Volume 620 Week 68 - Wednesday 15 September 2004 
Volume 620 Week 68 - Wednesday 15 September 2004 
[Volume:620;Page:15653] 
Wednesday 15 September 2004 
Mr Speaker 
 took the Chair at 2 p.m. 
Prayers 
. 
Visitors 
Japan—Parliamentary Delegation from the House of Councillors 
Mr SPEAKER 
: I have much pleasure in informing members that a parliamentary delegation from the House of Councillors Japan led by Mr Hirofumi Nakasone is present in the gallery. I am sure that members would wish that the delegation be welcomed. 
Questions to Ministers 
Question No. 1 to Minister 
GERRY BROWNLEE (Deputy Leader—National) 
: 
 I raise a point of order Mr Speaker. We notice that this question has survived today to go to the Prime Minister but we know in fact that it is to be answered by the Deputy Prime Minister—and he has just acknowledged that. We are wondering what the rules are for the transfer of questions. You will appreciate Mr Speaker that yesterday we set down pretty much the same question to the Prime Minister. She transferred it to the Acting Minister of Justice. We notice that the Acting Minister of Justice although he clearly did not answer yesterday and did not appear to know what was going on is in the House today yet the question has been left on the Order Paper in the name of the Prime Minister and is to be answered by the Deputy Prime Minister. Can we assume that if the Prime Minister cannot answer it and the Acting Minister to whom it is transferred makes a hash of it sooner or later it will end up with the Deputy Prime Minister and maybe we should just send the question there in the first place? 
Mr SPEAKER 
: The member knows the Standing Orders. He is just trifling with the House. It is at the discretion of the Government. 
Justice Acting Minister—Prisoners' Compensation 
1. Dr DON BRASH (Leader of the Opposition) 
 to the  
Prime Minister 
: Is she satisfied with the performance of her Acting Minister of Justice who yesterday rejected a National Party offer to facilitate urgent legislation removing the entitlement of prisoners to compensation from the Department of Corrections in light of news reports that 18 new compensation claims have now been lodged; if so why? 
Hon Dr MICHAEL CULLEN (Deputy Prime Minister) 
 on behalf of the 
 Prime Minister 
: Yes because legislation needs to be effective well drafted and well considered. Rushed legislation would be likely to be none of those as the member might consider when he thinks about the difference between his question yesterday and his question today. 
Dr Don Brash 
: What message does the Prime Minister wish to give to the victims of 18 of New Zealand’s worst prisoners in Auckland’s maximum security prison now that those inmates have been able to lodge claims for large sums of compensation only because her Government refused to accept the offer of cooperation from the National Party? 
Hon Dr MICHAEL CULLEN 
: If the member cares to read his question today he will see that what he is asking for today is a bill to remove the entitlement of prisoners to compensation. Yesterday his question proposed that a bill be passed to prevent prisoners from collecting significant taxpayer compensation. There is a significant difference between the two. In the case of yesterday’s question it was implied that compensation would be payable but then paid to the victims which is the Government’s position. Today he is proposing that no compensation be payable which would open up our prisons to any form of activity without any penalty applying. 
Nandor Tanczos 
: Does the Prime Minister agree that rights must be enforceable to be genuine rights and that removing the ability of inmates to sue for compensation for abuse gives a green light to abuse in the prison system? [ 
Interruption 
] 
Hon Dr MICHAEL CULLEN 
: The person interjecting is one of the few people in this House who have been convicted of anything as far as I am aware. I point out that this is where there is a difficult balance to be arrived at and why the legislation has to be carefully considered. Rushed legislation is likely to err significantly in one direction or another. 
Rodney Hide 
: Back in September 2000 did the Prime Minister not in fact invite prisoners and their lawyers to take the Department of Corrections to court when following the secret payouts to the Mangaroa Prison inmates by Margaret Wilson she stated: “If they want payment they should sue. I’d rather go to court and lose than pay out and that should be the method.”; and how is it that 4 years later we still do not see any legislation to fix the process of compensation that 4 years ago she invited prisoners to undertake? 
Hon Dr MICHAEL CULLEN 
: Indeed the Prime Minister did say that and one of the issues around this legislation is whether there should remain any right to sue at all—and if there is not the member might care to think about the possible consequences of that—or if there is any form of right to sue whether the victims of the crimes of those criminals then have the first right to payment which for example is the position taken by the leader of New Zealand First. 
Dr Don Brash 
: Is the Prime Minister aware of media reports that a further 200 compensation claims may be lodged by prisoners against the Department of Corrections; and why is her Government doing absolutely nothing to legislate against those claims when it has been assured of cooperation from other parties to do so? 
Hon Dr MICHAEL CULLEN 
: The Government is not doing nothing; the Government is preparing legislation. That question was from a man who used to take 6 weeks to make up his mind whether to put interest rates up or down which is a very simple thing compared with a bit of legislation. 
Ron Mark 
: How much credibility can there possibly be for a Government that promised no more payouts and no more golden handshakes that since coming to power has allowed about $350000 in payouts to Mongrel Mob members as a result of Margaret Wilson’s interventions at Mangaroa and a $42000 payout to inmate Rees in Dunedin and that now is only just starting to move on legislation because it has been severely embarrassed by the likelihood of perhaps $1 million or $2 million in payouts in this latest fiasco—what credibility can this Government possibly have? 
Hon Dr MICHAEL CULLEN 
: There is quite significant credibility in this area because work is being done on legislation. But I remind the member that his leader has called for legislation that would give the victims the compensation that any prisoners might receive. That is totally different from the proposition just made by the leader of the National Party. 
Stephen Franks 
: Could the Prime Minister explain just exactly what is so complicated about deciding whether any compensation should go to victims or whether there should be compensation at all given that the Government has had 4 years to think about it and it is 2 years since these proceedings were filed? 
Hon Dr MICHAEL CULLEN 
: What is complicated about that is that it is answered by the member’s own question: should there be compensation at all? 
Opposition Member 
: Yes. 
Hon Dr MICHAEL CULLEN 
: Well the member says “Yes” but the National Party says “No”. So already we do not have a majority in the Opposition for this particular form of legislation. We are to rush through legislation where the major Opposition parties cannot agree and the National Party cannot agree with itself from one day to the next! 
Ron Mark 
: Does the Prime Minister recall on 8 September 2000 her Minister of Justice Phil Goff using unministerial language saying that the Government had been “forced to make a compensation payment to a group of scumbags”—with reference to the Mongrel Mob payouts; if the Prime Minister can remember those very unministerial words can she tell the House why 5 years later the Government has still not done a thing? 
Hon Dr MICHAEL CULLEN 
: The recent case involved a somewhat different range of issues as I understand it and therefore we now have to consider what the nature of any legislation should be. But the member and other members do need to think carefully about what should be done. Mr Franks for example has said there should still be compensation because I think Mr Franks understands the dangers of removing any right to compensation in these circumstances. 
Dr Don Brash 
: Will the Prime Minister now accept the offer of the National Party to pass through all stages this week a bill to prevent convicted criminals from collecting significant taxpayer compensation; if not why not? 
Hon Dr MICHAEL CULLEN 
: I invite the member to be clear first on what it is he is actually proposing should be passed because what he said today is different from what he said yesterday. If the member is to come to the House for 2 days in a row for the first time in his career he could at least keep his mind constant over that length of time. [ 
Interruption 
] 
Mr SPEAKER 
: I would remind the Government that I am not moving on supplementary questions until those members are quiet. 
Dr Don Brash 
: I raise a point of order Mr Speaker. I had understood that it was not appropriate under Standing Orders for members to refer to the absence of other members from the House just as I have not for example referred to the absence of the Prime Minister. 
Mr SPEAKER 
: That is perfectly correct. I tried to listen as best I could but there was a lot of interjection at the time. The member is absolutely right. 
Gerry Brownlee 
: I raise a point of order Mr Speaker. That is hardly a satisfactory way to leave that answer. You may judge that the Minister standing on his feet and making some personal reflections is an address to the question but we certainly do not. The question was pretty clear: will they support the legislation being changed this week as the National Party has offered or will they not? 
Mr SPEAKER 
: Well if that was all the Minister did it would certainly be correct but it was not. 
Rodney Hide 
: In light of the Government’s proposed legislation to deal with compensation for prisoners did work begin on that back in 2000 when the Prime Minister directly invited prisoners and their lawyers to use the courts to seek compensation; if not why not and if it did where is it? 
Hon Dr MICHAEL CULLEN 
: No that work has just commenced. What happened in 2000 was that the Prime Minister made it clear that the Government would not simply give people compensation without the court first saying that they were entitled to it. 
Peter Brown 
: Noting the answers to those questions am I right to conclude that this Government puts a higher priority on the passing of the sherry tax legislation—which was passed overnight under urgency—than it does on this sort of legislation which reflects a problem that has been ongoing for 4 years? 
Hon Dr MICHAEL CULLEN 
: The issue of putting up tax on alcohol unfortunately is a much simpler thing than deciding the framework of this legislation. I remind the member again that members have heard today at least three different versions from Opposition parties of what the bill should be. 
Rodney Hide 
: I seek leave to table the Prime Minister’s statement in the  
Dominion  
on 22 September 2000 inviting lawyers and prisoners to sue the Crown for money. 
Mr SPEAKER 
: Leave is sought to table that statement. Is there any objection? There is. 
Rodney Hide 
: They do not like the truth. 
Mr SPEAKER 
: Objection was taken as any member is entitled to do. 
Boys—School to Work Transition 
2.  
LYNNE PILLAY (Labour—Waitakere) 
 to the  
Associate Minister of Education (Tertiary Education) 
: What initiatives does the Government have in place to help boys make a successful transition from school into jobs in industry? 
Hon STEVE MAHAREY (Associate Minister of Education (Tertiary Education)) 
: 
 There is widespread concern highlighted by my colleague John Tamihere that we need to help boys to make a successful transition from school to work. A good example of how to do this is Whangarei Boys High School. It has complemented the very successful Gateway programme through a partnership with local engineering firms called Apprenticeships Work which was the focus of a recent  
Morning Report 
 feature. Whangarei engineering employers are so enthused about the scheme they have bought Whangarei Boys High School $100000 worth of lathes and other modern equipment for its workshops so they know that young men can take their place in industry and are trained on good safe equipment. This example of Gateway in action is indicative of what is happening now in 126 schools around the country—and I am about to announce a number more. 
Lynne Pillay 
: What other initiatives are in place to help not just boys but girls as well to make the transition from school to work? 
Hon STEVE MAHAREY 
: Apart from Gateway which will reach 4000 students this year our youth transition initiatives include 6874 Modern Apprenticeships not to mention the 18000 young industry trainees outside the Modern Apprenticeships programme; the $56 million put into the youth transition umbrella services which will open in Whangarei Waitakere Rotorua New Plymouth and Porirua from early next year and then expand throughout the country; and the announcement today from Trevor Mallard the Minister of Education of the 75 schools taking part in the Designing Careers pilot which was a fabulous announcement. 
Health Services—Pacific Children 
3.  
BARBARA STEWART (NZ First) 
 to the  
Minister of Health 
: What concerns does she have if any regarding Ministry of Health chief Pacific health adviser Debbie Ryan’s reported comments: “the statistics made grim reading and showed the health system was failing Pacific children.” and what is she doing about this? 
Hon JIM ANDERTON (Associate Minister of Health) 
 on behalf of the 
 Minister of Health 
: The comment was made in response to a media question and honestly recognises that health services have not worked as well for Pacific people as we would all like. The article failed to explain however that  
Tupu 
OlaMoui: Pacific Health Chart Book 2004 
 which is a stocktake of Pacific peoples’ health is a summary of the use of health services over the past 10 years. It does not attempt to cover key health service initiatives that are currently addressing the health needs of Pacific children. 
Barbara Stewart 
: Will the Minister accept after 5 years as Minister of Health and given the health budget available that there is no excuse for the fact that Pacific children in New Zealand are almost three times as likely to get meningococcal disease twice as likely to fail the school entry hearing test five times as likely to get rheumatic fever and more than six times as likely to get tuberculosis when compared with the rest of the population? 
Hon JIM ANDERTON 
: I think the needs of Pacific Island peoples in terms of their health is a serious issue that all Governments have the responsibility to address. But let me remind the member when she mentions meningococcal disease that the Minister of Health has been primarily responsible for initiating a magnificent programme in which the Government has invested $250 million for meningococcal vaccination. That has had a very high take-up rate by the Pacific Island population—I am advised it is something like 95 percent. I think the Minister should be congratulated on that account. 
Dianne Yates 
: What other policies has the Government put in place to address disparities in the health system? 
Hon JIM ANDERTON 
: We have established primary health organisations in which more than 95 percent of Pacific people have enrolled. Primary health organisations will enable improved access to a wide range of appropriate health services—something that the report identified as a big issue. I have already indicated to the House by way of example the $250 million investment by this Labour-Progressive coalition Government in the meningococcal vaccination programme. 
Dr Paul Hutchison 
: Does the Minister accept that her Government has failed over the last 4½ years to improve some of the basic preventive interventions for Pacific children given that she has repeatedly been unable to tell me what percentage of children complete their immunisations and the report notes an estimated coverage of only 50 percent at 2 years of age for Pacific children? 
Hon JIM ANDERTON 
: No I would not accept failure. I accept that this area needs considerable Government investment and I know that in the last 3 years and going on into the fourth year this Government has invested a further $3000 million in the health system. Much of that funding is aimed at the most vulnerable citizens in the community which of course includes Pacific Island children. 
Barbara Stewart 
: What evidence does the Minister have that the numerous Pacific Island health providers contracted by district health boards around the country at a cost of millions of dollars to the taxpayer are doing anything to address the appalling Pacific Island health statistics? 
Hon JIM ANDERTON 
: I would have thought the member would be pleased that Pacific Island peoples just like organisations that take responsibility for Maori health care are taking their future into their own hands. They are participating in health care and are developing educative programmes as well as preventive health-care programmes. That is a very good example of how the future looks a lot brighter than the past did. 
Fisheries—Wage Compliance 
4.  
PAUL ADAMS (United Future) 
 to the  
Minister of Labour 
: On how many occasions in the past 5 years have labour inspectors exercised their powers under section 103 of the Fisheries Act 1996 to ascertain whether work permit holders employed on foreign charter fishing vessels are being paid at the levels required under the Minimum Wage Act 1983 and the Wages Protection Act 1983 and what has been the result of those inspections? 
Hon PAUL SWAIN (Minister of Labour) 
: 
 Since 1999 the labour inspectorate has conducted two such investigations. In one of these three Russian seamen approached the inspectorate and complained of non-payment of wages. When the New Zealand agent for the vessel was approached by the inspectorate the matter was remedied by immediate payment of the outstanding amounts due. The second case involved a vessel that was not fishing in New Zealand territorial waters so the provisions of section 103 of the Act did not apply. However I am aware that concerns have been expressed about labour issues in the industry and officers from the Department of Labour and the Immigration Service will be undertaking an investigation to ensure compliance with New Zealand labour and immigration laws. 
Paul Adams 
: Is the Minister aware that a number of foreign charter vessel operators evade employment laws such as the minimum wage by making substantial deductions from their employees’ pay packets for expenses like airfares food and accommodation which result in them receiving net rates of pay far below the minimum wage; and is he concerned about the implications of such practices for the competitiveness of fishing vessels that employ mainly New Zealand crews? 
Hon PAUL SWAIN 
: Yes I am and that is precisely why officials from the Department of Labour and the Immigration Service are due to start an investigation into the industry to ensure that New Zealand laws when people are fishing in New Zealand are complied with. It is for the reasons outlined by the member that that is happening. 
Phil Heatley 
: Why are the wages of foreign fishing crews half those of New Zealand fishing crews when section 7 of the Minimum Wage Act expressly states that employers may not deduct wages by more than 15 percent for board or 5 percent for lodging? 
Hon PAUL SWAIN 
: That is one of the issues that will be looked into. The Wages Protection Act has a lot to say about the kinds of things the member has raised. There is also the issue of the Minimum Wage Act which the member from United Future has raised. As I said the officials will be conducting an investigation shortly. 
Keith Locke 
: When the department conducts this long overdue investigation that the Minister has just referred to will the department follow up on the leads provided through New Zealand third parties and not apply the policy until now of trying to get direct evidence from the seamen when we know that Ukrainian Filipino and other workers on foreign vessels are reluctant to come forward with direct information because they fear they will be put on the first boat or plane back? 
Hon PAUL SWAIN 
: That is a fair point and the point I make now is that if people have information on the kinds of things that have been going on that would help the investigation I would welcome it. 
Paul Adams 
: Is the Minister concerned that the practice of minimising payment obligations to work permit - holding foreign fishing crews has created an environment in the fishing industry that is so uncompetitive for New Zealand crews of fishing vessels that a number of New Zealand - owned deep-water fishing vessels have had to be sold or tied up in recent times and their crews laid off; and has he discussed this issue with his colleagues the Minister of Fisheries and the Associate Minister of Immigration? 
Hon PAUL SWAIN 
: I have seen reports similar to what the member has said. I am not sure how much of that is due to things like quota around hoki and changes to quota or whether in fact it is due to labour or immigration laws. As a result of the investigation we should be a little clearer in regard to knowing what is happening. 
Gordon Copeland 
: I raise a point of order Mr Speaker. The Minister was asked also whether he had discussed this with the Minister of Fisheries and the Associate Minister of Immigration. He did not address that part of the question. 
Mr SPEAKER 
: He does not have to but if he would like to he may. 
Hon PAUL SWAIN 
: I certainly have discussed the matter with the Associate Minister of Immigration. I have had reports from the Minister of Fisheries about quota issues. 
Paul Adams 
: What steps if any will the Government take to investigate and then eliminate the anti-competitive and unfair practices of minimising payment obligations to work permit - holding foreign fishing crews? 
Hon PAUL SWAIN 
: As I have said we will begin an investigation into this matter very shortly and the investigation will be addressing precisely the matters that the member has raised. 
Paul Adams 
: Will the Government consider making it mandatory for inspectors to be present at all times on all foreign-crewed charter vessels; if not why not? 
Hon PAUL SWAIN 
: I am not sure how many fishing vessels there are and therefore requiring an inspector on each one might be a little burdensome not just on the industry but also on the taxpayer. I think what I would like to be able to do is get to the bottom of the issue and then work out what we do about it after that. 
Employment Relations Law Reform Bill—Unions 
5.  
Dr WAYNE MAPP (National—North Shore) 
 to the  
Minister of Labour 
: How does he believe the bargaining fee arrangements he intends introducing to the Employment Relations Law Reform Bill will benefit the nearly 1.7 million members of the New Zealand workforce who have chosen not to join a union and pay union fees? 
Hon PAUL SWAIN (Minister of Labour) 
: 
 What a non-union employee decides to do about a bargaining fee arrangement will be a matter of free choice. The bargaining fee arrangement recommended by the Transport and Industrial Relations Committee would apply only where an employer and a union agree on a bargaining fee arrangement. Affected employees take part in a ballot to decide whether a bargaining fee should operate in their workplace and non-union employees who do not want to pay the fee may opt out. A non-union employee who decides to pay the bargaining fee would receive the benefits of the collectively bargained terms and conditions. Non-union employees who do not wish to pay are free to negotiate their own terms and conditions. 
Dr Wayne Mapp 
: Why cannot the 1.7 million workers who choose not to belong to unions pay another third party not being a union their own fees so that they can negotiate their arrangements which may be the same or substantially better than those of the collective? 
Hon PAUL SWAIN 
: The Employment Relations Act specifies quite clearly the relationship between collective agreements and individual agreements. The Act is quite clear that the negotiation of collective agreements is for unions. That was Government policy and it is in the Act. 
Helen Duncan 
: What reports has he seen about responses to the select committee’s report on the Employment Relations Law Reform Bill? 
Hon PAUL SWAIN 
: I have seen a report that states that the business community is broadly happy with the Employment Relations Act. And I have seen a report that states that those comments are broadly consistent with National Party policy but that the person making the statements is not sure because he has not reread his own party’s industrial relations policy. That person is Don Brash the leader of the National Party. 
Dr Wayne Mapp 
: Is the Minister aware that it is the National Party’s specific policy to totally repeal each and every provision of the Employment Relations Law Reform Bill and why does he not understand that simple proposition? 
Hon PAUL SWAIN 
: Like the vast majority of New Zealanders I do not have a clue what National Party policy is on anything. 
Dr Wayne Mapp 
: What does the Minister say to employers negotiating with their employees who will now be subject to a fine of up to $10000 simply because they offer them the same terms as a collective which the unions would say has the effect of undermining the collective when that is all that is required by new section 59A(2) inserted by clause 19 of the bill? 
Hon PAUL SWAIN 
: That if they do so in good faith they will be fine. 
Drugs—International Trafficking 
6.  
STEVE CHADWICK (Labour—Rotorua) 
 to the  
Minister of Customs 
: What action is the Government taking to stop overseas drug syndicates from trafficking illicit drugs into New Zealand? 
Hon RICK BARKER (Minister of Customs) 
: 
 In the 2003 Budget the Government injected $1.9 million for the recruitment and training of additional specialist drug intelligence and investigation staff of the Customs Service. This funding was to strengthen the service’s ability to identify and investigate overseas-based syndicates trafficking illegal drugs into New Zealand. The Government has backed this up with a further $5 million in the 2004 Budget to increase the service’s inspection and detection resources at international airports and seaports. 
Steve Chadwick 
: Has this additional funding had a positive result and is the Government sending the right messages to the international drug community? 
Hon RICK BARKER 
: Yes it has. I have received reports from the Customs Service that show that in the last financial year the service seized more than 178000 Ecstasy tablets; 22 kilos of cocaine compared with 0.2 kilos the year before; 10 kilos of crystal methamphetamine compared with 0.9 kilos the years before; 1.2 kilos of heroin compared with 0.2 kilos the year before; 6000 LSD tablets; and 1.3 million ephedrine and pseudoephedrine tablets which was more than double the amount seized the year before. In addition 30 arrests have been made in New Zealand and overseas as a result of the increased cooperation with overseas agencies. The message to international drug traffickers is clear: their chances of being caught in New Zealand have gone up dramatically. 
Pita Paraone 
: Has he any concerns over the running and the effectiveness of the Customs Service coast watch programme especially pertaining to matters of privacy; if not why not? 
Hon RICK BARKER 
: Not at this stage no. 
Health Services—Waiting Lists 
7.  
HEATHER ROY (ACT) 
 to the  
Minister of Health 
: What was the total number of people at the end of June 2004 who following first specialist assessment were on waiting lists booked or given certainty of treatment within 6 months on active review or had been referred to the care of their general practitioner? 
Hon JIM ANDERTON (Associate Minister of Health) 
 on behalf of the 
 Minister of Health 
: In June 2004 the number booked or given certainty totalled 25028. This compares with the 30 June 1999 figure of 18075 in those categories. There were 31099 on active review as at 30 June 2004 many of whom were assessed and rebooked. That compares favourably to the 55066 who were languishing on the residual list as at 30 June 1999 with no continuing care. 
Heather Roy 
: Given that there were 50000 people on residual waiting lists when Labour was elected that the Minister has just told us there are 25000 people booked for or given certainty of treatment and that 31000 patients—as given to me in answer to a parliamentary question—are on active review is the Minister now telling us that the waiting lists are longer that more people are waiting for treatment than when this Government came to power? 
Hon JIM ANDERTON 
: There is not a country in the world that is not grappling with the challenge of public health sector funding and treatment and New Zealand is doing better than most. This year alone—the 2004-05 financial year—this Government has allocated two hospitals a further $296 million without any constraint whatever on how they can use that funding. That is the kind of commitment this Government is making but with an ageing population and new technology there will be a consistent challenge before any Government to deal with the health system. I have yet to see any realistic alternatives to those that the Government is following at the present time. 
John Carter 
: I raise a point of order Mr Speaker. I listened very carefully to the answer given by that Minister and I listened very closely to the question that was asked which was very specific. The question asked whether waiting lists were longer today than when the Government came to office. It was a very simple succinct question and there were no other parts to it. The question asked whether the Minister could confirm that waiting lists are longer today than they were when the Government came to office. He did not answer that question at all. 
Mr SPEAKER 
: I ask the Minister to address that part of the question. 
Hon JIM ANDERTON 
: If we were comparing exactly the same circumstances that would be a fair comparison but the circumstances are different. 
Rodney Hide 
: I raise a point of order Mr Speaker. I hesitate to raise this point because I know you are not responsible for it but the Minister was also asked in the primary question how many patients had been referred to the care of their general practitioner. As I heard it the Minister did not address that at all. What has happened is that the books have been cooked so that we now have three categories rather than just one. I think it would be helpful if you could ask the Minister to address that part of the question. If he cannot do it now in the House perhaps he could do it if given some time. 
Mr SPEAKER 
: Well the Minister did address the question. He gave a number of statistics in response to quite a few parts of the question. If he wants to add anything further later he can. 
Darren Hughes 
: Is the Minister aware of any advice given to hospitals when the system was first introduced as to how they might manage waiting list growth? 
Hon JIM ANDERTON 
: Yes. I have received that advice. The then Minister of Health the Hon Bill English wrote to chief executives on 16 September 1997 and advised them: “It is the Transitional Health Authority’s responsibility to manage growth in the number of people who have been placed on a waiting list after 7 May 1996. This can be achieved through either raising the interim and/or financially sustainable threshold or by diverting resources. No additional funding will be made available from the Government to clear growth in waiting list backlogs since May 1996.” 
Judith Collins 
: Does the Minister remember the comment of Helen Clark in November 1995: “I give you my word: Labour will blitz those waiting times for hospital treatment.”; and can the Minister confirm that the word “blitz” when used by her Labour Government means to throw thousands of people off the waiting list and to force those remaining into a revolving series of lists only one of which means an operation this side of the grave? 
Hon JIM ANDERTON 
: I remember every comment made by the Prime Minister of New Zealand at the present time—both currently and in the past. Those comments have come true: waiting times are down. 
Barbara Stewart 
: Does the Minister of Health have any concerns regarding the burgeoning health bureaucracy given that Ministry of Health staff numbers have more than doubled since 1999 and is she confident that it has not been at the expense of reducing waiting lists? 
Hon JIM ANDERTON 
: Well one could call more nurses and doctors for example burgeoning bureaucracy. But I can advise the member that in 2002-03 there were 267374 surgical procedures in New Zealand hospitals. This year to date—and the figures for the full financial year are not in yet—that figure has improved to 272881. 
Heather Roy 
: Given that $188 million in operating spending for the last financial year was unspent when it could have been used to cut the waiting lists or active review lists can the Minister of Health deny that this money was announced as part of last year’s Budget was not spent and was announced again as part of this year’s Budget; if not what has actually happened to the $188 million? 
Hon JIM ANDERTON 
: In terms of bureaucracy I recall when there were regional health authorities all over New Zealand and now there are functioning district health boards in—[ 
Interruption 
] In regard to the member’s question she will have to repeat it because I have actually lost the plot. 
Mr SPEAKER 
: Please repeat the question. 
Heather Roy 
: Given that $188 million in operating spending for the last financial year was unspent when it could have been used to cut the waiting lists or the active review lists can the Minister of Health deny that this money was announced as part of last year’s Budget was not spent and was announced again as part of this year’s Budget; if not what exactly has happened to the unspent $188 million? 
Hon JIM ANDERTON 
: In a health budget of approximately $10000 million $180 million is a very small amount to be carried forward. That money was carried forward from the previous year because it had not been totally expended but it will continue to be allocated to the programmes that it was allocated to in the first place. Is the member suggesting that it should be removed from the health system? This Government does not agree with that. 
Rodney Hide 
: I raise a point of order Mr Speaker. This is the precise trouble we get into in this House. I ask you to consider this for this Minister. I know he is not the real Minister— 
Mr SPEAKER 
: Please be concise. Those comments do not help the point of order. 
Rodney Hide 
: Well the specific question was that as the Government had announced that it was going to spend an extra $400 million and as $188 million had not been spent—money is fungible; it is the same money—what had happened to that money and had it been announced twice. The Minister got up and gave a long verbose answer. We just want to know what has happened to the $188 million and why the Government promised us an extra $400 million of spending. 
Hon Dr Michael Cullen 
: I raise a point of order Mr Speaker. 
