Volume 680 Week 11 - Wednesday 23 May 2012 
Text is incorporated into the Bound Volume 
Volume 680 Week 11 - Wednesday 23 May 2012 
[Sitting date: 23 May 2012. Volume:680;Page:2303. Text is incorporated into the Bound Volume.] 
Wednesday 23 May 2012 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Questions to Ministers 
Finance Minister—Confidence 
1. 
DAVID SHEARER (Leader of the Opposition) 
 to the  
Prime Minister 
: Does he have confidence in all his Ministers? 
Rt Hon JOHN KEY (Prime Minister) 
: 
 Yes.  
David Shearer 
: How can he have confidence in his Minister of Finance when he predicted in Budget 2011 that economic growth would reach 4 percent and it actually reached only 1.1 percent?  
Rt Hon JOHN KEY 
: I cannot be absolutely sure about the veracity of that statement because I can never be sure about them from Mr Shearer. But what I can say is that the Minister of Finance has been guiding the country through very difficult economic times which include the earthquakes in Christchurch the global financial crisis and the absolute mess we inherited from Labour. I know that on “Planet Labour” those things did not happen but here in the real world they did.  
David Shearer 
: How can he have confidence in his Minister of Finance when he predicted in Budget 2011 that unemployment would be a full 1 percent below the level that it is currently at?  
Rt Hon JOHN KEY 
: I think that one of the interesting points about employment is that New Zealand now has more jobs than it has ever had in the history of this country. I do not call that failure. New Zealand has a higher labour participation rate than Australia New Zealand has created 60000 jobs in the last 2 years and that is despite the fact that we have had to deal with a global financial crisis the earthquakes in Christchurch and the mess we inherited from Labour.  
David Shearer 
: Does he accept his Minister of Finance’s excuses for poor economic performance when both the global financial crisis and the Canterbury earthquakes occurred prior to the 2011 Budget?  
Rt Hon JOHN KEY 
: For a start off the global financial crisis has been rolling round since about 2008-09. New Zealand was actually in recession and had virtually a year of negative growth in 2008 before we took over. But let us put it to this test: not that long ago we had an election and we went to the country with Bill English’s prescription for the economy and that of one of the muppets from over there—I cannot remember which one—and the answer was we won.  
Rt Hon Winston Peters 
: Does the Prime Minister’s first answer which included the statement that he—and I quote him—“cannot be sure about the veracity of that statement” mean he does not know that the growth rate is not 4 percent as he predicted but rather 1.1 percent?  
Rt Hon JOHN KEY 
: No. It means that when David Shearer assigns a comment to someone I cannot be sure it is correct.  
Rt Hon Winston Peters 
: Does the Prime Minister know or not know that the current growth rate is 1.1 percent? 
Rt Hon JOHN KEY 
: I know that that was the historical rate not the rate necessarily going forward. 
David Shearer 
: Would a zero Budget have been required had his Government met its growth forecast of 4 percent? 
Rt Hon JOHN KEY 
: In my opinion yes. The reason for that is we inherited such a mess from Labour. We are having to pay off those debts that it basically inflicted on the New Zealand economy through some wild spending programmes and a hugely inefficient sector. And just before those members get on their high horse let us remember what state they left the export sector of New Zealand—in recession since 2000. 
David Shearer 
: I raise a point of order Mr Speaker. I think that answer was well wide of the mark in terms of the question. 
Mr SPEAKER 
: I allowed the Prime Minister to go on too long and I criticise myself for that. However he did answer the question because the Leader of the Opposition had asked whether a zero Budget would have been necessary had the economy grown at 4 percent as projected and the Prime Minister said “yes”—that he believed that a zero Budget would still have been necessary. So he answered the question. But I allowed him to go on too long and for that I apologise. 
Chris Hipkins 
: I raise a point of order Mr Speaker. I have been listening very carefully to the Leader of the Opposition—[ 
Interruption 
] 
Mr SPEAKER 
: Order! The member is entitled to raise a point of order. It must be a point of order though. 
Chris Hipkins 
: I have been listening very carefully to the Leader of the Opposition’s questions all of which have been in accordance with your requirement that they be straight questions with no conjecture or political attack and yet all of the Prime Minister’s answers have attacked the Opposition. You have said to us that if we ask straight questions you will insist on straight answers and I am asking you today to actually make sure that that ruling applies to the Prime Minister as well as to other Ministers. 
Rt Hon JOHN KEY 
: It is a straight answer to say that we have been living through a global financial crisis an earthquake in Christchurch and a— 
Mr SPEAKER 
: Order! That is not a matter of order. [ 
Interruption 
] Order! I am on my feet. The Prime Minister is defending his answer and that is not a matter of order. The member raised a fair point. The only thing I would point out is that where questions do seek an opinion they are always more risky than those seeking actual information. I have criticised myself already—I allowed the Prime Minister to go on a bit too long. But opinions were being sought and that is the difficulty in stopping him quite as quickly as perhaps I should have. But I think the member’s point was well made because there was no political innuendo I think in the questions asked and that is why I think some of the answers went on too long. 
David Shearer 
: How can he have confidence in any claim his Minister of Finance makes in tomorrow’s Budget when his previous Budget forecasts have failed to come true year after year after year; or will he simply fall back on the same old excuses tomorrow as well? 
Rt Hon JOHN KEY 
: Firstly I do not accept that claim as being correct. In fact the Leader of the Opposition yesterday directly in his primary question asked me questions about the forecasted growth rates in the 2009 Budget and as my answer proved the actual rates were fairly close to those. But secondly and most important we on this side of the House live in the real world and in the real world things change and you adapt to them. Whether they are the Christchurch earthquakes or the global financial crisis or the mess we inherited from Labour all of those things are things that have changed as time has gone on. We did not realise the enormous mess that Labour had left until we— 
Mr SPEAKER 
: Order! I think that is sufficient. [ 
Interruption 
] Order! I cannot help but smile because I accepted that I had been a bit remiss in not pulling the Prime Minister up on earlier questions and I immediately got a supplementary question that was highly politically loaded. But I guess that is the way the cookie crumbles. 
Rt Hon Winston Peters 
: How can he have confidence in the Minister of Finance when his projections have debt continuing to grow under his National Government for the next 5 years to at least $75 billion? It was $6 billion when National came to power and was up to $50 billion by 2011 an increase already of over 700 percent. What gives him confidence in that sort of tutelage and management?  
Rt Hon JOHN KEY 
: Could you ask the member to repeat the question? He was mumbling a wee bit and I could not hear it. 
Mr SPEAKER 
: Order! I would like the Rt Hon Winston Peters to repeat his question.  
Rt Hon Winston Peters 
: This is the man famous for his diction is he not? How can he have confidence in the Minister of Finance when he has allowed debt to increase from $6 billion in 2008 to $50 billion at the end of 2011—an increase of over 700 percent—and by his projections debt will continue to grow under his National Government for the next 5 years to at least $75 billion? 
Rt Hon JOHN KEY 
: I reckon that is a fascinating question actually from Winston Peters. This is the answer: in that period of time the Government has insulated New Zealanders from the worst of the recessions and applied about $13 billion in total to the Christchurch earthquake. So what New Zealand First and Winston Peters have just told New Zealanders is that if he was the Treasurer he would not be supporting Working for Families the pension age would be going up entitlements would be going the health system would be slashed education would be slashed— 
Todd McClay 
: And nothing for Christchurch. 
Rt Hon JOHN KEY 
: —and there would be nothing for Christchurch. I bet you that next time he is down in Christchurch he will not be looking the people of Christchurch in the eye— 
Mr SPEAKER 
: Order!  
Dr Russel Norman 
: Supplementary— 
Mr SPEAKER 
: I apologise to the member. [ 
Interruption 
] Order! Before I call Dr Russel Norman I say to the National Party on this occasion right round the House to please show a little more courtesy to the House.  
Dr Russel Norman 
: Does he recall the Minister of Finance saying in his Budget speech 2010 that New Zealand’s largest single vulnerability is now its large and growing net external liabilities and does he still stand by that statement? 
Rt Hon JOHN KEY 
: I cannot tell you whether the Minister of Finance stands by that statement because that is a statement assigned to him—or are you saying I said it? 
Dr Russel Norman 
: Do you agree with that statement? 
Rt Hon JOHN KEY 
: Well that is a different question is it not?  
Mr SPEAKER 
: Could the—[ 
Interruption 
] Order! It seems that the Prime Minister has answered the question because the question got somewhat confused. I call Dr Russel Norman for a supplementary question. [ 
Interruption 
] Order! Please I say to National Party members give Dr Russel Norman the chance to ask his supplementary question.  
Dr Russel Norman 
: On what basis does he have confidence in his Minister of Finance given that the Minister of Finance said in his Budget speech 2010 that New Zealand’s largest single vulnerability is now its large and growing net external liabilities and that international debt is projected to grow every year under his policies? 
Rt Hon JOHN KEY 
: I think if one was to look at the policies of the Minister of Finance and see what they are doing for New Zealand in very difficult conditions and contrast that with the rest of the world one would have enormous confidence in Bill English as Minister of Finance. New Zealand is a country that is growing; many other countries are simply not. New Zealand is a country that will be back in surplus; many other countries will never be back in surplus. New Zealand is a country that actually provides support for New Zealanders whether it is through Working for Families or through increasing the minimum wage under a Bill English - led finance team. If you go and have a look at the other policies we have had—making sure we get better value for money a tax system that works reform of accident compensation reform of the Resource Management Act reform of employment legislation—if you look at all those things and put them in the context of a world that is suffering from a global financial crisis I will bet you that many people in the world would rather have New Zealand than the problems in their own countries.  
Mr SPEAKER 
: Just before I call Dr Russel Norman can I remind all members that when they refer to “you” they are referring to the Speaker. If the Prime Minister is intending to refer to the Speaker that is fine.  
Dr Russel Norman 
: Given that Treasury’s projections show that for every year going forward the current account deficit increases and the net international investment position gets worse how can he have confidence that he is achieving his own goal of rebalancing the economy? When Treasury’s own projections show that the economy is becoming more imbalanced why would he have confidence in his Minister of Finance? 
Rt Hon JOHN KEY 
: The first thing is I am not entirely sure they show that. Secondly when he says “my own goal” it is actually the Minister of Finance’s goal although I am prepared to accept that. Thirdly in terms of the position of the net external liabilities part of that reflects the fact that New Zealand is a good operating environment. We are actually seeing capital coming in to invest in New Zealand. But the current account deficit has been a problem for New Zealand for over 30 years. The last person who campaigned on fixing that problem was Michael Cullen. He campaigned to halve it and he doubled it.  
Budget 2012—Sustainable Economic Growth 
2. 
TODD McCLAY (National—Rotorua) 
 to the  
Minister of Finance 
: How will Budget 2012 support sustainable growth? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The Budget will invest significantly in priority areas such as infrastructure skills innovation and research as well as health education and welfare. These measures show confidence in New Zealand in uncertain times and help build a growing more competitive economy with more jobs and higher incomes. 
Todd McClay 
: What measures is the Government taking to support jobs and grow the economy? 
Hon BILL ENGLISH 
: Sustainable jobs sustainable and new jobs are created only when businesses have the confidence to invest and grow and make the decision to employ people. In the past 3 years the Government has worked to reduce the tax on work raised taxes on property speculation and approved regulations to reduce costs for businesses. I will give one example. On 1 April this year ACC levies were reduced. That reduction leaves $600 million in the pockets of New Zealanders and around $250 million in the pockets of businesses which then have the choice to employ another person or raise wages. 
Todd McClay 
: How do New Zealand’s public finances compare with those of countries in Europe? 
Hon BILL ENGLISH 
: Compared with a number of countries in Europe New Zealand’s public finances are in a great deal better shape. In Greece and in Ireland for instance there are very substantial cuts in public servants’ pay and substantial cuts in entitlements and in the size of the Public Service. Even closer to home Australia has just announced its largest fiscal contraction ever in its last Budget. The state of Victoria announced just last week 4000 redundancies in its Public Service. 
Todd McClay 
: What alternative approaches to managing public finances has he seen? 
Hon BILL ENGLISH 
: There are a number of confusing alternatives some of which say that the Government should be stimulating the economy more by perhaps not taking control of its spending. In fact in the last year or two the Government has run quite large deficits to support the economy through a difficult patch. The same people are telling us to stimulate more then criticising the Government for borrowing money. This is a bit confusing. 
New Zealand - Australia Migration—Economic Policy 
3. 
HONE HARAWIRA (Leader—Mana) 
 to the  
Minister of Finance 
: What are the Government’s fiscal policies doing to stop the loss of New Zealanders to Australia which has now hit an 11-year high? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 The Government’s policies are taking the appropriate longer-term view of turning round the 30-year problem of a wage gap with Australia. Current migration patterns reflect significantly different growth rates over the last few years where the Australian economy has been sustained by a one-in-100-year minerals boom with record high coal and iron ore prices. As Australian growth flattens out and New Zealand growth picks up we would expect the growth gap in the shorter term will close while we continue to focus on the kinds of high-quality policy decisions that are needed for the next 20 years to close the historical wage gap. 
Hone Harawira 
: Does the Minister recall asking the question in 2008: “Does the Prime Minister agree that the fact that thousands of people are leaving for Australia—in fact in record numbers—means that she failed to do what she said the 1999 election was about which was to ‘build an economy that can retain our talented and skilled people’?” and what would be his answer to exactly the same question being asked of him only 4 years later? 
Hon BILL ENGLISH 
: If the member says I asked that question I almost certainly did. I think it is a lesson in that period from 1999 to 2008 that despite the best global economic conditions in a generation New Zealand actually went backwards relative to Australia. The damage done by those policies is the damage that we have to get on and fix. 
Hone Harawira 
: Does the Minister accept that his Government’s record of having 160000 people unemployed 107000 people who cannot get enough work 500000 people on less than $16 an hour and 200000 kids and their families living in poverty has anything to do with the fact that nearly 1000 Kiwis are leaving for Australia every single week or does he think it is because in Australia the wages are higher there are heaps more jobs and the first $18000 a person earns is tax-free? 
Hon BILL ENGLISH 
: As my colleagues are pointing out that member’s party is totally opposed to the kind of mining activity from which New Zealand could benefit and which almost alone is sustaining growth rates in Australia. Given his interest in higher wages and more jobs we look forward to the support of the Mana party for the offshore drilling programmes and the coal and goldmining operations that want to expand in New Zealand. 
Budget 2011 Forecasts—Economic Growth 
4. 
Hon DAVID PARKER (Labour) 
 to the  
Minister of Finance 
: Does he stand by his statement on page 1 of the Budget 2011 Executive Summary where he states that growth is “forecast to reach 4 percent next year and the economy forecast to create 170000 new jobs over the next four years”? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 Yes. That was Treasury’s best professional judgment at the time as it is required by statute to give to the Government of the day. Subsequent to those forecasts a number of things happened: New Zealand’s savings rate increased faster than expected world growth was lower and a major earthquake occurred in Canterbury on 23 December delaying the recovery. However the Government still aims to reach surplus a year earlier as was stated at that time. 
Hon David Parker 
: Is he standing by his promise in last year’s pre-election Budget that growth will be 4 percent in 2012-13—a promise that he made after the two major Canterbury earthquakes and 3 years after the global financial crisis hit? 
Hon BILL ENGLISH 
: I think the member misunderstands how the process works. The fact is that under the Public Finance Act Treasury is required to give its best professional judgment in its forecasts. The forecasts are not made up by the politicians nor do they amount to promises. They are forecasts of what is expected to happen at that time. This Government has shown that when circumstances change it is able to adapt its policy and right through the global recession and a slower recovery we have protected the most vulnerable maintained public services and worked on policy to build our longer-term economic prospects. 
Hon David Parker 
: Well if they are not promises when he wrote on page 2 of the 2011 Budget “Achieving Higher and More Sustainable Growth” was he trying to be funny and will tomorrow’s headline accurately reflect that his Government has in fact delivered the lowest growth of any Government in 50 years? 
Hon BILL ENGLISH 
: The Budget tomorrow will include Treasury’s best professional judgment about the economic forecasts for what will happen over the next couple of years. The member can look at the OECD forecasts that were produced this morning and compare those with the forecasts that Treasury will put in as the basis for the Budget. But as I think we have said before on “Planet Labour” nothing else happened in the rest of the world in the last 3 or 4 years. In the real world there have been a few challenges. 
Hon David Parker 
: Has he seen the National Bank’s regional GDP series which shows that despite its terrible problems the Canterbury economy has grown at a faster rate than the rest of the country since the February 2011 earthquake and why then does he continue to use Canterbury as the excuse for not meeting his own growth forecasts? 
Hon BILL ENGLISH 
: The Labour Party is getting to the position where it would use gravity as an excuse for why people cannot fly. The fact is in Canterbury the rebuild will mean much faster than average growth rates—not 2 or 3 percent but 7 8 9 or 10 percent growth rates as the rebuild picks up. I know the members believe that the Prime Minister is all-powerful but actually if he could have stopped the earthquake on Christmas Eve—which that party trivialises—then I am sure he would have.  
Hon David Parker 
: Does he stand by his statement on page 35 of the Budget that New Zealand’s growth rate is accelerating; and if so was the growth rate he was referring to not GDP growth but the rate at which his management is driving New Zealanders to Australia? 
Hon BILL ENGLISH 
: No; I was referring there to the rate of growth in GDP. The Government is pursuing policies that it believes will lift our long-term prospects. As the member knows GDP growth rates are affected by a lot of shorter-term pressures positive and negative but we are focusing on the long term—on building infrastructure lifting our skills capacity increasing innovation to support businesses and improving our regulations so that businesses will make active decisions to invest and employ. We are not going to rely as the previous Labour Government did on excessive consumption and Government spending funded by debt. That is not sustainable growth.  
Hon David Parker 
: If it is all going so well why are we having a near-zero Budget? 
Hon BILL ENGLISH 
: Even in year 4 we are still winkling out of the system the waste and extravagance of the previous Labour Government. And that is why we can afford billions of dollars of new initiatives and fund them from savings. 
Universities—Financial Performance 
5. 
COLIN KING (National—Kaikoura) 
 to the  
Minister for Tertiary Education Skills and Employment 
: What evidence has he received of the financial performance of New Zealand universities? 
Hon STEVEN JOYCE (Minister for Tertiary Education Skills and Employment) 
: 
 The latest figures released by the Tertiary Education Commission today show that the overall income of New Zealand universities has increased by 2.9 percent in 2011 to $3.22 billion up from $3.12 billion in the last year. This has been driven by a 3.6 percent increase in the Government’s investment from 2002 to 2011 which has now gone up by 13.5 percent over the past 4 years. These numbers do not include additional funding paid for research from other budgets like Vote Science and Innovation and the Primary Growth Partnership. Our increased investment in universities has been achieved in very tight fiscal circumstances and has resulted in strong fiscal and educational performances by our universities in the last 4 years. 
Colin King 
: What surpluses have been recorded by New Zealand universities in 2011?  
Hon STEVEN JOYCE 
: The strong income growth in universities has resulted in New Zealand’s eight universities recording combined net surpluses of $132.2 million in 2011. That is up slightly from $128.6 million in 2010. These surpluses include some abnormal earnings from both Canterbury University and Lincoln University as a result of earthquake insurance payouts. When those are netted out the surplus across all eight universities remains a very healthy $108 million. Overall the eight universities’ net assets have remained steady at $5.9 billion. Strong universities play a crucial part in lifting innovation and high-level skills across our economy and the Government is working hard to assist them in making an even greater contribution to our country’s future. 
Grant Robertson 
: Has the increase in Government funding that he mentioned in his primary answer kept pace with inflation? 
Hon STEVEN JOYCE 
: I think you will find that it is ahead of inflation which is actually a pretty amazing achievement given the tight fiscal circumstances. 
National Infrastructure Plan—Value for Money and Transport Funding 
6. 
Dr RUSSEL NORMAN (Co-Leader—Green) 
 to the  
Minister of Finance 
: Have all the projects identified in the National Infrastructure Plan been assessed against Treasury’s  
Better Business Cases for Capital Proposals 
 guidelines to ensure they represent good value for money; if not why not? 
Hon BILL ENGLISH (Minister of Finance) 
: 
 First of all the National Infrastructure Plan provides a snapshot of strategic opportunities that will help achieve goals for each major sector: transport telecommunications energy water and social services. It does not provide a complete list of current or potential infrastructure investments. But to answer the member’s question the Government’s policy around the quality of capital investment cases was clarified in July 2010. It was not retrospective so it applies to all departments and Crown entities from 2010 onwards but it does not apply to projects where decisions were made before that. 
Dr Russel Norman 
: Can the Minister tell the House what is the purpose of the Treasury guidelines  
Better Business Cases for Capital Proposals 
? 
Hon BILL ENGLISH 
: The purpose is to try to break the attitude in the public sector that capital is free stuff that drops out of the sky and has no particular cost attached to it when actually it is scarce these days; you have to borrow it or take it off taxpayers. And it is also to get the public sector to understand that although it may be able to access it cheaply—say through Government borrowing—the projects to which it is applying it are just as risky as if private capital was invested in a building that for instance has got to be earthquake-proofed or cannot be a leaky building. So it is to raise the awareness across the public sector of the importance of getting capital investment right. The Government invests billions of capital every year—billions and billions—and needs better processes to do it. 
Dr Russel Norman 
: Given that the purpose of the guidelines is to ensure good-quality spending on capital infrastructure projects has the $14 billion programme of roads of national significance been assessed according to Treasury’s  
Better Business Cases for Capital Proposals 
 guidelines? 
Hon BILL ENGLISH 
: They will not have been assessed strictly according to the better business case guidelines but I would hope that in the future that will be the case. What I can tell you though is that the assessment that has been done on the roads of national significance shows that they have significantly better economic benefits than for instance the central business district rail tunnel and other public transport projects some of which are advocated by the Greens; others of which are put forward by city councils that cannot afford them and want the Government to pay for them. 
Dr Russel Norman 
: Given the scale of the spending on the roads of national significance—$14 billion—and that many of the roads of national significance projects have not yet been initiated will the Minister begin the process of assessing the roads of national significance against Treasury guidelines given that he himself has said that he wants to eliminate low-quality spending and make sure that we have efficiency in capital spending by the Government and that these projects have not been assessed? 
Hon BILL ENGLISH 
: The Government has made commitments to the roads of national significance so they will be going ahead. But I might say to the member that in the transport area there is generally a more thorough approach to these issues than across the rest of the public sector and the focus of the better capital guidelines is particularly on the large-scale social assets in housing education and health where we believe there is scope for very significant improvements in capital decisions. Transport has been regarded as an area with stronger disciplines than most others. 
Dr Russel Norman 
: Given that the roads of national significance projects have not been assessed against these guidelines and the Minister’s statement that the transport sector takes a thorough approach to assessing the benefit-cost ratios in this issue why was it that a number of the roads of national significance projects were approved before the business cases were actually completed? 
Hon BILL ENGLISH 
: Well the member will be aware that in 2008 and again in 2011 the National Party campaigning committed itself to a range of projects that it believes are in the long-term interests of improved infrastructure getting it in place to accommodate the economic growth that New Zealand can achieve and we intend to continue with that. As it happens the benefit-cost ratios on those projects are all pretty good. 
Dr Russel Norman 
: So is the Minister saying that these roads of national significance projects—$14 billion worth of spending—are being supported by the Government because they made political decisions in Opposition that these were good ideas long before the business cases were ever completed and before Treasury’s better business cases for capital proposal guidelines were used to assess them so they are political roads of national significance whether they make any economic sense at all? 
Hon BILL ENGLISH 
: I can tell the member that we were not willing to let the traffic in Auckland park up until the middle of 2010 while we figured out a new set of business case guidelines. So the member is correct. The decisions about those projects were made before July 2010. We believe that they are sound projects. But I would suggest to the member that it would be helpful if he would apply the same rigour of analysis that he applies to roads to rail projects which on the face of it do not look to meet too many if any economic criteria. 
Dr Russel Norman 
: Is it not the truth of the matter that the Government could maintain important public services and still return to a surplus if it was not digging a hole for itself by wasting billions on motorways that do not have a business case and were not tested against the Treasury guidelines and by wasting billions on not fiscally neutral tax cuts and subsidies for polluters? 
Hon BILL ENGLISH 
: The way the transport funding now works is essentially user-pays. That is people who use the roads pay through their petrol tax and their road-user charges. That money goes into the dedicated transport fund. If we build more roads they would have to pay more. If we build fewer roads then conceivably they would pay less. In the long run New Zealand needs this kind of infrastructure. Actually I think there was general agreement across the parties by the mid-2000s that we were under-invested in roads and despite where the Greens would like to go most Kiwis still have cars and most of them are going to insist on using those cars and therefore we probably need roads. 
Schools Class Sizes—Teacher to Pupil Ratios 
7. 
Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) 
 to the  
Minister of Education 
: Does she stand by her statement “Under current settings we could have expected 1000 more teachers to be added by 2016”; if so what proportion of those teachers would have been employed in primary schools? 
Hon HEKIA PARATA (Minister of Education) 
: 
 Yes I stand by that statement. It is important to note that it is a net figure. The schooling system and the placement of teachers is a dynamic of roll growth location and the school that parents choose to send their children to over the next 4 years. Had we continued growing teacher numbers with no corresponding lift in student achievement we could have added about a further 1350 primary school teachers offset by a reduction in secondary school teachers of 320 being about the 1000 teachers we have decided not to grow the current workforce of 50000 teachers by. Instead we are investing in quality teaching because we are focused on raising student achievement. It is worth noting that under the new ratios we still expect that there will be an additional 250 primary school teachers. 
Grant Robertson 
: I raise a point of order Mr Speaker. It was a primary question with two parts. The first part I did get some indication of an answer to. It was a very long answer and I really do not know that we got— 
Mr SPEAKER 
: Order! I think the member should have listened a little more carefully. The Minister said the 1000 figure was a net figure derived from 1320 from memory fewer primary teachers and 320 more secondary teachers which produced a net of 1000. She has answered exactly the question asked. 
Hon Nanaia Mahuta 
: I raise a point of order Mr Speaker. The second part of the question which she did not address at all was what proportion of that 1000 figure was primary teachers— 
Mr SPEAKER 
: Order! Mathematically what the Minister was saying was the lot. You do not need the Speaker to do the maths. 
Hon Nanaia Mahuta 
: Has she read the 2005 study from the State University of New York which states that after 4 years of learning in small classes the likelihood of a student from a low socio-economic background graduating from high school is doubled; and if so did she just choose to ignore this evidence? 
Hon HEKIA PARATA 
: What I have read is that over the past 10 years we have raised teacher numbers by 12.76 percent at the same time— 
Grant Robertson 
: I raise a point of order Mr Speaker. The question asked whether she had read it and she began her answer by saying “What I have read” and that is not enough. It was a very simple question.  
Hon Gerry Brownlee 
: I think if we are going to accept that point of order being made by Grant Robertson we would insist that you go back to the hard Standing Orders 
with regard to the way in which questions can be asked. That question sought a matter of fact and if you look through the Standing Orders it sat outside the strict criteria for the asking of questions. It was an obscure piece of reading that the Minister was asked about. Frankly the Minister answered appropriately by saying what she did know. Clearly the question is about her management of the portfolio not her professional reading. 
Mr SPEAKER 
: No I am not sure it is fair to say what the member’s view was of what the question was about at all. The question was the question. I understand what the member is saying: that some members of the Opposition preface their questions by a whole lot of political opinions before they ask a question at all. When members do that I allow Ministers a lot of licence in answering. But on this occasion I do not think that was the case. To make the matter more clear I invite the Hon Nanaia Mahuta to repeat her question. I just remind Ministers that it is not helpful to start out an answer by saying “What I do know is this” or “What I can tell the member is this” because it usually means they are not going to answer the question. I do not mind them doing that if the question asked has a lot of political opinion prior to the question but I do not think that was the case on this occasion. 
Hon Nanaia Mahuta 
: Has she read the 2005 study from the State University of New York which states that after 4 years of learning in small classes the likelihood of a student from a low socio-economic background graduating from high school is doubled; and if so did she just choose to ignore this evidence? 
Hon HEKIA PARATA 
: No I have not read that selective small academic piece but what I have read is all the evidence which tells me that despite a five-fold increase in teachers student achievement has plateaued or declined. That is why we are investing instead in quality teaching to raise student achievement. 
Hon Nanaia Mahuta 
: How will she explain to the parents of children who end up in larger classes that their learning will not be negatively impacted by less time with their teacher? 
Hon HEKIA PARATA 
: I think it is important to know that although we provide ratios that are the basis for funding formulas of the 13 years that have funding formulas four have gone up seven have gone down and two have remained about the same. Therefore class size in any particular school is determined by the principal who is conscious of the community in which she or he works. 
Hon Nanaia Mahuta 
: Will she support parents whose children end up in larger classes to hire after-school tutors for their children if they are not achieving in larger classes? 
Hon HEKIA PARATA 
: We have made a conscious decision to have one or two extra students in a class in order that we can invest in quality teaching. If we do more of what we have done we will get more of what we have and what we want to do is raise student achievement. 
Welfare Reforms—Role of Work and Income Board 
8. 
Peseta SAM LOTU-IIGA (National—Maungakiekie) 
 to the  
Minister for Social Development 
: What role will the Work and Income Board have in the Government’s recently announced welfare reforms? 
Hon PAULA BENNETT (Minister for Social Development) 
: 
 The Work and Income Board will provide oversight of the design implementation and ongoing delivery of the Government’s investment approach to welfare. We know that its oversight and expertise combined with the right interventions will see fewer people on welfare for long periods. 
Peseta Sam Lotu-Iiga 
: What will be different under the investment approach? 
Hon PAULA BENNETT 
: Currently we do very little to identify those most at risk of long-term welfare dependency let alone provide the right support and interventions to get off welfare and into work. Under the investment approach the board will help identify target groups of beneficiaries at risk of long-term dependency and how best to invest in getting them into work. 
Peseta Sam Lotu-Iiga 
: How will these changes be evaluated and monitored? 
