it is very clear that entities have to be dealt with as well as individuals and acts. 
 To pick up on the point made by Dr the Hon Lockwood Smith I tell members that if we were going to be concerned about the financing of terrorist acts only we would miss a whole range of terrorist activity such as the financing of organisations for the training and upskilling and so on of terrorists. So in fact we would be saying it was OK to finance the resourcing of terrorist organisations but not the actual acts or commission of those organisations. 
New Zealand law therefore as it currently stands falls short of compliance with the UN Council resolutions and that is what we are seeking to address here tonight. If we had adopted Mr Jones’ resolution we would have fallen short of our obligations under the UN and that would not be the right thing for New Zealand to do. We usually do the right thing and support UN resolutions. 
Hon PETER DUNNE (Leader—United Future) 
: 
 I think that the Minister’s contribution and Mr Jones’ earlier contribution were particularly useful and I just simply want to acknowledge Mr Jones’ withdrawal of his amendment and the Minister’s restatement of the assurance that he gave in his second reading speech. 
The Foreign Affairs Defence and Trade Committee was concerned about making it absolutely clear—and this is almost one of those cases where one has to make it absolutely absolutely clear—that the sentiment we all thought was being captured by this provision was in fact the reality that the innocent unwitting genuinely motivated person who feels a sense of compassion for those who are suffering and who decides to give support to campaigns designed to alleviate that suffering does not then find himself or herself entrapped by the subsequent revelation that the organisation to whom he or she is giving support might have links to terrorist organisations. The select committee has no sympathy for the terrorist but a lot of sympathy for the genuine donor. 
As members of the select committee will recall we certainly agonised for some time about how effective the provision in the bill would be in giving that protection. We became satisfied that the test was sufficiently high in a number of cases to give that assurance. We then thought it would be critically important for the Government to restate the obvious in fact so that anyone looking at the bill as it is eventually passed the select committee’s report and the content of the debate in this House—and the judiciary have been known to do that on many occasions—would be left in no doubt as to what the true intent of the bill was. 
I think Mr Jones has done us a useful service by moving an amendment that actually focused our attention on the particular provision. That made us not only consider it but also debate it here this evening and place on record the absolute assurance and clarity that we feel about what this provision means in reality. I do not think it can be restated often enough that those who are genuine well motivated and innocent in terms of their intent have nothing to fear from the provision contained in this bill that we are about to pass. And I think that is where I should end this contribution because it really is the nub of the issue. 
The bill’s intent is a genuine one. It does protect the innocent but it also makes clear our abhorrence of the activity that people are concerned about. 
The CHAIRPERSON (Hon Clem Simich) 
: I call Dr Wayne Mapp. 
KEITH LOCKE (Green) 
: 
 I raise a point of order Mr Chairperson. In this debate the Green Party is the only party opposing the bill. There have been a whole series of speakers supporting the bill and it seems that the Green Party is being bypassed. It does not seem— 
The CHAIRPERSON (Hon Clem Simich) 
: Yes I make the choice of speakers. I note that you do not agree with it but it will remain Dr Mapp and we will come to you in due course. 
Dr WAYNE MAPP (National—North Shore) 
: 
 I want to make a comment on the comment that Mr Locke has just made. He said that the Greens are now the only party opposing the bill and that is true. It is also worth reflecting upon the fact that the Greens represent 5 percent of New Zealand. Strictly speaking one might expect them to get only one call in 20 but of course it does not quite work that way. So I believe that the Green Party can hardly say that in this Parliament their views are not well represented. I appreciate that Mr Locke puts a lot of work into representing his viewpoint. 
I want to pick up briefly on the points that others have made about the important distinction between act and entity. Section 8(1) of the Terrorism Suppression Act—and I am pleased that New Zealand First has now recognised the reality of this—applies only to funding the terrorist act itself. It has taken this bill the Terrorism Suppression Amendment Bill (No 2) to rectify what should have been done before under the United Nations convention—that is to include the funding of entities themselves. That is the sort of thing that needs to be fixed up. It does speak of a general problem. There is no doubt that the legislation in 2002 was passed in urgency and I do not mean “urgency” in a parliamentary sense but under the tempo of urgent times. There was an immediate need internationally to strengthen domestic law and international law to deal with the scourge of terrorism and most countries have acted. It is also true to say that most countries have had to fix up their legislation as well because in the nature of things legislation passed quickly is unlikely to be entirely perfected. 