Rodney Hide 
: Well let me finish. Putting it in the context of saying that the health budget is a big budget—$10 billion—does not get away from the fact that it was this Government that sat here during the last Budget and paraded the fact it was spending an extra $400 million but it actually did not spend it. 
Mr SPEAKER 
: The point of order was far too long. The member must be more terse in future. 
Hon Dr Michael Cullen 
: The last point was totally irrelevant and purely debating material which is why the member should have stopped when I rose. The Minister gave a perfectly adequate answer: the money was carried forward from last year to this year—much of it in fact because meningococcal meningitis vaccination money was unspent and was carried forward to the current year. 
Mr SPEAKER 
: The question was addressed. 
Ron Mark 
: I raise a point of order Mr Speaker. I am just struggling to find the particular Standing Order that requires members’ words to be taken as honest because they are honourable members. In respect of the Standing Orders I have to say I have noticed we have a rather large gathering of senior New Zealand citizens in the gallery. Whilst the Minister was giving his answer on waiting lists they were shaking their heads. If they cannot believe him why should we be required to? 
Mr SPEAKER 
: The member is being given a final warning. I should have asked him to leave the House. He knows full well that no one may refer to anyone outside the 120 members of this House. He knows that is against the rules. If he did not he now does. 
Heather Roy 
: Did the Minister of Health a Labour Minister in a Government that has experienced large surpluses actually cut real per person health spending in the 2001-02 financial year; if so why? 
Hon JIM ANDERTON 
: What I can tell the member is this: of approximately $800 million of discretionary funding that this Government had in that financial year $400 million—in other words 50 percent—was allocated to the health budget. Any Minister of Health who achieves that deserves an accolade not criticism. 
Rodney Hide 
: I raise a point of order Mr Speaker. I ask you to respect Parliament and question time. I know that you are not responsible for the quality of the answers but it has to be unacceptable for a Minister who has been asked a specific question to answer that question with “What I can tell you” then talk about something completely different. That cannot be considered under any interpretation as addressing the question as required by the Standing Orders. 
Mr SPEAKER 
: I can tell the member that if that was all that the Minister said then of course it would not be acceptable but he then went on—[ 
Interruption 
] The member is very very lucky that I am in a generous mood. I can tell the member that that was not all that the Minister said; he did go on to address the question. 
Stephen Franks 
: I raise a point of order Mr Speaker. I draw your attention to Speaker’s ruling 147/1 which states that replies should be “no longer than need be in order to answer the question adequately” and which should be read with Speaker’s ruling 146/7 which states that the Speaker will call the Minister to order if an entirely unrelated subject is addressed and may permit further supplementary questions to a particularly uncooperative Minister. In this particular series of questions we have repeatedly had answers of completely unnecessary length which is obfuscation. I ask you to consider offering some extra supplementary questions. 
Mr SPEAKER 
: No I will not be doing that. But I can say to the Minister that his replies have been too long. I think he should be concise in his replies and I shall be watching him very closely. 
Heather Roy 
: I seek leave to table three documents. The first is an answer to a parliamentary question that shows that from Treasury’s estimates the real per capita spending per person dropped— 
Mr SPEAKER 
: Leave is sought to table that question. Is there any objection? There is. 
Heather Roy 
: The second document is an answer to a parliamentary question showing that the number of patients on active review in June 2004 was 31000. 
Mr SPEAKER 
: Leave is sought to table that. Is there any objection? There is. 
Heather Roy 
: The third document is another answer to a parliamentary question that shows that the amount of operating funding underspent in the 2003-04 year was $188 million. 
Mr SPEAKER 
: Leave is sought to table that question. Is there any objection? There is. 
Nandor Tanczos 
: I raise a point of order Mr Speaker. I have brought up this issue before. I refer to Speaker’s ruling 127/8 which states: “Leave should only be sought to table papers that are not readily available from other sources.” Parliamentary questions by definition are available to all members of this House. I think the member is trifling with you and the House. 
Mr SPEAKER 
: I repeat that the chances of documents like that being tabled are very remote but every member has a perfect right to ask because that is in the Standing Orders. I am required to use the Standing Orders and members themselves would be very cross with me if I did not. The member is entitled to ask but I do happen to agree with the member that the particular issues raised—answers to parliamentary questions—are already printed and available for everybody. 
Hon Jim Anderton 
: I seek leave to lay on the Table of the House the letter from the Hon Bill English on waiting time funding when he was the Minister of Health. 
Document by leave laid on the Table of the House. 
Patient Safety—Ministerial Responsibility 
8.  
SUE KEDGLEY (Green) 
 to the  
Minister of Health 
: Does she accept responsibility for the safety of patients in New Zealand hospitals? 
Hon JIM ANDERTON (Associate Minister of Health) 
 on behalf of the 
 Minister of Health 
: Of course every Minister takes his or her share of responsibility for the outcomes in his or her particular portfolio area—in this case the health system. But no Minister can take total responsibility for every action that occurs in a hospital as decisions are made by health professionals on an hourly basis. I would refute any suggestion or implication that the vast majority of clinicians do not make sound decisions in the interests of their patients. 
Sue Kedgley 
: How can the Minister assure patients that they will be safe in our hospitals when emergency department nurses at North Shore Hospital are signing letters every day that state that they cannot guarantee patients’ safety because of staff shortages and huge workloads; and if someone were to suffer or even to die as a result of the lack of nursing care in such a situation who would be responsible? Would it be the Minister? 
Hon JIM ANDERTON 
: In the event of any untoward incident that resulted from inadequacies in the hospital system there are health and disability commissioners and other procedures that can investigate that. The Government on behalf of New Zealanders is therefore responsible for that kind of supervision and will take responsibility for it. 
Judith Collins 
: Will the Minister ever take any serious action to remedy the situation that last week saw one nurse looking after 12 patients in North Shore Hospital’s emergency care centre when the accepted ratio is one nurse to four patients in emergency care? 
Hon JIM ANDERTON 
: The answer is yes. 
Barbara Stewart 
: Does the Minister accept responsibility for the cost overruns on the new acute assessment unit in Hastings which is having to be strengthened to ensure patient and staff safety and which has been estimated by the chair of the Hawke’s Bay District Health Board to be costing the board over $50000 a day; if she does not who will take responsibility for that poorly managed project? 
Mr SPEAKER 
: That is very wide of the original question but the Minister can reply. 
Hon JIM ANDERTON 
: Quite simply that is a district health board responsibility and the accountability and responsibility for that lie at the local level. 
Sue Kedgley 
: What does the Minister say to Paula Barnett a nurse at North Shore Hospital who said on National Radio recently: “It’s just an untenable working situation—untenable for staff to try to provide anything like compassionate care or even adequate care or safe care and it’s just ghastly for patients and families.” 
Hon JIM ANDERTON 
: I would say to her that this Government has done more proactively to assist the public health system of New Zealand than any recent Government in living memory. 
Sue Kedgley 
: Does the Minister agree with the New Zealand Nurses Organisation that: “Dangerous overcrowding at North Shore Hospital’s emergency department is part of a nationwide crisis” and when will she exercise political leadership and intervene to ensure patients are not being put at risk by unsafe levels of nursing staff as she is entitled to do under the Health and Disability Services (Safety) Act? 
Hon JIM ANDERTON 
: Any Government or any member of this House is going to be concerned about conditions in hospitals of course. But I say to the member that if there is a crisis in the hospital system now it would pale into insignificance in comparison to what it would have been if the National Party or the ACT party was on the Government side of the House and running its health system. 
Sue Kedgley 
: I raise a point of order Mr Speaker. It was interesting to hear the Minister’s contemplations— 
Mr SPEAKER 
: What is the point of order? 
Sue Kedgley 
: The point of order is that he did not attempt to address the issue. He just talked about historic experiences. I asked when the Minister of Health would exercise political leadership and intervene in that event to ensure patient safety. 
Mr SPEAKER 
: Perhaps the Minister could address that issue. 
Hon JIM ANDERTON 
: The Minister does exactly that on every single day that she is in office. 
Sue Kedgley 
: Does the Minister agree that she has a responsibility under the Act to intervene when patient safety is clearly at risk as it was for example on 25 August when the emergency department at North Shore Hospital had 11 staff responsible for up to 12 patients each instead of the safe level of four had 42 patients in 25 beds had all corridor spaces and more filled creating a health and fire hazard and had four patients isolated with methicillin-resistant  
Staphyolcoccus 
aureus 
 etc. etc.? 
Hon JIM ANDERTON 
: When the Minister is advised or has information that there are serious safety issues in hospitals I am sure that she does intervene and act in accordance with the responsibility she has. 
Barbara Stewart 
: I seek leave to table an article from the  
Dominion Post  
of 15 September titled: “Quake fears lead to demands for back-up hospital”. 
Mr SPEAKER 
: Leave is sought to table that article. Is there any objection? There is. 
Schools—Funding 
9.  
Hon BILL ENGLISH (National—Clutha-Southland) 
 to the  
Minister of Education 
: Does he agree that the standard of education delivered in schools is dependent on the funds each school is able to raise from non-government sources as stated by the New Zealand School Trustees Association President Chris Haines; if not why not? 
Hon TREVOR MALLARD (Minister of Education) 
: 
 Under this Government real per pupil operational funding has increased by 10 percent. Under this Government fewer schools have deficits. They have much bigger total surpluses cash holdings equity and total assets. It is important that we get a consistent story. This member says that schools are awash with cash; his leader says that he is “not at all sure that spending on education should increase”— 
Dr Don Brash 
: I raise a point of order Mr Speaker. This Minister is not even making an attempt to answer a very straightforward question. The House is getting very impatient with him. 
Mr SPEAKER 
: And so am I. The Minister will start by addressing the question. [ 
Interruption 
] That is the end of any more nonsense when I am giving a ruling. Now I will have the answer. 
Hon TREVOR MALLARD 
: As I indicated under this Government real per pupil operational funding has increased by 10 percent. Under this Government fewer schools have deficits; they have much bigger total surpluses. Cash holdings have increased equity has increased and total assets have increased. That is why I disagree with Mr Haines. 
Hon Bill English 
: Is the Minister aware of the fact that parents and schools will raise this year about half a billion dollars over and above their Government funding; and can he advise the House whether it is still Labour Party policy that State education is free? 
Hon TREVOR MALLARD 
: I have read the report to which the member refers—at least its beginning. I got it this morning; I haven’t read right through. I thought the most interesting point in the report to which the member referred is that the proportion of principals who thought that Government funding was inadequate has dropped by 14 percent since I became Minister. 
Hon Bill English 
: I raise a point of order Mr Speaker. The Minister referred to a report in his answer that I did not refer to at all in my question. He did not in any way answer whether it is Labour Party policy that State education is free. 
Mr SPEAKER 
: That particular part of the question can be addressed. 
Hon TREVOR MALLARD 
: Of course it is Government policy and it is the law that State education is free. One of the things I thought interesting is that the vast part of the increase the member is referring to comes from overseas students—which cost schools. The major part of the increase in locally raised funds since I became Minister came from overseas students. If the member does not understand that I will get someone to read the figures to him. 
H V Ross Robertson 
: What does the report commissioned by the School Trustees Association state about the adequacy of school operational funding in the 1990s? 
Hon TREVOR MALLARD 
: The report notes that from 1990 to 1996 real purchasing power decreased by 10 percent. I quote directly from the report: “Funding cutbacks may have had later repercussions for school budgets.” I give credit to Brian Donnelly because between 1996 and 1999 school funding increased in real terms per pupil by 4.4 percent. He did not totally make it up but he made a lot of progress. Since I became Minister the real per pupil operational funding for schools has increased by 10 percent. 
Hon Brian Donnelly 
: Is it true that of the nine schools in the School Trustees Association study being referred to the teacher salaries grant fell between 4 percent and 16 percent short of its assessment of actual staffing requirements and that those schools spent on average 32 percent of operations grants and 80 percent of locally raised funds on teacher salaries and does he believe that is satisfactory? 
Hon TREVOR MALLARD 
: One of the things this Government did in 2000-01 was free up the ability of schools to use operational funding and locally raised funding for employing teachers. It comes as no surprise to me that some schools with their vastly increased operations grants have chosen to employ more teachers. 
Bernie Ogilvy 
: Does the Minister agree that the doubling of teacher numbers funded by that operations grant from 1672 teachers to 3355 between the years 1998 to 2004 will have been matched by a doubling of teaching staff numbers funded by the fund-raising each school obtains from non-Government sources; if not what justification does he have for the doubling of teacher numbers paid from the schools’ operations grant? 
Hon TREVOR MALLARD 
: I heard the question and I did not totally understand it but I think the point should be made that this year this Government is putting over $120 million extra directly into staffing so that would pay for a vast number of extra teachers over and above those required by roll growth. I think the fact that schools have chosen to add to that number is great. 
Hon Bill English 
: How does the Minister reconcile his stated policy that: “State education is free.” with the fact that this year parents and communities will raise half a billion dollars or about one dollar in every three of school operational funding? 
Hon TREVOR MALLARD 
: Because the community the member is referring to which is the one that has made the difference in the fund-raising is a Chinese community based in China. 
Bernie Ogilvy 
: Will the Minister follow Chris Haines’ recommendation for the Government to commit to a significant increase in operations grant funding to ensure that the high standards of education expected by both the Government and the communities can be achieved; if not why not? 
Hon TREVOR MALLARD 
: This Government works really hard on increasing funding for education. Mr Haines has told me recently that he appreciates the extra money the Government is putting into school information and communications technology into the Microsoft licensing arrangements that have been recently announced and into a number of contestable pools. He has suggested that we look at operations grants but he is also very keen on us increasing the number of teachers who go into schools and this will be looked at as part of the next Budget. 
Hon Bill English 
: Why is it that the Government decided to spend only $21 million in the last Budget on an increase in the operations grant when in the same Budget it is wasting millions of dollars on low-value tertiary education courses while parents sell raffle tickets to keep their schools running? 
Hon TREVOR MALLARD 
: As I indicated to the member earlier and as my colleague the Associate Minister of Education has also indicated to him there is a major realignment going on in the spend of tertiary education. There is a lot of work going on there and I am not satisfied with the quality of spend in tertiary education. However having said that the member must realise that overseas students have by and large replaced cake stalls in New Zealand schools. 
Hon Brian Donnelly 
: I seek leave to table page 15 of the report  
How do effective schools manage their finances? 
 which outlines the facts and figures that I had in my question. 
Document by leave laid on the Table of the House. 
Resource Management Act—Proposed Changes 
10.  
DAVID PARKER (Labour—Otago) 
 to the  
Associate Minister for the Environment 
: What is the purpose of the Government’s proposed changes to the Resource Management Act 1991? 
Hon DAVID BENSON-POPE (Associate Minister for the Environment) 
: 
 The focus of this review is to improve both the legislation and the way the Act operates in practice. The improvements will increase certainty and reduce delays costs and abuse of processes while not compromising good environmental outcomes or sacrificing public participation. 
David Parker 
: What is being proposed by the Government? 
Hon DAVID BENSON-POPE 
: The Government is proposing a comprehensive package of solutions that will enable central government to better express the national interest and provide decision makers with clear guidance on how to take such matters into account and to enable consent processes to be undertaken in a manner that provides certainty of process for applicants while ensuring appropriate public participation and the meeting of environmental objectives. It will improve the effectiveness of planning documents and enable their timely development provide certainty over the allocation of natural resources ensure that decision making is of high quality and improve public and user awareness of the Resource Management Act and its processes. 
Hon Dr Nick Smith 
: Noting that the so-called comprehensive package now provides for Environment Court appeals on the 48000 consents dealt with on a non-notified basis will the Minister tell the House how this can possibly help avoid the delays and uncertainty that are at the heart of the concern about the Resource Management Act? It will take us backwards. 
Hon DAVID BENSON-POPE 
: It is hard to reconcile a statement like that with last week’s World Bank report about the ease of doing business in New Zealand but I must say that the member must be out of touch because his views do not reflect the view of business. If I could quote Mr Michael Barnett from the Auckland Regional Chamber of Commerce who recently stated: “The issue with the Resource Management Act is not so much the content of the Act preventing developments proceeding but it is how it is administered by local authorities.” 
Hon Dr Nick Smith 
: I raise a point of order Mr Speaker— 
Mr SPEAKER 
: Yes I know what the member is going to say. Now I would like the Minister to come to the member’s specific question. 
Hon DAVID BENSON-POPE 
: I do not believe that the member accurately represents the situation. 
Hon Dr Nick Smith 
: I raise a point of order Mr Speaker— 
Mr SPEAKER 
: The member was perfectly entitled to give that answer. 
Hon Dr Nick Smith 
: My question was quite specific in respect of the issue of appeals to the Environment Court regarding non-notification as provided for in the Minister’s package today. It was in the Minister’s press release. It is perfectly reasonable for me to ask how that will help. 
Mr SPEAKER 
: And it is perfectly reasonable for a Minister to give a reply using the words that he did within the Standing Orders. [ 
Interruption 
] Just a minute was the Minister going to give an answer? Carry on. 
Hon DAVID BENSON-POPE 
: Unfortunately Dr Smith would appear not to have read the package. 
Gerry Brownlee 
: I raise a point of order Mr Speaker— 
Mr SPEAKER 
: Could we just let the Minister give the answer and then have a point of order. 
Gerry Brownlee 
: The point is that the Minister was asked a question about his own press statement and his answer was that the member had not represented it properly. I hope we will not see the Minister dive off into all sorts of other strange burrows as he might be wont in this part of the answer. He simply needs to stand by what is in his press statement or not do so. 
Mr SPEAKER 
: That is for the Minister to do. That is not my job. 
Hon DAVID BENSON-POPE 
: Dr Smith’s representation is not accurate. Whether that is because he does not understand or has not read the package I do not know. The fact of the matter is that the capacity of the Minister for the Environment to refer the issue of non-notification contestability to the Environment Court is an option that she can exercise at such time as the court reaches equilibrium point. 
Jeanette Fitzsimons 
: How exactly does the proposal for expanded ministerial call-in of a resource consent followed by a formal hearing by a board whose decision can be appealed only to the High Court differ in substance from direct referral to the Environment Court which Labour has opposed for the last 5 years? 
Hon DAVID BENSON-POPE 
: It differs very substantially because it is a process that can be triggered not only by the Minister but also by local community groups and applicants. 
Hon Peter Dunne 
: Now that the Government has announced its package can the Minister indicate what steps he has in mind both to get buy-in to the proposals and also to pass them into law? 
Hon DAVID BENSON-POPE 
: I thank the member for the opportunity to say that the Government has had very good support from United Future in developing these proposals. I am sure that that will continue. I will continue to discuss these very wide-ranging proposals both with his spokesperson on this issue and the wider community. 
Jeanette Fitzsimons 
: Why are ordinary people or community groups with no resources who want a say on matters affecting them to be forced to provide all their evidence witness statements and supporting information in writing before the council hearing starts and does that not make it even harder for them to take part than it is now? 
Hon DAVID BENSON-POPE 
: No I do not think so. I think it is a not unreasonable expectation of a process needing to be more robust at the initial level that that should be the case. 
Employment Relations Law Reform Bill—Small Business 
11.  
Hon ROGER SOWRY (National) 
 to the  
Minister for Small Business 
: Does he believe the Employment Relations Law Reform Bill as reported back by the Transport and Industrial Relations Committee addresses all the concerns that the small-business sector currently has with employment law; if not why not? 
Hon JOHN TAMIHERE (Minister for Small Business) 
: 
 Yes to this extent: I cannot think of any bill that has ever addressed all the concerns raised by a particular sector especially when the sector includes over 285000 individual businesses accounting for 97 percent of all Kiwi enterprises. 
Hon Roger Sowry 
: Has the Minister received any support from the small-business sector for the Employment Relations Law Reform Bill; if so from whom? 
Hon JOHN TAMIHERE 
: Yes I have received support. The Small Business Advisory Group has reported back on it and the select committee has reported back on it. A number of matters that have been addressed by the select committee have helped the sector immeasurably. 
Mark Peck 
: What evidence has the Minister seen that employment law is not the primary concern of small business? 
Hon JOHN TAMIHERE 
: Recent editions of the National Bank’s  
Small Business Monitor 
 have shown that skill shortages are the major concern of small businesses rather than compliance costs or employment law which seem to be the obsession of members opposite. 
Hon Richard Prebble 
: I wonder whether the Minister could reconcile his answer whereby he claimed he had received support from small businesses with the fact that the select committee that heard the Employment Relations Law Reform Bill did not receive a single submission from any one of the 285000 small businesses in New Zealand in support of the bill; and now that he knows that how can he as Minister for Small Business support that bill? 
Hon JOHN TAMIHERE 
: Quite easily. The Small Business Advisory Group has made a fulsome report with 19 recommendations on behalf of the sector and we will be working through that over the next 12 months. 
Hon Richard Prebble 
: I raise a point of order Mr Speaker. That answer was very close to deliberately misleading the House. That small-business report in no way supports the Employment Relations Law Reform Bill. Not one of the 19 recommendations advises the Government to support the amendment through the House. In fact when one reads that submission it puts in a number of recommendations for labour reform that are not included in the bill. 
Mr SPEAKER 
: The member has made his point but that was not a point of order. 
Peter Brown 
: Is the Minister aware that several of his colleagues have told small-business people that the Employment Relations Law Reform Bill will have no effect whatsoever on their operations; if he is aware of that and if he agrees with it will he consider producing a Supplementary Order Paper or ask his colleagues to produce a Supplementary Order Paper that exempts small businesses from the controls and prescriptions stipulated in the bill? 
Hon JOHN TAMIHERE 
: No I am not aware of that. 
Hon Roger Sowry 
: If the Minister has today been unable in the House to name any small-business proprietors who support the legislation how does he believe that the legislation has met the expectations he had for change when he stated earlier this year: “We’ll see what Swainy and the boys can get up to now the girl’s out of the way for a little while when the bill gets reported back.”? 
Hon JOHN TAMIHERE 
: I am grateful that “Swainy” has reported back from the select committee but let me broach just one or two issues in a whole list I have here. I respectfully refer the member to page 5 paragraph (4) of the report. It states that the circumstances of an employer’s situation will now be taken into account in determining whether a breach of good faith has occurred in individual bargaining as is already the case for collective. This is particularly important for small businesses because it takes into account the actual size of them. It is from a small test up. 
Mr SPEAKER 
: That is sufficient reply. 
Government Initiatives—Sporting Cultural and Business Events 
12.  
Hon MATT ROBSON (Deputy Leader—Progressive) 
 to the  
Minister for Economic Development 
: What initiatives is the Labour-Progressive coalition Government taking to encourage major sporting cultural or business events to be held in New Zealand? 
Hon JIM ANDERTON (Minister for Economic Development) 
: 
 Today I am announcing a detailed Major Events Strategy which will help to position New Zealand as a highly competitive and desirable destination for the hosting of major events. The strategy has been developed to select events to be supported by the major events support fund that will maximise the economic social cultural and international benefits to New Zealanders on a long-term basis. The 2004 Budget provided $12 million to support that work over the next 4 years. 
Hon Matt Robson 
: What criteria are used to decide whether a major event is to be supported by the Government? 
Hon JIM ANDERTON 
: There are three strategic criteria: economic development opportunities social and cultural benefits and international exposure. Economic development opportunities of regional and national significance may come from for example generating foreign exchange earnings increasing tourism in a region or building sector capacity. International exposure can be gained from international media coverage which can stimulate interest in New Zealand for future events of tourism potential. Social and cultural benefits may come from an event that develops and promotes high achievement for New Zealanders in the arts culture and heritage area or in sporting success. 
Urgent Debates Declined 
Education— 
How do effective schools manage their finances? 
Mr SPEAKER 
: I have received a letter from Bernie Ogilvy seeking to debate under Standing Order 373 the release of a report into how schools manage their finances. This is a particular case of recent occurrence involving ministerial responsibility but I do not consider that it requires the immediate attention of the House by way of an urgent debate. There will be many parliamentary opportunities to examine the report’s significance. The application is therefore declined. 
General Debate 
Hon PAUL SWAIN (Minister of Labour) 
: 
 I move  
That the House take note of miscellaneous business 
. We used to remember when the National Party was a proud and strong party— 
Government Members 
: When? 
Hon PAUL SWAIN 
: In the days of Holyoake. Remember those days? Remember back in the time of Marshall and Bolger? Those were the days when people knew what the National Party stood for. Members on this side of the House never agreed with their views but we knew what they stood for. But that is not so now. 
With that current bunch of members the National Party is a shadow of its former self. No one knows what they stand for no one knows what they believe in and no one knows what their policies are. They are a hopeless useless lazy Opposition. They are leaderless rudderless and directionless. Don Brash who is a part-time leader is the epitome of all that the National Party now stands for. In the short time available I want to remind members of some of the things that Don Brash the part-time leader has been up to. I refer them to National’s nuclear-free policy. 
In January 2004 Don Brash said: “If the National Party was in government today we would get rid of the nuclear-propulsion section today—by lunchtime even.” By lunchtime! Then he went on to say: “We had a range of views back then from both the party and the public and there simply doesn’t appear to be a strong demand for change.” and: “I think that the likely outcome is that we will say we cannot make this decision pre-election.” Then he said: “The likelihood is that we put a proposal to the Americans which they find acceptable and that of course would be after we become Government. We would then seek a referendum for any change in the law.” So National’s nuclear policy is hopelessly uncertain and undecided. 
What about the Employment Relations Act and employment relations generally? Of course in October 2003 Don Brash said that National would scrap the Employment Relations Act but yesterday he said: “I think the business community is broadly happy with that Act.” 
Darren Hughes 
: Flip-flop. 
Hon PAUL SWAIN 
: It is a flip-flop and a U-turn. In Parliament yesterday when he needed a ladder and chose a spade he went on to say that he thought he did support the Employment Relations Act. But then when asked today whether it lined up with the policy he said: “Frankly I haven’t recently reread our industrial relations policy from the year 2002.” So it is very hard to know exactly where the National Party stands on such issues. 
On the Holidays Act Don Brash said: “We will scrap 4 weeks’ holiday for New Zealanders.” Well that completely ignores the fact that when Dr Brash was Governor of the Reserve Bank 4 weeks’ leave was the standard leave package for people who worked in the Reserve Bank. So it is a question of: “What is good enough for me is not good enough for them.” and vice versa. 
Hon Trevor Mallard 
: He’s had 40 weeks’ holiday a year. 
Hon PAUL SWAIN 
: He has had more than 4 weeks actually if we judge the presence of that member in this House. 
On superannuation Dr Brash said: “We will need to increase the age of eligibility.” Then he went on to say: “I think it should rise in about 10 or 15 years’ time.” Then he said: “I think the age for receiving super will need to rise in 2020.” and then he said: “No Government of which I’ll be part will be touching the age of eligibility.” So it is very very difficult to know what that member thinks about superannuation. Of course he described the superannuation fund as “financial smoke and mirrors” whereas John Key said: “I think there are elements of this scheme which are quite good.” So the problem with the National members is that we simply do not know where they stand. 
I call on National Party members to tell New Zealanders where they stand on those things. It is important that New Zealanders know where they stand as an Opposition party. How on earth can people judge them when they do not know where they stand? They have no leadership. 
Hon TREVOR MALLARD (Minister of Education) 
: 
 I raise a point of order Mr Speaker. I think in the interests of decorum in the House it would be better if the advertisement being shown by the Green member was put down on the seat beside him. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: Thank you for raising that. He is not displaying it at the moment. I think he has just found a resting place for it. 
RON MARK (NZ First) 
: 
 Today New Zealand First wants to acquaint listeners with the extremely poor showing of this Labour Government and in particular the utterly abysmal performance of a number of its Ministers. It never ceases to amaze me how individuals when in Opposition roar like lions but once they get their hands on the tillers of power and their backsides into the limos they just revert to being sleepy little tame pussycats who sit in the comfort of their offices curled up by the heater and doing absolutely nothing. 