Hon PAULA BENNETT 
: The Work and Income Board will be responsible for monitoring and evaluating the investment approach. Work and Income will trial a number of services and interventions for individual groups. As the evaluations are completed it will build on a knowledge base for the board to draw on. So yes we will be trialling it and evaluating it. That which is successful we will go on and grow. That which is not we will move on to another trial to see how it works best.  
Jacinda Ardern 
: Is the real agenda of this board to establish the forward liability of the welfare system which we already know; to oversee the implementation of her reforms which we already have a Government department for; or is it to implement the Welfare Working Group’s recommendation that the role of Work and Income be transferred to the private sector? 
Hon PAULA BENNETT 
: No. As I have quite rightly pointed out the role of the board will be to assist the department and the Minister in how we actually implement the investment approach. So we are currently working with actuaries on what that long-term liability is how that is broken up into groups and actually to the point where it gets to individuals. That is the role of the board. 
State and Social Housing—Minister’s Statements 
9. 
Hon ANNETTE KING (Labour—Rongotai) 
 to the  
Minister of Housing 
: Does he stand by all his statements on housing? 
Hon MAURICE WILLIAMSON (Minister for Building and Construction) 
 on behalf of the Minister of Housing: Yes as long as they have been taken in context. 
Hon Annette King 
: Does he still stand by his statement that Housing New Zealand Corporation clients receive a good service that is getting better “week after week after week”; and if so how does he account for the fact that people are now waiting 48 minutes before someone answers his 0800 smarter faster phone service—up from 25 minutes just 2 weeks ago according to his own staff? 
Hon MAURICE WILLIAMSON 
: It does become very difficult to answer supplementary questions when the primary question is as broad as whether he stands by all his statements. But I can say— 
Hon Phil Goff 
: You don’t know. You’ve got no answer. 
Hon MAURICE WILLIAMSON 
: Unlike what Phil Goff is calling out I do have an answer. The Minister has made it clear to the Housing New Zealand Corporation that its current performance on the 0800 number is unsatisfactory. He has clearly communicated to it that he expects the service to be dramatically improved. The Housing New Zealand Corporation has responded by making it its top priority to fix.  
Hon Annette King 
: Well in light of that answer how can it be consistent with getting better? 
Hon MAURICE WILLIAMSON 
: I think I just made it clear it is going to be made better because a very clear direction has been given to the Housing New Zealand Corporation to improve the performance of the 0800 number. 
Hon Annette King 
: If the service is getting better “week after week after week” why is Ms Hayes from Dunedin mother of three children under 5 still waiting for her fireplace to be put back in a month after it was ripped out leaving a gaping hole in her lounge and leading to her 6-month-old baby being admitted to hospital with bronchiolitis; and does that sound to him like a better service? 
Hon MAURICE WILLIAMSON 
: I have to say that nothing in all the combinatorics or permutations of answers that I have got refers to Mrs Hayes of Dunedin. 
Hon Annette King 
: Does he think the Minister is on top of his portfolio bearing in mind he forgot that he had promised 100 Gateway houses at Hobsonville in 2009 30 such houses in 2010 and delivered 17 in 2012; forgot that he said that 600 houses in Christchurch that were damaged were in the red zone when they were not; and announced the same funding for social policy housing in five different ways over a 6-day period? 
Hon MAURICE WILLIAMSON 
: No matter how many times the member says something it does not make it right. The Minister of Housing never committed to 100 Gateway houses. There is nothing on record as ever committing to 100. What he did say in a number of interviews at the time was that he believed that up to 100 houses may be built under the scheme.  
Hon Annette King 
: I seek leave to table a letter from Clare Curran member of Parliament from Dunedin South—[ 
Interruption 
]  
Mr SPEAKER 
: Order! A point of order is being heard.  
Hon Annette King 
: —who wrote to me regarding Ms Hayes and sets out that she waited over 30 minutes for Housing New Zealand Corporation to answer her phone call on Friday and was still waiting on Monday for it to take any action for this woman.  
Mr SPEAKER 
: Leave is sought—[ 
Interruption 
] Order! It is a point of order. Leave is sought to table that document. Is there any objection? There is objection. Question No. 10 Brendan Horan. [ 
Interruption 
] Order! I have called Brendan Horan. [ 
Interruption 
] Order! I say to both front benches: please respect for a colleague at the back of the House.  
Transport Napier-Gisborne—Funding for Repair of Rail Network 
10. 
BRENDAN HORAN (NZ First) 
 to the  
Minister of Transport 
: Has he made a decision to fund the repair of the Napier-Gisborne rail network; if not why not? 
Hon GERRY BROWNLEE (Minister of Transport) 
: 
 No; because it is still under active consideration. 
Brendan Horan 
: What then does he have to say to the many families throughout the wider Napier-Gisborne region whose livelihoods hang in the balance and who suffer more hardship as each day of indecision rolls on by?  
Hon GERRY BROWNLEE 
: The question would suggest that transport routes into Gisborne are completely closed; they are not. It is important that there is proper consideration given to this decision so that there can be certainty about freight transport exports from the area in the years ahead.  
Brendan Horan 
: Is he aware that the closure of the rail link will cause the loss of many jobs in the area or is this the Government’s idea of regional development?  
Hon GERRY BROWNLEE 
: I think there is a supposition behind that question that I disagree with.  
Child Pornography—Government Initiatives to Combat 
11. 
Dr JACKIE BLUE (National) 
 to the  
Minister of Internal Affairs 
: What recent progress has the Government made in combating the trade of objectionable images of children? 
Hon CHRIS TREMAIN (Minister of Internal Affairs) 
: 
 The trading of objectionable images of children is an appalling crime that requires an international response. The Department of Internal Affairs censorship compliance unit has been working with international agencies as part of Operation Laminar to target and apprehend people involved in distributing these images. As a result yesterday 55 of the worst offenders were caught worldwide for trading in images of child sexual abuse.  
Dr Jackie Blue 
: What was the role of the Department of Internal Affairs in the operation?  
Hon CHRIS TREMAIN 
: The Department of Internal Affairs censorship compliance unit initiated the operation which was then coordinated by Interpol. The Department of Internal Affairs unit uncovered abuse occurring on social network sites and provided evidence to the 20 countries involved. This small team of highly regarded investigators has proven integral to the worldwide effort in this area. They are to be highly commended for their dedication and commitment to this very difficult area of work.  
Dr Jackie Blue 
: How many children have been protected from harm as a result of this work?  
Hon CHRIS TREMAIN 
: Just from the results of this one operation 12 children have been identified and removed from abusive environments. One of these children was in New Zealand. Many other children have also undoubtedly been protected from harm due to the apprehension of some of the world’s worst offenders. I want to take this opportunity to thank the team at the Department of Internal Affairs for its success in this operation.  
Budget 2012—Police Resourcing 
12. 
KRIS FAAFOI (Labour—Mana) 
 to the  
Minister of Police 
: What is the basis for her assertion that there will be no negative effect on Police front-line services despite no new money for Vote Police in tomorrow’s Budget and given that Police face potential cost increases of $470 million over the next four years in wages alone? 
Hon ANNE TOLLEY (Minister of Police) 
: 
 The Commissioner of Police has assured me that there will be no negative effect on front-line services and I have absolute confidence in him. The figure that the member has used in the primary question is simply conjecture as the police are currently in negotiations with the Police Association.  
Kris Faafoi 
: Given her earlier statement that savings would be made in human resources and accounting and the fact that last year the police spent $28.5 million in those areas where else will she be looking to make over $100 million of savings in the next year?  
Hon ANNE TOLLEY 
: Firstly I repeat that the figures that the member is using are Labour Party figures and Labour is making assumptions about the results of negotiations that have not yet been concluded and that is always very dangerous. However I would also like to point out in answer to the question that actually the police operate under the Policing Act—which is independently—and all operational decisions are made by the commissioner. He has given me his assurance that front-line services will not suffer; in fact they will be enhanced. 
Kris Faafoi 
: Does she agree with the Police Association President Greg O’Connor who in this month’s Police Association magazine wrote: “the Government will end up wearing the blame from unhappy voters once our own equivalent of a production crisis—service reduction—starts to affect them.” 
Hon ANNE TOLLEY 
: No. As I say we are in the middle of industrial negotiations and that is a very political positioning statement. 
Kris Faafoi 
: I seek leave to table Greg O’Connor’s column from the Police Association magazine of this month. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
Kris Faafoi 
: Does the zero Budget for the Police reflect the Prime Minister’s statement last year that our police officers had a little bit of spare time? 
Hon ANNE TOLLEY 
: In fact the Budget for the Police this year and in outgoing years reflects the fact that we are getting much better value from our Public Service spend than the Labour Government managed in 9 years. 
General Debate 
Hon GERRY BROWNLEE (Minister for Canterbury Earthquake Recovery) 
: 
 I move  
That the House take note of miscellaneous business 
. Tomorrow the Hon Bill English will deliver his fourth Budget confirming that the National Government has a strong economic plan in very difficult international circumstances. Every night when New Zealanders turn on their television sets each day when they pick up their newspapers they see what is happening in Europe they see what is happening in the United States they see the G8 countries coming together terribly worried about the situation economically throughout the world. They know that there is a problem out there. They know that they have to have a Government cognisant of that with a plan to insulate New Zealand as much as possible against its worst effects. The only people in the country who do not seem to know that are the people who sit on what the Prime Minister has described as “Planet Labour”—the people in total denial about the circumstances that exist within the world and the opportunities that we must avail ourselves of if we are to get through difficult times. 
We have on the other side of the House three books being put in front of us three prescriptions for the economy from the three Davids: one from David Parker one from David Cunliffe and one from David Shearer. There are three books but no single gospel about what we might follow as a prescription going forward. David Parker wants to agree with Bill English about what to do. David Cunliffe wants to be a right-wing politician but has decided his best chances are to head to the left. And David Shearer simply does not know what to do until Grant Robertson tells him which way he should make a choice. That is no basis for any party to attack a Budget the likes of which Bill English will deliver tomorrow in the best interests of New Zealand.  
So what do we hear from Labour? Firstly on the revenue side it is constantly: “Don’t do that don’t do that don’t do that.” Nothing that is being proposed by this Government to increase revenue in this country has been supported by Labour—not one thing in 3½ years. I challenge anyone on that side to stand up today and lift their finger and say one thing—one thing—it has supported that will increase revenue in this country. There is not any—not one. But instead we get this: “We want to spend more. We want to spend more on some dopey things like Radio New Zealand National. We want to spend more on KiwiRail. We want to spend more on the State services. We want to spend more on legal aid. We want to spend more on absolutely anything.” And any idea that we might put to try to get better value for services better value for the money that the taxpayer spends it is a no to that as well. 
The worst denial from Labour is the denial of the huge economic impact of one of the worst disasters in the world in 2010-11 the Christchurch earthquake. It gives me no pleasure to see Labour members constantly carping about the way things are being done down there and denying the fact that there are hard times difficult times and tough decisions that have to be made. If one were to extrapolate the earthquake event there would be effectively five earthquakes over 3 on the Richter scale every day since 4 September. That is what people are dealing with down there. What they need is some certainty about how recovery is going to be carried out. 
David Parker today stood up in the House and seemed to think that everything was OK because Canterbury has strong economic growth—stronger economic growth than the rest of the country. Well off the base that we are working off there that is great news but it is certainly not an indication that all is well down there for residents in that part of the world. I think that what Labour is doing is denying the huge commitment that everybody down there—in their workplace in their homes in their community groups—has made to recovery. It is good news that we are getting that economic growth—15000 homes down there have been repaired under the Earthquake Commission scheme so far $3.1 billion has been paid out in insurance payments by the Earthquake Commission 80 percent of unsafe buildings have been taken down and now there is a clear march towards a central business district plan that will see that part of the city redeveloped in a way that makes it a unique place in New Zealand if not in the South Pacific. 
Tomorrow the Government will reaffirm its commitments to Christchurch in the Budget and I welcome that. I say to Labour members that they should stop pointing out everything that is annoying to them as people on a planet where they have no idea of what is going on. They should get on the programme and start supporting a bigger recovery for Canterbury.  
DAVID SHEARER (Leader of the Opposition) 
: 
 I actually find objectionable that reference to our members from Canterbury—that they are not pulling their weight and that they are not representing their communities. I can tell you that Clayton Cosgrove Lianne Dalziel Ruth Dyson and Megan Woods have stood up defended their communities defended their electorates and played the right role they should have played.  
I can tell you that I sit in this House and the only thing you can hear from members on that side of the House is excuses about why this Government cannot get any growth going. They have to go back 4 years to Labour which actually left them in a positive—in a surplus. It left you in a surplus—9 years of surplus followed by 3 years of record deficit—and we still get that same excuse trucked out over and over and over. When is that side going to actually stand up and produce a plan for getting this country going? They talk about “Planet Labour”; this is cloud-cuckoo-land National. I can guarantee that “Planet Labour” came from Moonbeam when she was last talking to the Prime Minister.  
Tomorrow we will get a zero Budget. A zero Budget means zero growth. Zero growth means zero hope. And zero hope means 53000 people go to Australia—that is the calculation. That is the calculation you need to be taking account of: 53000 people which is the biggest loss of New Zealand talent in our history. It has never been bigger. This is in complete contrast to what John Key promised in 2008. In 2008 that is not what he promised.  
We have had the worst economic growth in 50 years—50 years. There has been no year since then when we have had worse economic growth. I cannot believe that this Government is standing up and saying to us that it is proud of the fact that it is producing a zero Budget. I know what is going to happen when the Olympics come along very soon. We are going to have John Key watching his television and saying: “Go on New Zealand. Don’t worry about gold; just get ahead of Greece.” That is what the Government is going to be saying. That is where this Government is setting its sights. It is setting its sights at the bottom—at the bottom. This was supposed to be a party of aspiration. It is not about aspiration any more; it is actually just pointing at the bottom.  
We have the worst growth in 50 years we have got 53000 people moving to Australia we have got 50000 more people unemployed and we have got 50000 more people on benefits. That is a successful Government? Give me a break! Those are the numbers that count. Those are the numbers that relate to real people not this vague cloud-cuckoo-land National that Mr English is putting out there. A zero Budget equals zero growth equals zero hope equals 53000 people going off to Australia.  
Why people will want to believe this Government is beyond me. They will not. When I go around the countryside and ask them what they think is going to be in the Budget for them they say: “Well nothing actually.” They are not expecting anything. And they will not be disappointed. They will not be disappointed. That is one great thing about this Budget: people’s hopes are so low that they are never going to be disappointed with this Budget.  
In Budget 2010 what did this Government promise? “In the end this was a Budget about growth a Budget about jobs a Budget about the future of New Zealand”. That was in 2010. In 2011 after the Government failed to meet its forecasts it said: “the Budget is likely to see very strong growth in real wages for New Zealanders … very strong job growth; and a much stronger economic outlook for New Zealand.” It did not make that either. And now in 2012 here we go again. This is what the prediction is: “The Budget documents will show we are likely to experience…reasonably”—aha—“robust levels of growth in 2013-14”. It just keeps getting put out further and further. 
Hon Dr NICK SMITH (National—Nelson) 
: 
 This week the John Key - led Government will set down another chapter in the plan to balance the books in a timely way and to grow the New Zealand economy for a better future for our country. We know now on the day before the Budget that the Leader of the Opposition is so not on top of his game that there was not one idea from Mr Shearer as to how we could grow the economy and not one idea from Mr Shearer as to how we could balance the Budget. I have an interesting challenge for members opposite. It is easy enough to talk about balancing the Budget as one David might say but the other David actually has to say how they would do it.  
Over the adjournment all we have heard from Labour members is how to spend more and how to stop growth. Let me just recite a few of the commentaries from members of the Opposition on their plan to address the economic problems of New Zealand. We had Labour members come out and say why they oppose gas petroleum and mining exploration. They can whinge all they like about jobs in Australia. Why is it that they oppose every initiative by members on this side of the House to grow petroleum to grow minerals?  
We had an even more dopey idea from the Opposition over the adjournment. They wanted to grow the economy by freezing the number of dairy cows—freezing the number of dairy cows. Can some member opposite explain to me how you grow the economy how the most important growing industry that this country has for the earning of export industries is going to grow by capping the number of cows? I asked the library: if you had capped the number of cows over the last decade what would that mean for jobs and exports? It would mean $8 billion less in exports and it would mean 5000 fewer jobs.  
Do you know what else happened over the adjournment? Well submissions were made public on King Salmon’s proposals to grow the aquaculture industry. This Government has got a plan to grow that industry up to be a billion-dollar industry and to employ another 8000 people. Do you know what the Opposition said? On every single application for new marine space the Opposition said: “No no growth.” So Mr Shearer I say to you: where is the growth coming from when every Opposition commentary over the adjournment was to stop aquaculture growth to stop marine development in terms of resources and to stop the growth of the dairy industry?  
What about the different views of the Davids? Mr David Parker says that Labour is going to balance the Budget by 2014-15. What a pity he did not talk to Mr Cunliffe because Mr Cunliffe has said they need to take a stimulus approach and that we should borrow more. What is more I hear every member of the Labour Opposition promising more spending. Well they have been promising more for housing and more for the police. We have got the broadcasting spokesperson promising another $25 million for TVNZ 7. Well I have got a simple message for members opposite. 
Andrew Little 
: $5 billion from that former Minister; it’s hopeless. 
Hon Dr NICK SMITH 
: I say to Mr Little that it is easy to say you are going to grow the economy but you have to walk the talk. It is easy to say you are going to balance the Budget but you have to walk the talk. The difference between members on this side of the House and members opposite is that there is a credible plan to balance the Budget. There is a credible plan to grow the economy.  
Over there on “Planet Labour” they are disconnected. I ask Mr Little how more holidays and more paid parental leave balances the Budget or grows the economy because that is what Mr Little has been talking about over the adjournment. The hope for New Zealand is with the John Key - led Government and is the next chapter in our story of how we balance the Budget in a reasonable time frame how we grow the economy and I just challenge members opposite— 
Mr SPEAKER 
: Order! Before I call the next member I did not want to interrupt the Hon Dr Nick Smith but the level of interjection there was getting quite unreasonable. I have got to say to Andrew Little towards the back of the Chamber there that sustained jabbing and yelling across the House is not becoming of any member in this place. I think the House should behave with a little more dignity—a little more dignity. 
Hon CLAYTON COSGROVE (Labour) 
: 
 I seek leave to table the results of a professional opinion poll survey of 18 May 2012 showing— 
Mr SPEAKER 
: Order! Before the member says what it shows I want to know the source of the document. 
Hon CLAYTON COSGROVE 
: It is Fairfax showing 87 percent of Cantabrians think the Government should do more for them about the earthquake. 
Mr SPEAKER 
: Leave is sought to table that document. Is there any objection? There is objection. 
EUGENIE SAGE (Green) 
: 
 Tena koe Mr Speaker. If we had a Green-led Government we would have a very different Budget from the one we will get tomorrow from National. 
Mr SPEAKER 
: Order! I apologise to the honourable member. Look Eugenie Sage is down at the back of the Chamber. I just cannot hear her if that level of interjection carries on. It is just discourteous. We are better than that—we are better than that. We do not need to behave like a bunch of brats. 
EUGENIE SAGE 
: A Green Budget would be based on smart Green economics. It would recognise that a healthy economy depends upon a healthy environment that we are nothing without the clean air the water the temperate climate and the fertile soils that nature provides us with. A Budget from a Green-led Government would recognise that the word “economy” has its roots in the Greek word “oikonomos”. “Nomos” means manager or steward. A Green Budget would ensure that our oikonomos or our economy was based on an ethic of stewardship or kaitiakitanga for our dwelling place these islands of Aotearoa and our larger dwelling place the planet itself.  
Meridian Energy’s decision to drop its plans to dam the Mokihinui this week was some very good news when we need it when we are looking at a zero Budget. It was a tribute to the thousands of New Zealanders who care about wild nature and about our rivers. They spoke up for the Mokihinui as a dwelling place for threatened species like tuna the long-finned eel and whio the blue duck and as a place to fish kayak walk and tramp. The Mokihinui dam would have drowned more than 200 hectares of conservation land flooding the largest area of public land since the Manapouri scheme. That people had to mobilise to protect the Mokihinui and the public conservation estate given the abundant scientific evidence about its outstanding landscape and ecological and recreational values shows what is wrong with the Government’s economic policy. That is that virtually nothing is off limits to National’s “sell it dig it drill it mine it irrigate it” agenda and its short-term thinking of getting the cash now and letting someone else take care of the environment and take care of our future.  
The Mokihinui is our seventh most important river in terms of its biodiversity values out of over 4700 rivers. It should have been obvious to Meridian Energy from the start that one of our top 10 rivers was no place for a dam particularly when Landcare Research had said that there was no way that you could offset the drowning and flooding of 200 hectares of conservation land through a land exchange.  
The Mokihinui debate should close the door on any more dams on our wild or braided rivers. Such dams are economically and environmentally unsound. We need a clear direction in Meridian Energy’s statement of intent that its energy generation should be sustainable and should recognise and provide for our nationally important rivers such as the Mokihinui. We need a sound environmental strategy as part of our economic policy. We have a network of national parks and reserves; we need a national network of permanently protected rivers. A Green Budget would include the funding and policy direction to secure permanent protection for a representative network of our rivers. A Green Budget would not weaken water conservation orders as this Government has done in Canterbury to expedite irrigation and hydro development.  
National’s Budget is likely to involve a further assault on our rivers through subsidies for irrigation and intensive agriculture. Emboldened by the prospect of the revenue generated from the sale of our assets the Hawke’s Bay Regional Council is now contemplating a $250 million mega-impact mega-dam proposal and that is because the Government is handing out subsidies for intensive agriculture. The previous speaker the Hon Dr Nick Smith fails to recognise that if you subsidise intensive agriculture if you do not cap cow numbers in sensitive catchments like the Waituna Lagoon and Lake Ellesmere you will be throwing good money after bad by trying to clean up those catchments when you are not dealing with the source of the problem.  
A Green Budget would put a fair charge on the commercial use of water in order to generate revenue to invest in more sustainable land and water management to restore wetlands and to protect riparian areas—to fence them off. And we would invest more in environmental research. A fair charge for the commercial use of water would ensure that intensive dairying does not freeload on the environment as it currently does. It would have to take those environmental impacts into account.  
We saw the landmark recommendations of the Land and Water Forum last week—proposals for a suite of environmental standards to set clear bottom lines. We will be looking at the Budget tomorrow to see whether there is investment— 
JACQUI DEAN (National—Waitaki) 
: 
 The good news for the previous speaker Eugenie Sage is that under a National Government we can have both. We can have sustainable development as well as look after our environment. But that is not what I want to talk about today because I have a far more important message for the House and that is that this National Government is proud—proud—of its record on tackling crime. We have a Minister who backs the police. We have a Minister who backs corrections. This National Government is proud that we put victims as the focus of the rights of the justice system.  
What were we left with by the previous Labour Government? I will tell you what we were left with. We were left with a criminal justice system in utter disarray. It lacked accountability and lacked any focus at all on the victims of crime. We have put that right. What were we left with by the previous Labour Government? A critical shortage of prison beds. What were we left with by the previous Labour Government? Gangs and organised crime that were growing in strength and the Government of the day was losing the fight against P. We had a Government of the day that released violent criminals on parole and the legal aid budget was completely blowing out. Violent crime was up 47 percent under the stewardship of the previous Government in the previous decade. Do you know that under the term of the previous Government only one law and order policy was released and that was—guess what—to form a committee?  
Well I can tell you that things are different under this National Government. In the first 4 years of this National Government we have clamped down on gangs. We have clamped down on organised crime and we are winning the war against methamphetamine. We have toughened bail sentences and we have abolished parole for the worst violent criminals which by the way the Labour Party has vowed to repeal. We have put more police on the streets for New Zealanders and we have given those police better tools to do their work.  
You know under this Government reported crime is down in the past 2 years and reported crime is at the lowest level since 1982. We have seized more than $30 million worth of P in 2012 and $40 million of criminal proceeds and that is just to date. That brings me to this year’s Budget and the huge goals that we have set ourselves because we believe that New Zealanders deserve to feel safe in their homes and their communities. 
 I believe that this Government puts people first. So that is why I am so proud of the announcements that our Minister of Police made for the Budget. Sixty-five million dollars will be prioritised in operating expenditure over the next 4 years. What will that do? We know that two-thirds of prisoners have addiction problems. We know that up to 90 percent cannot read or cannot write well. We think we should do something about that. Therefore we are going to increase investment in alcohol and drug treatment. We are going to increase investment in education and skills training. We want to reduce the likelihood of reoffending and increase the likelihood of successful reintegration into New Zealand society.  
This Government understands that addressing the drivers of crime and that involving whanau and involving communities in rehabilitation and reintegration is the way forward for New Zealanders. If we can help prisoners make a positive contribution to society on their release then we will have fewer crimes we will have fewer victims and we will have safer communities. Thank you. 
Hon DAVID PARKER (Labour) 
: 
 I am going later in this contribution to respond to some of Dr Nick Smith’s comments but before then I think it is salutary to reflect on the fact that this Government keeps making promises that its management of the economy will deliver—it will deliver growth jobs and higher incomes—but it is not working and it has not worked. The Government keeps rolling out these same promises. It is time for New Zealand to stop talking about what National says it is going to do and start talking about what National is actually doing and what it is not achieving.  
Tomorrow it is going to roll out the same promises. David Shearer has already read out some of the repetitive promises that have never been kept by the Prime Minister John Key. I am going to make reference to some of the similar statements by the Minister of Finance because there are so many of them. They are legion.  
In the Budget last year the Minister of Finance promised “growth is forecast to reach 4% next year and the economy is forecast to create 170000 new jobs over the next four years.” Was that achieved? No that was not achieved. And that promise was made after the two major earthquakes in Christchurch and 3 years after the global financial crisis. Then he says in the pre-election fiscal update—of course this is in advance of the election; National was trying to gild the lily there—“At present export prices are high business confidence remains firm and the Rugby World Cup has provided some temporary support for consumption and for services exports.” The pre-election fiscal update had some promises as to growth in the economy and the debt track. Those forecasts did they come true? No they did not either.  
Then on page 2 of the Budget Executive Summary last year he had the heading “Achieving Higher and More Sustainable Growth”. I cannot believe the gall of that statement. After already 3 years’ oversight of poor economic growth National said we were achieving high and more sustainable growth. Instead we have had growth that turns out to be less than forecast. Over the period of National’s Government it has been the worst of the last 50 years. Then in the Budget speech he said that the economy has “in prospect the strongest growth for a decade”—another promise that is not being kept. Then he said that the previous year’s Budget supported jobs and economic growth. Well if that is right why did we not get jobs and economic growth instead of people going to Australia for jobs and insufficient economic growth here?  
Then he said: “New Zealand’s growth rate is accelerating”. But did it? No it did not. Then he said it was “expected to accelerate in the second half of 2011 and through 2012”. Has it? No. Then he said the underlying growth was anticipated alongside Christchurch’s rebuilding—i.e. there would be growth not just in Christchurch but elsewhere. Has there been? No. Then he says the “recovery in activity is now expected from mid-2011”—explaining further delays—“with economic growth rising to 1.8% in the year March 2012”. Did it? No. Then he said it would peak at 4 percent in the year to March 2013. Will it? No.  
This Government’s promises on growth are not worth the paper they are written on. The problem is that National’s big economic initiatives have been the Job Summit which produced a cycleway and mining in national parks which it abandoned. Then it would not agree on any step to close the wage gap with Australia but had some promise that it would cause a step change in the economy which has never happened and then smarting because of criticisms that it had no plan to grow the economy it came up with this ridiculous idea of selling off the State-owned enterprises which increases the Government deficit by $100 million per annum. As we have often said changing who owns what already exists does nothing to grow the economy. You do not get any more exports.  
The economy is not growing. Our export sector earns too little because we are narrow based. We have not got enough savings. Tax incentives go to the wrong place. Tough decisions are needed on all of these issues and National will not make any of them. So even if National limps back to surplus in 2014-15—and I think it will; we would too—it will not cure our fundamental problems because it has not rebalanced the economy. We need growth in jobs in exports and in GDP per capita and on these measures National has failed. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Tena koe Mr Speaker kia ora tatau katoa. I te tuatahi katahi au ka hoki mai i te wa kainga i te ekenga o Te Poukai o te Kingitanga ki runga o Patea no reira ka mihi ki a koe ki Te Kahui Ariki Nanaia ko koe tera te kanohi o Te Kingitanga me mihi ra ki a koe na runga i tera ahuatanga te hononga o Te Arawa ki a Tainui. 
Te wiki kua hipa ake me ki i puta etahi ki te whai ao ki te ao marama. Kai te korero au mo te ahuatanga o te hunga i noho nei i te kore mahi i te kore moni ara ko nga kaimahi o roto i nga whare patu miti o roto o AFFCO. Ko te hunga e taupatupatu nei e tohe nei ki a Talley’s kia whiwhi i etahi moni a ka mutu kia hoki ki te mahi. Kai te korero au mo te hunga e noho nei i roto i te kore mahi mo nga ra 85 pea. Kai te korero au mo te kotahi mano tangata i panaia i puta ranei na runga i te tohe ki a Talley’s mai me ki i Te Tai Tokerau ki roto o Moerewa ki roto o Manawatu ki Horotiu ki Waikato ki roto o Ngati Kahungunu ki te Wairoa ki roto i a au ano ki roto o Tapuika ki Te Puke. Ko ratou katoa e noho nei i te kore mahi te kore moni. Me te aroha ki a ratau. 
I te wiki kua hipa i haere atu au ki a ratau ki te korero ki te tuku i etahi paku awhina ka mutu i te Rahoroi kua hipa ake i tae atu etahi o matau ko Brendan Horan tetahi ko Andrew Little tetahi i haere ki te hikoi i nga tiriti o Te Puke ki te whakairi i te haki me ki ki te tautoko i a ratau. Ko te aroha ki a ratau na te kore moni mo te rua marama toru marama. Pehea e taea ai e tatau te marama ki te uauatanga o te noho kore moni kore taea te whangai i nga tamariki te hoko pata me te paraoa era ahuatanga katoa. Me te ki ano hoki no na tata nei i tae atu taku kaimahi ki roto o Te Puke. I rongo ia i nga korero o te uauatanga o te noho o te hunga e noho mai ra ki reira. Ara kua panaia etahi i o ratou whare me ki kua puta te korero a etahi o nga kamupene hiko me ki ka wetohia te hiko ki tena whare ki tena whare. No reira ko ratau te hunga i rongo nei i te uauatanga ka mutu ko te rangirua ko te awangawanga o te ngakau. Me te ki ano hoki ehara i te mea e tino ngawari mai ai nga tari o te Kawanatanga ki etahi o ratau. 