I conclude by saying that National supports very strongly indeed the measures to strengthen the laws against terrorism. Both myself and Mr Carter are deeply offended by the statements of two Government speakers: the junior Labour whip and Mr Maharey. They alleged—not just alleged; actually stated—that we were insincere and were trivialising the issue. That is entirely false. I think it is quite reprehensible for the Government—[ 
Interruption 
] Well Mr Hughes’ colleague Mr Maharey included myself I would have to say and I think it is quite reprehensible for the Government to make that allegation. At no point did any of the National speakers seek to score some political point against the Government on this issue. We recognise that the Government has been reasonably forthright— 
Darren Hughes 
: Mr Carter did. 
Dr WAYNE MAPP 
: No he did not. He had been forthright in dealing with terrorism. We recognise that a substantial contribution by the New Zealand armed forces has been committed over a substantial period of time and indeed it is continuing to deal literally with the lair of terrorism in Afghanistan. I think it is unfortunate that the debate in that particular area took an unfortunate turn because it says that the Government maybe due to nervousness about an upcoming poll is losing perspective and its members are making personal attacks whenever they can. 
On an issue like this I think it is reasonable that we raise our sights and deal with the issue seriously. I have to acknowledge that Mr Locke does deal with the issues seriously. He does not try to personalise them. He always puts his point of view forward reasonably. I do not agree with it—it is fundamentally wrong. He does not seem to recognise the dangers of terrorism. But to have personality politics intrude into a debate of this nature I think was hugely unfortunate and lamentable in particular from a senior front-bencher of the Government. I conclude by saying I would like to think that the Government would take on board those comments. We on this side of the House expect serious issues relating to national security to be debated without personality politics being played out in this Chamber. 
KEITH LOCKE (Green) 
: 
 I think there is a bit of a misunderstanding here. The original section 8(1) in the principal Act prohibited funds intended to be used for terrorist acts—funds directed towards actually doing terrorist acts. The new provision concerns the giving of funds knowing they will benefit an entity that carries out terrorist acts. 
 One of the points I think that was made by Lockwood Smith was that we have to have that provision because there might be front organisations and we do not really know whether the front organisation will do the terrorist act but the funds for the terrorist act may go via the front organisation—such as an al-Qaeda front organisation. 
But if members just leave it on that level I think they are misunderstanding it. That clause is aimed at stopping support for and in effect destroying such organisations one of whose activities is terrorist acts. I think we can put terrorism within an al-Qaeda frame too much in that al-Qaeda—[ 
Interruption 
] No let me explain that. The al-Qaeda is a very covert organisation it does not control any territory and it has conducted a series of horrific terrorist acts. It is different from organisations that are nationalist ethnic groups and liberation groups like the African National Congress in South Africa which have genuine mass support and often have controlled territory. 
In the case of some of the Palestinian groups perhaps we could put that definition on them—and on the Tamil Tigers. But it is questionable whether we can in fact define the Tamil Tigers as a terrorist organisation now. A lot of people would say that we cannot given the peace that has occurred in Sri Lanka for the last few years. But the Tamil Tigers are relevant to the debate because they are designated as terrorists by Britain Australia and the United States and are treated by some of our State agencies in a de facto manner even if not by the Government itself officially at a political level. 
That is a good test case. For instance if we want to advance peace in Sri Lanka and the welfare of the Sri Lankan people perhaps we can get off the topic of tsunami relief although that is also relevant. If we go back to the wording the Minister used we note that one has to have an intent to give aid while knowing that the organisation engages in terrorist acts. If we did define the Tamil Tigers as terrorists then a lot of people giving aid to tsunami relief would do it knowingly—that is knowing that the aid would go via a Tamil Tiger channel—so they would not in the Minister’s words “do it unwittingly”. 
But the problem is whether in our approach to helping the situation in Sri Lanka—both on the tsunami-aid level or on the political level of advancing the peace process—our aim is to destroy the Tamil Tigers. Destroying such organisations is the essence of this amending legislation as is the piece the Minister read from resolution 1373. Is our aim to destroy a nationalist organisation—be it the African National Congress in the past or the Tamil Tigers more recently—that has in the past engaged in some sort of sabotage or activity that has killed civilians and can be defined as terrorism or do we want to deal with New Zealanders’ support for real terrorist acts? 