I want to give a few examples. Annette King the Minister of Health has presided over a chaotic health service that has gone steadily backwards and under her stewardship the system has failed dismally to bring about the improvements she promised when she was in Opposition. We now have longer waiting lists—we have waiting lists to get on the waiting lists—for surgery than at any time in the past. We are witnessing a failed health system which she has built full of bureaucrats. Morale amongst health professionals has never been lower and what is more no improvements are in sight. Her only success seems to have been in securing an excellent job for Mr King at the Hastings hospital but recent publicity shows that even that enterprise is failing and cost overruns of $50000 a day have now been confirmed. No wonder there is no money for real health services—quite clearly it has been siphoned off into the pockets of highly paid and very incompetent bureaucrats and administrators led by that Minister. Can members imagine what Labour would say if under a National – New Zealand First Government a charity hospital were built in Christchurch—a situation that is now firmly on the cards? 
Let us turn to George Hawkins our police Minister. What an absolute failure! What a disappointment he has proven to be. Criminals now have photos of George on their mantelpieces because he represents the best friend they have ever had. That failed Minister has devoted his years in the job to choosing the paint schemes of the cars that now make up his growing police traffic enforcement enterprise which has become a huge cash cow for this Government. George Hawkins would rather deploy his police staff to jump out from behind parked cars and flax bushes to ticket senior citizens on their way to church for minor offences than apply himself to dealing to the thugs criminals and gang members that prey on our society. Far from becoming a threat to criminals George has become their saviour. 
Now he and his colleagues Phil Goff and Rick Barker have set in train a whole new plan to reward criminals by paying out hundreds of thousands of dollars of hard-earned taxpayers’ money because the nasty police officers flicked tea leaves on to their hands during an interview or even worse took away their teddy bears and comforters for an hour or two thereby causing them serious trauma for which our fine human rights laws state they must be compensated. What absolute nonsense and what an embarrassment those Ministers have become. Perhaps George Hawkins’ next plan will be to have the baddies paid so handsomely that they can travel off to the fleshpots of the world under the justification that whilst they are over there they will not commit crimes here. It is probably a good scheme! However taxpayers will not suffer such stupidity for very much longer. The newly emerging practice of bowing to pressure from the human rights lobby for criminals is regrettable and we only wish those same individuals could demonstrate the same degree of anger frustration and commitment towards helping the victims of crimes when they have had their rights subjugated by villains. 
In conclusion the people of New Zealand have had a gutsful of being poorly served by this team of poorly performing Ministers. Even the Prime Minister has now sent a shot across poor George’s bows but he appears not to have heeded her warning. His job is in jeopardy. There is no doubt he will get the chop and what is more he thoroughly deserves it. He has let the people of New Zealand down badly and he is simply not up to the job for which he is richly reimbursed and the perks of which he richly enjoys. The Government came into office and told the nation that things were going to be different things were going to be better it was going to blitz the waiting lists it was going to eliminate the gangs and it was going to deal to crime. We now know that the Government picks and chooses who it will prosecute for whatever obscure reasons and that waiting lists are longer than they have ever been. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: Before I call the next member I point out that members speaking should and must address other members in the correct way. The score of transgression so far is 4 to 2. 
Hon CHRIS CARTER (Minister of Conservation) 
: 
 The score will stay the same while I am speaking Mr Assistant Speaker. I have to tell the House that the Government the previous speaker has just described has been an enormously successful Government. The team of Ministers that the member was talking about has been part of an incredibly successful team. It is a team that has overseen one of the fastest-growing economies in the OECD and the second-lowest unemployment rate in the OECD which at just 4 percent is better than that of Britain Australia Germany France the United States and almost everybody else. 
This team of Ministers has overseen a 50 percent increase in education spending a 40 percent increase in conservation spending an unprecedented investment in transport including $1.6 billion over the next 10 years in Auckland billions of dollars flowing into health a reduction in waiting lists a billion-dollar package in the last Budget to ensure hundreds of thousands of families have sufficient income to give their kids a good start in life and the lowest crime rate in 20 years. This is the successful team that over the last 5 years has seen those sorts of developments. 
This is a Government that acts swiftly when there are problems. Think of Air New Zealand. Our flagship carrier would have crashed and our billion-dollar tourism industry would have been ruined had this Government not acted quickly and decisively. It has seen New Zealand workers get 4 weeks’ holiday and it has restored the cuts that the previous Government made to superannuation. When this Government came into power 160000 people were on the unemployment benefit. Now there are approximately 70000. It is still too many but is almost a 50 percent reduction. That is amazing. 
The previous speaker touched on the crime statistics. Under Police Minister Hawkins the crime statistics in this country have declined to an all-time low. There are now more police clearances and we are seeing more criminals being put in jail—so many in fact that we cannot accommodate them all at the moment. We will have to do something about that very quickly. We have been tough on crime and tough on the causes of crime. Longer sentences have come in because we have listened to the people. Those are just a smidgeon of the amazing things this Government has done over the previous 5 years. When the people come to judge whether this Government should be privileged to have a third term in office those are the sorts of things they will be thinking about. They will be remembering that facts speak louder than words and that actions are better than just plain rhetoric. 
In fact one further reason why the people must vote this Government in for a third term is the extraordinary prospect of what the alternative would be. There is no alternative. My colleague the Minister of Immigration Paul Swain spoke about the failings of the leader of the National Party. I am a nice sort of guy and I do not want to get into personalities but I would like to quote what some of the journalists have been saying. I have in front of me an article from Jane Clifton—somebody who is not always known to be very friendly to this Government. Recently she wrote: “When Brash was wheeled back to Parliament this week even the comb-over looked more timorous than usual. Brash also needs to work on his parliamentary performance. Brash proceeds competently enough with his questions but he seems never to expect any come-back or smart-alecry. He sits back shaking his head and mouthing words of dismay like a vicar in a lap dance club.” John Armstrong wrote recently: “Home or away Brash is losing. The National Party has an awful dilemma. If it keeps Don Brash away from Parliament it is slammed for doing so. When he fronts up he is being slaughtered.” 
I think Don Brash is a nice sort of guy. He seemed very pleasant the few times I talked with him. But what this country needs is leadership. Helen Clark has provided this country with extraordinary leadership intelligent leadership decisive leadership strong leadership. That is what the people have seen—not words. They have seen actions. They have seen good governance they have seen delivery on promises and they have seen a leader whom we are proud of. Sometimes Opposition members criticise the Prime Minister. They say: “She’s going off to a job at the UN.” Has anyone in this House ever suggested Don Brash should be going to the UN? Did anyone ever suggest Jenny Shipley was going to the UN? Did anyone ever suggest Jim Bolger could go to the UN? But Opposition members often suggest that Helen Clark could go there. Why? Because they recognise the intelligence and the qualities she has. She has world leadership qualities. She is a leader to be proud of. Nick Venter wrote recently about the National Party: “National’s strategy has reduced the risk of embarrassment in Parliament. Dr Brash usually attends only once a week and when he is there he relies heavily on typewritten notes.” 
Hon ROGER SOWRY (National) 
: 
 The Labour Party is in a real mess this week over the industrial relations legislation that has been reported back to the House. The mess is of its own making. The Labour Party went out there in the guise of one John Tamihere the Minister for Small Business. When he got the job he did an interview with the  
National Business Review  
on 26 March and said: “… we’ve got to be a lot more straight a lot less spin and smarm. Businesses will smell that a mile away.” I say to Mr Tamihere that businesses can smell it and they are smelling that sort of smarm a mile away. That is why this week every single business organisation every tourism organisation and every lobby group in the country bar the union movement has come out and said that this employment relations legislation is no good that it will harm business and employment and that it will cost this country in growth. Every business person has said that. One can only assume that to use John Tamihere’s words “Swainy and the boys” were going to take control of it and we would see what they could get up to once the girls were out of the way. I presume that “Swainy and the boys” got rolled in Cabinet by the girls yet again. The consequence is bad for business bad for New Zealand and bad for growth. 
The particular people who lose in this are firstly the workers. Anybody who is one of the over 1 million workers in this country who do not belong to a union will find that he or she gets a lower pay increase than those who do belong to the union. It started with the State sector with Mr Mallard giving a bit of a nod and a wink to the teachers union. It got an extra $500 for every teacher who happened to be a member of the union. It was tough on the rest. They are not as valued according to this Government as those who are members of the union. So when Mr Mallard goes into the staffroom does he say to the staff member who is not a union member: “You’re worth $500 less than those who are in the union.”? They all got a payment of $500 and the private sector can see that that is what is coming down the tracks for them as well. The unions will already be claiming extra money for those in the union movement. 
The law is now quite explicit: if an employer passes on that same wage increase and the union deems its position has been undermined then the employer will end up before the Employment Relations Authority. In fact we asked in the select committee how that clause would kick in. The officials said that if one union member leaves the union and goes on to a private contract then it will be deemed to have undermined the union position and the employer will be in the gun. That is what the officials said in the select committee. We know that this clause will be bad for non-union workers. 
The other thing this bill is bad for is small-business employers who will be dragged into multi-employment collectives. We will see small-business employers forced to pay the same wages and provide the same conditions as large-business employers. It was best summed up by Fisher and Paykel which appeared before the select committee—and Lynne Pillay’s head nearly nodded off her neck; she was so excited because they were saying nice things about the Government. Then that company’s representatives looked up and said: “But this bill is bad.” She got very nasty then. She did not like that. They went on to say: “We can cope with this bill but all of the small suppliers that supply us won’t be able to. It will make them less competitive. We may have to look to go off shore.” Heinz-Wattie said: “We wouldn’t bring the equipment here and manufacture and produce if this bill was law.” We know this is bad law. 
JUDY TURNER (United Future) 
: 
 One of the very best pieces of news that I have received since arriving in Parliament happened for me last week. It occurred when the Hon Ruth Dyson let me know that the Government was prepared to extend the amendments to the Children Young Persons and Their Families Act so that non-governmental organisations could be contracted to do some of the vital work that the Department of Child Youth and Family Services has traditionally had sole responsibility for. This single decision has the potential to contribute to a real reduction in some of New Zealand’s more shameful negative social indicators affecting children and their families. 
EvelineHerfkens speaking at the 57th annual conference of the United Nations Department of Public Information and non-governmental organisations at the UN headquarters in New York said that non-governmental organisations were the prime movers for change in extracting promises from Governments and through their passion and energy provide a voice to the poor. She said: “Don’t let your Government off the hook to be accountable to its own people on how your own resources are being used.” 
Recent New Zealand research indicates that for every dollar provided to a non-governmental organisation voluntary agency between $3 to $5 worth of services are delivered to the community. The project on the value added by voluntary agencies reported that the annual accounts of these organisations did not adequately reflect their full value and what they added to social well-being and to the economy. New Zealand non-governmental organisations are staffed with highly competent transparent and accountable professionals who are well able to provide quality services in a timely and cost-effective manner. The work of non-governmental organisations generally arises in response to specific needs perceived within a community. They have strengths in targeting resources and services where they are most required and first-hand familiarity with the challenges faced by New Zealand families resulting in creative and innovative solutions. 
United Future’s proposal would see the staff of the Department of Child Youth and Family Services continuing to do the vital child protection work that occupies much of their present workload while being relieved of the equally important intervention work when families present with medium to low-risk concerns. At present these needs are either neglected or responded to in an untimely way due to the huge workload the Department of Child Youth and Family Services carries. 
Child protection needs to remain the statutory responsibility of a Government department due to the intrusive nature of that intensive investigative work. However preventive work can be and should be contracted out to the agencies that already have a credible track record in working with families who could do with a bit of extra support during a difficult season in their lives. 
So what should we see start to happen as a result of a differential intake system? Firstly we should see a reduction in the unallocated cases that sit in the in tray at the Department of Child Youth and Family Services. Statistically 99 percent of these cases are at the lower end of the criticality spectrum and because the Department of Child Youth and Family Services rightly prioritises its attention to urgent cases they often get missed out. 
Secondly because Department of Child Youth and Family Services social workers will have more time to devote to quality and to intensive casework the numbers of renotifications to the department should decrease as it is able to give families the level of attention they need. Thirdly and most important over time we should start to see a marked reduction in the number of critical child protection cases requiring statutory interventions. The reason is that if non-governmental organisations can intervene in a timely way early on before a crisis occurs the demand for protection services over time will decrease. We should remember that a larger percentage of high-risk interventions are second and third notifications that with earlier help may never have had to deteriorate to such a serious level of abuse requiring such devastating outcomes. 
While United Future is delighted at this step forward that the Government has agreed to take we continue and will continue to advocate for the full implementation of other aspects of our policy. Ultimately we would like to see the de-stigmatisation of what it means to get help for one’s family and ensure that families have access to the wide range of services available without having to resort to becoming an emergency. 
At United Future’s recent annual conference a party member described his interest in our party by saying that we influence outcomes through positive relationships. This is truly one of those moments. 
ROD DONALD (Co-Leader—Green) 
: 
 Yesterday I sought leave to table an article from the Melbourne 
 Age 
 about the Thai Prime Minister. It was headed: “No Room for Losers in the New Thailand” with a subheading: “Woe Betide Those Who Challenge ThaksinShinawatra Asia’s New Political Strongman”. The Deputy Prime Minister and many of his Labour colleagues denied leave for that article to be tabled. Members might ask why; I believe that it was because they do not want the truth about Thailand to be revealed in this Parliament. The Government does not want members of Parliament and the people of New Zealand to know that it is negotiating a free-trade agreement with a corrupt Prime Minister and a corrupt Government. 
Neither it seems do the New Zealand media want the people of New Zealand to know about this trade deal; no New Zealand paper has reprinted that article here especially that apologist for free trade the  
New Zealand Herald.  
I have to admit that it is owned by APN and this article appeared in a Fairfax publication. But at least I would expect the  
Dominion Post 
 and the Christchurch  
Press 
 to run this article as a point of balance to some of the more sycophantic coverage they have been giving to free-trade agreements. 
I want the people of New Zealand to know more about what is at stake because I believe that Kiwis need to know exactly who Labour is doing deals with. As Mark Baker wrote in the Melbourne 
 Age 
 on 3 July: “Prime Minister Thaksin is a tycoon turned politician who runs a large slice of his country’s media and who essentially bought his way into power with the tactics of a hostile corporate takeover. Like Berlusconi’’—the Italian Prime Minister—“he is an obsessive autocrat impatient with the checks and balances of democratic Government a publicity seeker averse to press he does not own or control and a leader with an alarming propensity to shoot from the lip.” He goes on to quote from the Thai Senate Foreign Relations Committee chairman who said: “Thai democracy is being eroded. The Election Commission the Anti Graft Commission the Constitutional Council—all these institutions are being stacked with Thaksin supporters and the independent media are being undermined.” 
He highlights one of the most obscene examples of corruption and nepotism in Thailand which is Thaksin’s hard-line approach to the drug trade sitting alongside his cosy political relationship with the Burmese military junta. There is a partnership between a subsidiary of the Shina Corporation which is a Thaksin family corporation and a company owned by the son of the Burmese Prime Minister KhinNyunt which holds a virtual monopoly on Internet and mobile phone services in the country. No wonder he is keen to see free trade with New Zealand! 
I ask this Parliament whether that is the sort of regime New Zealand should be negotiating a preferential trade deal with. Why does the Labour Government want a country that exploits half a million child workers and flouts International Labour Organization conventions on child labour to be New Zealand’s third-favourite trading partner after Australia and Singapore? Why is the Labour Government strengthening the right of New Zealand workers to collective bargaining—which we support because we believe that it is a positive step forward for workers’ rights in New Zealand—but at the same time deliberately destroying the jobs of those workers by turning a blind eye to Thailand’s refusal to ratify International Labour Organization Convention 98—that is the right of workers to organise and bargain collectively? 
I was extremely disappointed with Prime Minister Helen Clark’s answers to my questions about the Thai trade deal yesterday but I am even more disappointed with Lianne Dalziel Mark Peck Taito Phillip Field Mark Gosche Paul Swain Rick Barker Lynne Pillay Helen Duncan and Dave Hereora. Why? Because those members of Parliament all used to be trade union officials. I see Mr Mallard has put his hand up to be added to that list of members. That was the official list from the Parliamentary Library; he had better give the library an update of his former occupations. Those members were all trade unionists according to what they have admitted to the library before they came to Parliament. How could they go along with that deal? Why did they not turn up to hear SritaiNonsee a young Thai worker who is in New Zealand at the moment to talk about the impact of that trade deal and how bad it will be for workers in Thailand? 
JILL PETTIS (Labour—Whanganui) 
: 
 I am very pleased to join the debate this afternoon but I have to say that as a proud member of this Parliament and a passionate believer in democracy in New Zealand I am very worried about the girls in the National Party. I think the girls are being given a bit of a rough time over there. The boys are in the ascendancy and the girls are getting a bit of a hard time really. 
We have poor Katherine Rich who sits in the front and gets shorter and shorter by the day as she tries to cope with what I would say could be termed bullying. We girls on this side of the House would certainly refer to it as bullying because she just cannot seem to get her views through. Mr Brash refuses to listen to them. I feel a bit sorry for Katherine Rich because she was a bright light on the horizon originally but her star has faded and sadly she is looking a bit wan of late. I always suggest as a mother that a good dose of iron does wonders for anybody; that is a bit of collegial advice for that member. 
I also have to say that one of the other girls I am concerned about is Lynda Scott. She is a mere shadow of her former self. In fact she is so much of a shadow that we never see her these days—but moving right along! I have to say that Lynda Scott a qualified doctor an experienced geriatrician an experienced general practitioner— 
Darren Hughes 
: A member of the Millennium Club— 
JILL PETTIS 
: What’s that? 
Darren Hughes 
: Simon Power’s think tank. 
JILL PETTIS 
: Well she is a member of the Millennium Club which is obviously so high-profile that I have never heard of it. She was completely passed over as the health spokesperson. But I have to say that a bit of gender balance has come in there because also passed over was Dr Paul Hutchison who has considerable experience as a private gynaecologist—he got his finger into everything— 
Simon Power 
: I raise a point of order Mr Speaker. Even the Minister of Education was appalled with that comment. 
JILL PETTIS 
: Well he is; the member has not listened to the rest— 
Simon Power 
: The member should sit down and listen to the point of order. 
JILL PETTIS 
: Well I wish the member would listen to the rest of my sentence. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: I ask Jill Pettis to sit down. 
Simon Power 
: I think it is fair to say that a number of people in the House would have taken offence at that last remark of Mrs Pettis. In particular even the Minister of Education was shall we say baffled by the context in which it was said. I think you should warn the member to be a little more careful with her use of descriptive language. 
JILL PETTIS 
: Well I am not going to apologise for something that was completely misinterpreted. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: Would Jill Pettis please sit down. The member should either speak to the point of order if she wishes or wait for an indication from me. 
Hon Trevor Mallard 
: Although some of us did express some shock at what might be coming I think we should not anticipate and we should let the member finish her sentence. In that way we could work out whether it was really offensive or whether we were jumping to conclusions—as some of us jumped to the conclusion that Simon Power would be National leader one day. 
Simon Power 
: Are you going to let him get away with that? 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: No I am not going to let him get away with that but I think there was a fair element of anticipation there and it is really all in the mind and is to do with the state of our minds at the time. I think Jill Pettis was having a lot of fun and I did not take offence. 
Simon Power 
: Well it was still insensitive. 
JILL PETTIS 
: Well I have to say that Mr Power should not be so quick off the mark in future and as a mother I could add more but I will not. [ 
Interruption 
] Quite right Mr Williamson. 
What I was going to say about Mr Hutchison is that he was very premature in some of the comments he made about the health field. I felt considerable sorrow for him as he also is an experienced doctor—I will not use the other description of his profession that led some members over there to get excited. But I would have to say that his being passed over by Dr Brash was foolhardy in the extreme as far as I am concerned. National has a health spokesperson who has probably never done anything more than take a temperature. What does Judith Collins know about health? I suggest that what Judith Collins knows about health could be written on the back of a postage stamp with a carpenter’s pencil. That is about the extent of her knowledge on health. 
So I think all in all there is a fair amount of discrimination going on across the other side of the House. Some of the members have been given a hard time particularly in relation to the health area. 
One of the other double standards that is occurring over there that I want to refer to is with regard to the Department of Corrections. There has been a lot of heat and angst and much chest thumping from National Party members this week but I remind those members over there who have senile decay that their memories are very very short about what they have said in the past about corrections. 
JOHN KEY (National—Helensville) 
: 
 That was one of the more remarkable contributions to the general debate that I have heard in my brief 2 years here. I put it down as the single biggest waste of 5 minutes that I have ever heard in my life. I know that the Labour Party members take their general debate slots on rotation. I know that the Minister of Education was cringing when the senior Government whip got up to make that contribution. I know that many other members of the House were embarrassed to have the senior Government whip on her feet speaking such a load of drivel. It was a complete and utter waste of time. Even under the National Certificate of Educational Achievement that speech would not have got a pass. What a load of drivel it was from the soon to be former member for Whanganui! My advice to the member for Whanganui is to get out the situations vacant part of the newspaper because if that was her contribution to the general debate she will need it. 
The Government has introduced a proposed amendment to the Employment Relations Act. What is it? It is a nationwide recruitment drive for union members. That is what that bill is all about—a nationwide recruitment drive for union members. It is so blatant that it is up there with the $21 million that the Government decided to spend on promoting the Budget which even the Auditor-General found offensive. That is how blatant it is. That amendment is simply one thing and one thing alone: payback time for the unions—those flaky unions that that party wants to come to the House and represent. The Council of Trade Unions is getting its payback. 
Who is right? Let us ask the obvious question. Is it this arrogant “We know best.” Government which is going on a crusade for its union mates? Is it right? Or is it the hundreds of submitters who came before the select committee and said that the bill is bad and is sending New Zealand in the wrong direction? I see Mr Benson-Pope shaking his head in agreement and I want to thank him; he does not have the guts verbally to agree with me but at least in spirit he agrees with me that the bill is bad. 
What is the Government trying to do? I know: it is trying to force the 1.7 million New Zealanders who are not currently in a union to join one—to convince them somehow that it is a really good idea. A proposition that those people have spent years deciding is not a good idea is somehow going to become a great idea because the Labour Party Government has decided to go into cahoots with its mates and force those people to join a union. 
Darren Hughes 
: Give us a policy. 
JOHN KEY 
: Oh the member should not worry; we have plenty of policies. [ 
Interruption 
] When we do it will not be 42-all in the polls; mark my words a number of members over there will be looking for a job. 
One of the useful things that members of the Labour Party could do is to have a look at the growth rates of Germany and Japan—two of the most inflexible labour markets in the world. After 20 years Japan’s rate is still not recovering because it has inflexible labour markets. Members should see whether they can find a Virgin megastore in Frankfurt. The answer is they cannot. Why? Because Germany is the only country in the world where Richard Branson could not run a megastore. Do members know why? Because it has the most inflexible labour market in the world. That is where this Government wants to take us. 
 It is all very well for the Prime Minister in the foreword of various documents to tell the country that by 2011 we will be in the top half of the OECD— 
Hon Maurice Williamson 
: Is that what she said? 
JOHN KEY 
: That is what she said—mark my words. Members can put a ring around it: she said that in 2011 we will be up there in the top half of the OECD. I say we will not be there if we have the proposed amendments to the Employment Relations Act—if we have the sort of drivel that is going down. 
What sorts of things do we see in that bill in terms of the way in which a business can be bought and sold? I would describe the bill as the “goodwill gobbler”. That is what it will do to any business out there. Even the Minister for Small Business in his heart of hearts knows exactly what I am talking about. The hundreds of thousands of small-business people in New Zealand who work hard to build up goodwill will have their wealth destroyed with a flash of a pen. They may be nodding and agreeing out there but when it comes to polling day they will not want a bar of that very very bad legislation. That legislation will put employer-employee relationships back to where they were in the days of the 1951 waterfront strike. That is the sort of stuff the Government is trying to do. Employers will not be able even to have an honest conversation with their employees for fear of being seen to point them in what is not the right direction—to give them advice that might lead to their not being part of a collective agreement. 
DAVID PARKER (Labour—Otago) 
: 
 ACT scraped home with just above 5 percent of the vote in the last election—it got about 6 percent. But its vote has since collapsed. ACT is down to between 1 and 3 percent depending upon the poll and it is likely that it will disappear at the next election. I ask myself why. 
Hon Member:  
Rodney! 
DAVID PARKER 
: No it is because National is now ACT. That is why Mr Franks wants to join National—we all know that. Dr Brash makes his own feelings transparent. He is one of the few New Zealanders who expresses admiration for Mr Hide. They even holiday together. What jolly good times they must have together—not! But it does emphasise what the electorate knows: ACT and National share the same extreme fundamentalist ideology. 
The extreme right-wing views of Dr Brash were most recently highlighted in his reshuffle. Granted a reshuffle of National is a difficult job; if one shuffles the National pack the chances of turning up an ace are lower than the chances of winning first prize in Lotto. If one shuffles the National pack one gets a misère hand—misery. Nothing demonstrates Dr Brash’s ideology better than his choice of spokesperson on health. National has two people with training in the medical sciences and Dr Brash is not one of them. He makes people sick; he does not cure them. But he does have two doctors there. One is Dr Lynda Scott. Did he pick her? No he dumped her. He had an alternative in Dr Paul Hutchison a medical specialist. Did he choose him? No. Why not? Because he is not interested in moderate health policies; he is interested in extreme ideology. 
Who did Dr Brash pick? He picked a lawyer Judith Collins. Judith Collins is not even a moderate lawyer. She is a former chair of the Casino Control Authority which approved two casinos for the little town of Queenstown which is in my electorate. She is not a person of good judgment. She is a right-wing ideologue which suits Dr Brash’s purpose. Her right-wing extremism has been well illustrated this last week. For the last 30 years in New Zealand young women have had confidential relationships with their doctors. When it comes to pregnancy and abortion choices they have had confidential relationships. Those young women have had independent advice from doctors which is privileged communication between them and their doctors. That rule has stood the test of time. It was imposed after an independent inquiry; it was imposed by this Parliament. What would Mrs Collins do? She would scrap it and have us return to the old days of backstreet abortions and unwanted pregnancies for young girls. That is disgraceful. 
What did Dr Brash do after having inflicted that upon us? He shuffled off to Australia which has a higher rate of unemployment lower growth and higher rates of beneficiary dependency. What did he do while he was over there? He bagged New Zealand. He ignored the reality bagged New Zealand and compared us with a failing Pacific State. What balderdash! We have incomes thirty times those of the Pacific States we have strong democratic institutions we have health systems that are the peer of any in the world and we have good educational institutions yet he compared us with those States. He can say things in New Zealand; he can come to Parliament and argue his case and as the Opposition leader he should try to put down the Government but does Dr Brash do that effectively? No he goes to Australia and bags his country there. That is absolutely disgraceful! He bangs on about compliance costs and how difficult it is to do business in New Zealand. What happened? An international survey by the World Bank showed that to be a complete untruth. In reality we were the top country out of the 146 countries surveyed. We were not tenth ninth eighth seventh sixth fifth fourth third or second; we were first and that is absolutely outstanding. 
As Mr Swain said earlier the electorate wonders what the National Party policy is. It wonders because National will not come clean. It is about privatisation and a return to the failed policies of the 1990s. 
HEATHER ROY (ACT) 
: 
 A revelation was made in this House today by Associate Minister of Health Jim Anderton that 25028 patients are on waiting lists. They are patients who have been booked for treatment or who have been given certainty of treatment within 6 months. Whether they get treatment is another story. However that revelation follows 2 years of fudged figures deception new definitions and misleading information that today have been exposed by Jim Anderton. I do not know whether the Minister of Health when she gets back from her trip to China will be very pleased about that revelation because she has spent all her time as Minister of Health for this Labour Government in trying to hide those figures. 
Residual waiting lists had just on 50000 patients waiting for treatment when Labour was elected. Mr Anderton admitted today that the number of patients on the real waiting lists is now about 56000. So this Labour Government has totally ignored the number of patients it has been sending back to their general practitioners because there is no hope of their ever receiving treatment or surgery—it has totally ignored the tens of thousands of patients on those lists. We know that all this Labour Government has done for Kiwi patients is see a huge rise in waiting-list numbers. 
Today speaking on Ms King’s behalf—and as I said I am sure that she will not be happy about that when she finds out about it—Mr Anderton revealed that those 25000 will be added to the 31000 patients on active review—a little-known category that New Zealanders have no knowledge of. Active review is the waiting list one goes on when one is waiting to go on the waiting list. It is the waiting list for the waiting list. With the figures put together the total of 56000 patients is much larger than the number on the waiting lists when Labour came to power. 