Ko Work and Income tetahi kare i tino aro mai ki o ratau paku hiahia ki te awhina engari waimaria i te mea i reira me ki te Minita mo nga Take Maori a Pita Sharples. Ko ia tera i tuku i tetahi reta ki nga kaikorero o nga iwi katoa o te motu me te ki atu a kia whakakotahi nei ratau i a ratau ano. E ai ki taku e mohio nei i tono ia i nga reta katoa ki nga kaikorero ka mutu i tono ia i etahi o nga kaimahi o Te Puni Kokiri ki te awhina me ki ki te noho hei kaitakawaenga i waenganui i nga tari me te hunga i rongo nei i te uauatanga me te uniana. E ai ki nga korero 75 paiheneti o te hunga i roto i nga wahi nei he Maori no reira e tika ana kia whakakotahi nei a Maori kia taea e ratau te awhina i taua hunga. Ko taku mihi me ki ki nga toa ki nga whanau ki nga iwi ki nga koporeihana i tuku koha ki te awhina i tera hunga huri noa te motu. I nga taone pakupaku i tuku etahi i te kai i etahi atu i te moni hei awhina i a ratau i roto i nga uauatanga o te ra. 
Me mihi ano hoki me ki ki nga kaikorero o nga iwi nga mea penei i a Ken Mair o roto o Whanganui a Sonny Tau o roto o Ngapuhi Ngahiwi Tomoana o roto o Ngati Kahungunu tae atu ki a Mark Solomon ki a Tuku Morgan. Ko ratau te hunga i kokiri i te take engari ko te mihi nui whakaharahara ki a Ken Mair te tangata pakupaku nei o roto o Whanganui. Ahakoa tona pakupaku katahi te tangata mo te tohe e me te ki ano hoki i eke panuku i eke Tangaroa. Ka mutu ko ia te mea i tino aki i te uniana kia aro mai ki nga hiahia o te hunga kore mahi. No reira ka nui te mihi ki a ratau. 
Katahi ano tatau ka kite i te whakakorikori o Te Ao Maori i a ia ano kia panapana i etahi kamupene penei i tenei ki te ki atu anei tatau anei Te Ao Maori kia tupato kaua e haere poka noa kaua e mahi i roto i nga ahautanga pohehe nei. No reira ko taku mihi he mihi ki te iwi Maori tonu i kawe nei i tenei kaupapa ka mutu Whanau Ora ka puta te korero apopo kia eke eke panuku eke Tangaroa haramai te toki o haumi e hui e taiki e.  
[ 
Thank you Mr Speaker and greetings to us all. In the first instance I have just returned from the Maori King Movement’s Te Poukai celebration back home at Patea and as a consequence acknowledge you Nanaia as a representative of the King Movement. Under that circumstance it is fitting that I recognise Te Arawa’s connection to Tainui. 
In the week just past let us say that some people have seen the light of day and enlightenment. I am referring of course to the situation where some people remain jobless moneyless namely workers in AFFCO freezing works the ones in dispute with Talley’s over pay conditions and a resolution to return to work eventually. I am talking about those who have been without work for 85 days perhaps the 1000 sacked or those who went out in support over the Talley’s dispute from Moerewa in the North to Manawatu Horotiu in the Waikato among Ngati Kahungunu at Wairoa and in my very own region among Tapuika at Te Puke shall we say. All of them remain out of work and out of pocket. I pity them. 
Last week I visited and spoke to them and offered a little then last Saturday some of us—Brendan Horan was one as well as Andrew Little—walked the streets in Te Puke to hold up the flag shall we say and to support them. Being without money for 3 or 4 months is a sad situation. How can we comprehend the difficulty of being without money the inability to feed the children to buy butter bread and all those things? I should add as well that a staff member of mine was in Te Puke recently as well and heard about the difficulties experienced by those living there. Some have been evicted from their homes. Let us say some electricity companies have put out the word that individual homes will have their power supply cut off. So they are the ones in great difficulty and at the end of it all they are bewildered and stressed out. I should add that it does not help if some Government department bureaucrats are not so forthcoming in their support as well. 
Work and Income showed no concern at all about their needs for a little help but fortunately the Minister of Maori Affairs the Hon Dr Pita Sharples—how should I put it—was there. He wrote to the spokesperson of every tribe in the nation asking them to pull themselves together and to work as a collective shall I say. To my knowledge he sent all spokespersons a letter and furthermore directed Te Puni Kokiri to send staff to help work with families and to liaise with departments with those in difficulties and even the union. According to accounts 75 percent of those in these places are Maori. So it is apt that Maoridom should come together collectively so that they can help those in dire need. Let us say I really acknowledge the bold—the families the tribes the incorporations—who gifted to the cause to help those in need throughout the nation. In the smaller towns some gave food while others gave money to help them through the difficulties of the day. 
I acknowledge the tribal spokespersons as well like these ones: Ken Mair of Whanganui Sonny Tau of Ngapuhi Ngahiwi Tomoana of Ngati Kahungunu as well as Mark Solomon and Tuku Morgan. They were the ones who brokered the matter but big ups to the wonderful Ken Mair this little fellow from within Whanganui. He might be small in stature but what a negotiator in disputes. Let us say this: there will always be a great outcome when he is involved. Eventually he was the one who really urged the union to heed the needs of the unemployed. So I have great admiration for them. 
It is the first time we have witnessed Maoridom prompt itself as a collective and marshal companies like these together and say to them: “Here we are here is Maoridom be cautious don’t cut around and create uncertainty.” So my acknowledgment is really to the Maori people who took up this matter themselves. The statement eventually will be made tomorrow about Whanau Ora which is this: we have surmounted the dangers of the ocean the realm of Tangaroa we have arrived. Take up the adze gather together let it be done. 
] 
Rt Hon WINSTON PETERS (Leader—NZ First) 
: 
 We have heard about the saga at AFFCO which begs the question: when the National Government seeks to lurch the industrial relations law of this country to the right will the Maori Party support it or not? It is one thing to have fine sentiments but the real nub of the matter is whether when that law comes before this House the Maori Party will be for it or not. 
You see Mr Key came to power offering the country a brighter future. He kept on saying that he was aspirational that his glass was always half full. He made promise after promise after promise and barely one has he kept. Today it was very insightful that he would not answer the question as to what the current growth rate is. He knows that it is 1.1 percent. It is not the 4 percent that was promised but he tried to evade even that plain fact. A bit like the way that Columbus discovered America he has now rediscovered the PIGS—Portugal Italy Greece and Spain—and that is the reason that the economy is going bad in New Zealand. 
This is amazing. This was all known back in 2008 because the real facts can be found—in terms of who is to blame—in a very little tight article on today’s front page of the  
Dominion Post 
. There is a man 73 years of age a Hamilton retiree who said this: “It must never be forgotten that the prime cause of current money problems was an international money crisis originating overseas prior to 2008.” That is a money crisis that the Prime Minister of this country should know lots about because his company his business Merrill Lynch was at the centre of it. It and others brought the Western economy to its very knees and he has the audacity to walk into this House and blame the PIGS and not the companies for which he used to work. And that is the way he has run this country ever since. Every forecast has been wrong but his style is to parcel up a political derivative and shove it down the road for some other person to pick up the responsibility and the guilt. 
The only person keeping this country going right now is a woman called Julia Gillard. She is keeping this country going at the moment. There are 52000 people a year heading off a massive number every day. What are they saying? That it was 53462 in 1 year. That is 146 people a day exiting this country—gone for ever. 
 We are within 24 hours of Budget day and we are a country that needs to have a Budget that understands some fundamental things. We are an export-dependent nation. The Budget should reflect that. There should be assistance for exporters. We are an export-dependent nation. We cannot go on with an inflated dollar that the IMF has said is up to 20 percent inflated.  
Brendan Horan 
: Who can live like that? 
Rt Hon WINSTON PETERS 
: Who can live like that? Well no one can and that is why so many farmers despite high commodity prices are in financial trouble. We need a Budget that understands that jobs come from exports and research and development and some smart new products that the hands-off boys over there will never try like incentives for new market discovery— 
Hon Anne Tolley 
: Spend spend spend. 
Rt Hon WINSTON PETERS 
: —incentives for research and development and incentives to go offshore and bring money back to “Family New Zealand”. And as for the Minister of Police talking about what she is going to do well with the greatest of respect the first thing she is doing is cutting front-line police. Apparently having fewer police on the front line means it will be more effective. 
Hon Anne Tolley 
: Why don’t you read? 
Rt Hon WINSTON PETERS 
: I can read unlike that member who has got no academic qualifications whatsoever—none whatsoever. That is how she got the job of Minister of Education. The most unqualified person became the Minister of Education in a National Government. Unbelievable! 
We want poverty addressed and we do not want any more stupid Rogernomics “Ruthanomics” and hands off when it comes to running this economy. Look the National Government is out of ideas it is out of excuses it is out of luck and sure enough it is going to be soon out of office. New Zealand will have a brighter future; that is a fact. But that is going to happen only when National and its cling-ons on the starboard bow are gone from this House. Here are the facts. Those members stand in the House every day saying: “Trust us. We know how to run the economy.” Debt is up by 700 percent right? Debt is now $50 billion - plus and rising to what $75 billion. But there they are. When anybody asks them what sort of economic management is that— 
JAMI-LEE ROSS (National—Botany) 
: 
 If Winston Peters thinks that by attacking this Government on law and order he is on to a winner well he is absolutely wrong because the police force in this country is in the best shape it has ever been with 600 police officers put on to the front line in the past 3 years. There are 300 in Counties-Manukau alone an area of significant under-investment by the last Labour Government. As an MP from the Counties-Manukau area I want to stand up wave our flag and say that we say thank you to the National Government for putting more police on the street in Counties-Manukau.  
Tomorrow we will see the fourth Budget from the Hon Bill English the Minister of Finance for the National-led Government. I want to say that it is a bit rich for Labour members to be talking about Greece when they talk about our Budget because the only people who know about more debt more taxing and more spending are Labour members. Labour does not believe in getting back to surplus. It does not believe in keeping debt below 30 percent of GDP. Those are core goals that National campaigned on core goals that we believe in and the goals that the people of New Zealand elected us to deliver on. So when the Labour members want to talk about Greece they should look at their own policies because Labour’s economic policy would fit in very well with Europe’s. We would be drowning in a mountain of debt if we had a Labour Government right now.  
I want to talk about jobs because at the heart of any Budget should be jobs. Labour members do not want to hear it but 60000 jobs have been created in the past 2 years. There is growth in New Zealand: the economy has grown in nine out of the past 10 quarters. Those are results you cannot complain about. We have had an economic crisis worldwide. We have got countries that are going down the drain on the other side of the world and New Zealand is doing well. New Zealand is doing well with more jobs coming into place. We are doing well seeing growth in the economy in nine of the past 10 quarters. The labour force is at the second-highest level it has ever been in this country and in the past quarter 18000 more New Zealanders showed confidence in the economy and entered the labour force.  
But let us talk about “Planet Labour” and its planet of no jobs. Labour does not support jobs. We know Labour members do not support jobs because they have opposed every job creation opportunity that this country has seen recently. Labour members do not support the convention centre. They do not support 1000 jobs being created during its construction. They do not support the 800 New Zealanders who would have a job if that convention centre went ahead—800 people working every year; 800 people off the welfare queue and into work. They oppose jobs coming to New Zealand from Australia. They have had their finance spokesperson stand up and say in the media that they do not want jobs coming here from Australia. They insulted people who work in manufacturing jobs. They insulted the 23000 businesses in New Zealand that are manufacturing businesses and they told those people that their jobs were not good enough. When jobs are coming to this country we should be celebrating that. We should be celebrating the employers and the businesses that are showing confidence in New Zealand by bringing their jobs here but all we got from the other side was more saying no more saying they do not want jobs and more of “Planet Labour” opposing jobs for New Zealanders.  
The Labour Party also opposed the 90-day trial for workers. Why did the Labour members oppose that? Because their union mates did not like it. But what do we know from that? We know that 13000 people are saying thank you for that policy because they have jobs based on employers being able to employ them after that policy was implemented. The Labour members are also opposing our starting-out wages proposal. The starting-out wage will see more young New Zealanders be able to enter the workforce and more young New Zealanders have the benefit of work and have the lifestyle change that working actually brings.  
National’s plan is for more jobs. National’s plan is for a welfare system that is focused on work. National’s plan is for an education system that is focused on better-quality teaching so more young New Zealanders are better equipped to get jobs in the future. That is our plan; we are standing by it. We do not support the proposals that are being put forward by members on the other side because they are anti-jobs they are for more taxing and more spending and that is absolutely wrong. 
Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) 
: 
 New Zealanders will not be waiting for National’s fourth Budget tomorrow. They expect a zero Budget which means National has a zero plan which means there has been zero growth in jobs because unemployment has gone up. That means zero outcomes for hard-working New Zealanders and that is what they are expecting tomorrow—no surprises on that front.  
But if we translate that zero Budget that zero plan and that zero outcome for Kiwis in education what do we see? We see Treasury-led policy in one of the most important portfolios that that Government is presiding over: $43 million in savings under National by moving towards larger class sizes and capping teachers at the current levels. If that is National’s solution to grow the economy and the future of our citizens we will not have a bit of it. Parents all over the country are worried about their children starting school and going into larger class sizes.  
The Minister of Education confirmed time after time in questions in the House that her ambition in education is driven by Treasury not by evidence-based policy that is proven to show educational outcomes for all learners and in particular our most vulnerable learners. That is the type of education policy coming out of National. We should not confuse her ambition with her ability to deliver to all Kiwi kids who deserve the very best in education. Her ambition is thwarted by her ability to deliver on that front and we will challenge her time and time again in this House. Why? Because she said very clearly that trade-offs are being made. Trade-offs are being made between class sizes and teacher quality.  
Parents who are listening to that Minister answering questions on those issues are concerned. Members on this side of the House are receiving emails in fact on that very matter. We believe that it should not be a question of trade-offs in education but a combination of measures that will improve learning opportunities for all our children and—yes indeed—our most vulnerable and challenged and disadvantaged learners across this country. We do not want any child to miss out and we do not want any child to be left behind. 
But do not take my word for it. I have got a newsletter that was produced just on Monday from Willowbank School. You know this is a big thing for a school to put out information in its newsletter informing its parents about the impact of National’s changes. The Minister in the House today said that an extra one or two kids in a class will not make a fundamental difference but here is what Willowbank School said to its parents: “Class sizes for year 2 and 3 will increase increasing the number of children for reading writing and mathematics groups or increasing the actual number of groups a teacher would need to see in a day. This decreases the amount of time a teacher is able to spend with individual children particularly if there are more children in the class requiring extra learning or behavioural support.” 
The early development of literacy and mathematics is crucial if curriculum expectations are to be achieved. The Minister’s ambitions should not be confused with her ability to deliver so that every child is able to achieve in education. All our young children deserve the very best start in school. Establishing a good relationship with their teacher and a teacher who has enough time for one-on-one engagement really does matter. Labour backs all our children getting the best start at school; National does not. It has got a zero plan with zero outcomes for children in education which means many will miss out. Many will be left behind.  
But again do not take my word for it. I have got an email from a person in Whangarei a principal and he said: “It’s being blatantly dishonest to the public to infer that a few extra kids in a class won’t make much difference. You know as well as I do that your kids will hurt. It’s the very groups that you say you care about those needing extra help those falling behind including many of our own children who you say you are fighting for.” That is from someone in Whangarei Minister. You have that letter.  
There is also one from someone in Westport down in the south. They are saying: “We too fear for the future provision of our most vulnerable students in relation to the most recent education policy announcement by that Minister.” But again do not take my word for it listen to those people who are experts in the— 
MIKE SABIN (National—Northland) 
: 
 We have heard a few stones thrown around the glasshouse today: no plan no plan. It is funny because the three Davids do not seem to put one forward themselves—but no great surprise to the New Zealand public there. This National Government went to the electorate in 2011 with a programme to put this economy on a sound footing. National was re-elected because the New Zealand taxpayers the New Zealand public trust us to do the best by them to achieve just that.  
This Budget will reflect four of our key priorities: responsibly managing the Government’s finances; building a more productive and competitive economy; delivering better public services; and of course rebuilding and supporting our friends family and community in Christchurch.  
But a key plank of this Government’s priorities has been welfare reform—welfare reform—because welfare in this country has become a welfare trap and there has been a disgraceful programme by the previous Labour Government that has seen us in a position where some 350000 people are trapped in that predicament. So what does it mean? It means that the New Zealand taxpayer has to find $7.6 billion a year—$22 million a day—for those 351000 people 13 percent of the working population of New Zealand. And 220000 children are living in homes that are benefit-dependent. We can and must and will do better.  
I am internalising a very complicated situation in my head. I am doing this because Labour Party members and some of their colleagues across the floor oppose every change that this Government tries to put in place. They oppose everything that we are trying to do to ensure that we have more to go around to achieve what this country is capable of. They say that there are no jobs. Yet we have heard the Prime Minister tell us today that there are more people in employment now than ever before in the history of this country. Labour members will ask where the jobs are. Yet they will oppose every effort—every single effort—by this Government to grow our economy and the platform from which jobs are created. They will oppose every single effort from this Government. They oppose welfare reform but they also oppose every effort from us to curb spending so that we can support our most vulnerable to get back on their feet.  
This is the same Labour Party that squandered the good years. Let us have a look at that in some detail. The number of people on the sickness benefit under Labour increased by 51 percent and the number on the invalids benefit increased by some 47 percent. This was a huge migration from the unemployment benefit—figures that the Labour members trumpet—because so many were moving on to the sickness benefit and the invalids benefit. We also saw an 8.5 percent rise in the number of people on the domestic purposes benefit. So I guess if Labour members are opposing welfare reform on that basis then we are pretty much on the right track. That is the conclusion that I arrive at.  
This Government is committed to welfare reform. That is what Kiwis want that is what Kiwis expect and that is what Kiwis need. This Budget will see around $287.5 million over the next 4 years for investing in and improving our welfare system and for supporting New Zealanders to get ahead. There will be $80 million over 4 years going into childhood education; $55.1 million over 4 years towards 155 Work and Income staff who will be dedicated to supporting job seekers; and very important $148 million - plus over 4 years to support the most vulnerable youth who are at this stage on a collision course with an adult benefit.  
What will this all mean? This will mean that there will be more people in work and fewer people on welfare. This will mean that over the next 4 years you will see $1 billion worth of savings to the New Zealand taxpayer. This will mean that there are more reasons for Kiwis to see that this National-led Government is delivering for them and for New Zealand. 
DENISE ROCHE (Green) 
: 
 I am predicting that tomorrow’s Budget will deliver much hardship for many sectors of our community. In the last 3½ years over 5000 jobs have gone from the Public Service. Jobs have been cut and jobs have simply not been filled. The Government may call this efficiency but what it is is a massive reduction in the services that New Zealanders expect and we can list them: cuts to biosecurity services which put our primary production exports industry at risk; cuts to embassies which put our international reputation at risk; and replacing real people with call centres at Housing New Zealand Corporation and tax centres. What happens when those jobs are cut? We know that our Public Service staff are working harder than ever before. Last year a survey of women in the Public Service showed that around 2.5 million hours of extra work were completed by those women. It was not paid for. That amounts to $54.5 million worth or 1360 full-time jobs that were all gifted for free to the State.  
Tomorrow’s Budget is likely to result in more job cuts. This is a false economy. Cutting jobs means a reduction in taxes. It means less spent in the economy too. In last year’s Budget we also saw a reduction in the amount of money that was allocated to the community and voluntary sector. It dropped by around $11 million. How this reduction plays out for the social service providers is that they get squeezed to supply more for less. The not-for-profit sector frequently picks up the slack when the Government pulls back from providing those services directly. We already know that community organisations deliver amazing value. For every dollar they get from the Government they provide at least $5 more. At the Christian Council of Social Services conference last month we heard from the Minister of Finance that the Government does not really care how those services are provided as long as they are cheap. We also heard from the deputy chief executive of the family and community services group that it wants to deal with big players—cheap is good and large-scale providers are better. So how do you keep it cheap? You keep the wages low. On average workers in the community and voluntary sector earn around 15 percent less than those in the general job market earn. We recently heard that there is a discrepancy between what caregivers in the public sector earn compared with those in the private sector which amounts to discrimination—but hey it is cheap. Cheap is not good enough. It is not good for the economy it is not good for public services it is not good for communities and it is certainly not good for families. 
 Today over 60 organisations have formed a broad coalition to launch the Living Wage campaign. These organisations are at the coalface of the impact of the Government’s austerity moves and they are calling for a decent standard of living for all workers. Forty hours a week on the minimum wage brings in $540 per week before tax and workers earning this are usually subsidised by the Government with Working for Families. That means employers are being subsidised to keep wages low. But even then thousands of families are struggling to cover the basics like housing food electricity transport and school costs and many are working several low-paid jobs up to 70 hours a week to make ends meet. The difference between the minimum wage and a living wage is that one is really stressful and people are just getting by while the other is about getting by with dignity. It is about the ability to provide for your children to provide for their children and to provide for their families to contribute to our communities. This Government and our Government agencies will be called upon to pay a living wage and not just for those who are directly employed either but for those who are contracted to provide services such as cleaners security guards caregivers and the community and voluntary sector. Lifting pay rates in New Zealand for our lowest paid workers will reduce inequality and poverty and we need to do that or face the fact that we are condemning New Zealand to becoming a society of the haves and have-nots. 
The debate having concluded the motion lapsed. 
Crown Entities Reform Bill 
In Committee 
Part 1 New Zealand Public Health and Disability Act 2000  
CHRIS AUCHINVOLE (National) 
: 
 It is a pleasure to stand again and speak on the Crown Entities Reform Bill which is an omnibus bill that seeks to responsibly resolve a number of inefficiencies and missed opportunities within the State sector. The bill is a responsible reply to the very real concern of too much government doing too little for the people. I think we said in the second reading yesterday that this is a case of not so much reducing the Public Service but in fact increasing the service to the public from Government departments. 
Government is at its best when it can move effectively and efficiently. There are some things that only government can sensibly do but not when its body is struggling to stand from carrying the weight of duplicated overheads small siloed organisations and that sort of thing. So the structural changes planned in this bill will result in better services. The changes have not been made lightly. The benefits of this reduction of State sector fragmentation have been proven through the consultation process. I think we will find very quickly that—like other agencies that have had amalgamations and been brought together—a synergy develops that enhances the agencies’ activity and enthuses their staff and executives. 
The Crown Entities Reform Bill was referred to the Government Administration Committee on 4 October last year under the previous Government. The committee received and considered 43 submissions as well as receiving advice from the State Services Commission the Ministry of Health and the Department of Internal Affairs. Throughout the process the focus was on ensuring the future viability of the services and creating a better State sector. I think this is the important aspect of this particular bill. This bill I think accomplishes these goals.  
I acknowledge there are differences of opinion on the timing of one section of the bill but that is on the timing. From my understanding through the select committee work the concern was not a matter of resistance to that section but just a matter of timing. I am sure we can debate our way through that and come to a sensible sort of arrangement.  
The creation of a new Health Promotion Agency to enhance the functions of the Alcohol Advisory Council of New Zealand (ALAC) the Health Sponsorship Council and related functions of the Ministry of Health is a much-needed development. It will be applauded by the sector. It will strengthen the focus on health promotion activity by transferring existing health promotion activity in the Ministry of Health to a focused health promotion entity. That will create more opportunities for innovative and targeted approaches to those people and communities with multiple health issues. This is not a faceless organisation; it is one with true focus.  
The bill will bring forward the disestablishment of the Mental Health Commission which was structured only for a certain time.  
Grant Robertson 
: That is in Part 2. Are you in Part 1? 
CHRIS AUCHINVOLE 
: Would you like me to restrict my comments to Part 1? 
The CHAIRPERSON (H V Ross Robertson) 
: I certainly would Mr Auchinvole. That is what the debate is about.  
CHRIS AUCHINVOLE 
: I am very happy to do that because that gives us more opportunity to give emphasis to the aspects of this bill that are so important to us. The Health Promotion Agency for instance will be looking after the activities of the Alcohol Advisory Council. One of the concerns about that was that the money that is currently collected for the advisory council would be distributed over a wider front. In fact that is not the case. It is ringed it is fenced and it will be dedicated to alcohol educational work.  
Grant Robertson 
: Ring-fenced or ring and fenced? 
CHRIS AUCHINVOLE 
: Pardon me? It’s a what? What did I say? 
Grant Robertson 
: Is it ring-fenced or ring and fence? 
Hon Member 
: That sounds like torture to me. 
CHRIS AUCHINVOLE 
: No no. The change on the part of the Government’s programme is to ensure that the State sector delivers the front-line services that New Zealanders expect in the context of a challenging economic climate.  
Do you know I am always somewhat surprised to come and hear the debates following the work in the select committee because in reality—and I think it is important that the public of New Zealand knows this—there is a lot of harmony in select committees in terms of seeking the best from the bill and that was certainly the case with this one. It certainly received a lot of support from the people who made submissions. 
While we are dealing with Part 1 let us just look at the key points associated with the changes. Part 1 will reduce the current back-office governance duplication incurred by separate entities. ALAC’s independent evidence-based advisory function is retained— 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 It is my pleasure to relieve Mr Auchinvole from that arduous task of trying to address Part 1 of the Crown Entities Reform Bill. I would like to speak to Part 1. This is the part that the Labour Opposition is most supportive of and in fact I anticipate that we will support this part of the bill. We cannot say the same for other parts but we will support this part of the bill. It is the part that establishes the Health Promotion Agency by amalgamating the Alcohol Advisory Council (ALAC) with the Health Sponsorship Council. Although a number of submitters to the Government Administration Committee established some reservations about that—especially folding ALAC into another organisation at a time when Parliament and New Zealand are acutely focused on the issue of alcohol harm and what we can do to reduce our alcohol-related harm—most submitters were supportive of the establishment of the new Health Promotion Agency. It is a single agency that will focus on public health initiatives and the promotion of health and well-being. I note that one of the amendments that the select committee made to the bill was to add the words “and wellbeing” after the word “health”. I think that was a wise amendment by the select committee. In fact a Health Promotion Agency should be about maintaining encouraging and fostering the conditions for healthy lifestyles for good overall well-being in a population. 
I notice that a lot of the rhetoric that goes with this piece of legislation is that it is New Zealand’s first attempt I suppose to implement the Ottawa Charter. Kevin Hague spoke about this a little last night. It is an aspect of the Ottawa Charter but I think it is a very limited one. It certainly does not by any stretch of the imagination implement the entire Ottawa Charter. This is the health promotion part of the Ottawa Charter but the Ottawa Charter also talks about the environment the community the public health policy settings and the fact that that goes beyond the health system and it goes beyond what we do in hospitals and doctors’ surgeries—indeed what we will do in the Health Promotion Agency. It goes into all the other policies and decisions that Governments make such as whether we should have more pokies in our community such as whether we should get rid of programmes like Healthy Eating - Healthy Action which support good nutrition and physical activity amongst our young people. In that respect I think that some of the Government’s changes that it has made over the last 4 years are somewhat counter-intuitive. Although we absolutely support any intention to implement the Ottawa Charter—and this is part of it—in so many other ways the Government has actually run in a completely contrary direction to what the Ottawa Charter actually suggests. I do not think the Government can congratulate itself all that much on its efforts to implement or even adhere to the principles of the Ottawa Charter. That is really what a lot of the submissions on Part 1 were about.  
People were concerned that the amalgamation of these organisations might take the focus off the efforts to reduce alcohol-related harm and of course a lot of the efforts to reduce alcohol-related harm are to do with the environment in which alcohol is available and the environment in which alcohol is consumed. In that respect Parliament is regarding the Alcohol Reform Bill which many of the submitters to this piece of legislation argued was not as strong as robust or as forthright as it could be. That is a debate that we will have on another day. The Cancer Society submitted that part of the Health Promotion Agency’s core business should be addressing the issue of alcohol sponsorship in the same way as the Health Sponsorship Council was originally established to address tobacco sponsorship. That is certainly an issue that I would like to see the Health Promotion Agency consider in the future. That issue is how do we look at adjusting the environment in which alcohol is I suppose perceived not just by young people but by all people in New Zealand and the way that alcohol is so closely related to the sponsorship of sports and other community organisations? I think particularly of students associations and the close relationship between the alcohol companies and the students associations.  
Grant Robertson 
: Very close.  
IAIN LEES-GALLOWAY 
: Very very close; you are right Mr Robertson. I think that that should certainly be part of the Health Promotion Agency’s core functions which of course are established here in Part 1. 
The other aspect that I would like to touch on briefly in Part 1 is the question of the ALAC levy which of course will continue more or less in its current form except that the levy will now go to the Health Promotion Agency. But this legislation sets out the parameters under which that levy can be spent and it will be hypothecated directly into alcohol-related activities and alcohol harm reduction activities that the Health Promotion Agency will be carrying out. A number of submitters particularly the Smokefree Coalition submitted to the select committee that there was an opportunity to go down the same pathway for tobacco and to have a hypothecated tobacco levy that could be used for health promotion activities that reduce the harm related to tobacco. I know that the select committee considered this and ultimately rejected that proposal and certainly it is something that requires far more consideration than would be available if a member was to put up a Supplementary Order Paper in this debate. It is certainly not something that I propose but I think it is an idea that has merit and ought to be considered. Perhaps the Health Promotion Agency could consider and report back to the Minister and to Parliament about the possibility of introducing a tobacco levy that is analogous to the alcohol levy specifically to be used for health promotion activities. 