If we look at the northern and eastern areas of Sri Lanka today we see that the Tamil Tigers are supported not just in terms of tsunami relief. I have been through the Tamil Tiger areas of Sri Lanka. I did that a couple of years ago. All sorts of aid organisations are there from Oxfam to Unicef and all the UN organisations are engaged in all sorts of projects including projects for building a civil structure and leading to an advance in the peace process. 
Hon RICHARD PREBBLE (ACT) 
: 
 Mr Locke has correctly told the Committee that the Green Party is the only party that is now opposing this bill so I listened and tried to find out whether he has a coherent position. I have to say to him that I do not think his position is coherent. I even went back to look at his earlier arguments when he voted against the original bill. [ 
Interruption 
] Oh yes and when he voted against the original bill he stated that his reasons were that he did not like the designation of terrorist groups around the world by countries like the United States. 
I have to say to him that I think his motivation for this bill is that he is fixated about the United States. I think he thinks that anything the United States does is somehow evil and wrong and he is one of those people who thinks that the United States brought it on itself that the World Trade Center bombings occurred. I actually think that that is his position and has been right the way through his whole life. I find it interesting that the Green Party which has managed to sell itself to the country as being an environmental organisation is actually carrying within it a person like Mr Locke who I have never heard make a speech about the environment. All I hear from him are rabid speeches against the United States against capitalism against things that most New Zealanders— 
Hon Member 
: Watermelon party. 
Hon RICHARD PREBBLE 
: The member likes to say how sincere he is on these matters but I do not think he is sincere. If he were sincere he would be prepared to tell us that the reason he is not supporting this bill is that he does support the objectives of various terrorist organisations; he most certainly does. He can say that he does not remember or that he was misconstrued when he wrote stories about Pol Pot. Right throughout his whole life he has done that. He may not like it— 
Keith Locke 
: I raise a point of order Mr Chairperson. On previous occasions members have been forced to withdraw and apologise for trying to say that I supported Pol Pot. The reference here has that definite implication and I would ask the member to withdraw and apologise. 
Hon RICHARD PREBBLE 
: Again we have been through this before. I have tabled the papers before. I am happy to see whether I can find them. I will have to borrow Winston Peters’ papers I think. I am certain I can find them again. I most certainly am not prepared to withdraw the accusation I am making against him. 
Keith Locke 
: I raise a point of order Mr Chairperson. It has been established and I can get the dates that members have withdrawn and apologised for this very reason—on the assurance from me that I have never supported Pol Pot and his crimes. 
The CHAIRPERSON (Hon Clem Simich) 
: I thank the member for raising that. I do not think that is quite what the member was saying. It seems a sort of paranoia— 
Hon RICHARD PREBBLE 
: Let me put it to the honourable member this way. The reason he got himself into problems with Pol Pot and the reason he now finds himself in this extraordinary position on this bill is that he is so anti the United States he actually thinks that we in this Chamber should support anyone who is also opposed to the United States. A line has to be drawn somewhere. It may be difficult to determine exact definitions of terrorist organisations but that does not mean to say there is no such thing as terrorism. There most certainly is. 
This bill says that we should not give money to entities that we know are engaged in terrorism. Only the Green Party is saying the contrary—that it ought to be lawful in this country to raise money and send it to an organisation that we know is murdering people in terrorism. Mr Locke says that is what we ought to do. That is what the Green Party ought to campaign on during this election campaign. Green Party members should not go through the election campaign saying: “We’re a bunch of conservationists but when we get into Parliament we will hold the whole House up and we will be alone in saying it should be lawful in this country to support terrorism.” When Mr Locke looks back at his record he will find that he has voted against every single measure that has been raised in this House even though the United Nations has supported it and even though it is supported by every democratic party of the world. I ask him how he can possibly claim to be a Green member of Parliament. No he is not. He is an extremist. He is the reddest MP who has ever been in this Parliament and that is what he ought to tell the Committee before he votes on this measure again. 
MOANA MACKEY (Labour) 
: 
 I move  
That the question be now put 
. 
KATHERINE RICH (National) 
: 
 It is interesting to listen to Keith Locke talk about this bill because he makes comments about “real terrorism” as if somehow there is terrorism that is not genuine. It seems that Keith Locke believes that terrorism is very much in the eyes of the beholder. He says that one person’s terrorist is another person’s freedom fighter. I cannot think of any person in this country who would see Osama bin Laden as a freedom fighter. So I endorse the comments made by Richard Prebble. 