Those figures are an absolute disgrace. Cutting waiting lists was a key Labour election promise not only in 1999 but also in 2002. But what has happened to those figures? They have gone up. It was a key Labour election promise but 5 years on and after huge surpluses this Government today has admitted failure. 
In February 2001 the deceptions began. In February 2001 the Minister of Health announced—on a quiet Sunday afternoon when there was no news—that hallelujah the country’s waiting lists had dropped by 20000 people. Fortunately for the country a couple of smart journalists were around who thought: “Hang on a minute. These people can’t have just been swallowed up. Where have they gone?”. They were all transferred sideways on to active review—every last one of them. Those patients had been transferred to a category where they were then destined to wait to go on to the waiting list and today we have been told that 56000 people are now waiting for treatment. 
The deceptions do not stop there either. Labour has deceived us over health spending. Last year there was a $500 million underspend. Of a $9.6 billion budget half a billion dollars was underspent. Of that $188 million was operational and another $320 million—[ 
Interruption 
] Members can argue all they like. I have a parliamentary question answered by the Minister of Finance which members would not let me table today showing that exact figure—$500 million underspent. The spending only becomes clear well after the years have gone by. It is only now that the Government is admitting—as Mr Anderton did today—that there was a real spending drop in the 2001-02 year. 
So the Minister of Health’s legacy to health is an increase in the number of patients needing treatment in New Zealand. They have been assessed and told by doctors that they need treatment but most of them will not get it. That Minister of Health will be held accountable at the next election; her days are numbered. 
Firstly elective surgery and waiting lists are in serious trouble despite Labour’s deliberate policy of providing misleading or incomplete information. Members should view the Ministry of Health’s website and try to work their way through that. Secondly new health operational funding for this financial year is tens of millions if not hundreds of millions less than the Minister of Health has spun. She has been standing up and telling the country about all the new funding going in when we know now that $188 million of last year’s money was underspent. Thirdly the Minister of Health has seen a cut in real per-person funding. 
CLAYTON COSGROVE (Labour—Waimakariri) 
: 
 I wish to address some comments made by Ron Mark and others. I want to address my comments to others in the House especially to members of New Zealand First and particularly the conspiracy theorists like Mr Mark and Mr Peters who have made continual calls for the Minister of Police to firstly intervene in high-profile criminal cases and secondly pull and review police files. I raise the issue because such irresponsible and politically motivated calls go to the heart of New Zealand’s constitutional conventions in respect of the separation of powers as between politicians and the police or specifically the Minister of Police and the Commissioner of Police. 
I say to the House that it would be a very sad and dangerous day indeed if those constitutional conventions were broken as some members opposite would like to see. For the edification of certain members over there I remind the House that the Minister of Police is specifically prevented from interfering in police and operational law enforcement matters. In fact I quote from the then Solicitor-General J J McGrath who in 1993 spelt out the constitutional relationship between the Commissioner of Police and the Minister. For the edification of that amateur law lecturer Mr Mapp—I would have hated to be in his law class; he should shut his mouth and listen to this—I point out that the then Solicitor-General observed the following: “For many years it has been accepted that operational decisions made by the Commissioner are for that person and no other.” In his view the Commissioner of Police is an “independent statutory officer with his or her own authority in respect of law enforcement decisions in a particular case. It is not authority that is delegated by a Minister. The Commissioner of Police cannot lawfully be made subject to ministerial directions in such matters.” Mr McGrath goes on: “The Commissioner thus may not be subject to binding policy directions in respect of the enforcement of the criminal law in any particular area or type of offending.” 
I invite members opposite to clam up for a minute and consider—and I know we have some former police Ministers in Parliament—what would happen if those constitutional conventions were broken. In summary a Minister of Police is prevented absolutely from pulling case files whether they be individual or collective even if they are high-profile cases and even if the bleatings are loud from members of the Opposition. 
Let us look at another famous case. I refer specifically to Mr Mark’s case when one Major General Dodson inappropriately and wrongly pulled the personal file of that member of Parliament. Major General Dodson was not a Minister. He was in a senior executive role. I say that was wrong and I note what Mr Peters said of it at the time. He called it an “intrusion” in the  
Dominion 
 of 26 November 2001. He wanted Major General Dodson suspended and a High Court judge to be appointed to head an inquiry. I think Mr Peters was right then. The problem I have is that Mr Peters and Mr Mark now continually call for a breach in the constitutional separation of powers and those conventions and want the Minister of Police to wrongly and unlawfully intervene and review case files of individuals. I say that the day we get to that position when politicians can intervene in the lawful process of our police is a dark and dangerous day for Parliament and for this democracy. 
I say to Mr Mark Mr Peters and others including the bush lawyer over there Wayne Mapp that they should consider this. Politically motivated attacks that attempt to undermine those constitutional conventions—being the separation of powers between the Minister and the commissioner—should be seen for what they are. They should be seen as irresponsible and motivated simply by cynical political motives. I see we have in the Chamber another member who knows of those conventions and who once I believe was a Minister of Justice or had his fingerprints over partial law enforcement in this country—one Tony Ryall. I say to members opposite that in George Hawkins they have one of the best most ethical and professional police Ministers—one who does not breach conventions one who does not intervene in operational matters and one who has put more police on the streets of this country than any other in our history. I invite members to reflect on those constitutional issues. 
RON MARK (NZ First) 
: 
 I raise a point of order Mr Speaker. I draw your attention to the relevant Standing Order that deals with MPs who stand in this House and say things that by their very record in  
Hansard 
—and to prove that I am holding in my hand a file that contains every word of the  
Hansard  
of— 
Clayton Cosgrove 
: What’s your point of order? 
RON MARK 
: Are you going to throw the member out for speaking during a point of order Mr Speaker? 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: This is the last warning for speaking during a point of order. 
RON MARK 
: These extracts from  
Hansard 
 contain every word that Mr Peters and I have said in this House on the Edwards/Shaw issue. Mr Cosgrove has been allowed to get away with saying that we have actively sought for the Minister of Police to intervene directly. I listened to it on the radio. There has not ever been a call for that. That pretender who is aiming to take George Hawkins’ job by flattery today and bidding to knife him in the back tomorrow will not get away with that sort of nonsense in this House. He will be held to account in the electorate for the little lies he tells. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: Mr Mark will withdraw that reference to lies. 
RON MARK 
: I withdraw and apologise. Point of order— 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: No I am going— 
RON MARK 
: This is a separate point of order. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: After I have said something you may raise another. That was not a point of order. It is a debating issue. What was said or not said about yourself or any other member is purely a debating issue. 
RON MARK (NZ First) 
: 
 I raise a point of order Mr Speaker. I am fully aware that in this House members are honourable members. Their word must be accepted. It is not acceptable to say that they tell lies or porkies. But what recourse for redress is there for a member of Parliament when another member of the House goes to a Grey Power meeting and says something about that member that is patently obviously untrue and is outside this House considered by all who were there to be a lie? Is there any recourse for dealing with Mr Cosgrove for telling Grey Power things about me that are untrue? I know I cannot deal with it in this Chamber. I am looking for your advice as to how we might be able to deal with people who make such blatantly incorrect untrue statements outside the House as well. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: I thank Mr Mark for raising those issues. Neither was a point of order but the member was able to have his say. There is no remedy in this House for the issue the member raises. It is a debatable matter. The member can seek his remedies elsewhere. I cannot advise him. 
Hon MAURICE WILLIAMSON (National—Pakuranga) 
: 
 There can be no area of Government policy where the differences are so stark between the left and the right than that of labour relations. I say to this House that in 2000 just after the Labour Party won the election at the end of 1999 it introduced one of the most draconian disgraceful pieces of industrial legislation this country had ever seen. 
Darren Hughes 
: Don Brash likes it. 
Hon MAURICE WILLIAMSON 
: I tell the member that I will deal with that but he needs to hear this first. The Labour Party introduced one of the most disgusting draconian and outrageous pieces of labour legislation this country had ever seen. During the course of 2000 we went through what is now well known in political circles as the winter of discontent to the point that by the end of that year—I still have the date: 8 November—a Colmar Brunton Television One poll showed the National Party ahead of the Labour Party which had cleaned us out at the election the year before. That result was down to one piece of legislation—Margaret Wilson’s obnoxious Employment Relations Bill. 
So what did Helen Clark the ever-vigilant “knowing I am going to stay in power at all costs” leader do? She moved in and gutted the legislation. What was finally passed at the end of 2000 bore almost no resemblance to the bill that had been introduced. Businesses breathed unbelievable sighs of relief. Up and down this country business people were falling on to their leather couches saying: “Thank God! All the evil bits have gone. In fact we actually think that what has been left—it ain’t much—of the ERA is pretty OK.” I heard that up and down this country from that point on. I have heard it for the last 4 years. 
What was fascinating at the select committee hearing was that the first comments of nearly all the businesses that came one after another to submit on the Employment Relations Amendment Bill—that is right an Act that had been working brilliantly since 2000 somehow then had to be amended—were to ask why we were doing that. They said: “If it ain’t broke don’t fix it.” They said that employment relations in this country were as good as they had ever been strikes were almost not heard of wages were growing faster than the consumer price index and the unemployment rate was down to the lowest it had ever been so why were we considering the amendment bill. If I had a dollar for every business that came before that committee and said: “If it ain’t broke don’t fix it.” I would have made enough for my retirement. Good companies—decent companies that were trying to get on with their jobs—sat there looked through the legislation and said: “This smacks of  
The 
Empire Strikes Back 
.” 
Margaret Wilson had the absolutely obnoxious elements of her bill gutted in 2000 but she has wheeled them back in as her swansong for departure—for depart she will. She did not get the vice-chancellor’s job at Waikato University even though—[ 
Interruption 
] Well she was down to the shortlist but they said they could not afford to have that. I know she is going. She has gone from the labour relations portfolio already. She was got rid of because of the unpleasant odour the business community felt was in that portfolio. But as a dying shot she thought she would bring in those obnoxious bits of the legislation—plus a bit actually. This amendment bill is the old employment relations legislation’s obnoxious stuff on steroids. It has all the bad bits plus a few more. 
Let me tell members what a couple of decent companies said to the select committee. A young Maori man from NgaiTahu who was running the Shotover jet operation in Queenstown—a really first-class well-educated lawyer who was making a phenomenal success out of a business; a Maori this country should be proud of—asked why we needed this amending legislation. He was another one who said: “If it ain’t broke don’t fix it.” He said there would be real implications for his company when he employed casual or part-time labour and brought staff in and out. He said: “Please don’t do it.” 
Opposition Member 
: He pleaded. 
Hon MAURICE WILLIAMSON 
: He pleaded. Do members know what Labour members on the committee did? They sat there and laughed and they did not answer him. Then what was really interesting were the submissions of Dunedin’s best restaurateur the man who runs Bell Pepper Blues. He said we could go to his restaurant later on that night. We all paid our own bill so there was no scandal like that of the Kermadec or anywhere else— 
Opposition Member 
: Did the Labour people pay? 
Hon MAURICE WILLIAMSON 
: I think even the Labour members paid but what might have been put in their dinner was probably what they did not like. That man said: “Look I run this fabulous little restaurant. My greatest asset is staff and this bill will gut my company.” 
The debate having concluded the motion lapsed. 
Misuse of Drugs Amendment Bill (No 3) 
First Reading 
Hon JIM ANDERTON (Associate Minister of Health) 
: 
 I move  
That the Misuse of Drugs Amendment Bill (No 3) be now read a first time. 
 The purpose of this bill is to ensure that the misuse of drugs legislation is better able to meet its objective which is of course to prevent the misuse of drugs. The Misuse of Drugs Act has two key parts. The first is the Misuse of Drugs Act 1975 or the principal Act which comes under my responsibility as the Associate Minister of Health. The second part the Misuse of Drugs Amendment Act 1978 comes under the responsibility of my colleague the Hon Phil Goff the Minister of Justice. The bill will make several key changes to the principal Act to make it more responsive to changes in illicit drug trends in New Zealand. Those changes are in summary: moving presumption of supply matters from the provisions of the principal Act to its schedules so that they can be altered more quickly and flexibly by Order in Council setting the presumption of supply amount for methamphetamine at 5 grams rather than the current default amount of 56 grams and expanding the membership of the Expert Advisory Committee on Drugs to include a Ministry of Justice official. 
The principal Act currently provides for a rebuttal presumption that when a person is found with a certain amount of a controlled drug he or she possesses that drug for the purpose of dealing or supplying it to others. The onus is on the person found with the drug to prove that he or she was not supplying the drug and that the drug was intended for personal use. That presumption is referred to as the presumption of supply. Section 6(6) of the principal Act currently provides a presumption of supply that is set at the amount of 56 grams for all controlled drugs except for those that have a specific presumption of supply listed separately in that section. That situation gives rise to difficulties as the principal Act must be amended every time there is the decision on advice from the expert advisory committee to set or alter a specific presumption of supply for a particular controlled drug. That process can result in unnecessarily long delays. The principal Act will be amended to move presumption of supply matters to its schedules so that they can be set or altered through Orders in Council. The amendment will allow for a more efficient process than the passing of a new Act of Parliament each time but it will still allow for scrutiny by the Health Committee and the House as a whole as well as provide for public consultation. 
The Expert Advisory Committee on Drugs recently recommended that the presumption of supply amount for methamphetamine should be set at 5 grams and thus reduced from the present 56 grams. Accordingly the new presumption of supply schedule will be set for that amount of methamphetamine. In addition the expert advisory committee is to be expanded to include the expertise of a Ministry of Justice official. 
Changes are also proposed to respond to concerns that the enforcement provisions dealing with precursor substances are inadequate. Concern has centred on ephedrine and pseudoephedrine which are key precursor substances used in the illicit manufacture of methamphetamine. Currently there is no offence relating to the import or export of precursors for the manufacture of illicit drugs. In a border situation only charges for the offence of possessing a precursor can be laid. However possession is impossible to prove in cargo and mail interceptions as no person has physical possession or control of the substance. The Labour-Progressive Government has therefore created two new offences. The first will enable customs officers to seize and detain precursor substances that are imported into or exported from New Zealand in the knowledge that they will be used to commit an offence by producing or manufacturing any controlled drug with a maximum penalty of 7 years’ imprisonment. The second offence will enable customs officers to seize and detain precursor substances imported into or exported from New Zealand without reasonable excuse with a maximum penalty of 1 year’s imprisonment. 
At present the power to detain search and seize without warrant is restricted to class A B1 and C1 controlled drugs. The Government has also agreed that the principal Act should be amended to create a new Part 3 of schedule 4 to extend the powers in section 18(2) and (3) of that Act to enter detain search and seize without warrant the precursor substances listed in the new Part 3 of schedule 4 and to list ephedrine and pseudoephedrine in the new Part 3 of schedule 4. Therefore this bill will extend the powers of search and seizure without warrant to ephedrine and pseudoephedrine thereby allowing the police to respond quickly when investigating large purchases of pharmacy-only pseudoephedrine medication to be passed on to illicit manufacturers of methamphetamine. 
The last set of changes to the principal Act relates to the offence of possessing needles and syringes. Under the Health (Needles and Syringes) Regulations of 1998 there is a legal defence to the charge of possession of a needle or syringe if the injecting drug user can show the needle or syringe was obtained legitimately through the needle and syringe exchange programme. At present the onus of proof in the defence lies with the defendant and that has caused a number of problems mainly in the health area of intravenous drug users using used needles. The bill will amend the principal Act by moving the defence to the offence of possessing a needle or syringe from the regulations—where it is now—into the principal Act and by reversing the onus of proof from the defendant to the prosecution which will have to prove that the needle or syringe was not obtained through the exchange programme. Fundamentally that is to encourage the use of clean needles rather than to have the enormous costs that go with the health problems of hepatitis C HIV/AIDS and so on. 
The second part of the Misuse of Drugs Act is the Misuse of Drugs Amendment Act 1978. The changes to the amendment Act are intended to provide New Zealand’s law enforcement agencies namely the Customs Service and the police with powers that will enable them to more effectively detect the presence of controlled drugs and take appropriate action. The main changes will be that the provisions in the second part of the Act relating to controlled deliveries will be extended to include precursor substances like ephedrine and pseudoephedrine. Customs officers and members of the police will be able to conduct personal searches without a warrant during a controlled delivery. The law enforcement agencies in New Zealand will be able to facilitate international controlled deliveries without the prospect of the liability of the importer and exporter of the illegal substances being affected by the law enforcement agency’s involvement and customs officers and members of the police will be provided with the power to personally search persons held under the internal concealment provisions of the second part of the Act. 
There is one further issue relating to this bill to which I wish to draw members’ attention. In March 2004 the Expert Advisory Committee on Drugs recommended the creation of a new schedule of the Misuse of Drugs Act. The purpose of the new schedule is to enable some regulation of legal substances that are subject to abuse but that do not warrant on available evidence regulation under the current risk classes—the A B or C drug classifications. An example of such a substance is the legal high benzylpiperazine. The regulation proposed will allow restrictions to be placed on matters such as the legal age of purchase and on retailing supplying marketing and labelling in relation to the substances in the new schedule. Such a schedule would not be confined to substances like benzylpiperazine but would also provide another strategy in the spectrum of measures to reduce the harm associated with volatile substance abuse which includes solvent abuse. All members will know of the tragic cases of solvent abuse recently before the coroners’ courts. This bill provides an opportunity to put that new schedule in place now. It is the Labour-Progressive Government’s intention to introduce a Supplementary Order Paper providing for such a new schedule in time for it to be considered by the select committee together with this bill. We are taking the opportunity to do that now because if we do not provide for that in this bill it may be 1 or 2 more years before there is another opportunity. 
It is proposed to refer this bill to the Health Committee for consideration. The Labour-Progressive Government is anxious that this important bill be passed this year if that is possible. Therefore I propose that the Health Committee endeavour to make its final report to the House on the bill by the end of November 2004 so as to enable that to happen. 
JUDITH COLLINS (National—Clevedon) 
: 
 The National Party will support this bill. We are certainly very pleased to see that some action is being taken to try to deal with the problem of methamphetamines which is certainly a growing problem. I think the fact that we hear that the police are dealing with more and more clandestine laboratories for the manufacture of methamphetamines indicates that that is simply the tip of the iceberg. Although a number of laboratories are found and dismantled and a number of prosecutions come from that there is likely to be a significant number that are not found or dealt with but continue to thrive no matter how many times people are told about and see the results of the use of methamphetamines. In an ideal world and an ideal country we would be able to say to people—intelligent adult people; New Zealanders—that they can just decide on the things that they want to take because we know they will make the right choices. But unfortunately when it comes to drugs like methamphetamines there is no safe dosage. Although the police tell me—as they do—that alcohol is the No. 1 drug that they have the most difficulty with they do understand and we understand that alcohol for instance is a drug that does have safe tolerance levels. Methamphetamines unfortunately do not. 
At this moment I would like to give a bit of praise to the pharmaceutical people and to the pharmacies themselves. In many ways—certainly in my electorate of Clevedon and particularly in Papakura—they have gone out of their way to try to stop pseudoephedrine and other drugs like it that are used in the manufacture of methamphetamines from being bought and used for the manufacture of that particular drug. I think that is a very very good instance of the pharmacy people getting together and deciding that is the right thing for them to do. They are not required by law to do it and in some parts of the country they do not do it at all. But in places like Rotorua Papakura and Manukau City there is a widespread belief by the pharmacies and pharmacists that they should help to deal with that particular issue. I congratulate them on that and I think that members of the House would share the view that that is a very very sensible move. The problem for those of us who do not manufacture methamphetamines but who may wish to have a cold medicine is that it does make it more difficult for the legitimate purchaser to obtain those medicines. But those things can be dealt with and I think that we do owe the pharmacists a vote of thanks. 
In terms of methamphetamines as the Minister has rightly said there has been a big increase. In New Zealand we are dealing with a rise in not only the amount of methamphetamines manufactured here but also in those being brought into the country by way of illegal importation. One of the issues that is very very relevant is the resourcing and outputs of people in the New Zealand Customs Service and the New Zealand Immigration Service to make sure that they are given the resources to be able to deal with the situation. We need to have intelligence-gathering in other countries and we need very much to have an attitude that we will not accept this country being awash with methamphetamines. I am very pleased to hear the Minister speak in those terms. In this particular area however we do need to be vigilant. One of the problems with any sort of legislation is that it is always somewhat retrospective so we are acting after the event. Unfortunately methamphetamines have grown in terms of their use their availability and the addictions that have come from them in the last 5 years. Too little has been done for too long. I am glad that we are now to take the issue seriously. 
I am concerned that some children are being brought up in homes where methamphetamine use is a way of life. Prostitution is being indulged in on the basis that it pays for methamphetamine habits. There is no safe level of methamphetamine use. The brain damage that can ensue from that particular activity is now well documented and people in this country should know that. Yet we see no public health advertisements or campaigns in relation to methamphetamines. We certainly saw a tremendous number of public health campaigns in relation to passive smoking. Huge amounts of taxpayer dollars were spent to tell people by way of television—that being considered the most effective way to get the message through—about the possible results of passive smoking. Nowhere do we see anything on our television screens about the effects of methamphetamines or other illegal drugs such as marijuana—the effects on foetuses and the long-term effects on users. If we are ever to take illegal drug use seriously in this country we need to start to get the message out there. We need to stop pussyfooting around and fearing that we may offend someone if we tell the truth. 
It is about time that we in this House faced up to the fact that there is a tremendous amount of illegal and illicit drug use in this country. Drugs are illegal and illicit for very good reason: they do incredible harm and do no good. We need to accept that. I am pleased the Minister takes this issue seriously and I am very pleased that in Parliament we will be able to get—I expect—almost unanimous support on this issue. I say “almost” because not everyone will agree that illicit and illegal drugs have no benefits for and are simply an ill on the people who use them. 
In this country there are people who have difficulty in getting together enough money to pay their rent and to pay for their weekly food. Yet we as members of Parliament all know of instances where people would rather spend their money on drugs than on rent and food. In this country there is an attitude that nobody particularly cares whether people spend that money on drugs because it is their money. Well I say that when people are taking the food out of the mouths of their babies in order to feed their drug habits it is about time that we took drugs seriously. I do not subscribe to the 1970s view that drugs are all pretty good and are fine for us. I did not do so in the 1970s and I certainly will not now in the 2000s. 
Simon Power 
: How old was the member in the 1970s? 
JUDITH COLLINS 
: I tell the member that in the 1970s I was a teenager which just goes to show that non - drug use does help to keep one young. 
I have mentioned earlier the abuse of alcohol in this country. I take that issue very seriously. I take it seriously in terms of children of the health effects it has on this country and also of the police resources that are used so much to deal with it. Two bad drugs do not make one good drug; I think we need to make that very plain. We know we could never outlaw alcohol in this country. It is utterly a part of our culture and has been for thousands of years. We know what happened in this country when alcohol was outlawed: that led to gangs. In this country there is no need for us ever to go down the track of bringing in more drugs that we will have more trouble in trying to control. 
Hon MARK BURTON (Minister of Defence) 
: 
 I will just briefly comment. It is a pleasure to follow on from that member’s contribution. I agree with her. I think this is an area in which this House may well almost unanimously—if not unanimously—agree. We certainly should find agreement in supporting what is good legislation. 
This bill seeks to address a blight on our society. Anything that we in this House can do to fight that evil should be done. I commend members for the work they have done to progress the legislation and urge the House to support its rapid progress. 
CRAIG McNAIR (NZ First) 
: 
 In speaking to the Misuse of Drugs Amendment Bill (No 3) I want briefly to read an excerpt from the explanatory note to elaborate on that and then to elaborate on a few other provisions in the bill. 
Before I go on to that I want to say that New Zealand First like the National Party will support this bill going to the select committee. I look forward to hearing evidence and submissions to see whether there is any way we can make the bill even better. 
I will elaborate firstly on a section of the explanatory note. It states: “Police are attempting to address the increasing illicit trade in methamphetamine through targeting the precursor substances and chemical reagents used to manufacture the drug principally ephedrine and pseudoephedrine. The power to detain search and seize … is restricted to Classes A B1 and C1 controlled drugs. In particular the police are concerned that they are unable to respond quickly (ie without a warrant) when they are investigating shoppers who purchase large amounts of pharmacy-only pseudoephedrine medication to pass on to illicit manufacturers (pill shoppers).” The enhancement of police powers to search and seize is an action that New Zealand First and I believe is a positive move. 
I want to make one point as far as that issue is concerned. I remember that a while back now—probably 3 4 or 5 months ago—the former spokesperson on health for the National Party Dr Lynda Scott made an interesting point about pseudoephedrine being a product contained in a lot of cold and flu medications in pharmacies. I remember very clearly her saying that when she was studying medicine that ingredient was not considered very necessary in medications in respect of its not being the miracle ingredient. There were other ingredients that could be used to make cold and flu drugs etc. 
I remember falling sick a little while ago. I normally use a cold and flu medicine that does not contain pseudoephedrine but one of the pharmacy assistants recommended I use Codral— 
Darren Hughes 
: Day and Night! 
CRAIG McNAIR 
: Day and Night. I was told it was great stuff. I tried it and the pharmacy obviously had to take my driver’s licence number and so on. That is the common practice which is a good thing considering the fact that we have so many problems with pharmacies being broken into and with the problems that come along with that. Anyway I took it and it did not help me at all compared with the help I had when I went back to the old remedies. They were just as good if not better. 
The point I am trying to make is to ask whether there is still a necessity to stock those drugs within our pharmacies. The previous speaker said that a lot of pharmacies in Rotorua and other places do not even stock those kinds of drugs so I think that that is something we should look at in the select committee. 
As I said New Zealand First will vote for this bill because it is a step in the right direction. We have to take incredibly positive action in this area straight away because drugs are ruining young people families and children in our nation of New Zealand. 
I want to address one other thing—the Minister touched on it in his opening speech—with regard to the offence relating to the possession of needles or syringes. I am concerned about that issue and it is one thing that I—or if I am not on the select committee one of my other colleagues—will look forward to getting stuck into. The explanatory note again states: “The aim of the Ministry of Health funded Needle and Syringe Exchange Programme (NSEP) is to reduce the spread of HIV Hepatitis C and other blood-borne viruses among injecting drug users (IDUs). The aim is achieved through the distribution of sterile injecting equipment. The NSEP also encourages safe disposal of used needles and syringes and provides information about safer drug use techniques. It is operated through pharmacies and dedicated needle exchanges throughout New Zealand (NSEP outlets).” 
Further on the explanatory note continues: “The 1987 regulations also created a legal defence to the charge of possession of a needle or syringe (which is currently an offence under section 13(1)(aa) of the principal Act).” as the Minister said. “The defence provided that a person did not commit an offence under section 13(1)(aa) of the principal Act if he or she could show that the needle or syringe was purchased through the NSEP.” Again as the Minister said currently: “The onus of proof in the defence lies with the defendant. The current regulations the Health (Needles and Syringes) Regulations 1998 retain the defence created in the 1987 regulations.” As the Minister has just talked about the explanatory note goes on to state: “The Government has agreed to amend the principal Act to move the defence to the offence of possession of a needle or syringe from the Health (Needles and Syringes) Regulations 1998 into the principal Act and to reverse the onus of proof.” 
I am looking forward to the referral of the bill to the select committee so that we can talk about that issue. But on the face of it I would prefer that a user has to prove to a court that he or she obtained the needle or syringe from the approved source. 
Hon Tony Ryall 
: Absolutely. This provision is political correctness by a liberal Government. 
CRAIG McNAIR 
: I have agreement from another member of the House. He knows exactly where I am coming from. Hopefully the Police Association will make a submission and I will be very interested to see what it thinks. 
I personally think that the whole Needle and Syringe Exchange Programme is controversial in itself and it creates a lot of loopholes and problems in some areas. People might argue that it fixes problems in other areas. But that issue aside I still think the bill is soft on crime in that respect. It is a major concern of mine and in the select committee we must try to address the issue of offences relating to the possession of needles or syringes. 