We know that there is already a considerable excise tax and we have heard in the media that the Government is considering increasing that again tomorrow when it announces the next Budget. However although that is considerably larger than the amount of money that is already spent on health promotion activity the costs associated with tobacco use are not solely to do with health promotion activities. Of course most of the costs related to tobacco use come from the cost of the disease the cost of lost productivity and the cost of hospitalisations and care for people who end up getting smoking-related diseases and suffering from smoking-related diseases. That cost is significant and many people would argue that it actually outweighs the excise tax amount that is taken. So that is an option. It is not in this bill and I am not proposing it as a Supplementary Order Paper but I do recognise that the committee gave some consideration to this and I hope that it is something that Parliament can come back to at some point in the future. 
As I said overall with some reservations the Labour Opposition is supportive of Part 1. We look forward to seeing the Health Promotion Agency engaging in a range of health promotion activities to reduce not only the economic costs associated with the burden of disease but also the social costs particularly those diseases which are utterly preventable: the diseases associated with alcohol the diseases associated with tobacco and the diseases associated with poor nutrition and poor physical activity. Those are the diseases that will be the greatest burden on the health system in the years to come and those are the diseases that we have an opportunity to step in and do more about now. The Health Promotion Agency is just a small part of that. This needs to be something that the Government considers across all its policies. I reiterate our concern on this side of the Chamber that many of the policies that have been introduced by this Government over the last 4 years run absolutely counter to the concept of maintaining healthy lifestyles and maintaining well-being across the population of New Zealand. If the Government is not prepared to do more in that policy sphere then we are going to burden the health system with unnecessary costs we are going to burden society with unnecessary disease and that I think is a very short-sighted and unfortunate approach.  
KEVIN HAGUE (Green) 
: 
 It is a pleasure to speak on this part of the Crown Entities Reform Bill. As I indicated in the second reading debate Part 1 is the one part of this bill that the Green Party will vote for and support but for different reasons from those advanced by Mr Auchinvole on behalf of the Government. Mr Auchinvole spoke about the efficiencies of combining back offices and I invite the Committee to reflect on the history of structural change in the health sector and the extent to which that has actually delivered efficiencies in the back office. In fact history tells us that the reverse is generally the case and that the structural changes that we have tended to make in the health sector no doubt for well-meaning reasons have tended to reduce efficiency. They have cost momentum in structures in the sector to our overall cost. So I make the argument to the Committee that that is not a good reason for making this particular change.  
What is a good reason for making the change though is the creation of this new entity because combining the functions of currently separate organisations better reflects the health promotion task that they have. It moves from the fragmentation that we currently have towards the possibility of integrated health promotion action and that is something definitely worth supporting.  
I indicated in the second reading that I congratulated the Government on its bravery in bringing to the House a bill that had the intent of implementing the Ottawa Charter and I invited the Minister of State Services and I invite him again to take a call to indicate that the Government will make that an explicit purpose in the bill because I think the bill would be enhanced by that. It would remove any confusion that might exist.  
I spoke yesterday about some of the origins of the health promotion model and the fact that it is a socio-environmental model of health. It actually says that the health status of populations depends largely on their level of empowerment and control over their life circumstances and the environment that surrounds them not only the physical environment but also the social environment. If we want to improve the health status of populations those are the things we need to tackle.  
The Ottawa Charter sets out a five-piece formula for doing so. It says we need to promote healthy public policy we need to create supportive environments we need to strengthen community action we need to develop personal skills and we need to reorientate health services. If we were to walk into any district health board public health unit around the country we would see a poster on the wall indicating those five action guidelines because they have become ingrained in health promotion practice in New Zealand. The interesting thing about those guidelines is that none of them is specific to the health sector. Sorry the reorientation of health services is of course but those other four action guidelines are more generic reflecting as Iain Lees-Galloway has just been speaking about the fact that many of the factors—probably most of the factors—that influence a person’s health status and a community’s health status lie outside of the health sector. This new agency the Health Promotion Agency will succeed only if the Government’s intention that it implement the Ottawa Charter is reflected in its power to influence policy outside of the health sector itself. That will be a crucial element in the success of the organisation.  
The second point I want to make about that is that none of those action guidelines is specific to a particular illness or a particular cause of ill health. Indeed one of the accepted parts of our understanding of health promotion is that if we take that formula if we empower communities and create supportive environments around them the consequence of that will be the improvement of the health status of that community not only in a particular health indicator or disease state but across the board. What that says is that when we go about improving the health status of a community we will improve not just one particular thing.  
I used to work as many in the House will know for the New Zealand AIDS Foundation. The formula that we eventually found to be successful was the health promotion formula. Although our concern was improving HIV infection rates amongst gay and bisexual men the health promotion formula of improving the empowerment of that community and improving the social legal and physical environment that surrounded that community actually produces health gain in all indicators not only that one indicator of HIV status. That is why it is such an advance to bring together agencies that are currently working apart from each other in a fragmented way on particular health issues or disease state issues into a single agency. What that agency will now be able to do is to concentrate and focus on the factors that are leading to disease and poor health status across all indicators not just single indicators.  
I certainly encourage the new agency to work in that way—to take the opportunity that is provided for it and to integrate health promotion practice. It is going to be critical to success and for it to be able to do that it is also going to need Government support to work in that integrated way. It will not be able to succeed to the extent that is possible if it has a Government that is focused not so much on the health of communities but on preventing a particular disease. So that understanding is going to be crucial not only to the agency itself but to the Government masters of that agency. I invite the Minister to take a call to express his Government’s commitment around that crucial element.  
I think it is also important to say and this is another particular advantage of this approach that in addition to improving health status across all of those indicators a health promotion approach such as the Ottawa Charter sets out and which this new agency will be empowered to implement will also produce gains in other sectors as well. The very same factors that drive poor health status and so see disease clustered in particular communities across our country those very same factors of disempowerment marginalisation and poor physical and social environments around those communities also drive poor educational outcomes. They also drive poor outcomes across any sector we care to name. Implementing the Ottawa Charter approach will produce not only great health outcomes but better educational social welfare justice and every other sector outcomes. That is something that we need to celebrate.  
The Green Party will be voting to support this bill. We believe that the bill would be strengthened if the Government were to add to it a specific commitment to the Ottawa Charter rather than having the community and the agency itself relying on the expressions of support in this debate for its mandate on those grounds. We look forward to a Government that gives the agency sufficient rein and licence to be able to do that work properly. We expect that that agency not only will be able to influence outcomes in the health sector and right across the sectors that are managed by the Government but also will gradually take on the function of funding health promotion work that is currently undertaken by the ministry. That is yet another way that health promotion practice in this country can become better integrated and that is precisely the outcome that we seek. 
GRANT ROBERTSON (Deputy Leader—Labour) 
: 
 It seems a little unusual to stand up and join in the love fest that we have here on Part 1 of the Crown Entities Reform Bill because it seems that most parties in Parliament will support it. It is an unusual feeling for me to be able to stand up and affirm something that the Government is doing here but do not worry I will get to some problems in a minute.  
The first thing I want to do is to pick up where Kevin Hague left off in his excellent speech that he has just given and to indicate that there is something in this bill that shows that the Government gets the idea of what public health might be and what the Ottawa Charter means and that is the inclusion by the Government Administration Committee—and presumably with the agreement of the Government members if they were awake during this bit of the select committee—of the phrase “and wellbeing” within the functions duties and powers of the Health Promotion Agency under new section 58 in clause 6. The inclusion of well-being indicates that we are now moving beyond the notion that this is somehow a medical matter to the fact that this is a wider issue of public health and a wider issue of the well-being of our communities.  
Kevin Hague spoke earlier about what the core elements of the Ottawa Charter are and the fact that it does move beyond health and well-being to the question of the empowerment of communities and to the question of the environments in which communities live. These are the core elements of what public health means today in New Zealand. I do credit the committee and indeed the Government for putting in the notion of well-being.  
But my cynicism and where I would like the Minister to take a call rises in response to how the Government has looked after public health over the last 3 years. When I say “looked after” I mean cut. That is what I mean when I say “looked after”. That is what this Government has done with public health. It has certainly lowered it in priority beside other parts of the health system particularly in terms of secondary services and particularly when we look at something like the Healthy Eating - Healthy Action programme which was brought in under the last Labour Government. 
Hon Anne Tolley 
: Oh God you’re joking. 
GRANT ROBERTSON 
: Anne Tolley says that I am joking. The system was not perfect. The Healthy Eating - Healthy Action programme was not perfect so therefore we get rid of it completely! That is Anne Tolley’s solution to public health—if it is not perfect get rid of it completely. That is what this Government has done. That is why on this side of the Chamber we are somewhat cynical as to whether the Government will actually provide the resources that are needed to ensure that this works.  
We support the notion of the integration of these services. We support the notion that we will actually have an agency that will look at public health in its widest context. But it will achieve its goal only if this Government is prepared to give it the resources that it needs to put resources into prevention and to stop treating health over and over again as a political football so that Tony Ryall can hold up charts in this Chamber for targets that he has invented rather than what is actually going to help the long-term health outcomes of New Zealand which is investment in prevention and investment in public health programmes.  
I welcome the structure here but what I do not think we have seen from the Government is a true commitment to public health a true commitment to what it means to actually support the principles of the Ottawa Charter. I know that many of the agencies that submitted on the bill said that they supported this because they are looking for that better integration they are looking for a more responsive Public Service when it comes to public health matters. But they will get that only if the resources follow.  
The second question I have for the Minister is actually around what he can tell us about the current responsibilities of the Ministry of Health’s public health directorate and how that fits within this new structure. As Kevin Hague has just talked about the integration of policy practice and monitoring is vitally important. We can see that the bill focuses on bringing together the Alcohol Advisory Council (ALAC) and the Health Sponsorship Council and their responsibilities and that is good and useful but what do we know about the actual work of the Ministry of Health? What do we know about ongoing monitoring what do we know about how policy will work alongside in practice? I just want some assurances from the Minister that the responsibilities of the Ministry of Health in the public health area will actually be explicitly put in front of those who will be doing the work of this agency.  
My colleague Iain Lees-Galloway has already mentioned that some concerns were raised about the fact that ALAC is disappearing at the very time that New Zealand is confronting what to do about the issues around alcohol in our community. I do note that the bill under new section 58 in clause 6 does give the alcohol-specific functions to the new Health Promotion Agency. That is at least something. But once again we need to know from the Minister that those responsibilities will go on into the wider issues of alcohol its impact on the community and what damage it does in the wider environments in which people live. Those kinds of considerations are vitally important if we are going to get a functioning organisation under this part of the bill.  
I am not going to take up much more time of the Committee on this. Labour does support Part 1 of this bill. We do believe that this structure provides an opportunity to actually see real implementation of the principles of the Ottawa Charter and real implementation of public health policy but we sound the warning that the Government needs to assure New Zealanders that this will be resourced and funded to enable it to do its job properly that it will be given the kind of priority that it should be given and that it will continue to provide linkages between policy practice monitoring and promotion of public health.  
The CHAIRPERSON (H V Ross Robertson) 
: I recognise the member Kris Faafoi.  
KRIS FAAFOI (Labour—Mana) 
: 
 Thank you for recognising me Mr Chair. It is an honour to speak on Part 1 of the Crown Entities Reform Bill. As my colleague whom I recognise as Iain Lees-Galloway mentioned earlier in this debate we will be supporting Part 1 with some reservations.  
Part 1 of this bill establishes the Health Promotion Agency by essentially disestablishing and merging the functions of the Alcohol Advisory Council (ALAC) and the Health Sponsorship Council. As I think Kevin Hague—I recognise Kevin Hague over there—mentioned earlier in this discussion Part 1 takes two agencies that have been working in similar areas and working in a fragmented way and brings them together. I do agree with him that this is an opportunity for the new Health Promotion Agency to have some focus to have some clarity as to what its new function is going to be and to work in a much more focused manner on addressing some of the issues and responsibilities that it will now have under this bill.  
I would also at this stage note that we are going to be disestablishing ALAC so I think we should pay tribute to the work that ALAC has done—and to the chair Rea Wikaira and the chief executive Gerard Vaughan—for many many years now in terms of pushing that responsible drinking message. It has already been noted in this debate that we are going to have ALAC disappearing at a time when this Parliament our communities and this nation look thoroughly at alcohol law reform. Iain Lees-Galloway in his contribution to this debate noted that there were a number of submitters who were concerned about the fact that ALAC was being disestablished at this time and also that there were some concerns that the Alcohol Reform Bill does not go far enough but that is a debate for another time.  
The functions of the Health Promotion Agency are legislated in section 58 in clause 6 which states that it “must lead and support activities for the following purposes: (a) promoting health and wellbeing …” of our communities. As Grant Robertson mentioned earlier that change—to insert “wellbeing”—was made by the Government Administration Committee and I think that is a positive move. It is going to ensure that some of the proactive things that are happening with the Health Sponsorship Council and other agencies at the moment continue and that the health and well-being of our communities is pushed in a proactive way.  
Other functions of the new agency are: “(b) preventing disease illness and injury:” and “(c) enabling environments that support health and wellbeing …”—again “wellbeing” has been added by the select committee. A good thing which I think is going to stay within the functions of this new agency is that it will still have the ability to give grants and give sponsorship to any individuals or agencies that are going be pushing the healthy living and healthy well-being issues out in our communities.  
I can think of one instance that I think should be supported at the moment as it is very timely and that is the Smokefree Rockquest. It is an opportunity to engage with our younger New Zealanders in an environment that they may think is cool or is much more acceptable to them and to push that message that it is not OK to start smoking at that young age and that we do not want them to start smoking. I think that is one example of sponsorship that has worked very very well and I am glad to see that within the confines of this bill the Health Promotion Agency will still be able to carry out that function of sponsoring and allowing grants to go to agencies or individuals who are going to be able to push those messages of healthy living especially to our younger ones. As I mentioned the Smokefree Rockquest is a good example of that.  
The Government should not take for granted that just because we are supporting Part 1 we are supportive of mergers per se across the board. 
Jami-Lee Ross 
: Oh! 
KRIS FAAFOI 
: That is not necessarily the case but in the case of Part 1—we can hear the moans and groans already—we do think the new agency has the ability to work and as a number of members have mentioned before it will have the ability to work if the Government backs it.  
So we on this side of the House want to ensure that the commitment that the Government is making through the Crown Entities Reform Bill to establish the Health Promotion Agency is not just weasel words and that it is backed up with resources and commitment to ensure that the community is at the centre of this legislation in terms of trying to push those healthy living promotion issues right around New Zealand. As we have mentioned before—I will not take up too much more time—we do support Part 1 with reservations. Parts 2 and 3 may be a different story but we certainly support Part 1.  
Hon Dr JONATHAN COLEMAN (Minister of State Services) 
: 
 We have had some very informed debate on the Crown Entities Reform Bill so far. It is good to get it to the Committee stage. It is good to see such agreement across the House about public sector reform. I would like to compliment the members of the Government Administration Committee on the work they have done on this bill. I would also like to acknowledge the contribution of officials—people from a range of departments—in pushing through this very important legislation. I would also like to acknowledge my predecessor as Minister of State Services the Hon Tony Ryall who is the architect of this legislation and has put a lot of thought into it.  
It is good to see that the Labour Party is supporting Part 1 despite the fact that it voted against the bill last night. Listening to Kris Faafoi I do not think he is quite clear whether or not Labour will be supporting Part 2. I understand that it probably will be. And then of course we are going to have some rather contentious debate around Part 3. 
On Part 1 and the establishment of the Health Promotion Agency that is really going to give some focus to the work of that body. It is very important work promoting health to New Zealand communities. It is interesting though that the Labour Party’s first response on this is to ask for more money. It is not about more money although in fact I might add that this Government is putting more money into health than any Government in the history of New Zealand. But it is not about more money more borrowing or more people; it is about making sure that Crown entities are very focused on the work they have to deliver. I think that with this change which is going to bring that greater focus to health we are really going to see the benefits throughout our communities and populations throughout New Zealand because health has been one of the top priorities for this Government. If you look at the very focused way that the Minister of Health has gone about his work—identifying what he wants to achieve setting targets and then delivering on those targets—I do not think you could say there has ever been a more successful Minister of Health. There is no question that health needed that focus.  
We have heard some very vague platitudes from the Labour Party during this debate about health. But the fact is that when you look at what we have done around childhood immunisation rates around programmes to prevent rheumatic fever and around refocusing programmes that were failing such as the Healthy Eating - Healthy Action strategy—refocusing that around exercise and getting some measurable results—you can say that the approach this Government has taken has been very focused very specific and is delivering results. Grant Robertson was asking where the Ministry of Health fits into all this. Well what we can say is that the policy and the regulation the oversight function will still be preserved but the programmes are moving into this new entity and will be administered by the Health Promotion Agency. 
 I can say that it is great to see this unanimity across the Committee for what I think is an excellent initiative. It is great to see that. Maybe it is an early step in some of the Opposition parties really getting to grips with the concepts of State sector reform. But that has been a major priority for this Government—making sure that we can deliver meaningful results that actually make an impact in New Zealand communities. There have been tight financial times and a very tight fiscal environment. The answer is not borrowing more it is not pouring more money in all the time; it is making sensible use of the resources you have got setting some very clear targets and delivering on those.  
I would like to acknowledge the work that the Alcohol Advisory Council has performed over many many years. It has been very important work that has had a real impact in New Zealand communities. That work is going to continue on. The Health Sponsorship Council has also done very important work. But with this new entity we are going to see that work continue on and I believe that it is going to be enhanced because as has been acknowledged there will be that new and intense focus. 
I would like to acknowledge Kevin Hague’s commitment to public health and the points that he has made around the Ottawa Charter. I think to be fair few members of this House would have heard of the Ottawa Charter prior to the select committee process. But the point he made about bringing well-being into the broader definition of a public health outcome that we are striving for I think is one that is well made. When you look at that Ottawa Charter whether or not you have heard of it the principles embodied there are really common-sense principles that you would look for in any public health approach.  
So I think it is great that we have got such broad support across the Committee for Part 1. This entity is fully supported by the Government. It is a reflection of what we are doing in State sector reform but it is also going to produce some very valuable outcomes for New Zealanders. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I want to take a brief call to follow up on some of the comments that the Minister of State Services just made about State sector reform and how this bill the Crown Entities Reform Bill fits in with the Government’s wider agenda for State sector reform. I think this bill is quite different from a number of other aspects of the Government’s State sector reform agenda. First of all it does not involve putting Steven Joyce in charge of something else and I think that is quite rare. Most State sector reform under this Government generally tends to involve the Joyce empire growing while the other Ministers end up being underdeployed. This bill clearly does not do that. It puts some more functions under Tony Ryall’s little empire. Of course as we know from reading in the paper Tony Ryall does not play nicely with others. He likes to have everything under his control in his little box.  
The Labour Party does support sensible reform in the State sector. We support reforms in the State sector that make the State sector more responsive to the New Zealand public. We believe that the public sector can certainly be better and can certainly deliver services to the New Zealand public in a way that is more timely more efficient and more effective and we would like to see the public sector more focused on outcomes. We do not agree that in large part the Government’s agenda for State sector reform is achieving that. It is in fact doing quite the opposite in many areas. It is not leading to greater efficiency. In fact it is leading to greater inefficiency. The best example of that is the arbitrary cap on the number of people employed by the Public Service. What we are seeing is that that is resulting in a massive increase in spending on consultants and contractors. But that is an issue for another day rather than for the debate on this particular bill.  
I do just want to underline the fact that we in the Labour Party do believe in reform of the State sector. We will support initiatives to reform the State sector where they do lead to better outcomes for the public and the more efficient delivery of public services. That is why we are willing to support this part of this piece of legislation. We will talk more about further parts that we are less supportive of but we support this particular part because there has been a call for greater integration amongst the agencies working in the public health area and we believe that this bill will go some way to delivering on that.  
I move to new section 58 in clause 6 the objectives of the new Health Promotion Agency. We think that those are good things for the Government to be focused on—promoting and encouraging healthy lifestyles. We do believe in preventing disease illness and injury. I think that we should think a little bit about how that last bit about preventing injury fits in the context of the Government’s other reforms. We have seen the Government within ACC actually taking the focus away from injury prevention within ACC. I think that one of the big mistakes of the National Government’s public sector reform agenda has been removing that real emphasis on injury prevention from ACC. It seems to stand in contrast to what this bill is trying to achieve.  
I move back to new section 58—enabling environments that support health and healthy lifestyles giving advice and making recommendations on the misuse and harm of alcohol. Again these are things that we in the Labour Party certainly support and we think those are worthy roles for the Government. Of course coming back to the first one promoting health and encouraging healthy lifestyles I remember not that long ago maybe 3½ years ago the then National Opposition coming to this House—I was not a member at the time but I was a follower of Parliament—and decrying many of the public health initiatives of the last Labour Government as being nanny State. It said that the nanny State had no role in telling people how to be healthy. Those were the sorts of things that National members were promoting back then. I am pleased to see that they have seen the light and they now believe that there is a role a positive role for the Government in promoting health and encouraging healthy lifestyles. That is something that we in the Labour Party have believed in for quite some time.  
We have believed in the role of the Government in public health and in preventive health measures. We would far rather spend money to prevent people from getting ill and to make sure that people live full and healthy lives rather than take the Tony Ryall approach which is to focus on all of the measures of performance when things go wrong. So what Tony Ryall has done is focus the health sector so much on measures such as operations elective surgeries and so on rather than on preventive measures and on public health measures which is something that we in the Labour Party believe the health sector should be focused on. There should be far more focus on preventing illness rather than the ambulance at the bottom of the cliff approach which is what Tony Ryall has done. The way he has politicised the performance measures of the health service I think has been a real shame. There are elements of what he has done with the measures that I think have been good. However I am really concerned that those measures those performance targets that he has put in place have distracted attention away from wider public health measures wider public health programmes.  
So I hope that this new Health Promotion Agency will go some way to restoring the balance there and will have the support of the Government. Establishing an agency is all very well but if it does not have the support of the Government in its activities then it is not going to be very successful. I hope that the National Government now having finally conceded that there is actually a role for the Government in promoting health and encouraging healthy lifestyles and preventing disease illness and injury will adequately support this agency because so many of its other policies—take preventing disease illness and injury and promoting healthy lifestyles—and changes it has made within schooling within the education system have gone in the opposite direction.  
We have seen a reduction in funding for Healthy Eating - Healthy Action the HEHA programme in schools which would seem to be in stark contrast to what this bill is trying to achieve. I visit the primary schools in my electorate all of the time. I think one of the really positive things that primary schools are doing is planting vegetable gardens within the primary schools teaching kids about growing vegetables and about eating healthily. I think that is a really really beneficial public health initiative which is supported by the education sector and it will lead to better longer-term health outcomes for all New Zealanders by teaching kids the value of eating healthily and growing vegetables. There are other advantages of course of teaching kids how to grow vegetables. I am amazed at how many kids who until the time when the schools started planting vegetable gardens would not have had any idea where vegetables came from. So I think that is a very positive initiative.  
The schools in my electorate all tell me now that they are struggling to get the funding to sustain those healthy eating healthy action programmes like the growing of vegetable gardens in schools. We will pay the cost of that in the longer term if we have a less healthy student and child population. We will pay the cost of that in the long term. 
 Preventing disease illness and injury does involve the Government taking a proactive set of measures a proactive set of actions in a number of areas. If we are talking about disease and illness we have to look closely at the link between disease illness and poverty and people living in unhealthy houses. I want to acknowledge that the Government has not done everything wrong here. I think that some of the stuff it has done around better home insulation has been a very positive thing and something we in the Labour Party will certainly acknowledge is that having warmer drier houses is good. However we have still got a long way to go. In the State housing area in particular there is still a long way to go before we have all State house tenants living in warm dry healthy homes. If we are talking about getting serious about preventing disease and illness that is certainly something that we would like to see a much greater focus on within the Government.  
Finally just to sum up on the issue of injury prevention I do think that the ACC cuts that the Government has introduced where it has reduced the funding for injury prevention programmes within ACC have been a really bad step. It has taken us down a path that in my view is counter to what this bill is trying to achieve. So I hope now that there has been a change of Minister for ACC—the letter writer is no longer there and he is no longer in the way of making progress there—we might see ACC restore a bit more focus on injury prevention rather than simply being the ambulance at the bottom of the cliff. Thank you. 
DENIS O’ROURKE (NZ First) 
: 
 I move that the matter be now put. 
The CHAIRPERSON (H V Ross Robertson) 
: No. The member will need to learn the correct motion that will have me agree to what the member just asked. 
KEVIN HAGUE (Green) 
: 
 I rise to take another brief call on Part 1 of the Crown Entities Reform Bill partly to respond to some of the comments that the Minister of State Services made and secondly to make a further point. The Minister talked about some of the changes that the Government had made in public health programmes referring particularly to the Healthy Eating - Healthy Action programme. I cannot let that go unanswered because although that was presented as if it were a positive development it is important that the Committee knows that that change was in fact opposed by absolutely everybody working in public health including all of the experts on public health matters. It was a hugely retrograde step which took us a long way back. It reflected an approach from the Government that until now has not been very positive on public health matters and I am certainly aware of very many programmes throughout the country and in many areas of the health sector that have lost their funding or have lost sufficient funding that they have lost critical mass and are unable to carry out their very important functions.  
To put some actual numbers to that claim that I have just made in last year’s Budget—I am certainly mindful that there is another Budget due tomorrow—funding for Vote Health was reduced in actual dollar terms by 14 percent and that came on top of similar reductions in previous years. To actually reduce the budget not only in real terms but in actual dollar terms signifies a problem with the Government’s underlying approach to public health. As I have said I welcome the Minister’s comments about what I have had to say in this debate to date and I hope that this bill will signify a very substantial change in the Government’s attitude towards public health and towards health promotion.  
The second point that I wanted to make was I guess picking up on the question that Grant Robertson asked and the Minister answered about what the role would be for the Ministry of Health in public health and health promotion going forward. The particular point that I wanted to raise was a related question and that was what is happening with regard to section 14 of the New Zealand Public Health and Disability Act which established the Public Health Advisory Committee. I am a person who used to chair that committee and it is a committee that I believe has done a lot of sterling work. Its reports for example on factors that lead to adverse public health outcomes—looking at social factors looking at environmental factors—have been extremely important. Its report on child health is a landmark report and there is the work that it has done on the health of prisoners for example—all extremely good and valuable work that has essentially stopped over the last couple of years. The National Health Committee must establish a Public Health Advisory Committee yet that committee has essentially not existed for a couple of years. Not only have the members of the committee gone but its secretariat has gone so it is entirely non-functional. It is a statutory requirement that the Government is not in fact implementing.  
That function of advising the Minister and advising the National Health Committee on public health matters is an extremely important one in the sector because as I have already outlined the kinds of things that we are looking at in health promotion very often—even though they are the interventions that have the biggest bang for their buck; they actually produce the most health gain for the dollar invested—may take a long time to actually realise those big gains. That is why it is important that we have a committee like the Public Health Advisory Committee that is able to take that really long-term view and provide that really high-quality advice to the Minister and to the National Health Committee to inform public debate about public health matters. And so I invite— 
LOUISA WALL (Labour—Manurewa) 
: 
 Kia ora. Thank you very much for the opportunity to contribute in this the Committee stage of the Crown Entities Reform Bill Part 1 which we on this side of the Chamber will support. What I want to do is take an opportunity to actually acknowledge the history of both the Alcohol Advisory Council of New Zealand (ALAC) and the Health Sponsorship Council. Historically ALAC was established in 1976 following the Royal Commission of Inquiry into the Sale of Liquor. Its aim was to encourage responsible use and minimise misuse of alcohol in New Zealand. Obviously this is a big issue that this House will particularly have to debate in the coming months.  
I think it is important that we emphasise what ALAC has done in terms of safeguarding alcohol consumption in New Zealand for many of our communities. ALAC had a key role in shaping the discussions and debate around alcohol use and abuse in New Zealand for 36 years and its contribution to the sector should be acknowledged. I want to acknowledge the chief executive Gerard Vaughan and the chair of ALAC Rea Wikaira. That provides a really good segue into looking at the Health Sponsorship Council and particularly the role of its current chief executive officer Iain Potter who has been the chief executive officer since 1992.  
The Health Sponsorship Council was established under the Smoke-free Environments Act 1990 and it was initially established to replace tobacco sponsorships. In 1999 the Health Sponsorship Council had shifted its focus to social marketing to improve health outcomes for people in New Zealand so I think it is really important that at this time given the merger of these two organisations into the new Health Promotion Agency we acknowledge the contribution that the Health Sponsorship Council has made in terms of health promotion issues with campaigns including Smokefree / Auahi Kore the SunSmart campaign and the Bike Wise campaign. It is these campaigns that I think we have to thank agencies like the Health Sponsorship Council for and obviously this new Health Promotion Agency we are hoping will end up having these defining brands in terms of protecting and supporting the well-being of our communities.  
 The key message that I want to contribute about these two agencies is the significant contribution that they have made to key health issues. They were tasked with health issues that have significant social and fiscal costs for our families and communities and their contributions have helped to change some of the risky attitudes and behaviours of New Zealanders. So we are supporting Part 1 of this bill.  
Some of the most interesting I think comments from the Government Administration Committee report and what I want to highlight is that most submitters did broadly support the establishment of the Health Promotion Agency. They saw promise in the alignment and integration of its complementary functions. Some of the submitters particularly wanted the Health Promotion Agency to prioritise nutrition and physical activity and others wanted to see a focus on health promotion issues such as tobacco. So when we look at the functions of the Health Promotion Agency it is about promoting health and encouraging healthy lifestyles it is about preventing disease illness and injury it is about giving environments that support health and healthy lifestyles and it is about giving advice and making recommendations on the misuse and harm of alcohol. So it is wonderful to see that those will continue to be the key priorities of the Health Promotion Agency.  
I do not really want to contribute much more other than to say that some of the rationales for the realignment of these two organisations we can accept them when we look at the merging of these two institutions. It is not something that we would say is a general philosophy but in this instance we can see that the Health Promotion Agency as it has been proposed will be a good institution and it will continue the good work of both the Health Sponsorship Council and ALAC. Kia ora. 