I am concerned about clause 4 and I draw the attention of the Committee to something I think could be a loophole in that clause. Clause 4 states that it is an offence if we give money to someone knowing that they will benefit and the entity has to be one that carries out or participates in the carrying out of one or more terrorist acts. My question to the Minister in the chair the Hon Rick Barker is why does he specify the number of terrorist acts—because for example we could have a situation whereby a company—[ 
Interruption 
] If the Minister would stop laughing and listen to my point he might find that it is a valid one. 
An organisation or a trust may be set up for the express purpose of carrying out terrorism acts but may not have actually done anything yet. Clause 4 states that the entity is already carrying out or participating in terrorist acts. What happens if the organisation is set up for the express purpose of undertaking terrorist acts but has not done anything yet? So people could be giving their money to an organisation that has the intention of carrying out acts of terrorism but has not actually carried out any such acts. I wonder whether the clause could be improved by adding a reference that states something like “the organisation intends to carry out one or more terrorist acts”. 
Hon Dr Michael Cullen 
: You would have to prove it. It’s very hard. 
KATHERINE RICH 
: I am not making a point about putting a number on it because I think that is fine. We want to know that they are participating in something. But what happens if the organisation has not done anything yet? That leads me on to my next point which is that the benchmark is set extremely high. How are we ever going to prove that someone intended to give funding to a terrorist organisation? How can we get inside the mind of that person? What sort of evidence will have to be demonstrated in order to prove that? 
At the moment our police have serious rape cases sitting in in trays. Is the Minister really saying that the police will turn their attention to finding out who Granny Rich gave her donation to in the main street of Wellington? The benchmark seems to be very high and I am concerned that the chances of catching anybody are just about zip. It has to be demonstrated that the person knew. How do we do that? It has to be demonstrated that the person intended the money to go to a terrorist organisation which is very difficult to do. As we know al-Qaeda is just one example. It works in little separate cells whereby even the people involved in those cells do not know whom they are linked to or what they are doing. 
The key point is that there is a loophole in that clause that one could drive a bus through. Frankly if anybody is serious about carrying out acts of terrorism all that person has to do is set up a new organisation that has not actually done anything yet—that has not bombed anything yet or killed anybody yet—and that organisation technically has not been involved in or carried out any terrorist acts at all. Listing that an organisation must have been involved in one or more terrorist acts does not capture organisations that willingly bring themselves together in order to continue acts of terrorism. 
NANAIA MAHUTA (Labour—Tainui) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 74 
New Zealand Labour 51; New Zealand First 13; United Future 8; Progressive 2. 
Noes 36 
New Zealand National 23; ACT New Zealand 6; Green Party 7. 
Motion agreed to. 
The question was put that the following amendments in the name of Keith Locke to clause 4 be agreed to: 
to omit the reference “(2)” and substitute the reference “(1)”; and 
to omit the reference “(2A)” and substitute the reference “(1A)”; and 
to omit from section 8(2) of the principal Act after the words “To avoid doubt nothing in” the words “subsection (1)” and substitute the words “subsections (1) or (1A). 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 7 
Green Party 7. 
Noes 103 
New Zealand Labour 51; New Zealand National 23; New Zealand First 13; ACT New Zealand 6; United Future 8; Progressive 2. 
Amendments not agreed to. 
A party vote was called for on the question  
That Part 1 be agreed to. 
Ayes 103 
New Zealand Labour 51; New Zealand National 23; New Zealand First 13; ACT New Zealand 6; United Future 8; Progressive 2. 
Noes 8 
Green Party 7; Maori Party 1. 
Part 1 agreed to. 
Part 2 Extension of existing designations and consequential amendments 
KEITH LOCKE (Green) 
: 
 I raise a point of order Mr Chairperson. I seek your guidance on how you are will conduct the division of calls in this debate because I express a concern on behalf of the Green Party that in Part 1 we received only one call. Although in terms of the size of the party in Parliament there may be an argument for that number in this particular bill we are the only party against it. 
There are three other factors that I think are relevant to the division of the calls. First we are moving amendments and I was not given a chance in Part 1 to explain my amendments. I was not given enough time to do so. Secondly it is not that the contributions of the Green Party have been ignored in the debate—in fact a number of speakers in favour of the bill criticised either the Green Party or myself or both. I think if we are to have fairness in this Parliament that has to be taken into account. Thirdly I do not think that it was taken into account in the debate on Part 1 because people were voting on an amendment that had not been properly explained to them. 