There are a lot of positive aspects of the bill and I want to touch on them. The first relates to the controlled delivery provisions in the Misuse of Drugs Amendment Act. The bill extends those provisions to include precursor substances and gives the power to customs officers and the police to be able to conduct personal searches without a warrant during any controlled delivery. 
In another positive move I believe they will have the power to personally search persons held under the internal concealment provisions of that Act. One of the major problems that we as politicians read about in newspapers and read in letters from many organisations written to us as members of Parliament is that the police do not have adequate powers and resources to do the job. We have a competent police force but we need to be fair and to give them the powers and resources to fight this crime. 
NANDOR TANCZOS (Green) 
: 
 The Greens will be supporting this bill to the select committee. We think it will be an interesting examination and we look forward to the evidence on the pros and cons of the various aspects of the bill because it does contain a number of very different provisions. Some we support very strongly others we oppose and still others we feel neutral about. 
I shall indicate why we support the bill and why we thank Mr Anderton for introducing it. Firstly there is a provision to add a Ministry of Justice representative to the membership of the Expert Advisory Committee on Drugs. Some members may think that is insignificant but we think it is very important. It is well needed. If we think back to the scheduling of Fantasy it demonstrated clearly that there has been a glaring gap in the expertise available to the advisory committee in looking at these things. 
Let us be clear: at that time the Greens supported the scheduling of Fantasy. It was becoming increasingly obvious that there were very real dangers associated with its use. But we did have real concerns about making Fantasy a class B1 drug rather than a class B2 or some other because it included search without warrant provisions. The Greens have a very real concern about the extension of search without warrant provisions to the police. We think it is a very dangerous power and should be used very very carefully. There are a number of examples of case law where judges are criticising the way that police use powers of search without warrant—in fact they have acquitted people because of the way those powers have been used and abused in ways that breach people’s rights as guaranteed under the New Zealand Bill of Rights Act. Of course that does not mean all police officers but some front-line officers have used those powers in ways that the law did not intend. 
I think it is questionable whether the Misuse of Drugs Act would have contained search without warrant provisions at all if that 1975 legislation had been subject to the vetting of the New Zealand Bill of Rights Act in the way that legislation is today. 
We questioned the inclusion of those powers at the time. The answers we were given by the Expert Advisory Committee on Drugs were unsatisfactory. We asked why those search without warrant powers should be applied to Fantasy. We got no real justification at all. There was no evidential basis for that decision. We think that including a Ministry of Justice official as a member of the advisory committee will help to make sure that those considerations are discussed by the committee. If there are substances that will attract search without warrant powers then there will have to be an evidential reason why such draconian powers should attach to that substance. 
We strongly support the changes relating to the possession of needles. The Needle and Syringe Exchange Programme is an extremely important regime for reducing the incidence of HIV and hepatitis C among intravenous drug users. The places where the needles are available are also very important for providing information to those communities and getting information. Those are among the few areas where the intravenous drug-using community interacts with the State. It is important that we protect the integrity of that in order that we can understand what is happening within that community and the community can get better access to health information and harm reduction information. It is extremely important and we support the changes in the application of the defence provisions to expand the provision of those needle exchange services. 
However there are things that we oppose—in particular as I have foreshadowed the extension of search without warrant powers to precursors by amending schedule 4. Let us be clear: the Greens supported increased restrictions around precursors which have already been passed by the House. We supported those provisions because we recognise that P is an extremely dangerous drug. It has very very real risks. But we do not believe the search without warrant provisions attaching to those precursors are necessary or warranted. I have already spoken about the significant implications of search without warrant powers generally. There is no real constraint over how the police use those powers. 
I will be very interested to have a look at the advice of the Attorney-General on the New Zealand Bill of Rights Act implications of the extension of this to precursor drugs. It seems a totally unnecessary expansion of the arbitrary power of the police to search and seize. Freedom from unreasonable search and seizure is one of the basic guarantees in human rights conventions and bill of rights legislation. 
 We have to remember that precursors are by definition drugs about to be used in the manufacture of methamphetamine or other serious drugs. So if these precursors are being used in the manufacture of those drugs one does not need a search without warrant provision. There is ample time for the police to go to a JP or a judge and to get themselves a search warrant. We are talking about precursors that are involved in a lengthy manufacturing process; we are not talking about people on the street with a small amount of something. So it is just not necessary to have those search without warrant powers with the dangers that go along with increasing its use. 
The Green Party also has concerns about some of the provisions in relation to customs officers. The explanatory note talks about two new offences. The first one enables customs officers “to seize and detain precursor substances imported into New Zealand or exported from New Zealand with the knowledge that they would be used to commit an offence”. That is quite sensible and I can totally understand that. There is concern about the other offence which enables customs officers “to seize and detain precursor substances imported into New Zealand or exported from New Zealand without reasonable excuse with a maximum penalty of 1 year’s imprisonment.” We have a bit of a concern around that because what it once again seems to be doing as with other drug legislation is reversing the onus of proof and saying that one has to prove one’s intention rather than the prosecution proving it. We think that that is something this House should be very careful about doing. 
The other thing is this email that has just come around with a background explanation from the Government about the bill. One of the things I wanted to draw the attention of the House to is controlled deliveries in relation to search without warrant powers. We can see the point of allowing a controlled delivery to take place; it makes sense as that is a basic police sting operation. But the justification for adding search without warrant powers in this regard is it says that the police rely on section 18(3) of the Misuse of Drugs Act to detain and search without a warrant; however it is confined only to class A B1 and C1 controlled drugs. This precludes some current drugs of abuse that are being imported and the bill talks about precursors. 
Of course the thing is that if the bill is going to make precursors subject to search without warrant provisions then that no longer applies. So the very reasoning in the Government’s explanation actually no longer applies when the legislation comes into force. The second one it mentions is that the police powers under section 18(3) cannot be used in situations where the drugs have been substituted with placebos because there are no controlled drugs in the packet. But once again let us be clear that a search without warrant power is not needed. If the Customs Service knows there is a delivery if it is tracking it and if it is going to bust that house there is plenty of time for the police to go to a JP and get themselves a warrant. Look if they are tracking the package then they know where it is and they know where it is going. It takes just half an hour to go down to a JP and get a search warrant. I have seen them do it and that is how it works. The other point I am going to make— 
Craig McNair 
: It’s not quite as simple as that. 
NANDOR TANCZOS 
: It actually is as simple as that—I have seen them do it. The other point I would like to make is that the Supplementary Order Paper that the Government has said it will introduce to bring in a new schedule to allow R18 restrictions is something that we support. This is something that we recommended when the expert advisory committee was looking at benzylpiperazine and we think it is a very sensible thing. I would like to be assured that that will be introduced in a way that means the select committee will be able to call for submissions and examine them; that it will be introduced early enough so that it goes to select committee and the public gets to have a say. 
Our concern is also that it does not go far enough. The Misuse of Drugs Act is very complex confusing legislation and this is adding piecemeal new bits and pieces which makes it even more complex. We in the Green Party think we have an opportunity here to simplify and expand the Misuse of Drugs Act to tidy it up so that it is straightforward streamlined legislation and to expand it so it can deal with a wide range of recreational drugs. We support R18 provisions. Let us put tobacco and alcohol into the Misuse of Drugs Act as well. Let us put in the legal highs as well as those that are R18 restricted. We could put in a class that has no age-limit but includes things like warnings on vessels and advertising restrictions. We could put caffeinated drinks like V and Red Bull in there as well. We could have a single piece of legislation that deals in a consistent integrated and sensible way with a full range of recreational drugs. That would be a much more sensible way than the hodgepodge legislation we have now. 
Dr MURIEL NEWMAN (Deputy Leader—ACT) 
: 
 I rise on behalf of the ACT party to say that our party intends to support this legislation to a select committee but like other parties we do have reservations and I would like to use this opportunity to put some of those concerns on the record. The Labour Party measure in front of us right now does sound like it is getting tough on drugs crime and so on but the reality is that the Government’s progress in this area has essentially been pretty much a disaster. Too little too late is probably the best way to describe it. 
I would like to start by outlining some information I received under the Official Information Act in May of 2003. It stated that that was the sixth briefing paper that had been given to Ministers of this Government since 2001 all warning about the problems the country faced with the methamphetamine crisis that was developing. The Official Information Act papers were using as primary indicators the national drug use survey and customs and drugs seizure data. That is what the information was based on and the papers essentially stated that the Government was facing a huge problem. By 2001 the rate of amphetamine and methamphetamine use in New Zealand at 5 percent was higher than in almost every other country except Thailand where the figure was 5.9 percent. The authorities in Thailand had already said that they had an epidemic that was affecting all levels of society. New Zealand was almost at that level. 
The official information briefing paper warned the Government that New Zealand was facing a major problem across the board relating to the criminal area the social area law enforcement and the environmental area unless the Government got on top of the problem. Did the Government get on top of this problem? The answer is no. What we are seeing now is something that should have been happening years ago. This is simply a small hotchpotch measure that makes this Government think that it looks tough but essentially it is not enough to deal with this problem. 
The National Drug Intelligence Bureau back in 2003 said that it did not know of any other Western country experiencing the same explosion in the manufacturing of methamphetamine. Just to put it on record in 1997 the police discovered one clandestine laboratory; in 1998 the figure was two; in 1999 it was five; in 2000 it was nine; in 2001 it was 41; in 2002 it was 147; and in 2003 it was 164. This year the figure is expected to be more than 300 and the police are not getting to many. They know that the number of laboratories out there is growing like Topsy. The amount of P available in this society is such that it is everywhere. We even have corner dairies now selling the pipes that allow people to smoke P. 
What is this Government doing? It is taking police off the beat to guard prisoners and to go out and collect traffic tickets so that it can boost its revenue. It is taking detectives away from the job of fighting the drug barons and it is putting them on traffic duty. It has the drug team enforcing the seizure of drugs as they come in at airports instead of trying to track down the people who are at the heart of this problem of manufacturing and distribution in New Zealand. We have a police force that cannot even do its job because this Government is soft on crime. The official information report that I received in 2003 stated: “The current methamphetamine situation in this country is critical. The escalation of international and domestic organised crime involvement in the importation manufacture and distribution of amphetamine-type substances poses a serious threat to this country. The situation is far more significant and far-reaching than the impact on New Zealand of the Mr Asia syndicate in the late 1970s and early 1980s.” 
That was in 2003. Now the problem is far worse. This Government is trying to pass a half-baked bill that will go nowhere near the steps that are needed to get on top of the problem. I think it is an absolute disgrace. It is an indication that this Government does not care about crime in New Zealand. 
The Official Information Act goes on to warn of something else. It states that it is only a matter of time before those laboratories that manufacture methamphetamines turn to manufacturing ice—crystal methamphetamine. It talks about its powerful form and the effect it will have. It states that the effects of ice are very similar to crack cocaine with one significant exception: the effect of crack cocaine lasts for 10 to 20 minutes; the effect of ice is more prolonged at between 8 and16 hours. We already know the effect of P on citizens and how much more violence there is against the police. The police by the way are not even allowed to get the protective vests that would make them safe from the knife assaults that they face every day out there because of P-crazed offenders. 
We also have violence in hospitals. We have people at risk at all levels of society—even those who deal with children these days who are high on P. Yet this Government is not doing enough to get on top of the methamphetamine problem let alone to get on top of the ice problem which the officials warned over 18 months ago was going to be a real epidemic in New Zealand. 
We then look at the poor old Institute of Environmental Science and Research—the agency that goes out and tests these drugs in the methamphetamine laboratories. We ask ourselves: “Are they on top of their job?”. The answer is no because they are not given the funding or the resources to be able to do the job properly. I say that if this Government is not prepared to allow them to do the job properly then it should be contracted out to the private sector. That is what they did in Britain and that is how they brought down 2-year waits for samples that the police had collected to be analysed so they can put those criminals behind bars instead of having them on the streets. We cannot put someone on remand for 2 years which is how long it is taking to get these samples analysed. 
When the British Home Office contracted it out the time taken reduced from 2 years down to 1 month. That is what we should have in New Zealand so that when the police go out and bust a lab then 1 month later they have their samples analysed and they can bring the case to court. We then need to have some tough sentences. It is absolutely no good that somebody gets busted for methamphetamines gets put behind bars and serves only one-third of the sentence. He or she is then back out on the streets manufacturing again. It is a revolving door situation that this Government is not getting on top of at all. 
Ron Mark 
: What about the people who go on home detention? 
Dr MURIEL NEWMAN 
: My colleague makes a good point. They probably have methamphetamine laboratories in their homes and we are paying for them to stay at home and manufacture. It is just appalling. I know that the Government says that it is a matter of resources and we do not have the money to crack down on methamphetamines. That is rubbish. 
Ron Mark 
: A record surplus. 
Dr MURIEL NEWMAN 
: There is a record surplus but worse than that the Government is going to spend $21 million in election year selling its Budget. There is a big election campaign fund. Why does the Government not put some of that money into getting on top of this problem? 
Everybody at every level of society is concerned about this issue. The police will tell us that the place is awash with it. This Government has sat on its hands and seen a crisis develop in New Zealand. Unfortunately I do not think the public understands quite how bad it is. We know in this House that it is time the Government got on top of it. 
JUDY TURNER (United Future) 
: 
 I rise on behalf of United Future in support of the first reading of the Misuse of Drugs Amendment Bill (No 3). The Hon Rick Barker acknowledged in August this year that “methamphetamine abuse is the single biggest illicit drug problem facing New Zealand.” We acknowledge that the impact of drugs is absolutely enormous. The police crime statistics released recently pointed to a 30 percent increase in non-cannabis offences which the police have explained is driven by an increase in the manufacture of illicit drugs and of course the policing initiatives that they have been running. I also want to endorse the comments of the previous speaker who talked about the burgeoning number of clandestine laboratories. My understanding is that to date in this financial year 190 laboratories have been closed down. That is really the tip of the iceberg. I think most of us have heard anecdotally that because of the under-resourcing of the police the local police in many areas know where laboratories are but because they are not permitted to go in on their own initiative and search the premises in view of the danger factors they have to wait until the special police unit mandated to do that work is able to come into their area and investigate the situation. Because of that resourcing issue we have an absolutely rampant and out-of-control methamphetamine problem. 
We support the two main directions of this bill: firstly the amending of the presumption of supply provisions so we can crack down on the dealers and secondly the preventing of the importing and exporting of precursor substances. At present section 6(6) of the principal Act creates a presumption whereby a person who is found in possession of 56 grams of a controlled drug is deemed to have it for the purposes of supply. If the police can prove the person had the drug then the onus is on the defendant to prove that he or she had it for another reason. The problem that has been created is that if the measurement is set at the wrong level the legislation has to be changed. If we are to address with appropriate speed the rather outrageous measurement of 56 grams we need to have the ability to do that through an Order in Council. I want to pick up on that figure because at the select committee United Future will be very interested to hear some scientific evidence about the limit for personal use. We suspect that this proposal does not go far enough. Let me give this fact which shows how ridiculous it is that at present someone is allowed to be in possession of 56 grams of methamphetamine before he or she is deemed to be supplying it. Apparently P is bought in what is generally called points. A point is 0.1 of a gram. If someone purchases 1 gram of P for approximately $1000 it then has to be broken down into points in order to use it. This change recommends that someone would be allowed 5 grams before it would be considered not to be for personal use but for supply. I think that does raise some very interesting questions as to whether even a figure of 5 grams is too high. We will be watching that issue very closely and asking some very serious questions at the select committee to determine how we arrived at 5 grams as being an acceptable level. It is of course certainly a big improvement on 56 grams. 
We understand the importance of being able to move quickly to adjust the amounts by Order in Council and we are supportive of that. However we do have some questions about how that will be managed with regard to what would happen if a proposal came forward on a given substance to relax through Order in Council the amount that would be considered acceptable before one was considered to be in possession for supply. We have all assumed that this legislation is about the opportunity to tighten down on the amounts that people are allowed to have in their possession before they can be charged with supplying. I guess we need to be careful that we do not set in place a very quick and fast-track method that does not require revisiting an issue back in Parliament if the intention is to relax that provision. We believe it is important and essential to crack down on drugs quickly. The process should not be drawn out and the amending of legislation should be able to be done in a speedy manner. 
Many of the dealers who are pushing drugs on our teenagers for instance are enticing them with the opportunity to go shopping for the tablets needed in the manufacture of P and they are being supplied with some of their own needs in terms of their addictions. The other supply is from “tinny houses” where young people buying cannabis are introduced to even more dangerous substances. 
We support the second main provision of the bill which is to prevent the importing and exporting of precursor substances. It is extremely well known that overseas drug syndicates are targeting New Zealand both with methamphetamines and the precursor substances and that it is a growing problem. In 2004 for instance 12685 grams of methamphetamine was seized by the Customs Service at the border which was 10 times more than in the year before. In 2004 over a million tablets of pseudoephedrine and ephedrine were seized by Customs—a sizable increase from the amount that had been seized the year before. Those dealers are coming into our country with the full intention of supplying P laboratories up and down this country. 
The other controversial provision that other members have referred to is the amending of the provisions for the needle and syringe exchange programme. That is another area where we will be very interested to see what comes up at the select committee. Our understanding is that what motivated the inclusion of the provision is that many of the staff working on the needle and syringe exchange programme have had huge amounts of their time tied up in appearing in court to defend people who are on charges of having needles where the onus of proof is upon them to say where they acquired those needles. It has become a bit of an administrative nightmare and the staff feel they could be using their time a lot better. However we have some concerns about what this bill proposes and we will be very interested to see whether there are any other suggestions out there. One of my colleagues said that maybe a certifying certificate of some kind could be given at the needle and syringe exchange. That is used in other jurisdictions and it may have an application here—that is some sort of certificate of proof that could be given to users of the programme. 
We would also like a little more information on the Supplementary Order Paper that the Hon Jim Anderton indicated today would be introduced as part of this legislation. We have not had a chance to see any of those provisions and we would like to see some of the detail of them and get our heads around it in order to understand whether we could support the provisions. We think the intention is great. I agree with Mrs Newman that there are lots of other issues surrounding this flood in our nation that is causing so much damage that needs to be addressed and not just through this change in the law. It is a good start and we are keen to support it but we are also keen to make sure that it is sound legislation. 
Hon JOHN TAMIHERE (Minister of Youth Affairs) 
: 
 It is pleasing to note that all parties in this House will support the first reading of this bill and commend it being referred to the select committee. The purpose of the bill is to ensure that the Misuse of Drugs Act does exactly what its objective is—that is to prevent the misuse of drugs. Whilst we can have a debate around the detail of that it is pleasing that all parties will support this bill. 
I regret the stance taken by a number of members in some of their observations. Whenever Muriel Newman stands up in this House I feel like running for the Prozac bottle—although I have never taken it. She is the most depressing person to listen to in this House. In Maori terms there is a thing called aahua and when people have aahua they bubble there is an effervescence about them and there is a spirit in them. But every time Muriel Newman walks down to this House one really wonders why she gets out of bed in the morning. She can always see the most ugly evil venal and vile things in the world. That is all that particular party can talk about. No wonder it is tracking at around 2 percent! 
Also I disagree absolutely with the comments made by the Green member Nandor Tanczos. The reality is that it does not matter whether it is P today; it will be something in another 2 3 4 or 5 years whether it is called L Z or Y. Our police force as one part of combating drug abuse in our country needs to be empowered to do the job properly. This Government has acted accordingly not just in regard to this legislation but on a whole matrix of issues with regard to the misuse of drugs. It voted $19.6 million for a hunt-and-kill unit in the New Zealand Police. As that unit starts to bite in it must start to attack gang networks gang distribution lines and gang production lines. Long may the Black Power and the Mongrel Mob be members of the new Maori Party! 
We must toughen up our ability to hunt down the people who visit the type of mayhem hurt and carnage on our streets that our health and social services always end up having to pick up. We can no longer continue to tolerate the flower of New Zealand youth being burnt and blasphemed in this particular way and this legislation goes a long way to ensure that the police have the authority and power to move very quickly against those who are storing the precursors and using them in a production capacity. It also allows them to hunt and trace very quickly those who run the distribution networks and so on. So I commend it. 
I would like to acknowledge and thank the Hon Jim Anderton for championing issues relevant to alcohol and drug abuse and alcohol and drug suicide amongst our youth population. In conclusion I would like to invite “Tony Vile” not to conduct himself in his normal naughty venal little way and not to just be a wonderful consort and support to Madam Newman. I commend the bill to the select committee. I know that it will give this legislation careful and considered thought and report back a bill that we should all be proud of supporting. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 Thank you Madam Speaker for the opportunity to speak on this very important Misuse of Drugs Amendment Bill (No 2). I note it is the third amendment. The last one was just some time ago. That very much highlights the fact that the P epidemic in New Zealand is becoming increasingly serious and the criminals involved in it are becoming increasingly cunning devious and manipulative. It is vital that the legislation is appropriate in that it enables them to be tracked down. 
There are some concerns about civil liberties in terms of this bill and the National Party shares those concerns. However it is important because of the incredibly increasingly serious situation in New Zealand that the police and the Customs Service are able to show very tough action towards the criminals involved in the escalating P epidemic in New Zealand. It is important to remember exactly how fast this epidemic has occurred and how tardy the Labour Government has been in terms of responding. Back in 1996 we saw the first clandestine P laboratory busted by the police. In 2000 there were nine laboratories in 2001 there were 147 and in the first 10 months of 2003 something like 146 clandestine laboratories were closed down. One wonders what the Government has been doing— 
Hon Tony Ryall 
: Sleeping! 
Dr PAUL HUTCHISON 
: That is absolutely right. The evidence was there back in 1999. 
The point that Muriel Newman made with regard to the under-resourcing of the Institute of Environmental Science and Research is absolutely right. One of the major problems we have is that it is overwhelmed with work and under-resourced in terms of both money and the ability to have forensic scientists. The point she made about putting this sort of thing out to private contract as is done in Britain and bringing down the huge backlog in our courts is absolutely relevant. I am very concerned when I hear the Hon John Tamihere say such inappropriate things about a very good member who has taken the trouble to go to the Institute of Environmental Science and Research and actually look at the background problems that are holding up the process in New Zealand. It seems to me that the Government has failed to go into the details. With these things it is always the details that are so important. 
I also note that some years ago I think it was 2002 it was pointed out that methamphetamine was selling on New Zealand streets for about $100 to $180 per gram and P was selling for $1000 per gram. That was in 2002 when in comparison a tablet of LSD could be purchased for approximately $30 to $40 and 1.5 grams of cannabis could be bought for $20. That just demonstrates how hugely important this drug has become to the gangs that are dependent upon it for their feeding frenzy on the vulnerable throughout New Zealand. 
I think what Judy Turner mentioned about presumption of supply going from 56 grams with a street value of $56000 down to 5 grams with a street value when converted to pure methamphetamine of $5000 is right. I think it is very important that the select committee looks at that very carefully. It is a huge amount and is still enough to ensure that the gangs are intimately interested; I do not think that amount is little enough to stop their commercial interest. 
I think it is also very important to point out just how addictive this drug and its precursors are. We heard Nandor Tanczos earlier on scoffing at the importance of the precursors ephedrine and pseudoephedrine being included in this bill. They are hugely important. It is so easy to convert them into pure P. The points that he made really make me wonder once again about the relevance of the Greens in this Parliament. There is a hugely important chain going from the precursors to the final manufactured article pure P. 
P is highly addictive. It affects all sectors of the social strata and associated with it unfortunately are bizarre psychological reactions that are completely unpredictable and that at times have been demonstrated to be utterly devastating. I think Judith Collins made the point we have a huge problem with alcohol in this country; yes we do but what has been so scary about the P epidemic is that it has been rapidly escalating over the last 3 to 4 years. 
Only 3 years ago we were going through the debate on marijuana. I remember one of the submitters from Northland telling us: “Please don’t change the law because if marijuana is legalised then the gangs will be getting on to the hard drugs.” The hugely worrying thing is that in those 3 short years the gangs have gone on to the hard drugs and now they are not only endemic but epidemic in New Zealand. 
I think my colleague Judith Collins also mentioned the point about the pharmacies throughout New Zealand which indeed have done a very good job in trying to make domestic availability and accessibility to criminals much more difficult. Indeed they should be praised throughout the country for the efforts they have made in that respect. 
Clearly there are two major areas that this bill is concentrating on. The first is the presumption of supply. A variety of policy objectives are made and presumption of supply matters are added to the Order in Council regime. Again I remember only 2 years ago or even less the Regulations Review Committee being very concerned about this mechanism. However the point is that because the formulae of these drugs are so easy to change marginally and because the criminals have got on to that it is vital to have a ready-response mechanism available to Parliament—to the legislation—so that there can be a quick response. Amending the presumption of supply for methamphetamine is obviously absolutely appropriate as is adding a Ministry of Justice official to the expert advisory committee on drugs. The second main amendment relates to concerns about the increasing prevalence of methamphetamine use and importations of ephedrine and pseudoephedrine which are believed to be destined for the manufacture of methamphetamine. 
Certainly some pretty strong changes are made in this bill relating to searches of persons involved in delivery. Clearly in terms of the civil liberty protections it is very important to have protocols that do indeed safeguard the police the customs officers and the people who are perpetrating the crimes. For searches associated with detention warrants there are carefully spelt out protocols relating to the definition of rub-down searches and the definition of strip searches. Yes they are tough measures but yes it is absolutely relevant that they be carried out. We saw just a few weeks ago a huge quantity of P brought in through a lava lamp. We are pretty sure that large quantities are brought through on persons these days. It is vital to have extremely reactive measures to combat this problem and I certainly support this amendment bill being referred to the select committee. 
STEVE CHADWICK (Labour—Rotorua) 
: 
 I am pleased to take a call on the Misuse of Drugs Amendment Bill (No 3) and to follow that sensible member in Opposition because this bill is one of the strategies that as members of Parliament we feel we can get our heads round to prevent the misuse of drugs. It is a responsibility of every leader as a member of Parliament to show leadership on this issue particularly given the extent of the use of methamphetamine in this country. It is baked in labs in neighbourhoods that one would not believe and is endangering the lives of mothers and children in kitchens around the country. Leaders in this House must act of one accord to help the police and the Customs Service in their endeavours constantly to minimise the impact of these precursors on our society. 
It was interesting today to hear the Hon Rick Barker’s response. I would just like to repeat that we have this year seized 10 kilos of crystal methamphetamine compared with 0.9 kilos the year before and have also seized 1.3 million ephedrine and pseudoephedrine tablets which is more than double the amount seized the year before. I think the Misuse of Drugs Act scheduling process is starting to kick in when we see that sort of yield through customs. I remember working with the Hon Wyatt Creech when we first considered the Misuse of Drugs Bill and put in this unique scheduling through Order in Council. We all talked about expeditious scheduling and we all did not quite realise just how often we would be revisiting the Misuse of Drugs Act in terms of giving a very flexible and fast-action response to the recommendations of the expert advisory committee on drugs about rescheduling about dealing with issues of importation and about cutting off supply at the borders of this country. 
 I am pleased to see that now a Ministry of Justice official will go on to the expert advisory committee. At the time we introduced the legislation we did not consider that was necessary. It is great to see that we always have a flexible response to the way in which we deal with those issues. 
The one other thing I want to do today—because I have heard about the presumption of supply that will be dealt with through this legislation—is congratulate the Associate Minister of Health Jim Anderton on his Community Action on Youth and Drugs initiatives around the country. There were five when we got into Government and this year we put $2.55 million more into building up 15 more of those programmes around the country. I assure the House that wherever I go—places such as Thames and the Coromandel where I was just last week—people ask how they could get one of the Community Action on Youth and Drugs programmes. Murupara wanted a Community Action on Youth and Drug programme so did Rotorua and many other communities are saying that the programme is having an effect. 
I am sure that along with introducing this legislation we will keep up our war on the misuse of drugs in this country. I look forward to this bill coming to our committee. 
Hon TONY RYALL (National—Bay Of Plenty) 
: 
 It is most interesting to hear members’ contributions on legislation like this—particularly that from the member for Rotorua in light of her support for the decriminalisation of cannabis. I draw the House’s attention to how long it has taken this Government to deal with this issue which was identified way back at the end of 1999. It has taken this Government ages and ages to deal with an issue. It cannot help but convey the impression that it is half-hearted about it. It took this Government 4 years to reclassify methamphetamine as a class A drug. Does that portray any sense of urgency in this Parliament? 