The question was put that the amendment set out on Supplementary Order Paper 29 in the name of the Hon Dr Jonathan Coleman to clause 13 be agreed to. 
Amendment agreed to. 
Part 1 as amended agreed to. 
Part 2Mental Health Commission Act 1998  
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 As we on this side of the Chamber indicated during the debate on Part 1 Part 2 is a different matter and we unfortunately cannot be as supportive as we were of Part 1. I guess that reflects the fact that as I think was stated during the second reading debate the amalgamation of public services for the sake of it is not necessarily a good thing. What matters is what the outcome is from that amalgamation and although we can see merit in the amalgamation of the Alcohol Advisory Council and the Health Sponsorship Council we cannot support the amalgamation of the Mental Health Commission—or essentially the absorbing really of the Mental Health Commission—into the Office of the Health and Disability Commissioner and the creation of a deputy commissioner within the Office of the Health and Disability Commissioner who is responsible for mental health. If the Government had listened closely to what the submitters said at the Government Administration Committee it would have come to the same conclusion.  
The Mental Health Commission was originally established in response to the recommendations of the 1996 ministerial inquiry into mental health services most popularly known as the Mason inquiry. It was established really because there was a recognition that mental health services not only were underfunded and under - provided for but also did not get the recognition and the attention that they needed and that that was having a detrimental effect on our communities—that the people who suffered mental illness were not receiving the services that they ought.  
Although things have certainly improved in the years since then—we have seen the establishment of the mental health blueprint we have seen mental health funding ring-fenced and we saw on a number of occasions the length of time for which the Mental Health Commission would remain established extended through ultimately to 2015 was the last extension it received—it is fair to say that the job is far from done. In fact the replacement for the blueprint Blueprint II I would imagine is now in its pretty final drafting stages and the expectation is that that will be published soon. That seems to be the least appropriate time to disestablish the Mental Health Commission—given that one of the last things it will do is to publish the second blueprint it would be appropriate really for the Mental Health Commission to then see out its time through to 2015 and to use those first few years to get the second blueprint under way. If the people and the organisations that submitted on that drafting process are actually listened to there will be some not insignificant changes to the way we approach mental health services and to the way I suppose mental health services are shifted from a focus on secondary care to a focus on primary care and also an understanding that we need to focus on a much wider proportion of the population than what was mandated for in the first blueprint.  
That amount of change and shift in focus really needs a dedicated organisation to navigate the sector through that period of change and it seems extremely short-sighted to bring forward the disestablishment date for the Mental Health Commission from 31 August 2015 to 30 June 2012 and then leave it up to the Office of the Health and Disability Commissioner which has not had that focus on mental health and to a person who becomes a deputy commissioner subordinate to somebody else to be in charge of the navigation through that period of change. Given that if you talk to both consumers of mental health services and people practising in the area of mental health one of their principal concerns and beliefs—and I think quite reasonable beliefs—is that mental health services remain a Cinderella component which is the word that has been used of the health system I think it absolutely sends the wrong signal to be disestablishing the one organisation that was focused on mental health and to be folding that into another organisation and reducing that focus.  
I notice that in its comments to the select committee the Ministry of Health noted the fact that the Mental Health Commission’s longevity or existence has been tenuous. The fact that it has lasted as long as it has been the result of Governments successively extending its lifespan. The comment was made that shifting the monitoring and advocacy functions of the Mental Health Commission into the Office of the Health and Disability Commissioner secured those functions into the future. I accept that that is probably true but it is not necessary. We do not have to shift the functions of the Mental Health Commission into the Office of the Health and Disability Commissioner to give it that security. Parliament—the Government—is quite capable of giving the Mental Health Commission that level of security and still retaining it as a stand-alone organisation. So although it is true that the shifting of those responsibilities into another organisation does potentially create some security it is not a necessary change in order to secure those functions.  
There are no doubt some efficiencies to be gained in terms of transferring and reducing back-office functions but of course what we have seen across the State sector is that when back-office functions have been somehow rationalised or made to use the Government’s terms more efficient what ultimately ends up happening is that the people who are supposed to be delivering the front-line services end up having to pick up those back-office services. Therefore front-line services actually suffer. We on this side of the Chamber are very very sceptical of any arguments made that by reducing back-office functions that somehow will allow the shift of resources to the front line. Whether you look at the police force the Defence Force or all across the State sector we have seen that what ultimately happens is a reduction in front-line services. I think that is something that we have to be acutely aware of as well.  
A number of submitters said that shifting the Mental Health Commission into the Office of the Health and Disability Commissioner would make the organisation more reactive. I think that is true: the Office of the Health and Disability Commissioner is a very reactive organisation. It reacts essentially when things go wrong in the health system whereas the Mental Health Commission is a much more proactive organisation involved in the promotion of activities to promote and secure mental well-being. Again it is a shift in the focus a shift in the nature of the organisation. That really is a retrograde step as far as securing and supporting mental health services in New Zealand are concerned.  
So although superficially Part 1 and Part 2 may appear similar in that they are about the amalgamation of organisations the outcomes of those amalgamations are quite different. On this side of the Committee we cannot support the dissolving of the Mental Health Commission and the reduction of focus on services supporting those people with mental illness in our community. 
KANWALJIT SINGH BAKSHI (National) 
: 
 It is my pleasure to take a call on Part 2 of the Crown Entities Reform Bill. Part 2 of the bill relates to the expiry of the Mental Health Commission Act 1998 and the appointment of the Mental Health Commissioner under the Health and Disability Commissioner Act 1994. The Act will now expire on 30 June 2012 rather than on 31 August 2015. The bill will provide for the appointment of a Mental Health Commissioner under the Health and Disability Commissioner Act 1994 and the appointment of the chairperson of the Mental Health Commission as the first Mental Health Commissioner. I support this part of the bill. 
KEVIN HAGUE (Green) 
: 
 I am going to start where Iain Lees-Galloway left off. I think it is fair to say that I agree with everything Iain Lees-Galloway said which has happened before on several other measures. In the debate on Part 1 of the Crown Entities Reform Bill I talked about the dodgy rationale for Part 1 that had been advanced by Chris Auchinvole and I said that combining functions did not necessarily produce the kind of efficiency gains that those promoting the combination expected. That has definitely been our experience in the health sector. So in the case of Part 2 I wonder what on earth can possibly be the rationale for the change that is proposed because here is definitely a case where a topic mental health which has achieved a significant focus through the Mental Health Commission will clearly be receiving less focus if the commission is folded into the Health and Disability Commissioner’s office as is proposed without any benefit in terms of efficiency. There is no upside and some significant downside already in the loss of focus.  
But it goes further than that because on Part 1 the Green Party supported what the Government intended to do. The functions of those various agencies that are being combined into the Health Promotion Agency are at least congruent. By combining them into a single agency a significant gain in terms of integrating their functions is achieved. In the case of these two agencies the Mental Health Commission and the Health and Disability Commissioner’s office the functions are not congruent at all. The Health and Disability Commissioner has done over the years a fantastic job but the way that that office works is not by taking the big helicopter view but rather by focusing on individual cases—the individual who complains about a particular aspect of the service that they have received. The complaint is investigated in considerable depth and then the commissioner uses that opportunity to provide justice and some measure of closure for the person who has received services that they believe to have been inadequate or to have breached their rights in some other way and also to try to draw from that single incident some learning that may be useful for similar services or for other parts of the health services. On both of those things—actually providing a justice process for individuals and learning from individual cases—the Health and Disability Commissioner has contributed a considerable amount to the New Zealand health sector. It is really important that that office continues to focus in exactly that same way.  
But just as the Health Quality and Safety Commission a new entity that replaced the Quality Improvement Committee which replaced the EpiQual committee which was in the original Act was not set up as a subdivision of the Health and Disability Commissioner’s office because actually the function is a totally different one requiring a different set of skills and an entirely different focus so it is with the Mental Health Commission. The Mental Health Commission absolutely must take that helicopter view that considers the entirety of mental health services and plans out for the entire sector for not only the short term but also the long term and it must monitor against that plan. Those are also incredibly important functions but they are entirely incongruent with those that the Health and Disability Commissioner is providing for. As Iain Lees-Galloway has said certainly the intent was that there would be a finite term for the Mental Health Commission but the job is not done. Therefore that job needs to be extended out into the future.  
As Iain Lees-Galloway has pointed out the origins of the commission were indeed with the Mason inquiry. That inquiry focused on a particular part of mental health services and noted a woeful inadequacy around mental health services. The initial focus for the Mental Health Commission was on remedying that part of health services. Those were services at what we would call the serious end of mental illness because that is the end where the most severe harm is caused to particular individuals and the end that the Mason inquiry demonstrated was incredibly underfunded and poorly focused on by health services at the time.  
The Mental Health Commission established its blueprint which achieved very considerable support and endorsement from right across the health sector—appropriately so. Successive Governments have looked to properly resource that blueprint with ring-fenced funding and mental health services have moved from being what I have described as Cinderella services within the New Zealand health sector to being services that are seen as an integral part of at least the secondary health services. Within hospitals at the serious end of mental illness and in specialist-provided services mental health has made considerable progress towards that blueprint. It is not there by any means. There is still a distance to go even in that area. When we look at the performance of district health boards against the indicative volumes of services that the mental health blueprint sets out the vast majority of district health boards are still failing to produce even those serious secondary mental health services at the volumes the Mental Health Commission has indicated are appropriate. There is a growing problem with ring-fenced mental health funding leaking out of mental health and being used in other areas. Those are still areas of particular importance for the Mental Health Commission to focus on.  
But there is a whole other area that was not a focus in Blueprint I and that is the area of community-based services. There is an interaction between in-patient services provided within hospitals and community-based services. What we see are acute units in our hospitals still struggling to provide space for people with acute illness—serious illness—who require in-patient care. They are struggling because our acute services are still blocked up with people who largely have non-acute needs. They have ongoing mental health needs that need to be dealt with in community settings but those community services are not yet at that level. So we have a problem with meeting the need for secondary services because community-based services are not yet adequate. The Mental Health Commission needs to focus on that area as well as on the primary mental health services that are required by people with mild to moderate mental illness.  
There is an awfully long way to go when we see the World Health Organization predicting depression to be the most serious chronic illness faced by the world’s population. Actually what that is saying to us is that our health services need to focus very strongly on the primary care required in mental health services. Currently there is a bit of work going on there. It needs to be a major focus of Blueprint II and we need as a country our Mental Health Commission to be focused on that area. We need an organisation with the capabilities that the Mental Health Commission has to do that work not the capabilities that the Office of the Health and Disability Commissioner has. Both organisations play really important roles but they are separate roles that are not congruent. This is the wrong thing to do. 
KRIS FAAFOI (Labour—Mana) 
: 
 Thank you Mr Chair for the opportunity to speak to Part 2 of the Crown Entities Reform Bill. As I forewarned in my contribution to Part 1 this is where Labour’s relationship with National on this bill in terms of our support has to come to an end. 
Louise Upston 
: You’re not leaving us are you? 
KRIS FAAFOI 
: Yes we are. We are parting company. We are not going to hold hands any more on this bill because as Iain Lees-Galloway said and as Kevin Hague reinforced this is not a merger within this bill that we support. As I mentioned on Part 1 there were two agencies working in a fragmented way. We know there is sense and there are efficiencies in bringing those two—the Alcohol Advisory Council and the Health Sponsorship Council—together but in Part 2 the effective merging of the Mental Health Commission into the Office of the Health and Disability Commissioner we believe is not the right move. As Kevin Hague said this is not congruent. These two agencies do not meet the same purpose and we believe that there should be a real focus from the Mental Health Commissioner to stay focused on mental health issues. As a number of submitters to the Government Administration Committee said there was some concern that the Mental Health Commission is seen as proactive whereas the Health and Disability Commissioner is seen as reactive and therefore that the Health and Disability Commissioner’s office was not the appropriate agency to take on the new mental health and addiction monitoring and advocacy functions. That was one of the strong submissions that was made on Part 2 of the bill when it went before the select committee.  
As a number of speakers have already mentioned the Mental Health Commission started its life in response to the Mason inquiry back in 1996. It was set up in 1998 under the Mental Health Commission Act and it did have a sunset clause which was subsequently extended in the years of 2000 2004 and again in 2007. The date that it was meant to expire under the current legislation was 31 August 2015. That has now been brought forward to 30 June 2012. The departmental report said that by transferring the Mental Health Commission’s monitoring and advocacy functions to the Health and Disability Commissioner the bill would secure for them a permanent home in a resilient well-established Crown entity. We do not think that that necessarily is the best home for the functions of the Mental Health Commission. We believe that this agency should stay intact where it is at the moment. We believe that there is still work to be done in terms of what its functions are and what it sets out to do in terms of the short-and mid-term plans around mental health. So we do not believe that the Mental Health Commission’s best place is within the Health and Disability Commissioner’s office.  
The fact that the Mental Health Commission has been rolled into the Health and Disability Commissioner’s office has raised questions about the future long-term plans of this Government in terms of dealing with mental health issues. I guess that is another point borne out by the fact that this commission’s role is being rolled into the Health and Disability Commissioner’s functions which look at a very wide number of issues in terms of health issues that we have in New Zealand. So we do not support this measure in Part 2 to roll the commission’s functions into the Health and Disability Commissioner’s office.  
As I have said earlier in this contribution there is some sense in Part 1 and to the rolling of the functions into the new agency there. But in terms of this disestablishment of the Mental Health Commission in Part 2 we cannot support it. As Iain Lees-Galloway said we will need to have a positive outcome if we are going to take the action that is within this bill and we do not believe that there will be a positive outcome in terms of the delivery of mental health services for New Zealand and making sure we take a proactive role to support those people in our community with mental health issues. We do not believe that there will be efficiencies or positive outcomes in the mental health area in Part 2. 
GRANT ROBERTSON (Deputy Leader—Labour) 
: 
 Mr Chair I am sure you will call other Labour members as well in the near future. I was not quite aware of that other member seeking the call.  
Part 2 of the Crown Entities Reform Bill as my colleague Kris Faafoi was just saying represents a part that the Labour Party cannot support. One of the things I just want to talk about is the Mental Health Commission and its role—and I am sure other colleagues will want to talk about this as well—and the question of independence and independent leadership within the health sector and particularly within mental health. As has been discussed by other speakers mental health issues in New Zealand are dealt with at a number of levels in the health system and in a number of ways. What the Mental Health Commission has been able to do is provide an independent voice provide independent leadership and provide the monitoring of mental health activities which I believe is at risk with this proposal from the Government.  
The proposal from the Government to locate a Mental Health Commissioner within the Health and Disability Commissioner’s office is going to provide the commissioner with some positive links with other parts of the quality and regulatory monitoring part of the health system. But the trade-off with doing that is a trade-off away from the independence of the Mental Health Commission away from the focus— 
Hon Dr Jonathan Coleman 
: Rubbish! 
GRANT ROBERTSON 
: The Minister of State Services says “Rubbish!”. Well the Minister could get up to take a call and tell us how he will be ensuring that the Mental Health Commission’s independent leadership is now going to continue on within this structure. Because that is the fear that many in the sector have—that the independent leadership will have gone.  
The Mental Health Commission has over the years challenged institutions within the health system as to whether they are performing their role properly and whether they are actually implementing the blueprint. Is that going to be able to carry on with someone now within the Health and Disability Commissioner’s office with somebody who is now a deputy commissioner within that office? People who came and submitted to the Government Administration Committee made it clear that that was their concern. They could live with this change but asked whether the Mental Health Commission’s independent role would be able to be carried on under this change. I do not believe that at this point in time we have had anything from the Government to indicate that that would be the case.  
Blueprint II is being worked on and that is good and it is positive. We always felt that the Mental Health Commission would have the role of getting that going. But what we now have is a situation where many in the sector believe that the focus on the implementation and monitoring of Blueprint II is at risk with this proposal. This is a vital transition point in the way that mental health funding and mental health support is provided in New Zealand. At that very point the question is whether the Minister is saying to this House: “We can get that implemented. We can ensure that the monitoring is going to occur. We can ensure that the linkages between the provision of services and mental health policy are going to be able to carry on.” I do not believe in the bill’s current form that that is going to happen. I do not want to overdramatise this. I think it is clear that the Government has tried to come up with a way of continuing on with mental health monitoring and the provision of policy advice and services around mental health. But I do think this is the wrong way to go about getting the outcomes that we want for the new blueprint for mental health.  
Some of the other ideas which the Minister may choose to comment on that were raised in the select committee include the role of mental health service consumers in being able to have some input into the future provision of monitoring and services around mental health issues. Overall in New Zealand over the last 4 years we have seen a number of district health boards decide where they are going to go to find the funding cuts that have been forced on them by this Government and that is in the area of mental health. Certainly in my own area that is what the Capital and Coast District Health Board has done.  
The providers of mental health services in the community have had their budgets cut. Wellink one of the providers of services to mental health consumers in the Capital and Coast District Health Board region has had its funding cut by over a third. It is continuing to deliver the services. The Government is very lucky that many of the service providers in the mental health sector are so dedicated that they will keep delivering services. But the question that has to be asked is this: what will it mean in an environment where district health boards forced by the underfunding of this Government have made a decision to take cuts in mental health with the Mental Health Commission going out of existence? Will the Mental Health Commission’s successor this person who is now the deputy commissioner be able to actually provide a challenge to what is going on in our district health boards around New Zealand right now? Will they be standing up to the institutions that manage and control mental health and will they actually provide the advocacy for and the promotion of mental health and the linkages between policy and services? We do not know that. We have not had a convincing answer from this Government. It does give people in the sector the impression that once again mental health is being pushed to the side.  
Once again mental health is the poor cousin in the health sector. The Government could have carried on the Mental Health Commission carried on its mandate ensured that Blueprint II got fully up and running and then made its decision about whether or not it wanted to carry on with the commission. Instead it brings the date forward and puts into play risk and a lack of confidence within the sector. So I am going to end my contribution there— 
Hon Dr Jonathan Coleman 
: Great! 
GRANT ROBERTSON 
: Well I hope the Minister takes a call. I hope the Minister will take a call and answer the concerns of New Zealanders as to whether or not his Government is really committed to mental health. The question he needs to answer beyond the ones about the structure is whether this Government is prepared to fund mental health in a way that gives it the prominence that it deserves in our community and our society because it has not done so up to now. 
Hon Dr JONATHAN COLEMAN (Minister of State Services) 
: 
 There was only one fact that came out of that speech on Part 2 of the Crown Entities Reform Bill by the heir to the Labour Party leadership. That is the fact that Grant Robertson is going to be running around the mental health sector wringing his hands and telling people how bad it is going to be. That is the one bit of truth in that speech. All the rest was complete fiction. That was a speech designed to scare people out there. I want to put the record straight. Grant Robertson is in the Chamber talking about funding. Well the fact is that this Government has put more funding into mental health than any Government in New Zealand’s history—$40 million over 4 years in the last Budget. Grant Robertson gets up here and talks about mental health cuts. That is completely untrue. He knows that his local district health board has had more funding under National than it ever got under Labour and that that money has gone up every single year. He is not even going to get up and take a call I reckon to refute that fact. But that is the fact.  
Look this Government has not focused on bureaucracy and strategies like the last Government did. We focused on access to services. What was happening under that last Government in mental health under the Labour Government? It is a fact: Pacific Islanders were not getting access to mental health services Maori access was way less than it should have been— 
Grant Robertson 
: You’re making it up. 
Hon Dr JONATHAN COLEMAN 
: —I am not; I tell you what this is the absolute truth—and access for older people and the very young was not what it should have been. I can tell you if Labour thought that mental health was such a priority why did it never allocate it as a ministerial portfolio? It never did. 
Grant Robertson 
: What about a target for mental health? 
Hon Dr JONATHAN COLEMAN 
: See? Here he goes. His answer to everything is a target and more money. Yet when debating Part 1 of this bill Labour members were saying Tony Ryall should not be focusing on targets so they cannot be right both ways. They are absolutely confused. Grant Robertson went on about the independence of the deputy commissioner within the Office of the Health and Disability Commissioner who will now take over those functions of advocacy and monitoring. He is essentially questioning the independence of the Health and Disability Commissioner. Grant Robertson knows that he is being completely mischievous because he knows that the Health and Disability Commissioner reports regularly to Parliament. If there is one body in health I can tell you that is monitoring what is going on in the health system it is the Office of the Health and Disability Commissioner.  
 He is also trying to make out that somehow the blueprint work will not be done. Well Blueprint II is going to be completed by the Mental Health Commissioner. But the point will be that the implementation will then be carried on through this new position within the Office of the Health and Disability Commissioner and most crucially we have a whole Ministry of Health—you know hundreds and hundreds of very good public servants many of whom are working in mental health—who will be responsible through the district health boards for implementing this blueprint. So for the Labour Party to say that there is less spending in mental health is a complete fiction.  
I want to tell you that this Government has put a premium on mental health. We have focused on the services. Kevin Hague was talking about people not getting services in the community. Well we have put a major emphasis in the Primary Health Care Strategy of making mental health services more available. I do not believe that it is actually true that there are people in our mental health system who are in hospital beds when they should be being cared for in the community. There has been an emphasis for many years—the Labour Government actually did that as well—on getting people cared for in the community.  
Grant Robertson 
: I didn’t think we did anything. 
Hon Dr JONATHAN COLEMAN 
: Grant is right—Labour did not do much in mental health. He is owning up to that. He said: “I didn’t think we did anything.” and he is correct in that in some sense. But I want to give them some credit; they got the philosophy right. We have continued on with that philosophy. The best place for people with chronic illness to be cared for is in the community. I just want to assure people that the advocacy functions of the Mental Health Commission are going to continue. Mental health has a very high profile now in New Zealand society and I want to acknowledge the work of mental heath services consumers people who have suffered with chronic illness for the profile they have brought to this. I want to acknowledge the work of people like John Kirwan who have gone outside their comfort zone to break down stereotypes around mental health. That has been very positive. It is now a very acceptable thing to people to say to their mates: “Look I’m having a few issues.” and people by and large are very supportive in a way that they would not have been a decade or two ago.  
But I want to get back to the central point. This is a sensible change that will preserve the functions of the Mental Health Commission and mental health is a very high priority for this Government. 
LOUISA WALL (Labour—Manurewa) 
: 
 I will make a short contribution on the Crown Entities Reform Bill in terms of the debate. What I really want to focus on is rationale and what the rationale was for establishing the Mental Health Commission in the first place. When I was asked to speak on this bill today I thought: “Right. Well let’s have a look.” The commission was actually established after a 1995 inquiry because there were concerns in our society regarding the adequacy of mental health services following a programme of deinstitutionalisation and relocation to community living of people who have been in mental institutions. It was also established to consider the role of alcohol and drug services in relation to mental health. That was a need that society had at the time. We went through a process. There was an inquiry and as we know the Mental Health Commission which is actually an entity was created to improve and lift the priority around mental health in New Zealand. I actually think that is the question. What will change from having a specific entity—the Mental Health Commission—versus having an individual a person who is going to carry the responsibility to ensure that mental health continues to be a priority area in New Zealand?  
When I looked at some of the work of the Mental Health Commission it is very interesting because we know that one in five adults in New Zealand experiences mental health or addiction problems. This has a huge impact on our families and our communities. One of the other interesting pieces of research was done by the University of Auckland. We know that at secondary school level for example 10 percent of our girls self-harm and 5 percent of our boys self-harm. We have research that says that mental health is a big issue here in New Zealand. Obviously our youth suicide statistics and may I say our suicide statistics generally are pretty appalling. We would all acknowledge that as a country there is something seriously wrong when our kids are so hopeless that the only way out of the predicament that they see themselves in is to take their own lives.  
So the value of having an entity that focuses on mental health is that it ensures that there is a body that can collate that evidence that can drive that evidence and that can actually ensure that that evidence informs how the Ministry of Health does its work and how different aspects of social development funding provide the services that are critically needed in our community to address these needs. That is actually the difference. That is why we will not be supporting this part of the bill. We think that having a commission and having an entity with a capacity is much better than having an individual who will be in the Health and Disability Commissioner’s office and who has to be the champion of mental health. We think that is too big a burden to carry.  
Some of the other interesting research that the Mental Health Commission has produced about New Zealanders’ well-being relates to issues—for example we know that middle-aged people Maori Pacific people and people from the most deprived neighbourhoods have mental health concerns. We know there is a link between mental health and poverty. We know that there has been no change in the proportion of people aged 15 years and over who have hazardous drinking patterns—so between 1996 and 2006 we have not been able to address those issues. We also know that 6.6 percent of people over 15 years of age have a high or very high probability of an anxiety or depressive disorder. So there is a lot of need in New Zealand society.  
I look at the decision that has been made by this current Government and at the rationale for this bill. When the Government Administration Committee had its initial briefing on 15 February the purpose of this bill was to realign Government functions either by grouping complementary functions skills and objectives or placing functions in larger or more resilient agencies that had more capacity and capability. Obviously the overriding objective was about saving money pretty much. So I hope at the end of the day the decision to get rid of a commission and to replace a commission with a commissioner is not going to see an increase in some of the mental health indicators that we currently enjoy. As long as this Government is happy that this is not going to affect the ability of us as a nation to meet the needs of those who have mental health issues then that is fine. Kia ora. 
A party vote was called for on the question  
That Part 2 be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 59 
New Zealand Labour 34; Green Party 13; New Zealand First 8; Maori Party 3; Mana 1. 
Part 2 agreed to. 
Part 3Charities Act 2005  
The CHAIRPERSON (Lindsay Tisch) 
: This is a debate on clauses 41 to 54 and schedules 7 to 9. 
LOUISA WALL (Labour—Manurewa) 
: 
 I will start where I almost ended my last contribution. I want to focus again on the initial briefing to the Government Administration Committee by the State Services Commission on 15 February 2012. The last rationale for the Crown Entities Reform Bill was that the disestablishment of the Charities Commission and the transfer of functions to the Department of Internal Affairs were estimated to save the Crown $2.432 million over 4 years. These costs did not take into consideration the proposal for the three-person independent board. But I guess I would like to ask the Minister in the chair the Minister of State Services whether or not that is correct. If that is the biggest rationale for merging the Charities Commission into the Department of Internal Affairs it would be interesting to know given that there seems to have been no evidence for these financial savings. In fact I know that the group Te Ora o Manukau sent an email out and the Minister would have received it and its assertion is that it is more likely that the integration of information and communications technology systems information and operational functions will result in additional costs and wastage of resources already invested in the commission. No work has been done to determine the savings over the long and medium term of keeping the commission in place. So it would be wonderful if the Minister was able to provide some evidence about that.  
The other point that I want to highlight from the Te Ora o Manukau communication with me is that other countries have analysed the framework of the New Zealand Charities Commission with the intent to follow New Zealand’s lead. This is an area internationally where the way we do it here in Aotearoa is best practice. So it kind of does not make sense from our part of the world why the Government is pursuing this.  
We completely oppose Part 3 of this bill. We oppose the fact that communities and the community and voluntary sector organisations in our country have been ignored. When the select committee process went through it was very interesting to look at what the Government Administration Committee actually said. After committee members listened to the submitters—and of the 43 submissions 20 were specifically related to Part 3 of the bill with 19 opposed—this is what the select committee said. It did “acknowledge the strong concern expressed by submitters in relation to the disestablishment of the Charities Commission”. It did highlight that the process was interrupted with the end of Parliament which further added to confusion about the status of the submissions. There would have been many more submissions and many more community and voluntary organisations would have told the select committee exactly what they felt.  
Not all members of the select committee were convinced that legislative safeguards in the bill would be sufficient to maintain the degree of independence the Charities Commission currently provides. Members also expressed concerns that some functions would be less accessible to the public and less transparent when transferred to the Department of Internal Affairs. That is what the select committee said with a Government majority on the committee.  
What the Labour and Green members who were on that committee said—and I want to acknowledge the Hon Ruth Dyson who chairs that committee—was that “A review of the Charities Act is due to take place following the current review of the Incorporated Societies Act 1908.” So let the first-principles review occur. The Labour and Green members believe that the Charities Commission functions should not be transferred to the Department of Internal Affairs. No decisions on either legislative or operational change should be made until the review of the Charities Act has been completed and the independence and integrity of the Charities Commission cannot be retained if the functions are transferred to the Department of Internal Affairs. 
 We made some pretty clear statements about where we stood and it has been interesting as the spokesperson on the community and voluntary sector to talk to people in the sector about what they think about this part of the bill. When I say “the people of the sector” I am talking about the Association of Non-Governmental Organisations of Aotearoa I am talking about Philanthropy New Zealand I am talking about Social Development Partners I am talking about Bishop’s Action Foundation and I am talking about the J R McKenzie Trust. Letters have also been written I noted by two international speakers who attended a Charities Commission conference Lindsay Driscoll from the UK and Bob Wyatt from Canada. What they did was express concern at the impact of this move and the poor timing of it considering the planned review of the Charities Act that has already begun and is due for completion in 2015.  
The sector does not want this merger to happen. What the sector wants is for due process to take place for its voices to matter and for this Government to listen to it. My colleague the Hon Trevor Mallard will be moving an amendment that defers the introduction of Part 3 for 3 years because that is what the sector wants. On this side of the Chamber we are very interested in listening to our stakeholders listening to the people who are going to be most affected by this part of the bill. You know one of the four big points that our community organisations made was that the Charities Commission was established after over a decade of discussion between the voluntary and community sector and Government plus a detailed select committee process. There was an understanding that there would be a review of the Act which is actually going to happen. It is scheduled to be completed by 2015. So we do not understand why if one of the clear rationales for this bill was to save money if that is not the case why cannot we just let due process occur?  
That is the other challenge I have for the Minister: can he please explain why we will not let due process take its course. Let us see what the best configuration of the Charities Commission might be. I mean I could understand if this was going to save money if this was going to be more efficient or if this was going to provide some added value to the sector. But if we do not know that how can we just rush this part of this process through? This is within the context of the sector not having enough opportunity to have input and particularly in the context of the sector overwhelmingly asking you to please let the review happen. These questions I would really appreciate it if the Minister answered.  