The CHAIRPERSON (Hon Clem Simich) 
: I thank the member for raising that matter. The Chair tends to give the calls proportionately to different parties and different speakers. I think that is the fairest way. I am conscious of the fact that you are on your own and that you have amendments. In this part certainly I will try to give you more than one go at it and I will tell subsequent Chairs to be conscious of that. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 In examining Part 2 the clause that is of particular interest is really clause 6 and clause 6 is all about section 22 of the principal Act. Section 22 established designated terrorist entities. In fact it established from memory 318 designations of terrorist entities. What the Labour Government rather foolishly did when it passed the principal Act back in 2002—which is why I am a bit critical—was to put into the law a provision that the High Court would have to review each of those 318 designations when they expired 3 years later. The end of those 3 years from the passage of that legislation in 2002 comes up in October this year. Of course that is a ridiculous situation. 
I told the Government at the time we were debating the legislation back in 2002 that other countries do not temporarily designate terrorist organisations. I pointed out that countries like Canada and the European Union do not impose such limitations on their designations. But no the Labour Government here in New Zealand decided—I guess it was a very politically correct move—to designate those terrorist organisations for just 3 years and to put into the law a requirement for the High Court to then review those designations. 
Members should think about it: imagine the evidential requirements on the High Court to go about reviewing 318 designations. How many months would that tie up the High Court for? I struggle to think how long reviewing the designations would tie up the High Court. One would imagine the High Court would have to do it carefully because I guess some of those designated entities are not that well known to New Zealanders and therefore a fair bit of evidence would have to be gathered to assess whether the designations should be extended. 
Although clause 6 extends the designations for a further period of 2 years from the passage of this legislation I would urge the Government to think through—National would be happy to help—a better way of handling the issue of designations. I would suggest that once an entity is designated the onus should be on the entity to prove that it should come off the list. Then we would have the reverse situation. 
There is a good reason why the United Nations designated those entities. They are not entities that New Zealanders designated willy-nilly; they are entities designated by the United Nations. Sure we can add some but if New Zealand adds additional ones there would have to be a good reason for it. I think a much more sensible approach would be that if an entity believes that it should no longer be designated or is improperly designated it would have to apply to the court to have itself removed from the schedule of designations. I would argue that that would make more sense than requiring the Crown to go through this ridiculous process of having to review 318 designations. 
National will support Part 2 because the Government has not brought forward decent amending legislation but as part of the review of this Act under section 70 I think the select committee should look very hard at a much more sensible approach to designation review. I think that such entities should be designated permanently although there should be a procedure for entities that feel they are incorrectly designated—that is if their activities are no longer terrorist activities. It is possible I suppose that a terrorist organisation could turn over a new leaf and in those circumstances there should be a mechanism for an entity to come to the High Court and make its case for removal from the list of designations. 
I stress that National will support clause 6. Clearly we have to because we cannot leave a situation whereby the High Court is facing from October this year onwards a shambles of having to reassess 318 designations. What is more if the High Court cannot do it rapidly enough some of those designations will lapse and that would be very unfortunate. 
Hon RICK BARKER (Associate Minister of Justice) 
: 
 The points made by the Hon Lockwood Smith are well made. Firstly it would be unacceptable to have 318 cases before the High Court jamming it up. That is exactly why we are here passing this legislation. Secondly the issues around the process of designation and removing entities do deserve good consideration and that is what the Foreign Affairs Defence and Trade Committee is looking at now. We welcome the member’s input and the committee’s views. 
Finally I will comment on Mr Locke’s amendment which seeks to omit the expression “2 years” and substitute “1 year”. That would shorten the time recommended by the Foreign Affairs Defence and Trade Committee in its report and the Government will oppose that amendment. We could very well wind up in exactly the same position we are in now whereby we would have to come back to the House to pass legislation to extend the time. Of course that would be a nonsense so we will be voting against that amendment. 
KEITH LOCKE (Green) 
: 
 My amendment as the Minister has just said would reduce the period of extension from 2 years to 1 year and that was actually a recommendation made by the Human Rights Commission in its submission. It is concerned and put forward a very detailed paper about the weakness of the United Nations process. I can elaborate a bit: there have been incorrect designations because the United Nations Counter-Terrorism Committee which processes these designations does not have a proper interrogation process. It does not have a process for informing those so designated which would allow them to make submissions. There is not due process. 
Sitting suspended from midnight to 9 a.m. (Friday)