This is another case of Mr Anderton introducing a bill and not understanding the consequences of what he is doing. He brought in a bill that is now known as the “Sherry Tax Bill” claiming that it would curb under-age drinking. I am sure we have all seen children under bridges with bottles of Madeira! That turned out to be a lot of nonsense. 
What I want to alert that Minister to is that this bill effectively decriminalises the use of needles for injecting illegal drugs. If this legislation is passed effectively it will no longer be an offence to have needles for injecting illegal drugs. It will no longer be an offence because the police will find it nigh on impossible to prosecute any intravenous drug user who possesses a needle. This bill is part of this Government’s politically correct approach to drugs. I suspect that this Government has us on a path to legalised injecting rooms. That is where this decision takes us. 
The Government says it wants to protect the police and to encourage intravenous drug users to be more responsible. It claims that the police are arresting hundreds of people for carrying legal needles but that is nonsense. This afternoon I spoke to a senior drug investigator in this country who said that people are arrested not because they have one of these needles but because they are housing the needle in an unsafe way. There is a requirement that people house needles in a safe place and often those people are prosecuted because the needles are not being housed safely. They are also prosecuted in association with other drug-related crimes—generally the possession of illegal substances. In fact the numbers that the Government quotes in its own documents which we have been able to get from the Ministry of Health website are a load of nonsense. That senior drug investigator told me that under these changes it will be nigh on impossible for the police to prosecute people for possessing needles for the purpose of injecting illegal drugs. 
So what is the Government doing here? Right now section 13 of the Misuse of Drugs Act states that every person commits an offence who has a needle or syringe for the purpose of committing an offence under that Act—that is for injecting drugs. The exception is if a person possesses that needle because he or she got it from a needle exchange programme. That latter part is in the health regulations. Instead of taking those regulations and putting them in the Act what has the Government done? The Government has done this: instead of requiring the drug user to prove that the needles came from a needle exchange it will now be up to the police to prove that the needles did not come from a needle exchange and that the person who illegally has those needles obtained them believing that the person he or she got them from was not entitled to them. 
Let us go through what the hoops are. Instead of the drug user having to prove that he or she is part of the needle exchange and providing a certificate or something like that it will now be up to the police to prove that the needles did not come from the needle exchange and that the person who has those needles knew that they did not come from the needle exchange. That just makes it so much harder for the police to obtain prosecutions against users of drugs who have this paraphernalia. Effectively this measure decriminalises the possession of needles for injecting illegal drugs. 
I will tell members something: I bet that Jim Anderton does not even realise that. I think he has been misled by his officials just as he was with the sherry tax. Members might remember that he said in Parliament that that legislation was about targeting teenage drinking then was absolutely humiliated when the Opposition National Party said that it was about putting up the tax on Madeira sherry and fortified wines which are not the drinks of choice of teenage drinkers. With this bill he has not asked the questions. He is reversing the onus and that will make it harder for the New Zealand Police to obtain prosecutions against people who are illegally in possession of needles. There is no argument for that. 
I pulled from the Ministry of Health website the review of the needle exchange programme and it is the recommendation of that programme that the New Zealand Parliament approve the proposed amendment that would remove the offence of possession of needles and syringes legally obtained through the needle exchange programme. Well the Government has gone further than that. Effectively it is decriminalising the possession of needles for illegal drug use. This Government just does not get it. Corner dairies and shops in Auckland sell pipes for methamphetamine. They say they are ornaments and are not used in the performance of an illegal activity. This Government should be moving to make those items illegal. This Government should be moving to make P pipes illegal but instead it is moving to decriminalise the use of needles for injecting illegal drugs. 
It is all part of a politically correct liberal agenda being pushed by this Government and the health authorities under the name of harm minimisation when what is required is leadership that says this stuff is wrong and should be stopped. This afternoon I spoke to one of the leading drug educators in this country— 
Simon Power 
: It’s true; the member did. 
Hon TONY RYALL 
: I did. I asked her why she thought the Government was doing this and her clear answer was that it was all part of the politically correct soft-on-drugs agenda that we are seeing from the Government time and time again. I want to tell the House that the National Party in Opposition will oppose these changes to the needle exchange. Why would we make it harder for the police to secure a prosecution against an intravenous drug user who has those needles and is using them in an illegal way? I cannot believe that Mr Anderton would agree with that. I think that as with the sherry tax he has been fooled. Let me remind the House again of what is happening. Instead of the drug user having to prove that the needles came from the needle exchange then getting off the charge the police now have to prove that the needles did not come from the drug exchange and that the person who has the needles knew they did not come from the needle exchange. Well how hard will that be for the police to prove? The advice I have received from a senior police drug investigator this afternoon is that it will be nigh on impossible. 
The Government is absolutely wrong on this. It is late to the party on dealing with the methamphetamine crisis and it will cause another problem—which it does not need to cause—with its plan to decriminalise the possession of needles for the purpose of illegal drug use. 
Bill read a first time and referred to theHealth Committee.referred to Health Committee 
Maori Fisheries Bill 
In Committee 
Debate resumed from 14 September. 
Hon HARRY DUYNHOVEN (Minister for Transport Safety) 
 on behalf of the  
Minister of Fisheries 
: I move  
That the Committee divide the bill into the Maori Fisheries Bill and the Te Ture Whenua Maori Amendment Bill (No 2) / Maori Land Amendment Bill (No 2) pursuant to Supplementary Order Paper 254. 
A party vote was called for on the question  
That the motion be agreed to. 
Ayes 82 
New Zealand Labour 51; New Zealand First 12; Green Party 9; United Future 8; Progressive 2. 
Noes 34 
New Zealand National 27; ACT New Zealand 7. 
Motion agreed to. 
Hon ROGER SOWRY (National) 
: 
 I raise a point of order Mr Chairperson. This bill has been quite fiercely debated over the last 2 weeks in two different bites and each time the Maori Party has voted and has made it known in the House and through the media that the Greens have been carrying its proxy. I am aware that the Green whip at the moment is different from the whip who was acting on the rest of the bill and I would hate to see a member who has been opposing the bill throughout the process then find that her proxy was not being utilised. I draw that to the Committee’s attention and wonder whether the whip might have missed the call. 
The CHAIRPERSON (H V Ross Robertson) 
: I thank the honourable member for his contribution. All I can say to that is that it is up to the Maori Party as to what it does. 
Bill reported with amendment. 
Electricity and Gas Industries Bill 
In Committee 
Debate resumed from 9 September. 
Part 1 Amendments to Electricity Act 1992 ( 
continued 
)  
Hon ROGER SOWRY (National) 
: 
 I raise a point of order Mr Chairperson. Usually it is appropriate at this time that you announce who had the call when the bill was last being debated and how much time that member has. This debate does go back a couple of weeks—the Government’s programme is a bit shambolic—and I myself am struggling to remember but I understand that I was on my feet and I want to know exactly how much time I have left. 
The CHAIRPERSON (H V Ross Robertson) 
: The member is quite correct. He has 30 seconds remaining. 
Hon ROGER SOWRY 
: It will be 30 seconds that the Committee will not want to miss. I start by reminding members that this is a bill that National is totally opposing. It is a bill that every single electricity company—be it a lines companies or a generator be it Government owned or private sector—opposes. It is a bill that some of the brightest New Zealanders who have been involved in the structure of Government issues around State sector issues oppose. It is a bill that only Labour members seem to favour. It is a bill that sets up a structure that the Government has ignored. 
PHIL HEATLEY (National—Whangarei) 
: 
 Only the Labour Party supports this bill. It wants to see the Electricity Commission instated because it sees the commission’s prime role as being a taxation agent. The most important job of the Electricity Commission which is given rise to in this bill is to raise levies. 
Interestingly enough it does have a series of other roles and I would like to go through them because there are no fewer than 10—but its primary role is to impose levies. First of all it is to be a policy adviser. It is then to be a proposer of regulations and rules—so it will follow its own advice. It is to be a purchaser or provider of market operations. It is to be a purchaser of reserve power. It is already involved in the Whirinaki scheme. That generator is supposed to sit there and not be used. The levy payer somehow has to fund that particular generator to sit there and do nothing for month upon month and year upon year so that in a dry year when there is a shortage of electricity we can call upon it. Interestingly enough it has been wound up a number of times already. I have heard that it has been wound up almost fortnightly. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
PHIL HEATLEY 
: I thank the member for Banks Peninsula for returning to the Chamber in all her enthusiasm to hear the completion of my speech. I was talking about the roles of the Electricity Commission which seem not only numerous but in conflict with one another. I mentioned that the commission would be a policy adviser as well as a proposer of regulations and rules. Therefore following its own policy it will set regulations and rules. I do not know where the checks are there. It will be a purchaser or provider of market operations and a purchaser of reserve power. 
I was dwelling on the fact that the Minister of Energy and the future Electricity Commission seem quite delighted at the idea of money being spent on the Whirinaki station which is supposed to sit there in the dry years and not be used. In other words the taxpayer or levy payer funds that beast—that white elephant—which does nothing because its generation is excess in case there is a dry year. I wonder at the absurdity of that. To prove the point we find that that particular power source has been generating regularly over the course of the winter which is quite amazing given that it is supposed to be there to provide reserve power in times of particular shortage. 
The Electricity Commission has a fifth role as a seller of electricity in dry years—clearly from that reserve power—a sixth as an adjudicator of fines and penalties and a seventh as an industry facilitator. 
John Key 
: What does that mean? 
PHIL HEATLEY 
: That means it sits in the middle loving all sides not making the hard decisions engaging in a bit of hand-wringing and being indecisive—sending recommendations up the chain but not taking any responsibility. It has an eighth role as a promoter of energy conservation and a ninth as a decision maker over the investment services and prices of State-owned enterprises. Certainly in the electricity industry there are plenty of State-owned enterprises. In fact I do not think the New Zealand public knows that this Government is up to its eyeballs in electricity generation. There is a belief out there that electricity generation is in the hands of private enterprise yet we know that by far the largest generators—both in size and number—are Government owned and are filling Dr Cullen’s pockets. The tenth role under the Commerce Act is as a regulator of the prices and services of distribution. 
Hon RICHARD PREBBLE (ACT) 
: 
 The ACT party if anything is even more strongly against this proposal. 
Phil Heatley 
: That’s impossible. 
Hon RICHARD PREBBLE 
: Well we are very strongly opposed. The Committee should know that the submissions received were also hostile. There was a very good submission from Mr Scott who used to be the Secretary to the Treasury pointing out the inconsistencies in the bill and pointing out that the ways in which it will work will not actually achieve the purpose. I think that the Minister when he is looking at these particular clauses should think about the fact that they will meet the worst type of lawmaking: “there ought to be a law”. That comes from a drought from a possibility of electricity shortage and from great public pressure for something to be done. The Government has reacted to the notion that for every problem there ought to be a law. So here we have a law saying that there ought to be electricity. When we look at it we see that that is what it really is. The commissioners are really being told that somehow or other they have to create electricity. 
What the Government has not looked at are the underlying reasons that there is a shortage of generation. The Government knows the reasons—the Minister does. He can take a call because he knows. The Resource Management Act makes it virtually impossible to build generation as does the ideology of this Government—the fact that it has signed up to the Kyoto agreement. Interestingly enough if Government members read the latest issue of  
The Economist  
magazine they will see that it is predicting that within a decade there will be the ability to build coal-fired stations that do not emit. But this bill is set up because the Government has a shortage of gas. 
The impossibility of building a decently sized hydro scheme and the Government’s ideological opposition to coal mean that we are now being told we have to have this stand-by station. But does anyone actually think that that is a good use of taxpayers’ money? Even the Minister does not. Of course Government members then try to pretend that it is not taxpayers’ money—because it is a levy. Well does anyone think the generators will pay that? Of course not! The public of New Zealand will pay that. 
This is a bill to put up electricity prices. Here we are a country on the edge of the world looking for every competitive advantage we can get and one competitive advantage this country has had all through our lifetimes has been low electricity prices. But this Government is actually legislating against low electricity prices. I tell the Minister that that is what these clauses really mean and he is bright enough to know that what I am saying is completely correct. This Government does not believe in this bill. We can tell that because no one has taken a call to support it. If they had and if they believed that this bill would do some good there would be Government members going for the call. But they have not because they know that the bill seemed like a good idea a year ago when they had a blaze of headlines when people were worried about electricity shortages and when they felt there ought to be a law. Here is the “ought to be a law”—namely an Electricity Commission. I ask the Minister how on earth that will help. Does anyone seriously believe that it will? 
When we actually look at the projected energy needs in this country we see that this reserve station even after it is built will not in any way be able to compensate for the sort of weather cycles we will get. We know that we will have occasions—and that is absolutely predictable—when there will be a shortage of rain. When we have a shortage of rain we then have a shortage of water in those dams and that situation will come. It might be next winter it might be in five winters’ time but it will come. Will this legislation cover that situation? No it will not. What the Government should be doing is looking at the electricity market. It should have some faith in the market to enable the market to work. For a proper price the private sector is most willing to invest in electricity generation. We have only to look at the share price of the registered electricity generators to know that electricity generation is something that entrepreneurs are prepared to invest in. But they cannot get around the real problems that exist or around the Resource Management Act. 
PANSY WONG (National) 
: 
 It is interesting to look at Part 1 of the Electricity and Gas Industries Bill because that part states the purpose of the bill. The purpose firstly under clause 4(a) is: “to improve security of supply of electricity:”. I think the minority Labour Government is living absolutely in a fantasy world if it thinks that by forcing through legislation it can command the security of supply of electricity. 
The Minister of Energy came into this Government 5 years ago and had spent about 10 years in Opposition as spokesperson on energy. One would have thought that he came to his position with a vision and a blueprint for the energy portfolio but the first thing he did was set up an energy governance board. It would get the whole industry together with consumers and it was supposed to work out a solution but what it meant was the Minister never really had any solution or vision for the energy future of New Zealand. The Hon David Caygill was the chairman of that particular phase. Well millions of dollars later the energy governance board disbanded and then the Minister once again displayed to the public that he actually had no solution or vision for the future of the electricity sector of New Zealand. 
So as I pointed out yesterday during the Committee stage of the Maori Fisheries Bill whenever the minority Labour Government does not have a solution the answer is quite simple. It sets up either a committee or a commission. Now without really specifying the parameters or giving good guidance and directions it has kicked this difficult issue to a commission to resolve and to establish means and methods to secure the supply of electricity. 
When we look through Part 1 we see pages and pages of details reporting mechanisms disclosure requirements and dispute resolutions—exactly what the Hon Richard Prebble said—without examining the underlying problem of the shortage of generation or the unnecessary restrictions on the usage of various means to generate electricity. The Government resorts to disclosure requirements bureaucracy and appointing the commission to perform a task that the Minister has no solution for. So I think the Minister in the chair the Hon Harry Duynhoven should take a call to explain to the New Zealand public how Part 1 of the Electricity and Gas Industries Bill by setting up those disclosure requirements and the pages of code of conduct would secure the supply of electricity to the public. 
This bill is one of many that we have witnessed in 5 years under this Minister of Energy but we are yet to really know or appreciate what the vision or the way forward is for securing electricity supply for New Zealand. Today the Government announced some tinkering to the Resource Management Act and that will not be helpful either. 
Hon HARRY DUYNHOVEN (Associate Minister of Energy) 
: 
 It is a pleasure to stand on behalf of the Minister of Energy the Hon Pete Hodgson and reply to one or two of the issues that have been raised. Ms Wong talked about the Minister’s effort to encourage the generation industry to take a responsible long-term approach to generation for the good of the country. Well encouragement is a very useful thing but it has proven to be not quite as easy to encourage the industry. That is the reason for now taking a stronger approach. The Minister signalled right at the beginning of the process that he would take that approach if the industry failed to respond in the way that he wanted. 
What we have now is a situation where basically it is very difficult to unscramble a scrambled egg. I say to Mr Prebble who conveniently forgot the basic rules of the market this is about market failure. The reason that we do not have scads of unused generating capacity is very simple. It is that the maximum productivity from the investment in generating capacity is at 99 percent and close to 99.99 percent of full load as we can get for as much of the time as possible and that is where the maximum profits are to be made. Therefore no generator will be voluntarily building unused capacity and it is as simple as that. 
Opposition Member 
: That’s nonsense. 
Hon HARRY DUYNHOVEN 
: It is not nonsense; it is a basic rule of economics. If we go over to Victoria University Economics 101 will tell us that. 
Another reason which Mr Prebble conveniently forgets is that we have a large number of thermal stations in New Zealand and very simply thermal stations cannot be very quickly turned on and off. I have one in my electorate which I am very familiar with. It is an older station and takes some time to bring it up to load. Therefore having reserve capacity able to be switched in relatively quickly is a very good solution in the interim. Mr Heatley talked about the absurdity of doing that. Well I do not think it is absurd and I do not think the people of New Zealand do either—particularly if it is a choice between having some higher-priced unused capacity available for peak times or having various areas of the country with the power out because that is the choice. 
Phil Heatley 
: How much of that did you use in the last little while? 
Hon HARRY DUYNHOVEN 
: As I explained to the member that in turn is to avoid having to turn thermal stations on and off at a time when we want to be using as much of our water—and we have an excess of water at the moment—as possible. Our big problem has been with the storms we have had. The high voltage direct current link across from the South Island to the North Island has had a lot of salt contamination and it cannot run at very high load factors when the dielectric is reduced by the fact that salt is on the insulators. That is a fundamental physics issue. 
With regard to the private generators which Mr Heatley said were numerous there are actually four main generators in New Zealand and three of those are State-owned. As I said they are in a competitive environment which was set up by Mr Bradford. The member could dial back through the  
Hansard 
 record if he wishes and look at my speeches as associate energy spokesman at the time and he will see that not only I but even very dedicated and active members of the National Party opposed that move. If he looks at my speeches in  
Hansard 
 I have quoted from one of those members who was very well respected in the electricity industry. He said that what was being done then would be a disaster for New Zealand. He has been proven right and that is the reason this bill is required now. 
I think it is probably true to say that once we have scrambled an egg it is very difficult to unscramble it. This bill is an attempt to make the market work in a way that provides that even though some of the main generators are State-owned those generators will operate in a competitive market. That is what the power pricing model is and we should not ignore economic reality. Perhaps the National Party is suggesting that we should somehow nationalise Contact Energy; I do not think those members would want to suggest that for a moment. So this bill is a means of getting a positive result out of what was a pretty resounding mess that was left and over the last 4 years the Minister has tried very hard to make the electricity industry act responsibly in the interests of the country. I believe that through this mechanism we will get to see it. 
GERRY BROWNLEE (Deputy Leader—National) 
: 
 That was a speech from a Minister who does not have a clue what he is doing. That was a speech on behalf of a Minister who does not have a clue what he is doing either. Apparently we cannot unscramble an egg. Well that might be true but let us be very clear that in the 4 years the current arrangements have been in place Labour has been in Government. Right through the whole change process Labour has been there. Right now whether or not those members want to admit it more of the electricity industry is in direct Government control than was ever the case throughout the years of the 1990s. 
Government Member 
: Not true. 
GERRY BROWNLEE 
: That is absolutely the truth because what has happened is the big generators have become the big retailers. The Government has stood by and let them swallow up all the small organisations around the country that were there to represent the best interests of their consumers and to participate very directly in the market. We have to ask ourselves—I would have asked myself this if I were the Minister—how we can have competition when generation capacity is balanced with retail demand. How can we get competition in that sort of environment? 
There is no incentive for any of the State generators to provide low-cost electricity because they have captive consumers. They just quietly sit there and jack up the price as much as they possibly can and the Minister says that he cannot do much about it. He will form a committee and call it a commission and he will see what happens. I tell the Minister that nothing will happen as a result of this bill passing. The situation with regard to the security of supply of electricity in New Zealand will continue to worsen as long as the Labour Government chooses to put its head in the sand. 
This country has not had the investment in electricity infrastructure that it should have had during these years of a growing economy. The reason is simple: nobody will stick up his or her hand on a very big project worth hundreds of millions of dollars while the Resource Management Act is acting as a block to that happening. We know that right now if one of the Ministers was prepared to do what is sensible and give the go-ahead for the Dobson project security of supply in the top half of the North Island could be assured. No the Government has no interest in that. So now we have the situation whereby South Island residents have been told by Transpower that it can no longer guarantee security of supply even if enough electricity is being generated because there is too much demand for the end product. 
This Electricity Commission will comprise a group of interested people who will sit around writing reports and making recommendations to the Government. It cannot possibly do anything to hasten the development of greater electricity infrastructure in this country. All the talk about the work it might do to try to reduce demand simply ignores the fact that this country wants to live well wants a growing economy and wants people to have the benefit of living in supposedly the First World. I cannot see how we will achieve any of that if a group of Ministers are simply going to abdicate their responsibility to some bureaucracy. 
The Minister is sitting there shaking his head and saying that they will not do that. I ask the Minister why we are passing the bill. Why are we setting up this thing? Worse how much will it cost consumers? The purpose apparently is to improve the security of supply of electricity. The only thing this Government has done is to preside over racing electricity prices and that will continue. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 Firstly I want to acknowledge that the Minister made some very good points in his contribution as did Gerry Brownlee. When it comes to electricity this country is in an absolute mess. National knew that just before the 1999 election. I received panicked phone calls from Max Bradford. When he put through the 1998 reforms he did not listen to the advice of New Zealand First about putting through the appropriate amount of regulation. He did not regulate the lines for a start but he wanted to do so in 1999. New Zealand First though could not reach an agreement with National just before that election to tidy up the electricity industry. 
When Labour came to power it made an attempt to rectify the situation with the 2000 bill or whatever it was but I say with due respect to the Minister that it put the focus on making the market work as against getting the right outcomes. Right now electricity as it relates to the general public is in a mess. Prices are escalating weekly. 
Stephen Franks 
: You voted for it. 
PETER BROWN 
: We have not voted for this bill nor did we vote for the bill before it. 
Stephen Franks 
: You voted for the bill before. 
PETER BROWN 
: I tell Mr Franks that we did not vote for the bill before. He should check  
Hansard 
. We voted for this bill to go to the select— 
Stephen Franks 
: In 1998. 
PETER BROWN 
: In 1998 we did. 
Hon Richard Prebble 
: That’s when the egg was broken. 
PETER BROWN 
: Can I take questions from these guys? 
Hon Ruth Dyson 
: Why did you vote for Max Bradford’s bill? 
PETER BROWN 
: There was a clause in Max Bradford’s bill that allowed for regulation but when it came to it he did not implement that. There was quite a discussion behind the scenes about why he did not. But in 1999 he wanted to do exactly that; that is the fact of the matter. 
From the public’s point of view electricity prices are escalating weekly if not daily. The supply is threatened—or appears to be threatened; is perceived to be threatened. Cheap gas is running low and that will affect the price even more. 
New Zealand First members asked themselves three very simple questions: firstly will this bill help to guarantee security of supply? It goes a little way to doing that by giving the regulators some power and some teeth. 
Gerry Brownlee 
: How does it do that? 
PETER BROWN 
: It gives the Electricity Commission enough power to monitor the whole thing with a degree of independence. We have to be fair—the commission has an independent look about it. The bill goes some way to giving that independence. The second question we asked ourselves was whether the bill would provide fair and reasonable prices. It goes a teeny-weeny little way towards doing that because it brings in the 30c per day maximum lines rate. That is a reasonable little thing for low consumers of electricity. I say to Mr Brownlee that maybe he should read the bill—he will see that in it. 
But does the bill encourage investment into the industry— 
Gerry Brownlee 
: You don’t need a bill to do that. They could do that tomorrow if they wanted. 
PETER BROWN 
: I am not denying that to the member but that provision is in the bill and it does assist. The third question— 
Hon Ruth Dyson 
: Could you repeat that? I didn’t hear because he was talking. 
PETER BROWN 
: I said that the bill does provide for the 30c per day maximum lines rate for low users of electricity. That goes some way to reducing prices and New Zealand First is quite encouraged by that. 
The third question we asked ourselves was whether this bill would encourage investment into the industry to ensure ever-increasing capacity. I do not know how it will do that because I do not think it does. It makes a token gesture by allowing lines companies to increase generation capacity from 25 megawatts to 50 megawatts and makes a good argument for opening the door again so that lines companies can come in and become generators. I know the National Party wants to allow that. New Zealand First is not necessarily convinced that that is the way to go but we believe the token provided for in this bill is not good enough. 
In New Zealand we provide electricity to the amount on average of around 8000 megawatts per year and we use every megawatt. We use everything. In 1998 we had a surplus that we could sell. If we can produce something and sell it all effectively we have a very limited market—if a market at all. 
Gerry Brownlee 
: You can’t store the stuff. 
PETER BROWN 
: We cannot store it no. We sell it all. If anybody who produces electricity sells it all there is no market to put pressure on prices. 
STEPHEN FRANKS (ACT) 
: 
 I can see the enthusiasm among Government members for my speech. It is very interesting to go to a bill and see what is basically a 1950s sort of Stalinist regulatory prescription. This is the Minister who is going to make electricity by making rules. This Minister says that reserve energy is created by specifying the conditions of securing and using that energy and by specifying the circumstances and terms including volume and price by which that energy must or may be offered on the wholesale market. 
I ask the Minister why the Government lost its nerve to use the sort of mechanism that would have rewarded every consumer. Why does nothing in the bill enable householders who can save when we are short to get the benefit of their saving? If they will not save why does the bill not ensure that the price will give them a signal that power is suddenly more valuable when the rain is short the wind has stopped blowing and we cannot use coal because the Government has signed up to the Kyoto Protocol so that all the coal will be burned in China and India instead? 
 What is it about the market that has failed? We heard the words “market failure” tossed around but what we have is the absolutely predictable outcome of a Government looking as if it is about to panic. 
What investor is going to build any new capacity when the Government is holding a big stick out and saying: “If we don’t like the price you charge and it’s awkward and politically embarrassing we will regulate.”? Why would new capacity go in in those circumstances? 
So what we had last year was a bluff being called. When the market said: “We won’t build new capacity in these circumstances.” the Minister could then turn round and say that he had to go ahead and pay someone to build it. Of course the market is not going to agree when it has a Government that came in in 1999 saying: “We believe in looking active.”—“We as politicians will go out there and earn votes by looking as if we will thump people around who have lots of money.”; “We will thump them first with an increased tax rate and then we will thump them with regulations that tell them what price they can buy at what price they sell at how much and who they supply to.”—together with all the conditions that are now set out in clause 10 and the pages and pages of rules that the Minister can now make. Because it is patently obvious to anyone who reads those rules that it will be politically imperative to respond the next time there is any kind of crisis. 
The Minister will not be able to resist when the major electricity users group the telecommunications users association equivalent comes and says: “We don’t want to pay the real cost of reserve generation for our industries. We would much rather that you took that from the taxpayer or disguised it in a levy or seized it from consumers because you’ve got the power to do it. So please do it Minister.” How will the Minister withstand that kind of pressure? Putting that kind of regime into legislation is an absolute recipe for being able to say—for the next 25 years—that the market does not work because there will not be volunteers in a market whose building is unconstrained and when it is quite plain the Minister can stipulate its rate of return at will. 
This is that self-fulfilling prophecy: the Minister will get up and say: “I fear market failure so I’ll give myself powers to deal with market failure.” and of course there will be market failure. But it is not failure; it is simple market prudence. It is exactly what any investor would do. It is exactly what the Electricity Commissioner said when the Government came in and guaranteed the Meridian investment. The commissioner asked why people would go ahead without the benefit of a guarantee. Who will want to compete when the Government can be panicked into stepping in every time there is a complaint? 
In Part 1 we now have pages and pages of powers—or what look like powers—given to a Minister that in fact will end up as fetters. They will end up as irresistible demands on the Minister because the Minister will not be able to stand there in front of us on the  
Holmes 
 show saying: “Yes I did have the power. No I chose not to use it because I thought that using it would frighten people from investing in generation.” No this Minister will not say that. The Minister will instead pull the levers and try to look as if he is generating electricity by his rules and what we will have instead is a return to the New Zealand of the Muldoon days—the New Zealand where Mr Muldoon managed to fend it off for quite a long while. 