I would also appreciate it if those members of the Committee seriously considered the community and voluntary sector organisations in your communities. I mean there are over 93000 community and voluntary sector organisations in New Zealand and over 25000 registered charities. The sector is very clear about what it wants so I just plead with you to please think about it and I look forward to the Minister explaining particularly that part of the rationale for the bill. We hope that actually tonight we have an opportunity to make sure that the voices of our community and voluntary sector—which are but one step away from the families and communities across Aotearoa whom they are helping meet the needs of—have a say in the framework around how they do their jobs. Thank you.  
JAMI-LEE ROSS (National—Botany) 
: 
 I am pleased to take a call on Part 3 of the Crown Entities Reform Bill. It is a bill that the National-led Government believes is important and it is part of our Government’s overall programme to improve State sector performance as a whole. These changes are part of the programme to ensure that the State sector delivers the front-line services that New Zealanders expect in the context of a challenging economic climate. Reducing the number of Government agencies will improve coordination reduce fragmentation and ensure that functions are delivered by agencies with greater resilience that are better able to perform in tightened fiscal environments. That applies to the Charities Commission and the new board that will sit under the Department of Internal Affairs.  
I think it is important that when we consider the charities issue and the question of whether it is appropriate that charities sit within the Department of Internal Affairs we consider the parts of the bill that are designed to allay the fears of those who are concerned that one the charities functions that the Department of Internal Affairs will have will lack independence and two that the Charities Commission’s education goals will no longer exist. The charities functions of the Department of Internal Affairs will most certainly be independent. The bill clearly outlines that. And the bill also clearly outlines that the educational functions that the Charities Commission used to hold are still important and need to be implemented. 
I was listening very carefully to Louisa Wall’s speech and the point I really picked up about her speech was her mentioning Te Ora o Manukau. I think it is good that she highlighted Te Ora o Manukau because for those who do not know the history I would like to let them know that Te Ora o Manukau was set up in the 1980s and it is actually an organisation that is funded by the Ministry of Health and the Manukau City Council—well now by the Auckland Council. The reason why I think it is important to highlight Te Ora o Manukau a bit further is that it is actually an example of an organisation that is funded by a council and by the Government has its secretariat provided by a council and is able to provide independent governance independent advice and independent advocacy. That is exactly what is being talked about in respect of this board. The secretariat of this board will be provided by the Department of Internal Affairs it will be funded through the Department of Internal Affairs and the chief executive will provide advice from the Department of Internal Affairs to the board but it will still have independence. So if we talk about Te Ora o Manukau as an example Te Ora o Manukau is very similar to what we are talking about here. So I thank Louisa Wall for raising this point about the charities functions of this bill.  
I think it is important to highlight to the Committee some provisions of the bill that will help to allay the fears of individuals who have submitted on the bill. The bill elevates into the purpose clause of the Charities Act principles around education. It is important that charities are provided with assistance by the board which sits under the Department of Internal Affairs and the very fact that the educational elements that the Charities Commission held are being moved into the purpose clause of the Act highlights the fact that education provision is important for the board. New section 3 which is in clause 43 of the bill highlights in paragraphs (a) and (b) the board’s responsibilities for promoting public trust and confidence in the charitable sector and encouraging and promoting the effective use of charitable resources. The bill really does accept the point that the educational functions of the commission are important. It is highlighted right there in the purpose section. It is also worth pointing out that the Chief Executive of the Department of Internal Affairs will also have functions that he is required to implement around good governance and management promotion of charities. It is all right here in the bill. 
Independence is also important and that is also highlighted very clearly in the bill. If we are looking to ensure that the board is independent it is right here in the bill it is going to be spelt out in legislation and we cannot get any clearer than that. And if we want to ask ourselves whether the Department of Internal Affairs has the ability to provide a secretariat provide funding and still allow an organisation to act independently we need only to look at the Gambling Commission and we need only to look at the Local Government Commission. They are examples where organisations sit within the framework of the Department of Internal Affairs the Department of Internal Affairs funds them and provides secretarial support but those organisations are still most certainly able to make independent decisions independent of the Department of Internal Affairs. There are examples where the Department of Internal Affairs is already doing what is proposed in this bill. It has expertise in this area so we should not fear the changes that are coming. In fact the Gambling Commission often makes decisions that differ from the Department of Internal Affairs’ advice. The Gambling Commission is able to stand up to the Department of Internal Affairs. I am very sure— 
The CHAIRPERSON (Lindsay Tisch) 
: I am sorry to interrupt the honourable member. The time has come for me to leave the Chair for the dinner break.  
Sitting suspended from 6 p.m. to 7.30 p.m. 
DENISE ROCHE (Green) 
: 
 I am asking the Committee to support this Supplementary Order Paper that is in the name of Trevor Mallard around Part 3 of the Crown Entities Reform Bill. The Greens particularly want to defer the Charities Commission from being absorbed into the Department— 
The CHAIRPERSON (Eric Roy) 
: My understanding is that the Supplementary Order Paper in the name of Trevor Mallard is to clause 2 of the bill. We are on Part 3. 
DENISE ROCHE 
: No it is Part 3. 
The CHAIRPERSON (Eric Roy) 
: We are on Part 3 but is there a Supplementary Order Paper? 
DENISE ROCHE 
: Yes there is. 
The CHAIRPERSON (Eric Roy) 
: My apologies.  
DENISE ROCHE 
: No. 32. Can I start again? 
The CHAIRPERSON (Eric Roy) 
: The situation is that the Supplementary Order Paper applies to clause 2 but in effect it is about the commencement of Part 3. So we should actually debate it at the time of clause 2. 
DENISE ROCHE 
: May I speak to— 
The CHAIRPERSON (Eric Roy) 
: Yes you certainly can. I was just trying to clarify what we are doing. 
DENISE ROCHE 
: Thank you. I appreciate that. We will be opposing this part of the bill. Last night the Minister Kate Wilkinson referred to the Gambling Commission as an example of a model of a statutory board that works well despite being under the auspices of the Department of Internal Affairs and she suggested that the Charities Commission would fare just as well.  
However the two are very different beasts. The Charities Commission is a stand-alone organisation that operates separately from the Government and Government departments. Since its inception it has registered 28000 charities. It has ensured compliance and reporting and it monitors the activities of charities to make sure they are doing what they say they are going to do and to make sure that they deserve the tax exemptions that are conferred on them by virtue of the fact that they have gained charitable status.  
On the other hand the Gambling Commission is an organisation that sets the gambling levy does some regulatory work around the casinos and things like the host responsibility programme and is an appeal body for the gambling compliance unit which sits within the Department of Internal Affairs. The Charities Commission at this moment does much more than that. Its does compliance and if that function is to be lost to the Department of Internal Affairs then we are likely to see less compliance because there is a real struggle to investigate as it is.  
The Charities Commission also develops the capacity of the charitable sector. It has taken it about 6 years to develop a solid reputation and it is hugely effective in delivering information that enhances the sector. Any move to diminish the role of the Charities Commission is a great leap backwards. International charities law experts—and there were four of them from the UK Canada and Australia here last month—say that to reduce the functioning of the Charities Commission goes against all international trends. According to the chief executive of The Bishop’s Action Foundation: “The changes being proposed were premised on the mistaken belief that Government funding to charitable organisations for service provision gives it ownership of the whole sector.”  
Many in the charities and community and voluntary sector believe that this bill will result in less transparency around the charitable sector. They also think that it will mean more bureaucracy and subsequently less innovation. There are well-founded fears that removing the Charities Commission from its stand-alone status reduces its ability to be independent and will result in less understanding by the Government of the sector. We want to retain the special and effective characteristics that the Charities Commission has worked so hard to achieve over the last 6 years. The amendments that the Government is wanting to put up just will not manage that.  
The actions that are doing this are premature. The Act is still a fairly new piece of legislation and it is due for review in 2015. The terms of reference are currently being discussed. Additionally the Incorporated Societies Act is due for review. Part of that review is to plan to meet the needs of the sector in the future. In light of these changes to the Charities Commission the bill is premature.  
We need to listen to the people in the community and voluntary sector who are affected by these changes. It is a significant sector. If you include all the voluntary hours they contribute they contribute the same amount as the construction industry to the GDP of this nation and that is about 4.9 percent. According to Philanthropy New Zealand $2.67 billion—none of it from the Government; all of it from the private pockets and trusts of New Zealand—was used for charitable purposes throughout the last year. That alone adds up to 1.35 percent of our GDP.  
The move does not make sense in terms of timing it does not make sense in terms of what the sector wants and it does not make monetary sense either because we have already heard that there will be no savings if you move the Charities Commission to the Department of Internal Affairs. That is why we will be voting against it.  
The CHAIRPERSON (Eric Roy) 
: Before I call the Hon Trevor Mallard there were several conversations going that were more than in a dulcet tone so if members wish to have those conversations they might like to curtail them or go into the lobbies. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 Thank you Mr Chairman. I thought your description of the junior Government whip was a bit unkind in that way. 
The CHAIRPERSON (Eric Roy) 
: Order! The member is a longstanding member. He knows better than to comment on the ruling of the Chair. 
Hon TREVOR MALLARD 
: I do. It is very rarely I come to the defence of a damsel from the other side and that is what I get for it. 
The CHAIRPERSON (Eric Roy) 
: You’re doing it yet again! 
Hon TREVOR MALLARD 
: Ha ha! Mr Chair— 
Louisa Wall 
: She’s a good netball player Trevor. 
Hon TREVOR MALLARD 
: Is she a good netball player? 
Louisa Wall 
: She is. 
Hon TREVOR MALLARD 
: Is she? Well the member would know. I had better not make the next comment or I could be in very serious trouble. The Chairperson has no idea what I might have been going on to say so I certainly will not.  
I want to make it clear that the Labour Party thinks this is the most obnoxious part of this bill. I think it is fair to say that as was indicated yesterday there was the first part of the bill which we supported; the second part which we opposed; and this is the part that we very seriously oppose because what is occurring is a premature killing off of the Charities Commission well in advance of the requirements for the review of the Charities Act.  
The normal process whenever there is good governance is that the Government does the review before it takes the decisions rather than take the decisions and do the review after the fact as in this particular case. There is I think an attempt by the Minister—and I do not know whether it is a genuine one or one that really is just to try to save face to try to promote the independence of the Department of Internal Affairs in this matter but I think all of us know that when there is a Minister and a chief executive it is very very hard for there to be statutory impendence as far as the decision making is concerned. In this case there is just massive suspicion in the sector about the objectives of the Government in this abolition.  
As I indicated at the time of the second reading no one is pretending that the Charities Commission has always done its job in a way that has been positive and lacking in bureaucracy. I think it is fair to say that especially earlier in its time it was too tight and it was unreasonable. Again I have related—not all members were in the Chamber at the time—the experience that one of my colleagues had with it with regard to the non-registration of the Anglican Church as a charity because of the lack of a wind-up clause in the constitution of the Anglican Church. I think that does get to the point of being unreasonably bureaucratic although again one of my more religious colleagues indicated that perhaps that sort of— 
Hon Simon Bridges 
: Raymond Huo doesn’t even believe in God! 
Hon TREVOR MALLARD 
: I think what we were talking about was the other ways of intervening in order to indicate whether or not a wind-up clause was necessary for the Anglican Church. People have a variety of beliefs in that area. I might say that the Prime Minister has been a Jew a Christian an agnostic and an atheist—all of those things—when it has been convenient. 
Hon Jo Goodhew 
: And they all need a wind-up clause.  
Hon TREVOR MALLARD 
: The member is criticising me after her colleague Simon Bridges brought my colleague’s religious beliefs into the debate. The members opposite cannot have it both ways. They cannot have it both ways. Either they want members’ religious beliefs left out of it or they open it up and the Prime Minister has four positions—four positions—on his religious beliefs. I did not know you could have four positions on whether you had a religious belief. In fact we could have the Prime Minister in charge of the Kama Sutra of religious beliefs. Getting back to the bill— 
The CHAIRPERSON (Eric Roy) 
: Please do. 
Hon TREVOR MALLARD 
: —I think if there was ever a need for a wind-up clause for the Anglican Church it would be if the Prime Minister joined it. If the Prime Minister joined the Anglican Church I would want to wind it up if I was the archbishop. Do they have archbishops in the Anglican Church?  
Iain Lees-Galloway 
: Yes. 
Hon TREVOR MALLARD 
: If I was the archbishop I would want to wind it up. The point that I am making is that occasionally in the past—[ 
Interruption 
]  
The CHAIRPERSON (Eric Roy) 
: Order! 
Hon TREVOR MALLARD 
: No I am happy Mr Chairman. It is a robust debate and if the members opposite disagree and want to feed me some lines I am happy for them to do it. I am happy for them to do it and I do not think it is your—oh well Mr Chairman I am not telling you what your job is. 
The CHAIRPERSON (Eric Roy) 
: Yes you are. Proceed.  
Hon TREVOR MALLARD 
: Mr Chairman do not coach them please—do not coach them. Let them make their own mistakes Mr Chairman.  
Going back to the disestablishment there is a strong view that the legislative safeguards within the bill as it was reported back by the Government Administration Committee do not go far enough. Again I was just beginning to commend the Minister in charge of the bill the Hon Dr Jonathan Coleman for his attempt by way of his Supplementary Order Papers on this part to improve the bill but we do not think those attempts go far enough to preserve the independence. 
I am certainly of the view that the Department of Internal Affairs—and I know there are some very good officials who work at the moment and from time to time for the department—is very much a department of what no one else wants. It is a department that has a set of functions that other departments do not really want. It is sort of the opposite to the Ministry of Economic Development under Steven Joyce which grabs everything that might be important and might make a decision. 
What is clear is that with this review of the Charities Act or with this shift of the Charities Commission there is yet another thing being added in to the Department of Internal Affairs that will not be particularly useful. We will therefore be working very hard in order to oppose this. I want to ask the Minister whether clause 50(1) especially paragraphs (a) and (b) is in fact consistent with previous legislation in this area. Is this a standard technical redundancy clause or is it something that is different? On the equivalent employment clause clause 50(2) again I would like the Minister to tell the Committee whether or not that clause especially paragraph (d) on the treatment of the period of service is in fact something that is the same as has been used in similar legislation in the past.  
 The other question is whether because these people currently work for a Crown entity and are not public servants that period counts as a period of public service even though it was in a Crown entity. The Chair is nodding. I do not think he is going to sleep. I think the Chair at least understands the difference and the importance of the difference as far as the conditions of employment are concerned.  
I want to get an assurance—and I want to get an assurance both ways—that the employees are not being advantaged as a result of this change and that they are not being disadvantaged as a result of what appears to be a change of conditions for people from being State servants who work for a Crown entity to being public servants because they come in within the core of the State Service. I know that Dr Coleman is someone who is well versed in the niceties of the if you like different borders and rings around the State sector and the concentric circles we have but the Public Service is important to New Zealanders. 
DENIS O’ROURKE (NZ First) 
: 
 Mr Chair— 
The CHAIRPERSON (Eric Roy) 
: Denis O’Rourke. 
Hon Trevor Mallard 
: But he didn’t call.  
DENIS O’ROURKE 
: I did call. The Crown Entities Reform Bill as some others have said is proceeding in advance of an imminent review of the Charities Act 2005. 
Todd McClay 
: Already this is better than the last one. 
DENIS O’ROURKE 
: Well of course. It is unwise for this bill to proceed at this time in the face of a review that is about to come and that I hope would make a better job of reforming the Charities Act than Part 3 of this bill would do. It is a piecemeal approach and that is very bad lawmaking. The real issue we should be dealing with tonight as far as charities are concerned is a new definition of “charitable purposes”. That is the one that people want to be addressed not some mindless unnecessary restructuring of the administration of charities which this bill represents. 
It is untrue that to disestablish the Charities Commission as it now is at this stage would somehow create a more robust and resilient agency in the form of what is now proposed. That is absolute poppycock. The truth is that that structure will actually weaken the independence of charities and the result of that will be negative for the whole community. In fact the new structure would be less robust and less resilient—totally the opposite to the purpose that this bill is supposed to achieve. The result of all this is going to be less public support for charities fewer donations and the Government seen to be trying to take over the charities sector. That is a more Government approach not a less Government approach and that is surprising from a National Party and surprising from an ACT Party which will no doubt support this bill as well. It is totally opposite to their stated— 
Brendan Horan 
: Is he still here? 
DENIS O’ROURKE 
: —philosophy. Well he is still here for the time being. We will wait and see. There will be more cost to the Government from this structure not less because the Government will have to pick up the pieces from charities that are less robust and less able to do the things that they do for us all today. The essential issue as many have said is the issue of independence. The current commission is in fact and is seen to be independent. To transfer so many functions to the Department of Internal Affairs removes genuine independence and it certainly will not be seen as being independent. The new board of three people will be seen as nothing more than Government lackeys by a lot of people and there will be some justification from that point of view. The truth is this: whatever the bill says about preserving independence means nothing. It is the practice that really matters. I have to say that some Ministers would have integrity and would abide by that principle but I am afraid that others would not as well. Others would not. That is the problem that we have got here.  
Independence is important because when you look at the purpose of the bill you see that it is to promote public trust but it will not. In fact it will alienate public trust. So it is going to defeat the very purpose that it is stated to be trying to achieve. It is said that it would promote the effective use of charitable resources. I do not know really what that means but if it means State interference in the charities sector which does a damn good job of it right now then I see no advantage in it at all. If in fact it is so bad then it should be reviewed and done in a holistic way as I said before. That is why New Zealand First will also support the Supplementary Order Paper. 
The truth is that the donors and the charitable organisations themselves should decide what is an effective use of charitable resources not some department of the Government. More ominously still we see that the bill would seek to empower a chief executive to carry out functions. That means again more Government. It means more interference in the private affairs of people and charities. It means more bureaucracy less freedom less public encouragement to donate less flexibility and less public engagement. All of the things that you would hope the Government would be trying to achieve this bill is going to defeat so it should not go ahead. For those sorts of reasons this bill is not wanted by any of the charitable organisations I have had contact with and I have had contact with quite a few. Quite a few of those who have contacted me have objected to the loss of independence of a board they have objected to the loss of flexibility in the administration of the charities sector and they certainly do not want more bureaucracy because that is time-consuming it is uncertain and it is just a hassle for them and they want to avoid that as we all would. 
Bureaucracy itself is a dead hand on something that is actually functioning very well in this country. It would mean no real fair or impartial access by charities to the system of administration. I know those in the Government departments would say that no that is not going to be the case. I am afraid that in practice it would be. There would be no real transparency of decision making either. Decisions made under this structure will be secretive will be made behind closed doors typically non-consultative and that is not what we want to see in this sector. But that is typical of Government departments which do not reach out and contact well with the people out there who are trying to raise money and distribute it for charitable purposes. Instead the Government should be encouraging and engaging not regulating and controlling. A Government department culture is not appropriate for these sorts of functions and the current commission I think is building a good culture for itself and is a better way to conduct the administration of the charities sector in this country than what is proposed in this bill. 
New Zealand First I am happy to say does support charities does heed their views has listened and has agreed with them. On the other hand the Government has ignored their needs and their views and has set itself up in opposition to the charities sector as a whole. This bill weakens the charities sector. It undermines public confidence in the independence of charities it creates barriers of bureaucracy it provides less transparency less accessibility and certainly does not have anything like the public support that a measure of this sort should have. Part 3 of the bill is bad law and it should not proceed. 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 I think one of the most salient comments in the departmental report on this bill the Crown Entities Reform Bill is comment No. 152 on page 25 for those of you who are following at home. The point is— 
Hon Simon Bridges 
: It was not. 
IAIN LEES-GALLOWAY 
: Mr Bridges do you know what it is? Feel free to share. He knows a lot about this bill Mr Bridges as a knowledgable Minister. The comment that I am referring to is as follows: “The points made in favour of retaining the Charities Commission are acknowledged. However they do not address the Government’s wider objectives for the State sector.” In other words when people came and said to the Government Administration Committee that the independence of the Charities Commission’s functions will be compromised by transferring them to the Department of Internal Affairs when people came to the committee and said that the Charities Commission’s role in educating the charitable sector will be compromised by the transfer of its functions to the Department of Internal Affairs when people came to the select committee and said that the Charities Commission should be retained in its current form until after the completion of the review of the Charities Act 2005 and when people came to the select committee and said: “We don’t believe that this will actually save an awful lot of money for the Government.” all those points were noted.  
The ministry and the officials said: “Yes we actually think the submitters have a point but it doesn’t fit with the Government’s so-called plan.” The Government’s plan for the public sector is just to cut cut cut and in this case regardless of what the outcomes are to cut the number of organisations and to merge organisations whether they fit together or not and whether the outcomes are positive or not. That is the Government’s mantra: “cut cut cut in the public sector”. That is the only thing the Government knows how to do. It is the most unimaginative approach that you could ever have from a Government but that is what this Government has to say.  
Even in the officials’ own departmental report they say that the submitters had good points that the submitters’ points showed an understanding of the sector and in fact that the Government should listen to what those charities have to say. The report says the Government should listen to the non-governmental organisation sector that it should trust it and that it should believe it. But no because it does not fit with the Government’s mantra then it is just going to do the opposite anyway.  
It certainly does feel as though Part 3 puts the cart before the horse. It is just like we saw with the Mental Health Commission—the early termination of an organisation that still has plenty of work ahead of it. As Trevor Mallard said ordinarily what a sensible Government would do if it was going to review a piece of legislation or if it was going to review the way a Government department works would be to carry out that review first and then make the structural changes. But what we are seeing here— 
Louisa Wall 
: Too logical. 
IAIN LEES-GALLOWAY 
: —is the Charities Commission. Well it is probably too logical for this Government I think. It is frankly just too sensible for this Government. The Charities Commission really ought to be retained until the review of the Charities Act 2005 is completed.  
Again the submitters’ points were noted but then the point was made that it is outside the scope of the bill. Well it does not really matter whether it is outside the scope of the bill. The bill is wrong. What the bill is doing is wrong. The proper approach here should be for the review to take place first and then for any changes to the structure to happen after that. Submitter after submitter charity after charity came to the select committee to tell it that but this Government just does not listen. It does not actually trust the charitable sector and it is not prepared to listen to what it has to say.  
Of course apparently this is all with a view to cutting costs. The Government has got its zero Budget coming up tomorrow—its zero growth zero imagination Budget—so it is cutting public sector organisations in an attempt to cut costs. Well I think the submitters who came to the select committee and said: “We’re a little bit dubious about that.” actually had a point. But I am not going to trust just those submitters; I am going to trust the very select committee that heard them. I am going to trust people like Kanwaljit Singh Bakshi. I am going to trust people like Chris Auchinvole. I am going to trust people like Eric Roy. When they performed the financial review of the Department of Internal Affairs they discovered that when Archives New Zealand and the National Library were merged into the Department of Internal Affairs that was expected to cost $2.5 million. That merger a similar merger to the one that is being proposed in Part 3 of this bill was supposed to cost $2.5 million. Well in the end it did not cost $2.5 million and it did not cost $3.5 million; it cost $4.126 million with a further $1.751 million spent on capital assets. In case you missed that Mr Hipkins it was $4.126 million with a further $1.751 million spent on capital assets for integrating the IT systems of the departments. 
 This will not save the Government money; this is going to cost the Government money and all because of its ideological— 
Chris Hipkins 
: How much did they budget? 
IAIN LEES-GALLOWAY 
: How much did it budget? Two and a half million dollars. 
Chris Hipkins 
: So it was twice the cost. 
IAIN LEES-GALLOWAY 
: So it was twice the cost—all up it was twice the cost. 
Louisa Wall 
: How many consultants? 
IAIN LEES-GALLOWAY 
: That is a good question. That is a question for the Minister of State Services to answer: how many consultants were involved in that merger and how many consultants will be involved in this merger? It will not only cost the Government money but also destroy the functionality of the Charities Commission and it is going to put an even greater gap between the non-governmental organisations that work with the Charities Commission and the commission.  
In fact again the select committee—the same select committee that considered this bill with those members from the National Party whom I mentioned just before—actually noted in its financial review of the Department of Internal Affairs that it was very concerned that the integration of the Charities Commission with the department might reduce its transparency and the independence of the Charities Commission. That is coming not just from the sector and not just from the Labour Party the Green Party and New Zealand First but from the select committee that considered this bill—all of the members of that select committee. I would like to hear from the members of that select committee who are in the Chamber as to how they can reconcile those different positions. They are standing up and saying that they support this bill whilst in a report that they have tabled in Parliament they express their concerns and they express their very great concern about the additional cost that goes along with these amalgamations.  
With that I am looking forward to hearing what the Minister’s response is on that. I am looking forward to hearing what the members from the other side who have made those comments in those reports have to say because I think there are some very concerning and pressing issues here. We are undermining the Charities Commission and it is all for naught. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I am very happy to take a call on these changes to the Charities Act 2005. I guess in beginning these comments what I want to do is express concern about the lack of a coherent plan or strategy when it comes to the Government’s approach to State sector reform. It does not seem to have any idea what it is trying to do. On the one hand it is putting a whole lot of small entities into Government departments and then it takes one of the biggest Government departments the Ministry of Social Development and suddenly it is putting a board in there somewhere that will have some sort of role in welfare as well. I am not quite sure exactly why or exactly how that is going to work. It is totally incoherent.  
If the Government were to say its strategy was that it was going to do away with all of these independent entities and it was going to merge everything into the superministries that would be a strategy. It would be coherent. It may not be sensible you know and we might not agree with it but at least there would be a logical flow to that kind of restructuring. That is not what we are seeing. What we are seeing is a whole lot of contradictory decisions being made in the way the Government is reorganising the State sector. In fact it is not putting forward adequate business cases. It made the decision to create Steven Joyce’s little empire—what are they calling it—the Ministry of Business Innovation and Employment without actually doing the business case. The business case came after it had made the decision to create the ministry. And what we have seen as Iain Lees-Galloway just pointed out is that when the Government makes these decisions it does not do the business case adequately and it costs more money than what it was supposed to. In the case of the merger of Archives and the National Library it cost twice what it was budgeted to cost. And unfortunately what we are seeing in this bill is yet another decision—the decision to do away with the Charities Commission—basically being made on an ad hoc basis without a coherent plan for what the Government is trying to achieve with State sector reform.  
The Charities Commission was set up by the last Government after a substantial process of engagement with the charitable sector. I think that stands in stark contrast to this Government’s approach. The National Government regards government as something that it does to people rather than something that is done with people. And I think in the case of the charitable sector what is actually the most sensible and logical process to follow is one that involves all of the stakeholders and gives them a say in the process. When the decision was made to establish the Charities Commission there was a process put in place to review it. That process has not yet been completed. So why undertake more structural reform which is going to impact significantly on the charitable sector without actually involving it in the review and having a full consultative process whereby the charitable sector can buy into whatever decision is being made?  
I have to say I have monitored the Department of Internal Affairs; I sat on the Government Administration Committee in the last Parliament. I have monitored the Department of Internal Affairs which is becoming this huge mother ship basically of a whole lot of agencies departments and entities that do not really have any relationship with one another. The Department of Internal Affairs is basically just everything else that is left over. All the stuff that no one else wants gets lumped into the Department of Internal Affairs. It is not necessarily a coherent entity. Of course they put the Minister that no one else wants in charge of it normally as well. But that does not necessarily make it the most sensible decision. It does not necessarily make things more efficient because they do not fit together. If there were logical fits for the Department of Internal Affairs it might be more efficient but actually it is not necessarily.  
I have some real concerns about the independence of these smaller entities that are being sucked up into the Department of Internal Affairs though the Charities Commission is the one that is being debated in this bill. But we have seen it with the National Library and with Archives. They have statutorily independent roles that are being sucked into the Department of Internal Affairs without in my view strong protections for the independence of those roles. I am very concerned that if we allow the Charities Commission to be sucked into the Department of Internal Affairs we could actually undermine the charitable sector’s confidence in this process and people’s confidence in the charitable sector because there is not a coherent plan for what the Government is trying to achieve with this particular reform.  
The Supplementary Order Paper being put forward by my colleague Trevor Mallard is in my view a very sensible one. It allows for this provision basically to be put on ice while the review that I have talked about is conducted and takes place. I think that is a very sensible thing to do. But I would actually go further and say that more than just review the Charities Commission it actually needs to go wider than that and what we need to see is a coherent plan for public sector reform. I think it is totally legitimate to say that there should be reform in the public sector that we want a more citizen-centric responsive efficient Public Service. The Labour Party is quite happy to support change where we think that that is what is going to be delivered. We certainly do not think that is going to be delivered by this piece of legislation because it is simply ad hoc. It is basically creating another little empire.  
Like the previous part of the bill that I talked about when we were talking about the new Health Promotion Agency I guess this differs a little bit from other elements of the State sector reform being undertaken by the National Government in that this is another little component part that is not going to end up in the “Ministry of Joyce” the Steven Joyce empire. It is only a matter of time—it is only a matter of time—before this gets sucked up into the orbit of Steven Joyce’s new— 
Hon Trevor Mallard 
: No no. It’s not attractive enough. 
CHRIS HIPKINS 
: It is not attractive enough. No there are not enough fun things for Steven Joyce to play with. So he is just going to leave this behind. But I do not know—I do not know. 
Hon Trevor Mallard 
: But he is beating Bill English at the Budget. 
CHRIS HIPKINS 
: Treasury could be next to be sucked into the orbit of Steven Joyce’s little empire; it certainly would not surprise me at all.  
This is obviously quite different from other elements of State sector reform in that it is not putting more and more under Steven Joyce’s control. The Department of Internal Affairs is I think an agency that we need to take a step back from and think about what the department is why it is there whether it is a logical grouping of agencies whether there is a more logical grouping to take place there. But we should do that by asking the question of what we are trying to achieve out of it rather than simply having reform for reform’s sake which is what we see from this Government. There is no coherent plan. It is not like it is out there saying: “Well these are the principles behind our State sector reform.” whether it is about efficiency or about making it more responsive to the public. It does not have that coherent articulated set of principles behind the public sector reforms it is doing; it is just literally making it up as it goes along and making contradictory decisions.  
In this decision like the Ministry of Business Innovation and Employment decision it is pulling together Government agencies; it is removing independence from the process. Yet in other areas it is adding independence. It is adding independence—or supposed independence—into the welfare system for goodness’ sake and yet it is taking it away from the charitable sector. Well how is that coherent? How does that make any sense whatsoever? I cannot see the logic in it and I have yet to hear the Government articulate exactly what it is that it is trying to do with State sector reform. State sector reform is costly it is time-consuming and when there are these constant reorganisations mergers segmentisation—segmentation—of different agencies— 
Louise Upston 
: New word. 
CHRIS HIPKINS 
: —yes it was nearly a new word—but when you are constantly— 
Hon Trevor Mallard 
: He thinks he’s John Key. 
CHRIS HIPKINS 
: Golly I am not John Key. That is a bit rough. But when you are constantly pulling departments apart and putting them back together again what it does do is disrupt all of the people who work in those entities from the job that they are there to do. Because of the lack of a coherent plan for State sector reform under this Government we are seeing that the poor people who work in say science and innovation who have only just been reformed and restructured are just finally coming to terms with that fact that they are part of this new agency and now they are being lumped into another new agency. It is constant. The people who work in housing policy who previously were with the Housing New Zealand Corporation then they were yanked out of that and put into the Department of Labour are now going to be put into the Ministry of Business Innovation and Employment. It is symptomatic of the lack of a coherent strategy for public sector reform which is what we are seeing in this bill when it takes the Charities Commission—particularly in this part—with no coherent plan for what it is trying to do with it and whacks it into the Department of Internal Affairs. I think that is wrong.  
I think what the Government needs to do is take a pause take a breath and come up with a coherent plan for public sector reform. If it actually gets it right—if it gets the principles behind it right—it might actually find that it gets more support from around the Parliament for what it is doing because public sector reform can be a positive thing. If the principles behind it are very clear and if the benefits of it are very clear then we might actually support it. We do not think that this has been well-thought-through. We do not think that undermining the independence of the charitable sector is a good thing and that is the reason why I think the Government should reconsider. It should look at the amendment being put forward by Trevor Mallard and consider putting this one on ice and getting it right. 
KEVIN HAGUE (Green) 
: 
 I wish I could say it is a pleasure to take a call on Part 3. I have spoken on Part 1 and Part 2 of this Crown Entities Reform Bill in the debate today and in both of those contributions I have spoken about the fact that reorganisation mergers in the State sector typically end up costing more than was expected and typically fail to deliver the gains that were anticipated. That is not just a risk of doing that kind of thing; it is the usual experience. The usual experience is that actually the financial gain is not there and that a critical loss of momentum in the performance of the functions of the entity occurs quite commonly in both entities that are being merged. I think that is a big problem in this case because the only case that has been made for the change the Government intends here is about increased efficiency: a cost saving in back-office functions. Well for goodness’ sake the Charities Commission is a tiny entity and so its merger into the Department of Internal Affairs has even in the most optimistic scenario a very very small gain and that gain is extremely likely to be outweighed by the cost of that change and a critical loss of momentum. So given that the potential upside is tiny what about the cost?  
Like Chris Hipkins I am a bit confused by the Government’s inconsistent approach to decisions in this area. It seems to have a confusing attitude towards the State sector because in this move it is taking a step that is in 180-degree contrast to its usual approach to the performance of the role of government. Ordinarily National is the party of smaller government—trying to keep government out of the lives of citizens and make it as small as it possibly can—and I usually disagree very heartily with that. But in this case here we have an institution the Department of Internal Affairs which is at the very core of the executive part of the government sector actually being added to by something that is on the very fringe. That is important because what is occurring here in contrast to other parts of this bill is that the Government is wading apparently heedlessly into an area of constitutional arrangements.  
It is of fundamental importance that we have in this country a State sector a private or business sector and a community sector that have separation from each other. The arrangements that govern the interfaces between those three sectors have arisen over a considerable period of time and ought not to be done away with without very considerable thought. The third sector or community sector—and I would prefer those terms I must say to the “charitable sector” but “charitable” perhaps at least gives a hint about the history of the organisations in this sector—has come about largely independent of Government and so Government’s interface with that sector is an issue of considerable sensitivity to those within the sector. The creation of the Charities Commission in the first place occurred through very considerable consultation with the community sector organisations. What we are about to do is disestablish that institution which was brought about by consultation with the sector and we are going to disestablish it in the face of consultation that shows pretty uniformly opposition to that change from the community sector.  
It is of course appropriate for the State to have some institution that manages its side of the interface between the Government and community sectors—it is entirely appropriate—but the community sector is saying extremely clearly that it wishes that institution to be at some distance from the core State and not right at the very heart of the core as the Department of Internal Affairs is. That is why the community sector in its many submissions on this part of the bill was pretty uniformly opposed to what the Government intended to do. What we are experiencing here is a change that has even in the most optimistic scenario a tiny upside and on the downside we see not only a very very likely cost blowout but also a disruption of the basic arrangements between the State and community sectors. That is why members of this House—and I am sure it is not just us—are being exposed to the expression of considerable disquiet from the community sector.  
I just want to mention a letter that I received from Greenpeace about this. I will quote a little bit from its letter because it referenced some basic misunderstandings on the part of the Government about what it is actually engaged in here. Greenpeace said first of all that the proposed change illustrates a “Lack of understanding that charities are set up by ordinary New Zealanders … to address an issue they see in their community. And that such goodwill and initiatives do not require the involvement of a government department”. Secondly it said “Most charities receive no direct funding from government so their responsibility is to their members and their community—not government”. Thirdly it said the involvement of the Department of Internal Affairs “is likely to dampen initiatives in the community rather than encourage them”. And fourthly it said “The proposed change is out of step with government’s own policy push around Better Public Services—it will instead lead to more bureaucracy and lower innovation.” That is typical of the kind of feedback that Parliament is receiving from the community sector the sector that is to be managed and controlled by this new institution and that ought to give everyone pause for thought. It is the wrong thing for this Parliament to be doing.  
I hesitate in saying this but I would very much like to hear from the Hon Peter Dunne in this debate because the leader of the United Future party campaigned on one thing and I understand is intending to vote for this ridiculous part of the Government’s bill. I believe that the community and the community sector would very much like to hear from Mr Dunne as to his reasons for that change. 
Hon Lianne Dalziel 
: Hear hear! We seek leave for Mr Dunne to take a very extensive call on this matter. 
KEVIN HAGUE 
: Yeah. Of course the bill is intended to be split into three parts and there will be another opportunity for Mr Dunne to vote against it at the third reading. I certainly hope he chooses to take up that opportunity.  
In the meantime this is a part of the bill with a negligible upside and very considerable downside not only in the obvious and explicit terms of extra cost loss of efficiency and loss of momentum but also in implicit terms in a disruption of the constitutional arrangements between the State and community sectors. Those arrangements have come about through history and tradition and a lot of hard-won gains and they ought not to be set aside as lightly as this Government intends. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I want to reinforce the call made by Kevin Hague for Peter Dunne to take a call in this debate. I think the Committee will be interested in his view on this and the apparent inconsistency between the promises that he has made to charities and to the funders of charities and the position that he has set out in a recent email. Earlier I spoke of contortions with regard to religious positions but I think it is fair to say that Peter Dunne is subject to a pretty serious contortionist act in this particular circumstance.  
Mr Chairman through you I would like to ask the Minister in the chair the Minister of State Services about the charitable entities that are dealt with in new section 12 in clause 45 which goes to the establishment of the board and the chief executive. There does not appear to be a definition of “charitable entity”. There is a requirement for the chief executive to have meetings at least once a year with representatives of charitable entities and those people have to be given an opportunity to ask questions around the Act and to make submissions on the operation of this Act to the chief executive. But nowhere in here is any sort of definition of the group that has to be brought together for this annual review or marking process.  
My question to the Minister is whether there is a definition of “charitable entity” within the bill. I think it is fair to say that despite the very good work of the Government Administration Committee the bill is not that well drafted with regard to references. It is a bit of a hodgepodge. It may be that I have missed the definition of “charitable entity” within the bill but I cannot find it.  
I would now like to turn to clause 46 of the bill which is the clause that adds schedule 7 to the Charities Act. Schedule 7 of course as you are aware is set out in the bill and I would like to focus first of all on the validity of members’ acts. No before I do that I really just want to ask the Committee what we think we are doing by spending $2.4 million in change to replace a commission with a board. You know what are we actually doing here? We are going from an independent commission to a semi-independent quasi-independent board subject to the Department of Internal Affairs. We are spending a fortune in doing it and what for? Because what we have got is that instead of all the legislation we had about a commission we now have a whole pile of legislation as part of schedule 7 which relates to provisions relating to the board the chairperson and members.  
I am focusing in particular on the appointments and then on clause 3 of schedule 7 “Validity of members’ acts”. I am going to plead guilty to not focusing carefully on this clause at an earlier stage but seeing that we are at the Committee stage I think it is important that we do so. This is the time to get down to the nitty-gritty and to the detail. Clause 3 is around the validity of members’ acts. It says: “The acts of a person as a member or chairperson of the Board are valid even though—(a) a defect existed in the appointment of the person;”. So you can end up with a person who has been improperly appointed and maybe even a whole board that has been improperly appointed but it does not matter.  
It just seems to me that you have got to ask a question about why we are passing a set of legislation here that sets out requirements as to the appointment of a board which is replacing a commission for no good reason but somehow we are giving carte blanche to the Minister to make a total mess of the appointment process and even if the Minister has made a total mess of the appointment process then it does not matter what the board has done. I just ask why we are putting into the legislation some requirements around an appointment process if we are saying it does not matter because whatever the board does if it is improperly appointed its acts will be valid anyway. Especially if we look at clause 3(b) it just adds to the question.  
It then seems to repeat itself and again it would be good to ask the Minister in the chair to tell us what the difference is between clause 3(a) and (b) of schedule 7 taken together and clause 4(1). Clause 3 says: “The acts of a person as a member or chairperson of the Board are valid even though—(a) a defect existed in the appointment of that person;”. Then clause 4(1) says: “The appointment of a person as a member or chairperson of the Board is not invalid only because a defect existed in the appointment of the person.” Well you know what is the difference? Why have we got both? Is it belt and braces or is it things that are completely different? Is it a matter that the Minister worked through carefully? In fact I do not think he was the Minister in charge of the bill. Maybe the Minister could tell us more about the costs of the three-person board how much is saved and what the cost is as a result of this transfer.  
I would like to ask the Minister whether this is autonomous or semi-autonomous according to the definitions in the State Sector Act and especially with regard to the removal of members where clearly the Minister under clause 6 of schedule 7 has to consult with the person concerned before the member of the board is removed from office and must notify the removal in the  
Gazette 
. It says: “(5) To avoid doubt the Minister may not remove a member unless the Minister has properly considered the matter and complied with the principles of natural justice.” Does that mean that the Minister can remove without cause or does it mean that the Minister has to have cause in order to remove the person? That I think is a pretty important thing.  
We are dealing with a group that is meant to be autonomous and what it gets down to is whether or not the Minister in firing someone who is meant to be independently fulfilling some functions independent from the chief executive and independent from the Minister in the actions of this board has to give a reason. If the reason is just that the Minister does not like the decisions then I have no doubt that the person will have cause against the Minister and there would be some definite changes as a result of that.  
On the term of the appointment of a chairperson there appears to be no ending of the term of a chairperson on death. That is a normal provision as I think the Chairperson of this Committee knows. It is a normal provision within legislation that terms end with death and that has not been taken into account as far as I can see under clause 8 of schedule 7 of the bill. I want to ask the Minister in charge of the bill why not. Why has the provision which is a standard provision that clarifies that a dead person cannot chair a board—[ 
Bell rung 
] Mr Chairman. 
The CHAIRPERSON (Eric Roy) 
: You have had your four calls. 
Hon Dr JONATHAN COLEMAN (Minister of State Services) 
: 
 That was a very interesting dissertation there from Mr Mallard trying to tie the public up in all the intricacies and all the detail to make this sound like some morass. But look the fact is the Government Administration Committee did its work the officials have done a very good job on this and what we have got here is something completely consistent with the Government’s approach to public services. 
Chris Hipkins talked about plans for the Public Service. What I can tell you is that under Labour there was a plan for the Public Service. It was to grow it bigger and bigger year by year and sink more and more money into it. And what happened? Nothing. We did not get any real meaningful outcomes that meant something to the average person in the street in New Zealand. So the Government’s approach around this has been to get public services focused on things that matter to New Zealanders. Within that we have got to provide better public services within a constrained fiscal environment. 
Trevor Mallard talked about so-called inconsistency on the part of Peter Dunne around this issue. It was not like Mr Dunne did something like speak out against Skycity when he was in Parliament but support it when he was in the corporate box at the Rugby World Cup final. It was not like he did anything like that. But no it is one rule for people over there and one rule for the rest of the people. 
When you look at what is happening overall with this Charities Commission situation the functions are going to remain. I can understand that people in the charities sector could be concerned with any change. People do not like change and they have had a situation that they have got used to and been comfortable with for a long time. But when you look at the wider situation and what we have got to do across the public sector as a whole it is about actually making some sensible changes that get some efficiencies made and get greater functionality out of what we have got there. 
We will have this three-person board. The New Zealand First member down there was worried about independence. Frankly I think some of these members have been questioning the independence of the Department of Internal Affairs. What I can tell you is the officials are very used to handling this sort of situation. They have done it with the Gambling Commission and the Registrar-General of Births Deaths and Marriages. There is extensive experience there and the registration and the deregistration function will be handled by that three-person board. The chief executive of the Department of Internal Affairs and the staff will provide the secretariat functions. 
So the key message here to the public is: “Look the functions of the Charities Commission are going to remain. It’s just going to be within a different entity. Life will go on. Charities will continue to play a vital role in New Zealand society. Don’t be scared by these people over there.” Opposition members are trying to seize on a political issue in difficult times for them and turn it into something that scares people out there. The reality is it is quite simple. It is very consistent with the wider plan around the public sector to make sure that things are working far more efficiently and that we are getting some outcomes that actually make a difference for people. 
Mr Mallard also I think got very confused about costs as opposed to the benefits of this. He was citing costs of $2 million. Well actually they are the benefits. The cost of setting up this board is probably going to be about $400000 so overall it is going to be a net positive. The message is that the functionality remains. We have actually strengthened the education function. We have strengthened that. This is going to end up being a better server of the original purpose of the Charities Commission overall with that strengthened education function. So there are many positives that will come out of this. Not the least though one point that needs to be made is that one around independence. The New Zealand First member also said: “Look the Charities Act review is just around the corner. It’s just about to happen. Why don’t you wait for that?”. In actual fact it is not happening until 2015. I guess that is progress in reforming the public sector New Zealand First - style. The reality is we need to act on this now.  
Nothing that will happen in that review of the Charities Act will be precluded by these changes that the Government is putting forward and wanting to pass into law. So no one needs to be worried about that. The Charities Act review will still happen but these changes will happen in advance and quite frankly they are sensible changes. I can tell you if you go out into the streets of New Zealand people will still find that the charity sector is working very very well. I was a bit disappointed by the New Zealand First member’s knowledge of the Crown Entities Reform Bill but you know he has not been a member for that long and will have time to study this legislation at leisure in time to come. So Part 3 is actually a very good piece of legislation— 
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 That was an interesting contribution from the Minister of State Services and I would like to just respond to some of the points that the Minister raised. He seems to think that the concerns about this Crown Entities Reform Bill have actually been dreamt up by the Opposition. 
Hon Simon Bridges 
: That’s right. 
IAIN LEES-GALLOWAY 
: That could not be further from the truth Mr Bridges because all that the Opposition members are relaying to the Government tonight are the concerns that were brought to the Government Administration Committee by the non-governmental organisations and the charitable sector that this piece of legislation will actually be directly affecting. This is about listening to the people who are working at the front line. That is all this is about—about listening to their concerns listening to what they want to see happen in their sector listening to the fact that they have said and acknowledged that there is a review coming up that a review is appropriate and that the only sensible logical thing you do when there is a review coming up is you wait for that review and then you sort out your structure afterwards. Form should follow function not the other way round but this is typical of this illogical Government which has no sensible plan for anything. It certainly does not have a sensible plan for the charitable sector. So this is not just about the Opposition scaremongering.  
I love the way the Minister says “Trust us. Trust us. There’s nothing to see here nothing to worry about nothing to worry about nothing to worry about.” He kept on saying it over and over— 
Hon Member 
: “I’m here. I’m here to help.” 
IAIN LEES-GALLOWAY 
: That is right. I do not know how many times he said in 5 minutes “There’s nothing to worry about.” Personally I start to worry when Jonathan Coleman says there is nothing to worry about. Ask the navy personnel who used to man the inshore patrol vessels about being told by Jonathan Coleman there was nothing to worry about. But then Mr Coleman went on to say that the functions are going to remain; nothing is going to change. So I ask what the point is. What is the point of this structural change which is going to cost money? It is going to cost money. The Minister says it is going to cost about $400000. Well from previous experience we know that means it is going to cost at least $800000 and probably more especially by the time all the consultants have been paid off. Yet this is all for nothing. The Minister himself said this is all for nothing—nothing is going to change for the charitable sector. So the Minister plans on spending money he says to make the public sector more efficient. 
Hon Simon Bridges 
: I can’t believe what I’m hearing from this member. 
IAIN LEES-GALLOWAY 
: Sorry? 
Hon Simon Bridges 
: I can’t believe what I’m hearing from this member. 
IAIN LEES-GALLOWAY 
: You have not been listening very closely then have you Mr Bridges? This is according to the Minister all about making the public sector more efficient but time and time again we have seen the so-called efficiencies that the Government seems to think can be achieved by this kind of system of mergers and acquisitions within the public sector. All we see are additional costs additional pain jobs losses and people at the front line having to pick up the work that was previously done by those poor back-office bureaucrats who are so much maligned by this Government because they are out of sight and are an easy target. Maligned sacked and persecuted—there are a number of words that you could use for the people who actually perform the very important administrative functions of the public sector. Again they are going to be under attack here. It is bad enough for those people but of course what is even worse is that once they are gone the people on the front line have to pick up those jobs. The jobs do not disappear; the work does not disappear. It still has to be done but now instead by the people on the front line.  
Actually I would not be surprised if some of that work gets passed on to the charitable sector so that it has to start picking up that additional work and then again the Government will be able to say “Oh we are making things more efficient because we have actually passed on those costs.” 
Hon Trevor Mallard 
: Contracting them out. 
IAIN LEES-GALLOWAY 
: By contracting them out—that is exactly right. How many times have we seen that from this Government?  
I thought that was a very very interesting contribution from the Minister but as you can see it is very very easy to pick it apart. It is very easy to pick apart this Government’s argument on these changes which are simply about doing what it can to appear to be making the public sector more efficient and to appear to be cutting costs within the public sector. But of course what we have seen time and time again and from experience is that there could be nothing further from the truth. 
KANWALJIT SINGH BAKSHI (National) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 58 
New Zealand Labour 34; Green Party 12; New Zealand First 8; Maori Party 3; Mana 1. 
Motion agreed to. 
A party vote was called for on the question  
That Part 3 be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 58 
New Zealand Labour 34; Green Party 12; New Zealand First 8; Maori Party 3; Mana 1. 
Part 3 agreed to. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I raise a point of order Mr Chairperson. Can I just do a check on that? I thought it was 61 to 60. 
The CHAIRPERSON (Eric Roy) 
: Well I have counted the votes and I took particular note. 
Hon TREVOR MALLARD 
: I am sorry. I apologise Mr Chairperson. 
Schedule 1  
A party vote was called for on the question  
That schedule 1 be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 58 
New Zealand Labour 34; Green Party 12; New Zealand First 8; Maori Party 3; Mana 1. 
Schedule 1 agreed to. 
Schedule 2  
A party vote was called for on the question  
That schedule 2 be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 58 
New Zealand Labour 34; Green Party 12; New Zealand First 8; Maori Party 3; Mana 1. 
Schedule 2 agreed to. 
Schedule 3  
The CHAIRPERSON (Eric Roy) 
: The question is that schedule 3 stand part. Those of that opinion will say “Aye” the contrary “No”. The Ayes have it— 
Hon Trevor Mallard 
: No. Noes have it—practising for Saturday. 
The CHAIRPERSON (Eric Roy) 
: Ha ha! Party vote. The Clerk will conduct— 
Hon Trevor Mallard 
: Thursday night. 
The CHAIRPERSON (Eric Roy) 
: Excuse me we do not need the embellishment. The member should just call. 
A party vote was called for on the question  
That schedule 3 be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 58 
New Zealand Labour 34; Green Party 12; New Zealand First 8; Maori Party 3; Mana 1. 
Schedule 3 agreed to. 
Schedule 4  
A party vote was called for on the question  
That schedule 4 be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 58 
New Zealand Labour 34; Green Party 12; New Zealand First 8; Maori Party 3; Mana 1. 
Schedule 4 agreed to. 
Schedule 5  
A party vote was called for on the question  
That schedule 5 be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 58 
New Zealand Labour 34; Green Party 12; New Zealand First 8; Maori Party 3; Mana 1. 
Schedule 5 agreed to. 
Schedule 6  
A party vote was called for on the question  
That schedule 6 be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 58 
New Zealand Labour 34; Green Party 12; New Zealand First 8; Maori Party 3; Mana 1. 
Schedule 6 agreed to. 
Schedule 7  
A party vote was called for on the question  
That schedule 7 be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 58 
New Zealand Labour 34; Green Party 12; New Zealand First 8; Maori Party 3; Mana 1. 
Schedule 7 agreed to. 
Schedule 8  
The question was put that the amendments set out on Supplementary Order Paper 29 in the name of the Hon Dr Jonathan Coleman to schedule 8 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 73 
New Zealand National 59; Green Party 12; ACT New Zealand 1; United Future 1. 
Noes 46 
New Zealand Labour 34; New Zealand First 8; Maori Party 3; Mana 1. 
Amendments agreed to. 
A party vote was called for on the question  
That schedule 8 as amended be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 58 
New Zealand Labour 34; Green Party 12; New Zealand First 8; Maori Party 3; Mana 1. 
Schedule 8 as amended agreed to. 
Schedule 9  
The question was put that the amendments set out on Supplementary Order Paper 29 in the name of the Hon Dr Jonathan Coleman to schedule 9 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 58 
New Zealand Labour 34; Green Party 12; New Zealand First 8; Maori Party 3; Mana 1. 
Amendments agreed to. 
A party vote was called for on the question  
That schedule 9 as amended be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 58 
New Zealand Labour 34; Green Party 12; New Zealand First 8; Maori Party 3; Mana 1. 
Schedule 9 as amended agreed to. 
Clauses 1 and 2  
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I would like to speak to clause 1 and 2 of the Crown Entities Reform Bill. I think this is probably the appropriate time also to speak to my amendment which is set out on Supplementary Order Paper 32 dated yesterday. To make it clear the effect of the amendment is to delay the commencement of Part 3 by 3 years in order to give the opportunity to the Government to fulfil its commitment to have the review of the Charities Act and in particular the Charities Commission before the Charities Commission is disestablished.  
I think members on this side of the Chamber are of the view that it is better not to review things after they have been disestablished. It is better to review them to see whether they are working to see whether they have come up to speed and to see whether there can be changes made to them in order for them to work properly. And it is better to do that before the disestablishment rather than doing the disestablishment and reviewing something that then does not exist any more. It seems to be relatively pointless to do a review of an already disestablished organisation. Therefore the effect of this amendment is to delay the commencement of Part 3 so it does not come into force until the day 3 years after the date on which this Act receives the Royal assent. That is working on the possibility the likelihood that this bill gets a third reading and gets a Royal assent at some stage in June. That amendment runs the Charities Commission through the period of the review and that then is the point at which you go forward.  
There was a debate on our side as to whether in fact we should move an amendment as far as Part 2 of the bill is concerned. I know that there are some strongly held views around the Chamber. I heard the member Kevin Hague speaking eloquently on Part 2 of the bill earlier and I invite him or any of his colleagues if they want to amend my amendment to include a delay for Part 2 as well in order to keep the Mental Health Commission and its work going for a period. It might well be a good idea for them to get an amendment drafted up and copied off with 10 photocopies put on the Table of the House so members can in their debate consider it. Then there would be the ability to consider that question.  
I think we have come to the point where there is acceptance in the Committee around Part 1 and therefore it is logical to have it coming into force at the beginning of the financial year. I am one of those people who still sometimes think for the purposes of legislation of the old financial year which used to finish on 31 March back in the old days; 1 April was a new financial year. I know for a number of companies that is the case but as far as Government departments are concerned and Government budgets are concerned the financial years are 1 July to 30 June. Therefore it is pretty hard to make a case for a change in the coming into force of the part of the bill that we accept should come into the Act.  
I want to go to the explanatory note of my Supplementary Order Paper and the reasoning behind the delay. That is the agreement that was made between the Government and the charitable sector with the formation of the Charities Commission and the agreement that it would be independent. That was fundamental to the agreement between the Crown and the sector made in 2005. Although I am not going to pretend that it is an agreement with the status of the Treaty of Waitangi it is something that was a serious agreement with a very large sector a sector that is very much voluntary and where a lot of organisations and individuals have been involved. They go I think from the people who do the relatively small collections for the RSA with the poppies and other areas for the charitable funds to be raised by the RSA; there are people like the Foundation of the Blind. There are a number of collections. I mean we do Plunket collections and there a number of organisations that are either charitable in themselves or have wings that have charitable status.  
They were the ones that were involved in this treaty—this agreement—after a lot of discussion with the Government. I think it is unlikely given the legislation that is around that failure to abide by this agreement will result in anything that looks like a Treaty claim although I think it is fair to say that with the activist Supreme Court that we have got it is slightly unpredictable. I see the Attorney-General nodding; oh he is going to sleep. Oh I see. He should try to stay awake at 9 o’clock at night. But I think a number of us have seen some decisions from the Supreme Court that have been slightly unpredictable and whether or not the Supreme Court would regard this as a matter for its review and its intervention given the treaty arrangements that existed in 2005 and that are referred to in the explanatory note of this Supplementary Order Paper which goes to the commencement date is a moot question. It is a moot question and I am not sure which way it would be likely to go.  
Without referring back to the bits that have already been passed there is a requirement to consult with charitable entities. The board that is set up and the chief executive both of the board and the department have to have a consultation with the entities that are within the sector. My question is what consultation has occurred with them to date in advance of the passing of this bill— 
Denis O’Rourke 
: None. They had a month.  
Hon TREVOR MALLARD 
: Sorry?  
Denis O’Rourke 
: They had a month.  
Hon TREVOR MALLARD 
: No no I know they had—it was actually a little bit of a mess because of the way I understand the legislation was brought in before the election. No one understood the requirement to make submissions before the election and subsequent to that there was not a calling for submissions again and there was confusion. But sorry to the member that was not the point that I was making because that would be outside this particular clause.  
The proposed amendment goes to the delay and the question is whether if this amendment is passed the Minister would make a commitment to do that consultation with the sector at that point. You know that is an opportunity to have the consultation and to do what we expect would be done in order to make this legislation work properly. My view is that there is a real possibility that the Government does not like this particular provision because it would require it to have a period of 3 years and it is slightly unpredictable what might happen in those 3 years. It might consider it slightly untidy but I just want to say to the Minister of State Services that every now and again there is tidiness and there are principles. It would be good for the Minister to accept the principle of consultation with this sector before precipitating this sort of change—this very serious change because this is the abolition of a commission. Albeit I do accept that it is going to be replaced by a board and there is a certain amount of “What’s in a title?” but there is certainly an indication of autonomy. There is a different— 
Hon Dr JONATHAN COLEMAN (Minister of State Services) 
: 
 I think Supplementary Order Paper 32 is a very disappointing one really. This is the sort of thing that in the public mind brings Parliament into disrepute. It certainly does nothing to enhance the reputation of the member who has tabled this because basically we have had this debate already on Part 3 of the Crown Entities Reform Bill. It passed and Labour has lost the debate. Effectively what Trevor Mallard is trying to do is relitigate this by delaying it for 3 years. It is a complete waste of— 
Hon Trevor Mallard 
: I raise a point of order Mr Chairperson. I think you are aware—and I know that it is a relatively junior Minister in the chair but he should be aware—that one must not refer to previous debates once that part has been decided. His entire call so far has been an attack on me related to the previous part which has already been decided.  
The CHAIRPERSON (H V Ross Robertson) 
: I thank the member and I appreciate the point that he has made. As to the second point there is always a bit of leeway when a Minister has the reply. But I would caution the Minister to keep to the debate.  
Hon Dr JONATHAN COLEMAN 
: Well the point is that this is a wide-ranging debate on the commencement date. The fact is that the Committee has made its will known quite clearly and I do not think there is any point spending any further time on this. The will of the Committee has been declared pretty firmly.  
IAIN LEES-GALLOWAY (Labour—Palmerston North) 
: 
 Well that was an ignorant call from the Minister of State Services because if he understood Parliament’s Standing Orders and if he understood how the Committee stage of a bill actually worked he would know that it is possible to amend the commencement date only whilst the Committee is debating the title and commencement of the bill. He would also know if he had been paying attention earlier on in the night that Denise Roche attempted to debate Supplementary Order Paper 32 during Part 3 and in fact the Chairperson at the time— 
Hon Lianne Dalziel 
: And they took a point of order.  
IAIN LEES-GALLOWAY 
: Yes the National Party took a point of order in order to close down that debate and the Chairperson at the time supported that point of order and informed the Committee— 
Hon Trevor Mallard 
: I raise a point of order Mr Chairperson. I am really reluctant to do this to my colleague but he is doing what the Minister did. He is now referring to points of order that were ruled on as part of a previous debate. This is actually quite a broad amendment but what he is saying is not part of it.  
The CHAIRPERSON (H V Ross Robertson) 
: I thank the honourable member for his help and I remind the member of course that the Chair is the sole judge of relevancy. I have been listening to the member Iain Lees-Galloway and I would ask him to reflect on what he has said and to bring it to the debate as it is supposed to be: on these clauses and on Mr Mallard’s Supplementary Order Paper 32.  