Hon ROGER SOWRY (National) 
: 
 This is a major part of the bill and one we are very very opposed to. I start by saying to the Minister in the chair the Hon Harry Duynhoven that his help on Part 1 in the Commerce Committee does need to be acknowledged and I thank him for that help. If I can give a bit of history it was during the latter stage of the bill—in fact after all the submissions had been heard—that Transpower toddled around the back of the bike shed and went to see the Minister Pete Hodgson. Transpower said that it must be excluded from any legal action being able to be taken by a lines company or a generator that thought Transpower was at fault—if there had been a breakdown in supply or something like that and someone wanted to take legal action Transpower wanted immunity from legal action. That was not in the bill so I thank the Hon Harry Duynhoven for agreeing with me that interested parties should at least be consulted on this. And they were. A number of parties came to the select committee and they were outraged by this. Meridian Energy as a generator and Orion as a lines company are two that stick out in my mind. They were just outraged that they would have no legal remedy against Transpower if there was a fault that was due to Transpower’s negligence. 
There are very few times that I am disappointed in the advice from officials but this was one of them. The officials sat in front of the select committee and to paraphrase it basically said that this is what is done around the rest of the world there are precedents for this; so be it. When we looked at those precedents we saw that it was not done. In fact other State-owned transmission companies do have the right to be sued—albeit it in a narrow range. We now have those clauses back in the bill with a much narrower range around them. 
So I start this speech by being positive and saying to Harry Duynhoven: “Thanks for your help in getting that part of the bill right.” because I think we have got those clauses right in this part. What worries me about this part though is the levy on industry participants. I say to the Minister that we are tabling an amendment to this and I am looking forward to other parties’ support on the amendment. We are not being radical. United Future members do not need to die in a ditch just worrying about whether they will or will not support the Government—again. All we are saying is that before the levy is set we believe that the Electricity Commission should have to consult all affected parties. That is fair enough. 
At the moment if one goes to the Electricity Commission’s website right now—and Mr Copeland can shake his hand; he does not think it is fair—one will see the levy that it is putting on lines companies. There are now lines companies planning legal action against the commission. They were not consulted. No one asked them. They were levied. “Bang. This is what you pay. That’s it. End of story. There’s your cost. Pay up.” That is a cost that goes straight through to consumers. I was with my lines company Electra this morning and they are furious about this. They are involved in legal action using consumers’ money to fight this proposal. It will be interesting to see how the Labour members vote; whether they think that the lines companies should be consulted. That is all! We are not asking that they have to agree because I do not think I could get people to agree to that. So it is a soft amendment saying that at least the commission should have to consult. 
I hope that the Committee will see fit to put this amendment into the bill so we do not end up with the commission having the power to tax with no accountability at all. The Minister in the chair the Hon Harry Duynhoven is checking to see whether the amendment is soft and I am pleased he is. I hope he takes a call. In fact I hope the Government supports the amendment because I do not think it is onerous on a Government at all to ask for consultation. For members who are following the debate it is an amendment to add new paragraph (d) to subsection (1A) of section 172ZC inserted by clause 16 which talks about the way the levy is prescribed. I am saying that we should add that any levy must be determined by the commission after full consultation with all the relevant industry groups including consumers. 
The reason I put in “including consumers” and I do not expect them to go out there and consult every household is that I have had Grey Power members in my office. They are very worried about the cost of the commission being levied on the lines companies and the lines companies saying: “Oh well that’s a tax.” and then whacking it straight through to elderly consumers. They are saying there is no consultation in the bill. All I am saying by adding new subclause (d) is that any levy must be determined by the commission after full consultation with all the relevant industry groups including consumers. 
 I have to say that I do not think we could get a softer amendment than that. It has no financial implications. I do not think the Government can go out there and veto it because it is only consultation. Once it has consulted it can still see it but at least it can give people a chance to have a say. The Minister must acknowledge this. Consumers are really wound up. They do not get a chance to have a say any more. They get a letter from Contact Energy from their lines company saying: “Your prices are going up.” Contact blames the lines companies. They end up having to go to the Commerce Commission to get it sorted out and they find out it was actually Contact that put the prices up all along. Genesis Energy whacked its prices up the other day. 
Consumers just get this continual barrage of price increases. We can blame all sorts of previous structures but we have a structure that the Minister is trying to make better. I do not think this bill does it but I think that by putting in this amendment at least we are giving people a say. We will be moving some further amendments as Grey Power in particular is concerned to have a say on some of the industry committees and I think one appointment does not actually matter a big deal. I think that is a good point to have. We will be looking to do that. We will be looking to increase the lines companies’ ability to generate. 
But I particularly want to make this point to Harry Duynhoven given that he helped the committee dig the Government out of a hole on the issue of Transpower not being able to be sued when the fault was there. Given that he was reasonable about that when the Minister clearly was captured by Transpower officials—the Minister did not even bother to come to the committee to explain it to us but Mr Duynhoven was very generous in his willingness to work with the committee to get some better clauses in this part of the bill—my appeal to Mr Duynhoven is to support the addition of new paragraph (d) to subsection (1A) of section 172ZC inserted by clause 16. This is a small change to enable us to go back to our lines companies and say that before the levy is placed on them they will at least be consulted so that they do not find out about it as lines companies did on this one by logging on to the web and finding out that this is what their levy will be so pass it on. We are not talking about a small amount of money. It is millions of dollars is it not Minister? 
Hon Harry Duynhoven 
: Yes it is. 
Hon ROGER SOWRY 
: It is and he nods; generously so. It is. It is millions of dollars. So I think that amendment will go a long way and I hope the Minister can see fit to support this. I hope that others in the Committee will support it too. I know the Greens will because they are always worried about low-income earners and Grey Power. I do not think they will want to say to Grey Power: “Actually we just did not favour any consultation.” 
I think this is a small move. It will not solve the Act. It does not alter my view of the bill at all in terms of supporting it but it is a small move that says to the Government that if it is going to ram this through as it is at least put a bit of consultation in there for people who are most at risk. And those who are most at risk in electricity terms are consumers who end up bearing all of the cost. Lines companies do not bear any of this as none of the fees and none of the levies stay with them. They do not take it off their bottom line; it all gets passed through. 
That is why Electra and two other lines companies are looking at legal action. What a waste of money! What a waste of the money that those lines companies will spend. Judy Keall who was a member of this House is on the Electra trust board and she is looking at legal action to fight her Government because of the levy and the way it has been put on. What sort of nonsense is that? So when the Labour members who have gone on to the trust board are fighting their own Government that tells us that all is not right in the state of Rome or the state of Levin or wherever one happens to be at the present time. 
So I am saying to the Minister that I hope he can say a few words on this and explain to the Committee that he is happy to support it because that will go a long way to facilitating this debate. 
Hon HARRY DUYNHOVEN (Associate Minister of Energy) 
: 
 I accept the member’s point that there should be some consultation involved in this. Although he says it is millions of dollars he should remember that that is a small fraction of a percent on power bills and it is to provide the reserve capacity needed that is not provided because of the way the market works. I say to the member that his amendment would be a good one if it were not already covered. If he checks section 172ZCA in clause 16A he will find that the budget set-up includes consultation with the parties involved. 
I will make a quick comment in relation to Mr Brownlee’s earlier comments about the Dobson project. The Dobson project just happens to be in the South Island. Mr Brownlee said that it could cure the supply problem in the northern part of the North Island. 
Gerry Brownlee 
: I raise a point of order Madam Chairperson. I appreciate the Minister’s response but so that we be clear I said it was about security of supply in the northern part of the South Island. 
Hon HARRY DUYNHOVEN 
: I thank Mr Brownlee. I misheard him and I apologise for that. Mr Brownlee also said there was a responsibility on the part of the Labour Government for generators gobbling up retailers. In fact all purchases of retail businesses by generators and that includes the State-owned enterprises took place in 1998 and 1999. All of them were completed by 1 April 1999 except in one instance. That was On energy in 2001 which was taken over by Genesis and Meridian because On energy had failed to take out hedge contracts before the 2001 winter. One of the reasons that this legislation is being put in place now is of course as a result of the shortages that occurred at that time and the way in which the market did not cope and did not provide for security of supply. The electricity market is a technical complex and dynamic being to the extent that we could never include in primary legislation everything needed to ensure that it operates in response to every situation and when we get into regulation and rules Ministers have to be involved. This cannot be totally delegated independently. 
I thought Mr Franks’ simple and dogmatic arguments that the Government was in panic and we should have a hands-off approach were interesting. That failed us years ago. Intervention is necessary at times and that is what this is about. It is to ensure that where necessary the right amount of signal is given. The Electricity Commission has a large number of features. It does not simply regulate. It does not simply make decisions. It is not only about recommendations but also about regulations and rules and three or four recommendations regulations and rules have already been promoted. It is about initiatives. It is about new legal initiatives that might be required. It gives effect to the Government’s policies on electricity. It is a much broader mandate than a simple regulatory body as has been portrayed. It makes contracts for reserve energy to ensure security of supply. It will regulate and coordinate to ensure security of supply to ensure not only that we have the capability in the system but also that fuel stocks are available that we have coal stockpiles where needed etc. It is very simple to write it off and say that it is a panic reaction. By the way it is very hard to argue that this is a panic reaction on the one hand then say on the other hand that for 5 years the Government sat on its hands. Clearly that is not the case. 
Hon Roger Sowry 
: Are you coming back to the amendment? 
Hon HARRY DUYNHOVEN 
: Mr Roger Sowry says that the amendment does not cover consumer groups. 
Hon Roger Sowry 
: No it doesn’t cover consumer groups. 
Hon HARRY DUYNHOVEN 
: I am not sure that the member is correct in that because the advice I have had from the officials is that in the setting of budgets groups have to be consulted. The suppliers and participants—and presumably therefore their voice from the consumer groups—have to be consulted. After all as the member has just pointed out many of them have trusts that are involved. Surely they represent the consumers in the area. I know that in my area they certainly do until events that are happening right now that are quite separate from this bill. 
Hon Roger Sowry 
: So will Grey Power be consulted? 
Hon HARRY DUYNHOVEN 
: I am not sure of the answer to that but I imagine that it will have very strong representation particularly in Electra. As the member said I am sure that with Judy Keall there Grey Power will have very strong representation. But one of the features of the system we have now— 
Darren Hughes 
: She’s a former member who got elected to that trust. There’s a former member from our area who will never get elected to it. 
Hon HARRY DUYNHOVEN 
: Can I say in response to the interjection that Judy Keall was a very good and assiduous member of Parliament and I am sure that the views of Grey Power will be strongly represented in that particular electricity trust. 
Hon RICHARD PREBBLE (ACT) 
: 
 Let me turn first to the amendment moved by Mr Sowry and the response from the Minister in the chair Harry Duynhoven. I say to the Minister that in the way I am following it I am not sure he is correct. The clause that requires consultation—and there is such a clause—states: “The Commission must before submitting a request to the Minister seeking an appropriation of public money for the following year or any change in the appropriation in the current year consult with those industry participants who are liable to pay a levy …”. So that provision certainly is there. But when we look at the levy is there a requirement to consult? No there is not. It appears to me that Mr Sowry’s amendment may be needed. I am reluctantly willing to support Mr Sowry’s amendment because I would not want anyone to think that the ACT party thinks that once consultation has occurred this levy is a good thing. No it is not. Also to say it is only a few cents on the power bill is to avoid the reality of what this levy is for. 
One reason the levy is there is for “endeavouring to ensure the security of supply”. That could be a bill of hundreds of millions of dollars. Indeed I think the levy will go up and up because this bill makes it very difficult for private sector generators to enter the market. It makes it less likely that they will do so. It will mean that the commission will have to build more and more of our generation. How do we know that? Genesis has already said that it will not build without a Government guarantee. If a State-owned enterprise backed by the deep pockets of Treasury is not prepared to build generation then why on earth would a private sector investor? I believe we will see the Government finding more and more requests to build new generation coming either from its own State-owned enterprises meeting by a guarantee or from the commission. 
The Minister has not responded to the points made by Mr Franks. I need to make this point to him: the market failure he is referring to and that has occurred in electricity is the result not of failures of the market but of failures of regulation. One of them is quite simple. We all know that if a large amount of electricity in New Zealand is consumed by households and if they are all exempt every time we have a power shortage and it all falls on the private sector then we do not have a market. If it were possible for consumers to participate in the market—and we participate by deciding to switch off and have cold showers for a while—and benefit financially from that or if those who wish to spend and have electricity at a time of shortage pay more then we have a true market. Would that work? Of course it would work. 
The reason we have not had it is that successive Governments in New Zealand have not been prepared to allow consumers and electricity suppliers to enter into agreements like that. If we want to have an agreement with our electricity supplier that guarantees one’s electricity supply even in times of shortage then we ought to pay more for it—of course we should. That requires some sort of reserve being put aside. But if people are prepared to go through an electricity shortage with less electricity—and I believe there are large numbers of New Zealanders who would—then they ought to be able to opt for a contract that allows that. In New Zealand only the commercial sector has been allowed to have those sorts of markets. The market failure the Minister refers to is a failure by the Government to believe in the market. 
I draw to the attention of the Committee to those members who may not have read this the number of regulations the Government is proposing here. I think we are unfair to describe this as “Muldoonist”. I cannot recall a bill that had these sorts of regulations. As far as I can see the Minister will be able to regulate virtually anything. This is Stalinist. I draw the Minister’s attention to clause 9 which contains the provisions relating to regulations. In the wholesale market we are able to have electricity including pricing—I guess Muldoon went in for pricing—clearing settling and reconciling market transactions; scheduling and dispatching electricity; disclosure of market information; disclosure of information on hedge and contract volumes and prices; the promotion of hedge including futures markets; minimum prudential standards for market participation; and minimum standards of market conduct. That is just for wholesaling. 
In generating there will be electricity generators to hold and provide for reserve fuels including water—we are going to regulate that; electricity generators to offer by tender a minimum volume of contracts; electricity generators to post buy and sell prices for hedge. We are to have disclosure of information on hydro lake levels and inflows thermal fuel stockpiles supply contracts for thermal fuels capacity to generate disclosure of offers into the spot market and disclosure of information on spill. Then on transmission there will be quality and security standards for transmission systems and reasonable terms and conditions on which Transpower must enable distribution lines. It goes on to expansions replacements or upgrades and so on for pages and pages. 
This industry has not been nationalised; it has been regulated. It will be totally regulated. Will new participants want to enter into this industry? I say to the Minister that the market risk of entering into generation now will be enormous. That is why the question of the levy is important. In effect we are nationalising the building of new generation. That will be produced by levies. I realise there is consultation in some areas but I do not think it covers the levy. If we do not accept Mr Sowry’s amendment we will have a situation whereby a substantial amount of tax in New Zealand will come through our power bills. It may be the result of a commission that goes power mad and decides to start building more generation than we need. Of course that was the situation in the 1950s 1960s and 1970s in New Zealand and I think it could well occur again. We could end up with a gold-plated electricity system where there is no proper debate or discussion as to whether the reserve generation is needed. 
A consultation clause of course is no substitute for the disciplines of a market but if we are not going to have a market then we should at least enable consultation. There ought to be consultation by those who will be affected which will be the lines companies. I am not sure whether Grey Power could make a great contribution to this matter but I most certainly believe we ought to ensure that a consultation clause is included. For that reason even though I do not want to have this interpreted as the ACT party supporting a levy I recommend that we vote for it. I ask the Minister to consult his officials. It does appear to me that consultation is only about a request for public money. Is he saying when we look at the definitions that a levy meets that? In looking at the definitions clauses of the bill I cannot see that. It may be that he can direct me to some other clause but I think that his officials are being disingenuous when they say that yes there is some consultation. Yes there is but is the consultation over the levy each year; if so where is it? I cannot see it in the bill. If I cannot see it then I bet members that when this bill has gone through the commission will not be able to see it either. 
The commission will not want to consult over the levy. As the bill states the commission can think up any figure it likes which could be hundreds of millions of dollars. Personally I think that is a tax one that if it went through this House we would debate. We would call for consultation and we would have a great deal of discussion on the matter. We are taking a power of taxation and giving it to this quango and then the quango I believe when it comes to the levy itself will not have to consult. 
DAVE HEREORA (Labour) 
: 
 I move  
That the question be now put 
. 
PHIL HEATLEY (National—Whangarei) 
: 
 I would like to continue this debate particularly along the lines on the issue of consultation. Members may be interested to know that although we have been debating one particular levy this Electricity Commission being set up under this bill has the potential to put in place seven different levies that will ultimately hit consumers and whether those consumers are the levy payers or the taxpayers the reality is that they are the mums dads and businesses in this country. 
The Electricity Commission can have a systems operation levy a market operation levy a supply security levy if it wishes—and I am sure it will—an electricity efficiency levy and if that is not enough it can have a consumer protection levy. One has to ask how a levy protects the consumer. I would have thought it should have a levy protection levy with all those coming down. The sixth type of levy is an electricity transmission levy. There are six different levies that this Electricity Commission can put in place in order to tax consumers because ultimately they will pay. But last of all the commission can levy what is known as “other activities” and that can be as broad as the imagination will allow. 
I have an amendment put forward by Roger Sowry in relation to the Whirinaki issue which I would like to raise with members. The amendment adds to clause 19 new subclause (5) which states: “The Minister must consult with all other generators before determining the terms of the Whirinaki contract.” Here we have the absurdity. Clause 19 informs us that the Minister may direct the commission to enter a contract relating to the Whirinaki power station. Here is a power station—a diesel generator by the way—in the Hawke’s Bay commissioned last year operating on diesel and not as a State-owned enterprise but in all senses basically subject to the Electricity Commission which is supposed to provide security of supply. 
What is happening is that the Electricity Commission is purchasing reserve power. Whirinaki will be sitting there on a retainer which will cost the consumer and it will kick in when there is a high electricity demand where supply does not meet demand. The Minister is prepared to legislate a reserve generator to meet the demand when supply is low yet he is not prepared to legislate for or on any policy platform support for those in the private sector or even for State-owned enterprises to go into the construction of generation plants themselves. 
The Minister will not promote in any way coal generators because he is against coal. He will not promote in any way geothermal generators. We saw this in recent times when the extension of the geothermal generation at Ngawha in the far north was literally put on the back-burner by this Government. The Minister will not promote in any way other generators around the country. In fact as the Hon Richard Prebble mentioned the E3P project in Huntly was not going to get off the ground at all unless it was underwritten because that generator had no confidence whatsoever that it would be a runner with current Government policy and legislation. 
GEORGINA BEYER (Labour—Wairarapa) 
: 
 I move  
That the question be now put 
. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I welcome the opportunity to comment on Roger Sowry’s two amendments. I think he has put his finger right on the button. I am surprised—actually I am a bit embarrassed—that we did not pick these things up at the select committee. They are very obvious things and I compliment the member on bringing them up. 
With due respect to the Minister the clause that he referred to does not cover the issue and these two amendments should be given serious consideration by the Government. They are fairly innocuous really and simply state that there is an obligation to consult and we will support them wholeheartedly. The Hon Richard Prebble either wittingly or unwittingly illustrated quite clearly how badly the market is failing in this country in terms of electricity. I say to members of the Committee that it is not acceptable to the average New Zealander living in the 21st century to have to pay extra to have access to their power all the time. 
Hon Richard Prebble 
: They do it elsewhere. 
PETER BROWN 
: They might do it elsewhere but that is moving back to the 19th century. That member should get into the 21st century. We want power at the flick of a switch at reasonable prices and that is the problem that MPs must face up to. The question that New Zealand First has asked is whether this bill does that. The answer unfortunately is no it will not do it. 
Hon Richard Prebble 
: Well you’re right about that. 
PETER BROWN 
: I am right about that and I am right about the other one. That member should ask any members of the public whether they want electricity any time of day at a reasonable price. 
Hon Richard Prebble 
: Win Lotto! 
PETER BROWN 
: He is comparing wanting electricity with winning Lotto. I would suggest to Mr Prebble that average New Zealanders see the winning of Lotto as something that is extraordinary but when they go home at night on a cold day they want to be able to put the fire on and the lights on. I know that the average New Zealander is accommodating and would say: “Well I don’t want all the lights on. I’ll turn them off in this room if I’m only using that room.” People do not want all their lights all at the same time but they do want access to electricity 24 hours a day 7 days a week 365 days a year. 
I believe that people want that electricity delivered at reasonable prices and that is the challenge that we in Parliament must face up to. That is the issue that the public wants us to address. Will this bill do it? New Zealand First says that it will not. Will a competitive market deliver reasonable prices to the average consumer to the business consumer and to all consumers? The answer is that if there is a working market then it will but we do not have a market that is working to the fullest extent. Can we get there? This bill will not help us get there. In the view of New Zealand First it will not encourage investment in sufficient quantity to develop capacity supply and generation. 
We need to face up to the fact that we have billions of tons of coal in this country and use it at a reasonable price to generate electricity. The amount of carbon dioxide that would go into the air or wherever is negligible on a worldwide scale. We sell it to India and to China. They burn it with impunity and we restrict it here. I say to the Minister in the chair Mr Duynhoven that he should think again about the use of coal. Wind will go so far—we can get so much wind power relatively cheaply—but to get the full amount of electricity we need will be very very costly. Cheap gas is running out. We know we have to find an alternative and it is sitting there. We have enough coal to supply electricity to this country for hundreds of years but we prohibit its use for ideological reasons. I say that is daft. New Zealand is a relatively small country with a very small population on a world scale. We should be using coal to generate electricity at reasonable prices. 
Hon Richard Prebble 
: The member is right again. 
PETER BROWN 
: I am right on about five things. 
Gordon Copeland 
: I think so too. 
PETER BROWN 
: United Future agrees. I think I might have a re-think now! I say seriously to the Minister that this is not a joke. We are using electricity on an ever-increasing basis. 
DARREN HUGHES (Junior Whip—Labour) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be put. 
Ayes 70 
New Zealand Labour 51; Green Party 9; United Future 8; Progressive 2. 
Noes 47 
New Zealand National 27; New Zealand First 12; ACT New Zealand 8. 
Motion agreed to. 
The question was put that the following amendment in the name of the Hon Roger Sowry be agreed to: 
to amend section 172ZC(1A) of the principal Act by adding the following new paragraph: 
(d)any levy must only be determined by the Commission after full consultation with all the relevant industry groups including consumers. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 47 
New Zealand National 27; New Zealand First 12; ACT New Zealand 8. 
Noes 70 
New Zealand Labour 51; Green Party 9; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the following amendment in the name of the Hon Roger Sowry to clause 19 be agreed to: 
to amend clause 19 by adding the following new subclause: 
(5)The Minister must consult with all other generators before determining the terms of the Whirinaki contract. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 47 
New Zealand National 27; New Zealand First 12; ACT New Zealand 8. 
Noes 70 
New Zealand Labour 51; Green Party 9; United Future 8; Progressive 2. 
Amendment not agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 243 in the name of the Hon Pete Hodgson be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 70 
New Zealand Labour 51; Green Party 9; United Future 8; Progressive 2. 
Noes 47 
New Zealand National 27; New Zealand First 12; ACT New Zealand 8. 
Amendments agreed to. 
The question was put that Part 1 as amended be agreed to. 
A party vote was called for on the question  
That Part 1 as amended be agreed to. 
Ayes 70 
New Zealand Labour 51; Green Party 9; United Future 8; Progressive 2. 
Noes 47 
New Zealand National 27; New Zealand First 12; ACT New Zealand 8. 
Part 1 as amended agreed to. 
Part 2 Amendments to Electricity Industry Reform Act 1998 
Hon ROGER SOWRY (National) 
: 
 We are now into Part 2 of the bill and I guess the pattern of the debate has been set where we will see the Greens voting with the Government on this bill which will put up the price of electricity substantially. They are doing it I guess for conservation reasons. They think that if people have to pay more they are more likely to conserve. We see United Future voting with the Government to put the price of electricity up. I am not quite sure what their reasons are. United Future seems to take an increasing approach of voting against the business sector and the business community and this is probably part of that approach. It is also their little game that goes on with the Greens as to who will be in bed with the Labour Party on any particular day. 
That aside we are now into Part 2. In this part we have an amendment to delete paragraph (a) of clause 22. Part 2 is a very important part because the constraint in the electricity industry at the moment is one of availability of power. We do not have the fuel or the generation that we need in this country. We have five major generators of which three are State-owned and two are privately owned. It is a pretty cosy little club to be honest. 
A whole lot of other potential generators are lines companies. They are sitting out there with an enormous amount of capital ready to invest back into the industry. This bill increases the amount those companies can generate up to a maximum of 50 megawatts or 20 percent of the total demand for their lines. We say that is just not enough. 
The two major lines companies in New Zealand are Vector which is Auckland-based and supplies Auckland and Wellington and Powerco which is headquartered in New Plymouth and supplies the New Plymouth and Tauranga regions right through down to Wairarapa—as the Minister indicated. They are the two largest lines companies in the country. They came to the Commerce Committee and said: “We want to get into generation. We want to build some generation facility but we won’t do it if you put these artificial limits on.” 
That is what New Zealand First members were talking about when they said that we needed some more generation. We might differ with them on how much generation is needed but National’s view is that given that the Commerce Commission now controls the pricing of the lines business through its consumer price index minus X formula lines companies are highly regulated and given that they cannot cross-subsidise—which is the purpose of the Commerce Commission regulations—then why would one restrict them? 
The Government has fallen between a couple of stools. Pete Hodgson says: “Well I don’t want them to generate but I’ll let them do so much. They can do a little bit of generation so that ideologically I’m not being totally opposed to them generating.” Then the Greens toddled into Mr Hodgson’s office and said: “We think that the lines companies should be able to generate as much as they like from renewables.” and the Minister said that was OK. 
So a lines company can put up as many windmills as it likes but it cannot put up a coal-fired unit. The Greens nod and say that that is fine except if one is cold and the lights go out. I predict that the Greens will feel the political blast of that in the near future. 
So there is no principle in this at all. I know that New Zealand First can see there is no principle in it because its member said so in the House before. He might not go as far as us but at least he understands the issue. What I would really be interested to see is where United Future members go on this. In effect they have said that the deal has been done behind closed doors and they will not listen. But I ask whether they will be prepared at least to look at the fundamental principle. 
A lines company is either generating or it is not. What we have now is lines companies with abundant amounts of money and not knowing what to do with it. Powerco is off to Australia with its money. Because we deny the company here it will invest in Australia. That is smart; really clever. Vector is likely to do the same. That does not seem very smart politics to us. 
However what is even more worrying to me is the small lines companies out there doing all sorts of potty things with their money because they cannot buy or invest in a local generation scheme. For example Electra owns a finance company. Well that is really useful for power consumers. Electra owns Oxford Finance in Levin. I am sure that every power consumer wants to own one of those. Electra also owns an electrician’s business. I suppose one could say that owning an electrician’s business is OK. 
The other day Electra’s chairman said to me that it was looking at investing in a winery. I said: “What?”. But there is more. It has just put up its prices. The Government has Electra on a consumer price index minus X formula which allows it to put up its prices this year so it has put them up to meet the formula. So consumers are paying more money and the lines companies want to invest the money in generation but they are not allowed to except if it is wind. Well it does not blow very much on the Kapiti coast. Electra’s chairman said: “What the hell we’ll buy a winery.” I hope that he was pulling my leg but I do not think he was. So that is the worry with the nonsense of this. It is just ludicrous; absolutely ridiculous. 
I say to the Minister—and this is genuine—that he has gone out there and staked his reputation on getting new explorers into the country and good on him. We have two rigs out there at the moment which is the most we have had for a zillion years and all of that. God help us if they find anything! If they find something and want to bring it on shore in Canterbury the major investor to help them would be the lines company and it will not be allowed to. I bet that if they find something we will be back in this House changing the rules because that is what we will have to do. 
Hon Harry Duynhoven 
: It’s a good thing they’re drilling in the Wairarapa. 
Hon ROGER SOWRY 
: I do not know why and I am not sure how that helps because Powerco still will not be able to invest in it. 
We are locking out major chunks of potential capital for no good reason. Why would the Government vote to say that the power companies cannot build a combined-cycle gas turbine plant but can build a windmill? Why would it say that? Who built the last combined-cycle gas power plants? A lines company did. 