Hon Trevor Mallard 
: I raise a point of order Mr Chairperson. Sorry I was not asking you to rule on a question of relevancy. I was asking you to rule on a question of whether this was within the scope rather than relevant. There are numerous rulings from Speakers that indicate that it is not in order to refer to a previous ruling from a Speaker or in this case—[ 
Interruption 
] Sorry? 
Hon Lianne Dalziel 
: In the same debate.  
Hon Trevor Mallard 
: In the same debate. These are different clauses. It was a previous part; it has been ruled on. But whether or not it was a previous part what the member has been doing—and I mean he is one of my colleagues and no doubt I am going to have to shout him afterwards for making this point. But the point is that he is not allowed to refer to a matter that has been raised—and he is absolutely right: it was raised and it was ruled on and ruled on in favour of the National Party. He is not allowed to raise it now.  
The CHAIRPERSON (H V Ross Robertson) 
: I thank the member. He is right of course but can I also remind him that points of order are short terse and to the point and not a debate. He certainly should not shout. The member will come to order and debate these clauses in the way in which they should be debated. 
IAIN LEES-GALLOWAY 
: Very good. Well thank you very much Mr Chairperson and can I say thank you very much to my honourable colleague Trevor Mallard. It is always helpful to get advice from the more elderly members of the caucus and I will take that advice— 
Hon Trevor Mallard 
: I am not as old as the member you are sitting next to! 
IAIN LEES-GALLOWAY 
: I could not comment about that but I will take that advice and I will attempt—I am not as old as that member either— 
The CHAIRPERSON (H V Ross Robertson) 
: Order! We have had our fun. 
IAIN LEES-GALLOWAY 
: I will attempt to bring the debate back to the title and commencement of the Crown Entities Reform Bill and indeed the amendment proposed by my colleague Trevor Mallard. As has been said a number of times during the debate this bill has three parts that are each quite different in terms of their outcome. Superficially they look similar but the three parts are in fact quite different. I think for that reason there is a very good case to be made for having three separate commencement dates for each of the parts.  
As has been discussed Part 1 has received broad support from the Committee and it does make sense given that it is a change that is supported and for which the sector and the organisations involved are prepared for that part to come in as is stated in the current clause 2 of the bill on 1 July 2012. That I think is something that no member of the House would have any reason to disagree with.  
Part 2 of course if quite different. Part 2 actually brings forward the date for the disestablishment of the Mental Health Commission. The reasons for not wanting to do that have been well canvassed. To support the arguments made against doing that a sensible and logical move would be for the commencement date for Part 2 to be 31 August 2015 which is the current date for the disestablishment of the Mental Health Commission. Having said that I agree again with the Hon Trevor Mallard that having dates for the commencement or disestablishment of Crown entities that are not at the beginning of the financial year is a little untidy. So I think most members would probably see— 
Hon Trevor Mallard 
: Mine should have actually been 1 July 2015 rather than the 3 years—I apologise to the Committee. 
IAIN LEES-GALLOWAY 
: Well I am sure the Committee would appreciate that apology. I would agree that I think a sensible commencement date for Part 2 would in fact be 1 July 2015.  
That would give an opportunity for the second blueprint which is about to be published by the Mental Health Commission to be given a 3-year period of bedding in. You never know. From the way the blueprint is finally drafted it may be determined by Parliament that that commencement date of 1 July 2015 would no longer be relevant. We may want to push it out or we may not want to disestablish the Mental Health Commission at all. Again this is a case where we have an important document—a guiding document—for the sector that has not yet been published yet we are determining the structure for the organisations that are guided by that document. Indeed the commencement date of the change that is included in this bill has been established before the final version the public version of the second blueprint is actually available. So it is somewhat similar to our concerns around Part 3 where again the Government has put the cart somewhat before the horse. So a very very sensible amendment could be to have the commencement of Part 2 on 1 July 2015.  
That brings me to the Supplementary Order Paper in the name of the Hon Trevor Mallard. It would amend the bill so that Part 3 comes into force on the day 3 years after the date on which this legislation receives the Royal assent. Trevor Mallard is again quite right in that the logical date for that to achieve the same thing would be 1 July 2015. That would give the Government an opportunity to make good on its promise to the sector—not that this Government is particularly good at keeping its promises—to review the role of the Charities Commission the Charities Act itself and the charitable sector as a whole. The Government has said it intends not to carry out that review until 2015 which again is somewhat inconsistent. There is a great rush to bring this legislation in and for this legislation to receive the Royal assent yet the Government sees so little importance in reviewing the sector that that review it says will be put off until 2015.  
But this amendment in my colleague’s name would offer a period of grace under which the Government could actually bring that review forward. It could have that review. It could figure out what the right structure is then if it still believes that bringing the Charities Commission into the Department of Internal Affairs is the right thing to do it would be able to do that in 2015. That seems I think to most sensible people to be the logical approach. I will certainly—and I know members on this side of the House will—be supporting that amendment.  
We are also debating the title of this bill. The title is the Crown Entities Reform Bill. That word “reform” often strikes fear into the hearts of those organisations that are going to be— 
Hon Trevor Mallard 
: A predecessor of the National Party the Reform Party. 
IAIN LEES-GALLOWAY 
: Yes ha ha! It is such an innocuous word but it is so often loaded. The organisations that are affected by this bill—you cannot actually tell what reform means. Will it be a positive? Will it be a negative reform? Really for this Government reform is a euphemism for cuts or a euphemism for a transfer of responsibility from the Government on to those organisations—in this case on to the charitable sector.  
But there are some other possible titles for this bill: the “Change for the Sake of Change Bill” would be quite a good title for this bill. As the Minister has said he anticipates that nothing will change in their day-to-day operations for the organisations affected by this bill so you have to ask what the point is of enacting this legislation.  
Another name for it might be the “Public Sector (Mergers and Acquisitions) Bill” given that it is entirely focused on merging different Government organisations regardless of whether the outcome of that merger is sensible whether it is good for the sector and in the case of the Mental Health Commission whether it is good for the organisations working in the mental health field or indeed for the consumers of mental health services. It is just an example of this Government’s fixation on the merger of different Government organisations. We saw Steven Joyce in the Chamber for a little while earlier on. I wondered whether maybe he had come down to take control of this bill and these organisations as well. 
Hon Trevor Mallard 
: Why didn’t he do the Budget? 
IAIN LEES-GALLOWAY 
: Well that is right. I am sure Steven Joyce will be all over tomorrow’s Budget. Steven Joyce is perhaps not so involved with these mergers and acquisitions although he does seems to be the maestro behind most of the other mergers and acquisitions of the Government sector.  
The “Consultant Pay Enhancement Bill” might be another name for this piece of legislation. We will be seeing the need for the Government to contract more consultants to assist it with this merger process and that of course will result in more costs. So there are plenty of possible different titles for this bill. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 Mr Chair— 
The CHAIRPERSON (H V Ross Robertson) 
: I call the honourable member Chris Hipkins. 
Iain Lees-Galloway 
: So does his mother.  
CHRIS HIPKINS 
: Yes that is right. I am happy to take a brief call on the title and commencement clauses of the Crown Entities Reform Bill. I will begin with the title because that is what generally comes first. Actually I think the name of the bill the Crown Entities Reform Bill is misleading because it suggests a wider reform agenda for Crown entities in total. Actually a more accurate title would be the “Crown Entities (Selected Entities) Reform Bill” because it does not actually reform that many Crown entities and it is not actually that wide-ranging as a reform agenda.  
There are a huge number of Crown entities—district health boards the New Zealand Qualifications Authority—and if the Government had some kind of coherent plan for what it wanted to do with the Crown entities then this would be an adequate name for the bill but it does not have an adequate plan. Just to give an example this bill moves the Charities Commission into a Government department into the Department of Internal Affairs which is something that we have debated about quite a lot this evening. If that is going to be the Government’s overall agenda for Crown entities will we see the New Zealand Qualifications Authority merged into the Ministry of Education? Will we see— 
Hon Trevor Mallard 
: Good idea.  
CHRIS HIPKINS 
: Trevor Mallard a former Minister of Education thinks that it is a good idea. Will we see the Tertiary Education Commission—I think that would be a Crown entity—merged into the Ministry of Education? Will we see the district health boards merged into the Ministry of Health? These are questions— 
Hon Annette King 
: That’s not a good idea. 
CHRIS HIPKINS 
: That is not a good idea. If this bill genuinely was a Crown Entities Reform Bill it would actually have a coherent— 
Hon Trevor Mallard 
: It’s sort of a “Crown Entities Minor Tinkering Bill”. 
CHRIS HIPKINS 
: That is right: “Crown Entities Minor Tinkering Bill” I think would be a more accurate description for this piece of legislation because it does not actually present a coherent plan for what the Government is trying to do in State sector reform in so far as it relates to Crown entities.  
To move on to the commencement of this particular piece of legislation it comes into force at the moment—all of this from what I understand—on 1 July 2012. Can I congratulate the Government on at least being clear about the date of the commencement for this piece of legislation. Quite often there is uncertainty around when a bill comes into force because it says it comes into force on the day after which it receives the Royal assent. There can be any number of variables that can impact on that so quite often in legislation that we debate in the House there is no certainty around that because in fact there are factors that can prevent a bill receiving the Royal assent. For example there is technically a reserve power for the Governor-General to refuse to sign a piece of legislation and so therefore when a commencement clause says that it is the day after which it receives the Royal assent that technically could be quite some time.  
In New Zealand we are relatively fortunate. The Governor-General will typically sign all legislation without too many issues. But take for example the Belgian Parliament where the King refused to sign a piece of legislation because the King disagreed with it. This was one of those bills that would come into force the day after which it received the Royal assent but the King refused to sign it. So the Government in Belgium effectively removed the King from office for a day in order to enact the legislation— 
Hon Trevor Mallard 
: What was the legislation about?  
CHRIS HIPKINS 
: —and then restored him. It was a moral issue; it might have been legalisation of prostitution or something like that. It was something that was a conscience issue and so the Parliament in Belgium basically said: “Well if the King won’t sign it we’ll remove the King for a period of time in order to give the Prime Minister the power to enact the legislation.” That is what happens in Belgium and that is what it did. The bill then received the assent—what would have been the Royal assent but the King had refused to sign it—and therefore it became law. But because— 
Hon Trevor Mallard 
: But you know what we do in New Zealand in those cases? 
CHRIS HIPKINS 
: What is that? 
Hon Trevor Mallard 
: We send the Gov offshore and get the Chief Justice to sign it. 
CHRIS HIPKINS 
: That is right. In New Zealand as Trevor Mallard has just pointed out if that situation were to occur and the Governor-General was uncomfortable or refused to sign something the Governor-General could be sent out of the country and then the Chief Justice could sign the law. So that would be the New Zealand equivalent of the bill receiving the Royal assent to what I was just talking about with regard to what happened in Belgium. But in this bill— 
Hon Trevor Mallard 
: Did you know that I’ve been in the Executive Council in the past? 
CHRIS HIPKINS 
: Well that is a very concerning thought. That is a very concerning thought. But in this bill there is no ambiguity at the moment as to the date on which this bill will come into force based on the current wording of it—it is 1 July 2012. However the Supplementary Order Paper put forward by my colleague Trevor Mallard would change that. It would say that instead of the bill coming into effect in its totality on 1 July 2012 Part 3 would come “into force on the day 3 years after the date on which this Act receives the Royal assent.”  
Actually I think Trevor Mallard made a mistake. I actually think he should have been specific in the date that he wanted it to come into force rather than this whole concept of 3 years after the date on which it receives the Royal assent because as I just outlined that can be very uncertain. There can be confusion and there can be complications whereas if a specific date is specified there is a lot more certainty. So I actually think Trevor Mallard probably should have said “1 July 2015”. That would have avoided any ambiguity.  
Hon Trevor Mallard 
: Why didn’t you say so at caucus? 
CHRIS HIPKINS 
: That is right. I am normally hanging off every word that Trevor Mallard says at caucus but in this particular instance I have to confess that it slipped past my usually very accurate radar.  
Trevor Mallard has suggested that Part 3 should come into force 3 years after the rest of the Act—with all of the things that I have just said about how it might not be exactly 3 years but more or less 3 years after the rest of the bill comes into force. That is because we in the Labour Party believe that the Charities Commission which is a relatively new entity has not been in existence for particularly long and should not be disestablished until a proper process has been gone through with the charitable sector which has bought in to having the Charities Commission through a pretty collaborative and consultative process. This Government is simply doing away with it because National knows best—or National thinks it knows best.  
Actually in the charitable sector I think it is important that the sector is involved that it gets a chance to have its say and that it gets a chance to feel some ownership of whatever decision is taking place or is finally made. I think that delaying this Part 3 of the bill by 3 years in order to allow the charitable sector to get involved in that to have a proper review to allow the Charities Commission to actually prove what it is capable of doing and to preserve that independence of the Charities Commission in the meantime is really quite important. That is why a delay of 3 years seems eminently sensible. It would allow a proper review process to take place. It would allow the Government to finally work out what its agenda for Crown entities is to come up with a slightly more coherent plan for State sector reform around what it is trying to do with Crown entities and to resolve the issues of whether all of the Crown entities now are going to be put up for review and treated in the same way as the Charities Commission—merged into Government departments where Ministers can fiddle around and play with them.  
We know that some of the Ministers fiddle around and play with things even more. Can we imagine for example if Murray McCully was made the Minister of Internal Affairs? Murray McCully would be in there boots and all telling the Charities Commission part of the Department of Internal Affairs exactly what it should be doing. The independence would be totally compromised and therefore the buy-in and the support from the sector and from the public would be quite badly compromised. I think that preserving the independence of the Charities Commission is quite an important thing. It is something we in the Labour Party are strongly in favour of. I doubt that the Department of Internal Affairs will be able to manage this as well as the Charities Commission can manage it at the moment.  
It is time to take a breath. It is time to actually go back and have a proper review rather than just the approach of “National knows best. We’re going to do whatever we like.” It is time to review it properly and have a collaborative process with the sector where the sector will get to have its say. Then once that is done I imagine we will be getting up towards the 3-year time frame that Mr Mallard has specified in his Supplementary Order Paper and that would be a good time for Parliament to revisit the issue. Thank you. 
DENISE ROCHE (Green) 
: 
 Tena koe Mr Chair. Thank you for the opportunity to speak to Supplementary Order Paper 32. I am very keen to see this Supplementary Order Paper go through and to see this amendment take place to the Crown Entities Reform Bill. I am not going to get into any discussion about what the name of the bill should be because I have not really given it much consideration. My mind has really been focused on the Charities Commission and how the Supplementary Order Paper would assist the community and voluntary sector to come to terms with what the Government’s desire is—to see it shift into the Department of Internal Affairs.  
When the Charities Commission was first introduced under the Charities Act I think about 5 or 6 years ago there was quite a bit of resistance I have to say in the community and voluntary sector and a bit of distrust as well. It took the sector some time to understand the merit and the worth of the commission that was set up. The role of the commission was very widely debated and it took some time for community and voluntary organisations to get themselves into a position where they registered with the commission. But over time the reputation of the commission has really settled in and it has proven its worth to the sector. What has happened is that more and more charities and community organisations have registered—I think currently 28000 have done so—and that has meant that a monitoring and compliance regime has been set up. It took time it took quite a bit of time for the sector to bed in these changes. This Supplementary Order Paper is asking for time for this sector to come to terms with the changes that the Government wants to push through.  
I also support this Supplementary Order Paper this amendment because it is an elegant solution to those feelings that are felt very deeply in the community and voluntary sector— 
Hon Trevor Mallard 
: Thank you. 
DENISE ROCHE 
: You are welcome Trevor. 
The CHAIRPERSON (H V Ross Robertson) 
: Order!  
DENISE ROCHE 
: Sorry. 
The CHAIRPERSON (H V Ross Robertson) 
: What you must do is you must use the member’s full name or his title. 
DENISE ROCHE 
: Sorry. Mr Trevor Mallard the Hon Trevor Mallard. I have lost my train of thought; sorry about that.  
The reason why it is quite a big issue and an important issue to defer these changes for 3 years is not only about allowing time for transition but also allowing time for reviews. It does not strike me as terribly cost-effective—or even sane quite frankly—to hold a review of the Charities Act after you have changed it after you have changed what happened and what was intended through the Charities Act when it was first set up and when the Charities Commission was set up. So it does not strike me as a very good idea to have reviews after you have changed what is supposed to be reviewed.  
There are two reviews that are supposed to happen. One is of the Incorporated Societies Act which is currently up for review and the other is of the Charities Act which is the legislation that set up the Charities Commission in the first place and set up the roles of the Charities Commission. They need to be reviewed as well in 2015. But because of the review of the Incorporated Societies Act there is already a bit of discussion about what the terms of reference will be.  
The community and voluntary sector is hoping those terms of reference and that review will also incorporate future needs what the sector will require in the future. So if we stop now and say right we are going to change everything and put it into the Department of Internal Affairs what that does is it says that we are not going to look at the future at this time. It is a clear signal to the charities sector to the community and voluntary sector that there is a lack of caring about their future needs for building the capacity of their sector.  
In these times of austerity as well—and we have got the zero Budget coming up tomorrow—we are also looking and a responsible Government will be looking at making savings. We know that there are no cost savings associated with transferring the Charities Commission to live within with a different board arrangement the Department of Internal Affairs and that has been fairly well canvassed and it is fairly widely known. There are however costs associated with that. If we are looking at responsible Government if we are looking at good financial governance then we should be looking at making changes that actually have an impact that do make savings that are more effective and that do make the community and voluntary sector act more effectively as well.  
There is also concern about the independence of the Charities Commission once it is submerged into the Department of Internal Affairs. Whether or not that happens—and from where I sit that is certainly one of the concerns that is being voiced and it is also one of the fears that I have—we are however hearing from members on the Government side that they believe that it will not happen and we are hearing that they think there are measures in place to prevent it. But perception is everything and once you start to interfere with the independence of an organisation like this you do start to make it less effective.  
So leaving aside these changes for 3 years means there are ways that we can test whether that would actually happen. There is time to test different models for the Charities Commission to see whether they would in fact work and whether they would meet the needs of the charities and the community and voluntary sector.  
I guess I will finish up by just saying that the Greens will be supporting this Supplementary Order Paper because we think that this is what is in the best interests of the community and voluntary sector. We think this will deliver better and more transparent compliance and monitoring within the charities and the community and voluntary sector. We would really ask for the support of the members over there for this Supplementary Order Paper. Thank you. 
MICHAEL WOODHOUSE (Senior Whip—National) 
: 
 I move  
That the question be now put 
. 
The CHAIRPERSON (H V Ross Robertson) 
: No I am not going to accept that. 
LOUISA WALL (Labour—Manurewa) 
: 
 Kia ora Mr Chair. Thank you very much. Ten minutes? Wow we will see. This is my first clause by clause korero and contribution. I have spoken on every part of the Crown Entities Reform Bill tonight but I do want to focus on the title. 
It seems appropriate that this bill is called the Crown Entities Reform Bill 2011 but when I look at the definition of “reform” it is quite interesting. I like looking at dictionaries actually. “Reform” means make changes in order to improve something. The synonyms are amend mend improve reclaim. It is about reformation amendment and improvement. I think all of us tonight have been interested particularly in relation to Part 3 in the evidence for the reform that we are seeing in this bill. We would say that what dictates using that word “reform” is having the actual evidence for in this instance merging the Charities Commission with the Department of Internal Affairs. What we do not see in this bill is any evidence or rationale for why we should do that. 
From our perspective we think the first-principles review that is currently scheduled in the Charities Act would have provided that evidence and it would have also enabled input from the sector—that is the community and voluntary sector the not-for-profit sector and the charity sector—which incorporates 93000 entities. We have over 25000 registered charities in New Zealand. So in fact what this title says is actually quite contradictory because the reform that we will see particularly in Part 3 has no evidence for it and has had no input from the charity sector. It is actually incumbent on us as the Opposition to make sure that the voices of the community and voluntary sector who have come to us who came to the select committee are heard. Of the 43 submissions we received 20 were specifically about Part 3 and 19 of those submissions were opposed. 
I can now possibly go on to the commencement. We would obviously advocate support for my colleague Trevor Mallard’s bill which wants to let due process— 
Hon Trevor Mallard 
: SOP. 
LOUISA WALL 
: —his Supplementary Order Paper his amendment—take its course. We want to see the Charities Act go through the review that is scheduled that is part of the Act that was created after 10 years of engagement with the sector. It just seems so ridiculous that this Government does not think that that process and that history particularly—[ 
Interruption 
] What are you saying “Come on.” for Sam? 
The CHAIRPERSON (H V Ross Robertson) 
: Order! 
LOUISA WALL 
: These are our community organisations that are spread right around the country that provide services and support and are working at the coalface with the communities families and children whom we all serve. I am in an electorate where I have numerous community and voluntary sector organisations that are trying to meet the needs of our community. So you know we take seriously the fact that our community and voluntary sector has actively engaged in lobbying me lobbying Denise lobbying Denis and lobbying many of us who care about the community and voluntary sector to be their voices and to speak for them in this House because they are being ignored. The Government side of the House does not care about the community and the stakeholders specifically in relation to the merger of the Charities Commission with the Department of Internal Affairs. All we are saying is “Why do you not let due process happen? Let the first-principles review happen. Take the sector with you. Don’t leave it behind.” You know I find it incredible that the Minister for the Community and Voluntary Sector has not advocated for the people she is there to serve. So it is incumbent on me as Labour’s spokesperson on the community and voluntary sector on Denise as her— 
The CHAIRPERSON (H V Ross Robertson) 
: Order! I did not pull the member up the first time but you have actually used— 
LOUISA WALL 
: —on Denise Roche who is the Green Party spokesperson on the community and voluntary sector and on Denis O’Rourke who is the New Zealand First spokesperson on internal affairs. We have attempted— 
The CHAIRPERSON (H V Ross Robertson) 
: I call the honourable member Kanwaljit Bakshi. Sat sri akaal. 
KANWALJIT SINGH BAKSHI (National) 
: 
 Sat sri akaal. I move that the question be now put. 
The CHAIRPERSON (H V Ross Robertson) 
: The question is that the question be now put. As many as are that of that opinion will please say Aye— 
Hon Trevor Mallard 
: I raise a point of order Mr Chairperson. That motion has to be put without any preface. That member prefaced it with something before he put it. Therefore it is invalid. 
The CHAIRPERSON (H V Ross Robertson) 
: Actually it is my fault but the member is absolutely right. The member can only say: “I move that the question be now put.” He cannot respond to the greeting I gave him. I made the mistake but I cannot accept the motion and therefore I have to go to the other side of the Chamber. 
KANWALJIT SINGH BAKSHI (National) 
: 
 I raise a point of order Mr Chairperson. I replied to your greeting. I did not do anything else. If you had not asked for a greeting I would not have done it. 
The CHAIRPERSON (H V Ross Robertson) 
: I understand that and I accept responsibility—my mistake. However having said that I have to decline the motion and I seek a call. 
CHRIS HIPKINS (Labour—Rimutaka) 
: 
 I am very happy to take another call on the title and commencement of the Crown Entities Reform Bill. I have to say I am somewhat surprised to be taking another call but I am very happy to help the Committee out at this particular time. I did not get the opportunity to complete all of what I was intending to say earlier on which will come to me in a minute. I tell you what I will talk a little bit more about commencement. This was something that I began to talk on. I just sort of glossed over the issue of the Royal assent earlier on and of what the Royal assent might actually mean.  
I am referring particularly to my colleague Trevor Mallard’s Supplementary Order Paper 32 to amend clause 2 “Commencement”. In the first part he talks about “Part 3 comes into force on the day 3 years after the date on which this Act receives the Royal assent.” There are many many things that can complicate when that might actually be. As I have described before in New Zealand’s constitution there is no absolute requirement for the Governor-General to sign a piece of legislation that this Parliament has passed. It is convention that the Governor-General will sign legislation on the recommendation of—Trevor Mallard will help me here—normally the Prime Minister who would be the chair of the Executive Council. 
Hon Trevor Mallard 
: No no.  
CHRIS HIPKINS 
: No? 
Hon Trevor Mallard 
: The Governor-General chairs it. 
CHRIS HIPKINS 
: Oh the Governor-General chairs the Executive Council. 
Hon Trevor Mallard 
: But a Minister—any Minister; normally the Prime Minister or sometimes the Attorney-General—signs off the recommendation. 
CHRIS HIPKINS 
: That is right. But the convention is that the Governor-General takes his or her advice from the Prime Minister and if the Prime Minister was not there then it could be any Minister could it not? Any member of the Executive Council— 
Hon Trevor Mallard 
: Any Minister can act for any other Minister. 
CHRIS HIPKINS 
: And any Minister can act for any other Minister. 
Hon Trevor Mallard 
: I made the recommendation on the prostitution legislation. 
CHRIS HIPKINS 
: Well there is an interesting piece of history. Trevor Mallard made the recommendation to the Governor-General to sign the prostitution law reform piece of legislation. Basically the Governor-General receives the recommendation and the convention within our constitutional arrangements is that once Parliament through the Ministers has recommended that a piece of legislation be signed the Governor-General will sign it but he or she does not have to do that. The Governor-General has a reserve power to refuse to sign legislation that has been passed by the democratically elected Parliament.  
That could be seen as a strength or a weakness in our constitutional arrangements. Some constitutionalists would argue that because we have a unicameral Parliament and we do not have an Upper House we have a very simple legislative process but actually having some check within our constitutional arrangements—i.e. the Governor-General having the power to refuse to sign legislation—is a useful thing. On the other hand people could argue that the Governor-General has no mandate whatsoever. The Governor-General is not elected. The Governor-General is appointed by the Queen the head of State normally on the recommendation of the Prime Minister. People could argue that the Governor-General does not have a mandate to be determining which legislation should or should not be signed and come into law and that that in fact is the prerogative of the elected Parliament.  
But our constitutional arrangements as they stand at the moment do give the Governor-General the unelected effective de facto head of State—or the person acting on behalf of the head of State who is also unelected—the prerogative to not sign laws. Therefore the issue around the date on which a bill may receive the Royal assent can be a little ambiguous. If the Governor-General in New Zealand for example were to refuse to sign legislation the Government could simply wait until the Governor-General is out of the country and could then go to the Chief Justice who if I am correct is the Administrator of the Government in the absence of the Governor-General. The Government could get the Chief Justice to sign the legislation and that would therefore trigger the legislation and bring the legislation into force.  
So I think it would actually be cleaner for the legislation and for Trevor Mallard’s Supplementary Order Paper if in fact Part 3 were to come into force on a specified date. I think 1 July 2015 might in fact be a more appropriate date than 3 days after the date on which this Act receives the Royal assent which at this point we do not know when that is going to be. If the debate on the Committee stage for example continues beyond more than another 7 or 8 minutes the Committee stage will not be finished tonight. The House will then have to go back into Committee on a future date to reconsider this bill and therefore again we are not entirely sure when the Government may finally move this up the priority list in order for it to be passed. 
KATRINA SHANKS (National) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Noes 55 
New Zealand Labour 34; Green Party 12; New Zealand First 8; Mana 1. 
Motion agreed to. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 58 
New Zealand Labour 34; Green Party 12; New Zealand First 8; Maori Party 3; Mana 1. 
Clause 1 agreed to. 
DENISE ROCHE (Green) 
: 
 I raise a point of order Mr Chairperson. In the previous vote I was not clear about what the result was. Could you please say it again? I thought I had heard you say a different figure from what I added up. 
The CHAIRPERSON (H V Ross Robertson) 
: The vote just taken was 61 to 58— 
Denise Roche 
: The one before that. 
The CHAIRPERSON (H V Ross Robertson) 
: The one before that was 64 to 55. 
Denise Roche 
: I don’t think that’s right. 
MICHAEL WOODHOUSE (Senior Whip—National) 
: 
 If I may clarify for the member the Maori Party is voting with the Government on procedural motions which the motion to put the vote was therefore they voted in favour of it but opposed the part. That may clarify why it was different. 
The CHAIRPERSON (H V Ross Robertson) 
: Thank you for the explanation. 
The question was put that the amendment set out on Supplementary Order Paper 32 in the name of the Hon Trevor Mallard to clause 2 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 55 
New Zealand Labour 34; Green Party 12; New Zealand First 8; Mana 1. 
Noes 64 
New Zealand National 59; Maori Party 3; ACT New Zealand 1; United Future 1. 
Amendment not agreed to. 
A party vote was called for on the question  
That clause 2 be agreed to. 
Ayes 61 
New Zealand National 59; ACT New Zealand 1; United Future 1. 
Noes 58 
New Zealand Labour 34; Green Party 12; New Zealand First 8; Maori Party 3; Mana 1. 
Clause 2 agreed to. 
Hon Dr JONATHAN COLEMAN (Minister of State Services) 
: 
 I move  
That the Committee divide the bill into the New Zealand Public Health and Disability Amendment Bill the Mental Health Commission Amendment Bill and the Charities Amendment Bill  
pursuant to Supplementary Order 30 
. 
Hon Trevor Mallard 
: Mr Chairman— 
The CHAIRPERSON (H V Ross Robertson) 
: Is it a point of order? 
Hon Trevor Mallard 
: No no this is a debatable motion. 
The CHAIRPERSON (H V Ross Robertson) 
: A debatable point OK. 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I am surprised that there might be any doubt about whether this should be debated. I will say to start with that I just want to accuse the Government of having a very short time span for what it wants to call legislation. I think it is not more than about 3 minutes ago that we had a vote where National members voted to call the Act the Crown Entities Reform Act 2011—I think that would have been changed to 2012—but now we discover they have changed their minds. They have changed their minds. They do not want to call it the Crown Entities Reform Act any more; they want to call it the New Zealand Public Health and Disability Amendment Act 2012 they want to call it the Mental Health Commission Amendment Act 2102 and they want to call it the— 
The CHAIRPERSON (H V Ross Robertson) 
: I sorry to interrupt the honourable member. The time has come for me to report progress. 
Progress to be reported presently. 
House resumed. 
The Chairperson reported progress on the Crown Entities Reform Bill no progress on the Commerce Commission (International Co-operation and Fees) Bill and no progress on the Biosecurity Law Reform Bill. 
Report adopted. 
The House adjourned at 9.56 p.m.