Hon Member 
: Genesis. 
Hon ROGER SOWRY 
: No Genesis Power did not build them and the Minister knows that. Genesis is about to build one a little jet engine thing. The one the Minister knows I am talking about which is the Taranaki one—the one he is proud of and beats his chest about and for good reason—is a good plant and he knows that it is. He has been there. He told me that when I was there. It was built by the lines company. Why would we lock them out? Why would we allow windmills to be built but not small coal-fired power stations or combined-cycle turbines? It just does not make sense. So we have an amendment to take out clause 22(a). Let us tell the lines companies to make their business decisions go out there and if it stacks up build it. If it stacks up and they can get resource consents they should build it. 
If the Greens think that the answer is in wind I ask them what happened tonight at 6 o’clock. The Genesis wind farm failed to get consent because it offended Maori values. That is a Resource Management Act issue and I suspect that members will probably come to that in the House tomorrow. It is an issue in itself. The wind farm met all the other criteria but offended Maori values. The proposal was turned down by the Environment Court today. 
So wind power is not that easy to get. It is easier for a lines company to buy a finance company a winery or God knows what next—a Chinese restaurant or something—than to invest in the infrastructure that we really really need in this country. 
GORDON COPELAND (United Future) 
: 
 I shall take a call on Part 2 and speak to exactly the same clause that Roger Sowry has just spoken to—namely clause 22. In some ways I agree with a lot of what he said. However I also thought that at times he wandered off into a mist of hypothetical unreal situations. So let us get down to a little bit of reality about the clause. Firstly when the bill went through its first reading and then to the Commerce Committee the limitations on lines companies for investing in non-renewable generation were amounts of no greater than 25 megawatts or 10 percent of the maximum demand of the lines owned or operated by the person. The bill of course has now been amended to provide for a limitation of the greater of 50 megawatts or 20 percent of the maximum demand of the lines owned or operated by the person—namely a doubling of the situation which every party in the House should be very happy about. Why has that happened? It happened in a rather unusual way. When Meridian Energy decided to pull the plug on Project Aqua we had an urgent debate in the House about that matter. In the course of the speech that I gave on that occasion I asked the Minister the Hon Pete Hodgson why on earth we had those restrictions on lines companies of 25 megawatts or 10 percent. In response he was good enough to say that I had a good point and that he would go to 50 and 20 percent. So on the spot he basically doubled the amount. That was obviously a very very worthwhile move. 
Therefore the question now arises—and this is Roger Sowry’s point—of why we have any restrictions at all. I must say that I have some sympathy with that point of view. I think though that he completely overstated the case in a couple of areas. 
Firstly there is nothing to stop a lines company from building a small coal-fired plant or a small gas-fired plant because those companies can go up to 50 megawatts. Roger Sowry’s was a completely erroneous statement. The second and more important point is as he has just said that the situation is very very simple if a lines company at any point in time does discover gas—and let us hope that they do; I certainly hope that they do because we desperately need more fuel—or indeed if it wants to build a large new coal-fired station which United Future would support 100 percent. Like Peter Brown we believe also that coal is a resource that we should exploit in this country. Recently I gave my support to Mighty River Power’s proposal for example to try to convert the Marsden B power station to coal and I hope that it is successful in its resource consent for that. However the reality right now is that we do not need lines companies to buy up existing plants. There is no point in our just simply reshuffling the pack and swapping the ownership of existing non-renewable generating companies from the present generators to lines companies. 
The urgent need this nation has right now is for brand new generation. We need to have brand new generation and we need it quickly. We need it to utilise any fuel that is available frankly. If the day comes when a lines company does want to build above the 50 megawatts or 20 percent level in coal or in gas then I have the assurance of the Hon Pete Hodgson who has given me his word which I am recording in  
Hansard 
 tonight that in those circumstances the company simply has to come to him and we will very quickly whip a bill through the House to permit that to happen. Obviously if we do that we will have the support of every party here so it should not be a problem. I point out to Roger Sowry that the gap between discovering some new gas off the Canterbury Bight for example and actually processing it to generate electricity would in any event be several years long and we would have ample time to whip some legislation through the House to permit that to happen. 
A straw man is being set up here tonight. The goal is to get new generation going and to encourage that. The other example that I gave to Pete Hodgson was that I know Solid Energy will probably go out to tender at some time for a 100 to 150 megawatt coal-fired plant near Westport. 
Hon RICHARD PREBBLE (ACT) 
: 
 I deliberately waited until after the United Future party had spoken to this part because I was interested to learn how a party that claims it is centre-right could support such legislation. Let me say to that party that this is one of the most socialist bills I have seen—and I have been in this House for 26 years. I saw Sir Robert Muldoon’s legislation and I know this is Stalinist centralised command-and-control legislation. Then we found that the United Future party boasted that it had a role in the bill. Yes it has managed to persuade the Government to lift the generation limitation for lines companies from 25 megawatts of power to 50 or from 10 percent of their load to 20 percent. Somehow that is a justification for United Future to vote for the bill. Then the member gave us another extraordinary justification: he said that if somebody does find some gas we will whip a new bill through Parliament. 
Gordon Copeland 
: Why not? 
Hon RICHARD PREBBLE 
: The member asks why not. I ask the member given that that party says it is principled where the principle is behind voting for this legislation and where the principle is—whether economic religious or from any ideology of any nature—that states it is evil for a lines company to generate 51 megawatts of electricity and it is evil for it to generate more than 21 percent of its load. 
I could understand a split between lines companies and generation if the limitation was set at zero. Or if we are to say that lines companies should get into generation why can it not be set at 100 percent? I say to the United Future party that I realise it likes to suck up to the Government and its members like to be able to get up in the Chamber and say that they made a tiddly little change so they are good boys. 
Gordon Copeland 
: More than you can say isn’t it? 
Hon RICHARD PREBBLE 
: The member says it is more than I can say. I say to Mr Copeland that at least one knows the ACT party has a rational point of view. We have a rational point of view and we are asking why if lines companies are to be allowed to get into generation the limitation is set at 50 megawatts? Is there a law that states that generators that generate less than 50 megawatts are efficient? If one listens to Mr Copeland’s own words—which is more than he does—one can hear that he is arguing for a 150-megawatt station to be built by Solid Energy but not by a lines company. Now I ask Mr Copeland what is wrong with that? He cannot give us an answer to that because the United Future party is on the far far left of New Zealand politics. It does believe that the Government and the Minister ought to interfere with the industry in that way. United Future does believe in command and regulation. It is on the left in terms of its views and it ought to be upfront and admit that. United Future ought to be upfront and say that the Government would not be able to introduce this socialist legislation without the support of the United Future party. 
It is no good for the United Future members to come along to the Chamber and say that they made a minor variation to the bill and therefore this socialism is OK. Either one is in favour of the free market and believes in free enterprise—in which case one would vote against the bill—or one does not and is a socialist. I say to Mr Copeland that he is a socialist. He is on that side of the paddock and he ought to be proud of it. He should go out there and tell small-business people that he does not vote in favour of deregulation but that he gets up in Parliament and supports a Stalinist bill. Yes the United Future party does belong with the Labour Party. Mr Dunne has not changed his stripes; he is a socialist. He does believe he knows better than other people and that he can tell investors what they should do. That party believes it knows better than other people and it is telling the lines companies that it is evil for a lines company to generate more than 20 percent of the generation in its area. I do not know what that evil is because Mr Copeland has not got around to telling us what it is. Apparently it is terribly inefficient to generate 51 megawatts but we are told that if gas is found then all Mr Copeland’s principles will go out the window and he will come down to the Chamber and rush new legislation through. 
PETER BROWN (Deputy Leader—NZ First) 
: 
 I want to follow on from where Richard Prebble left off although not perhaps in such a fierce mood. I say to Mr Copeland that he has let New Zealand down by taking pride in doubling the megawatts from 25 to 50 that lines companies are allowed to get involved in generating. He has let New Zealanders down. I wish New Zealand First had known that before today. We did not really know where that figure came from; nobody on the Commerce Committee could tell us that. Now we know there was some sort of little backroom— 
Gordon Copeland 
: I wrote to the select committee and told it about that. 
PETER BROWN 
: I say to him that if he had done nothing but put a representative on the select committee—and I cannot recall a United Future member turning up to the select committee at all if I am correct— 
Gordon Copeland 
: I raise a point of order Mr Chairperson. I think that is a breach of Standing Orders. The United Future party does not have representation on that committee and for the member to announce to the people of the New Zealand that we are not on that committee is against the Standing Orders. That is not fair to— 
The CHAIRPERSON (Hon Clem Simich) 
: That is not a point of order. 
PETER BROWN 
: I have to go on along those lines because I say to Mr Copeland that frankly if United Future had even had someone sitting in the audience to listen to the submitters and especially to the lines companies he might have thought then as we thought that 50 megawatts was not enough. 
The debate tonight has certainly convinced me in my mind that there is a stronger case for National’s proposal to totally uncap the limitation on lines companies. The honourable member shakes his head but I can remember that separating lines businesses from generation was a result of the Bradford reforms. The argument was pretty sound. I thought Labour opposed it at the time; as I recall the situation it opposed it pretty strongly. But the point now which Roger Sowry made exceedingly well is that we now have lines companies investing in generation in Australia. I hope they are not investing in wine companies but they have to do something with their money. There is a strong case for considering allowing lines companies to get back into investing in generation in this country. 
New Zealand First debated that matter at length in our caucus. We were concerned that if we removed the cap totally one of them—or maybe two—would go out and buy Contact Energy and we would have not a kilowatt more of generation. But there would be some advantages in that because Contact Energy would be a totally New Zealand - owned company. We decided that the whole matter should really be subjected to a comprehensive review by professionals by people who know the industry inside out with a view to determining the best outcome for New Zealanders in terms of security of supply a reasonable price and the availability of electricity at the flick of a switch. 
But after hearing the debate tonight and after listening intently to Roger Sowry and then to Gordon Copeland New Zealand First has decided it will support the National Party’s amendment. We think there is a lot of merit in deleting clause 22(a) and allowing lines companies back into the scene so to speak. We know that they are now subjected to regulation that they are controlled by the consumer price index minus x formula and that they cannot cross-subsidise. Why we did not do that in 1998 I am at a loss to know. It seems to me that the National – New Zealand First coalition Government at that time made a mistake because it did not think through that change thoroughly enough in my view. I know that the Minister the Hon Pete Hodgson made very strong representations at the select committee—he was on that committee at the time—along the lines that we should not just split it all off totally. 
So New Zealand First is of the view that there could be some significant benefits to New Zealanders and to this country as a whole if we get new generation. It seems we can get that more readily by allowing the lines companies in and it seems that if we allow them in and allow them to build coal-powered generators with some degree of liberalisation for want of a better term we will all be better off. 
GORDON COPELAND (United Future) 
: 
 I raise a point of order Mr Chairperson. I would like to direct your attention to Speaker’s ruling 24/1 which states: “(1) The convention of not referring to the absence of a member is equally valid when applied to the presence or absence of a member from a select committee hearing.” I could not bring the reference to mind when I raised my point of order but I think that that Speaker’s ruling makes it very clear that members should not refer to the absence of a particular member from a select committee. I would like you to take that into account. 
Hon RICHARD PREBBLE (ACT) 
: 
 Mr Copeland should have read out the whole of that Speaker’s ruling because it goes on to state: “(2) there is no breach of the convention in referring to the fact that a member was not a member of the committee and so did not attend committee hearings when evidence was being heard.”As I understand it Mr Copeland’s main argument is that he was not a member of the committee which is exactly what Mr Brown was pointing out to the Committee. Of course Mr Brown was perfectly entitled to say that United Future members could have gone to the Business Committee and could have made themselves members of the Commerce Committee but they did not. 
The CHAIRPERSON (Hon Clem Simich) 
: I thank both Mr Prebble and Mr Copeland. I tell Mr Copeland that he has no basis to his argument; Mr Prebble is quite right. 
GORDON COPELAND (United Future) 
: 
 I raise a point of order Mr Chairperson. I agree entirely with the second part of the Speaker’s ruling which is why I said that we were not there. But if we go back and check  
Hansard 
 we will see that Mr Peter Brown said that no member of United Future decided to go to the select committee. Therefore the second part of that ruling is not applicable—the part that gives him permission to refer to the fact that we were not there if in fact we could not have attended because we were not members. He simply said that we did not bother to turn up and I think that that is a breach of the first part of Speaker’s ruling 24/1. 
Hon RICHARD PREBBLE (ACT) 
: 
 Well I was trying to give Mr Copeland the benefit of the doubt because in fact he interrupted Mr Brown’s speech when Mr Brown had actually made the points he was referring to. I presumed that Mr Copeland would not be relitigating a point of order he had already made and that he was raising a new matter. Mr Brown after that point of order corrected himself and then went on to point out that United Future did not have a member on the committee. In fact Mr Copeland’s point of order is completely out of order because it should have been raised at the time and not afterwards. 
The CHAIRPERSON (Hon Clem Simich) 
: I thank members for that. The ruling is that Mr Copeland was out of order and he should not interrupt a member’s speech when he does not have a proper point of order. That is the way it is. Mr Brown was not referring to any absence from the committee in a way that is covered by Standing Orders or Speakers’ rulings. 
PHIL HEATLEY (National—Whangarei) 
: 
 I would like to bring the Minister of Energy the Hon Pete Hodgson up to speed on what we have heard in the Committee this evening regarding the deal he made we understand with Gordon Copeland of United Future. United Future has apparently made a deal with the Labour Party in relation to lines companies having the ability to go into generation over and above the 50 megawatts as proposed in clause 22. 
We would like the Minister to comment and confirm that Gordon Copeland had assurances from him that if there were some discovery in terms of gas or some huge need or opportunity for lines companies to go into significant generation—by definition I suppose that means above 50 megawatts—the Minister together with United Future would put a bill through the House— 
Hon Richard Prebble 
: Rush it! 
PHIL HEATLEY 
: —and rush it through the House we presume under urgency to allow lines companies to go into generation well over and above the 50 megawatts as proposed in the bill which is the current restriction they have. So we would like to hear from the Minister whether that is in fact the case. Will lines companies sometime in the future be able to generate well over and above 50 megawatts? We would like to ask the Minister whether he gave assurances to United Future that legislation would be passed. Did he do that verbally or in writing and does he stand by it? I invite the Minister to take a call on that matter. 
In doing that I also invite the Minister to tell us why he thinks that in the future—whether in the near term medium term or distant future—there might be a sudden need for generation that is over and above the need that exists today. We already know that the No. 1 constraint in the electricity industry today is the availability of power. There is constraint through the lack of generation and through the fact that the Government in no way encourages generation in this country at this time and certainly has not for the past 5 years. The Government does not encourage coal generation with the Kyoto Protocol and through the Resource Management Act. It is starting to dismiss wind generation and we saw that by the cancellation this evening of a proposal for wind generation because of constraints under the Resource Management Act. We know that the Minister does not support geothermal generation because the constraints on that for sustainability go way past 100 years—which is unachievable. So why would this Minister suddenly decide that at the moment with the lack of generation in this country and with poor growth seen into the future there may be some need down the track? Can the Minister please take a call on that and tell us whether he has given some assurance that he will whip legislation through the House to allow lines companies to go into significant generation. 
We also ask the Minister: what is magical about 50 megawatts? Why has he chosen in clause 22(a) that lines companies are allowed to generate 50 megawatts of energy? We know that 25 megawatts was the magical answer before that and that is in the bill and before this legislation came to the House 5 megawatts was the magical number that lines companies were allowed to go into generation with. So why was it once 5 megawatts—why was that the magical figure? Why did it become 25 megawatts? How come through this legislation today lines companies are suddenly limited to a figure of 50 megawatts? In percentage terms it has gone from 5 percent to 10 percent and then to 20 percent. 
Hon PETE HODGSON (Minister of Energy) 
: 
 The preceding speaker has asked a number of questions which basically boil down to: why did we choose 50 megawatts? I will tell him the history. There was earlier in this Parliament a member by the name of Max Bradford and he came to the view—supported by all the National Party members—that the way we should run our electricity system in the future was as follows. If someone owned a line that person could not simultaneously own an electron. That was the view of the National Government at the time. 
Hon Roger Sowry 
: We’ve changed our mind. 
Hon PETE HODGSON 
: Roger Sowry has just chipped in saying: “We’ve changed our mind.” That is good is it not because that is proof that the National Party now realises that that was a most extraordinary error. The disruption around the country was amazing. It was astonishing; so much so that by the time we came to the winter 2001 event— 
Phil Heatley 
: Why 50 megawatts? 
Hon PETE HODGSON 
: I have 5 minutes and I will get to that question. I did not chip away at the member who has just resumed his seat during the course of his speech which went on and on and I expect him to stand by and get an answer to the question that he has put to me. If he does not want an answer he can continue to chip and I will resume my seat. 
What happened then was we went to winter 2001 and we found some reserve generation on the waterfront of Wellington but the person who owned the generator also owned the line and we could not turn it on. That is why we needed to get the electricity amendment legislation of 2001 through the House in a hurry. That is how silly it was. At that stage we said: “Let’s start moving in such a way that lines companies can generate a certain amount.” At that stage the threshold was set at 5 megawatts. 
Then we came to this legislation 3 years later. In the interim something else had happened. Lines companies were placed under Commerce Commission regulatory review. They are under watch. They may be subject to a Commerce Commission inquiry or they may be subject to the CPI-x regime and on it goes. So now for the first time we have decent disclosure as to how lines companies run; whether they are making excess profits; and whether they are doing what they were doing in Britain which was creaming it and behaving monopsonistically and the answer is generally speaking they are not although there are some exceptions to that. Those exceptions are detailed by the Commerce Commission and as the years have gone by we have a much much better handle on whether there has been monopoly rent taken by lines companies and an ability to reduce that rent if it is taken. 
So I put to the House legislation that said: “Let’s raise the threshold. Five is too low so let’s go to 25. Let’s just quintuple it.” That legislation then went to a select committee. In the course of the select committee hearings a number of people came along and said: “That’s still too low.” and the select committee came to the view that it should be raised to 50 megawatts. Then in the House—in front of the member who has asked a question about a so-called secret deal—Gordon Copeland got up during a question and asked: “What does the Minister think about going to 50 megawatts?”. I said: “Well if the select committee decides that is the right thing to do it is fine by me.” And that is the end of the story. 
Hon RICHARD PREBBLE (ACT) 
: 
 I hope Mr Copeland was listening to the Minister because the Minister basically told us that Mr Copeland’s belief that he is responsible for the 50 megawatts is as far as the Minister is concerned nonsense—and Mr Copeland is telling members what a great influence United Future has had. Mind you the Minister could not actually tell us: “If it’s 50 then why not 100?”. But let us turn our minds to the ridiculous amendment from the Greens. 
The Greens have said that line companies can generate any amount they like providing it is from a new renewable energy source. I looked at the principal Act to see whether “new renewable energy source” is defined. The Greens might be interested to know that it is not. I know the Greens do not know anything about physics but that means that they are in favour of a line company—and there might be one mad enough to do it—generating by nuclear fission because nuclear fission results in plutonium. The Greens might be interested to know that it is definitely within the definition of a “new renewable energy source”. So the Green Party is saying it is in favour of nuclear power in New Zealand and I never thought I would see that day. 
Peter Brown 
: Maybe he’s had a few smokes! 
Hon RICHARD PREBBLE 
: Maybe he had a few. Well he thinks it is funny but that is exactly what this clause does. Let me tell him something else. I am a lawyer and I would be quite willing to go along and argue—as I am sure a line company lawyer will—that a new renewable energy source does not cover just wind and water but also covers things like coal. Coal is generated over millions of years and there must be new coal being generated as we speak. It will be being formed and new gas will be being formed. There is nothing in this bill to say how rapidly the renewal of the energy source has to be just that it is happening. Well as a matter of scientific fact it is happening so the Green Party is introducing a measure that actually says that line companies can generate any amount of energy provided that they get a lawyer like me—and I will soon be available—who is quite happy to argue that this clause covers any energy and it certainly covers nuclear fusion. There is no doubt about it. 
Sue Kedgley 
: Is that renewable? 
Hon RICHARD PREBBLE 
: It is renewable—of course it is. Nuclear fusion results in plutonium. It is one of those interesting processes where one ends up with more energy at the end. In fact the Greens ought to love nuclear fusion. Perhaps they do—perhaps I have misinterpreted the Greens. Perhaps the Green Party is really right into nuclear power. I always thought that they were against it but I see this clause being put in and I say that this is the sort of clause—like the 50 megawatt clause; if we accept Mr Copeland’s argument—that gives MMP a bad name. Here we have small little parties trying to prove to their membership that they have some influence so they put forward this sort of amendment. Even though the clause is nonsense—and both clauses are nonsense; the whole bill is nonsense—in order for the minority Labour Government to have a majority to put through this Stalinist legislation we have clauses of this sort. It is sheer madness. 
The Government ought to realise that the reason it is in this position is not just MMP and its loony flaky coalition partners like United Future and the Green Party but that what it is trying to do does not make any sense. There is a Resource Management Act and it is for that Act which talks about sustainable New Zealand to decide those sorts of questions. It is bad lawmaking—and the Minister knows this—to put in a clause that uses the term “new renewable energy source”—a term that has not been defined by the Greens. The Greens do not know what that means. Nor do the line companies. There will be litigation about this matter. I say to the Green members that the result might be the exact opposite of what they think. We have line companies that are crazy enough to invest in wineries and finance companies so they are certainly nutty enough to invest in nuclear power now that they have been told by the Green Party that it is the only form of energy they are allowed to invest in. Why should this Parliament be attempting to make those sorts of guides and rules for the energy companies? It is complete utter nonsense. 
DIANNE YATES (Labour—Hamilton East) 
: 
 I move  
That the question be now put 
. 
Hon ROGER SOWRY (National) 
: 
 I want to take Minister Pete Hodgson’s attention for a while because he was not in the Chamber for the debate. I say to him firstly that the Commerce Committee did not decide to do this in the way he portrays it. In fact when we in the select committee asked about going to an unlimited amount of generation—and the Labour members were there when we asked the officials—the officials told us it was a policy decision. The Labour members of the committee voted for the Labour policy. One presumes that that was something the Minister decided. We were told earlier by Gordon Copeland that both he and the Minister decided on that new artificial limit. The debate really is about why we should have the limit. 
I accept the arguments the Minister made about what National did in the 1990s. As I said we changed our mind; it is not our policy now. 
The Minister has here a “get out of jail free” card. We can have unlimited generation by lines companies and because of the “CPI minus X” regulations and the regulatory environment the Minister has put around lines companies we can feel confident that the cross-subsidisation the Minister and his predecessors worried about will not occur—or if it does occur will be adequately picked up and monitored. We are confident with that. 
I think the Minister is confident with that as well in his heart of hearts. Otherwise why would he allow lines companies to have an unlimited number of windmills but not to have anything to do with gas? Before the Minister came to the Chamber tonight I put to members a situation. I was criticised because it was hypothetical but let us say it is not. We have two gas rigs currently drilling at sea. The Government should rightfully accept credit for having a couple of rigs out there after a long period without rigs. Some of that credit is to do with the Government and some is to do with the price of Maui Gas being right but those rigs are drilling now. I have heard the Minister say that he has been worried about finding gas and that that has been his biggest concern—rightly so. If a company finds gas for example in Canterbury and wants to bring it on and do a deal with a lines company to build a combined cycle plant—the last major one built in this country in New Plymouth was built by a lines company—it will not be able to do it. This bill will prevent it from doing that. 
Gordon Copeland who supports the bill said in the Chamber that that was OK and that he had talked to the Minister who said that amending legislation would be brought in to fix that should gas be found. I do not know whether Mr Copeland is right or wrong—I have no reason to disbelieve a God-fearing man—but I say to the Minister that that is a bit of a silly way of doing it so National will vote to remove the restriction. We will help the Minister so that he does not have to be a hostage to the Greens. I suspect that if the Minister were to put his hand up to vote for that even United Future would vote for it. I think United Future is kind of clinging to the fact that it has a small gain and it thinks that that is about where the politics are on this issue. 
The politics are in letting a lines company unleash some of its capital. The Minister will know as I know that lines companies are talking about investing in Australia. That is nutty when we need the investment here. It is crazy! If we can guarantee that those companies will not cross-subsidise the investment why not let them make it? As the Minister well knows lines companies are also looking at other investments that are way off beam from electricity. I gave the example before of ElectraLines which owns a finance company. 
Hon Pete Hodgson 
: Who’s that? 
Hon ROGER SOWRY 
: ElectraLines. It owns the Oxford Finance Corporation in Levin and I do not think the Minister believes that that is a good use of money for a lines company. That is not what it should be doing. It should be investing in some generation if it wants to invest or just giving a rebate to consumers—I do not care what. I know the politics of the industry; I know what has gone on before; I am not trying to walk away—[ 
Interruption 
] The member can go on about that but I am not trying to walk away from any of it. 
National disagrees with the bill. In fact it might be made more difficult for us if there were no limit in the bill on lines companies. But I say to the Minister that we should remove that limit and let the lines companies live with “CPI minus X”. Let us have faith in the Commerce Commission: I am glad that that is where the Minister has left the regulatory regime and we will come to that in the next part. Let us do all that. Let us remove this silly clause that allows a lines company to put up as many windmills as it wants but does not allow it to put a small coal-fired unit or something else in place. 
Hon PETE HODGSON (Minister of Energy) 
: 
 I think the member raised some good points but I think he has also told an incomplete story and I would like to finish the other half if I may. The issue of whether we should allow generation capacity of above 50 megawatts is of course something that people have talked about. It is a matter of fact that with new renewables there is no limit—there has not been one for 3 years. It is a matter of fact that new renewables are defined in the 2001 legislation and that in that legislation reserve generation can be built without limit. 
Notwithstanding those changes and notwithstanding the fact that the without limit provision for new renewables has been in place for nearly 3 years there has not been a lot built. That raises the question of why. Because that answer is not yet known to me in the past few weeks I have asked the Ministry of Economic Development to go and find out. In fact after discussions with Gordon Copeland and other members—and with myself one might say—I have asked the ministry to go away and consider whether we should remove that threshold altogether. That work is now under way. 
If we were to remove the threshold we would of course allow all retailers to buy lines companies. That means we would have the prospect of some sort of regional concentration. There might be one Auckland power company or one Wellington power company that would have part of its obligations regulated etc.—OK? So we will take a look at that and see whether it is the right thing to do. 
In the course of the Commerce Committee hearings one lines company decided that it wanted that to happen now without the public policy analysis—if we did not mind. Well we do. That company did not want to build new generation; it wanted to buy other people’s. If only its trustees—or the National Party members amongst them—could stop taking one another to court then maybe we would see that particular lines company get into the gas business. It did not want to build new generation; it wanted to buy existing assets—and that is a very interesting distinction. 
The member asked why we did not release capital for new generation. The answer is that we just did somewhat—not that much has been built. If we removed the threshold entirely the capital may not go to new generation for indeed the largest lines company in the land has decided that it wants to buy other people’s assets. 
GERRY BROWNLEE (Deputy Leader—National) 
: 
 That may seem like a very reasonable contribution from the Minister. People listening to the radio or sitting in their offices around Parliament would have thought that was a nice peaceful little explanation from the Minister and I suppose it gives us an indication of a Government that is thinking about these things. But the reason there has been no substantial investment in renewables for generation in the last 3 years is that it is so hard and what is left to people is so unreliable. The Minister would have to concede that if one wanted to do a hydro project in this country—and hydro power is a renewable form of energy—it is almost impossible. He would also have to concede that if one wanted to build a wind project in this country the economics make it almost impossible. Big companies like the State-owned generators can carry out the nice little exercise of building wind farms everywhere but everyone knows that on the best of performances they will be barely 40 percent efficient. So why would a lines company want to risk its consumers’ or its owners’ capital on such a dodgy venture? When it comes to biomass energy or something else—when it comes to any form of emission—we know immediately that the Resource Management Act will stand squarely in the way. 
The fact that nothing has happened in the last 3 years since the Minister allowed lines companies to look at unlimited amounts of generation from renewables is that all the other conditions that have to be in place are not in place. It does not matter how many times the Electricity Commission meets sits and makes decisions until those other factors are taken care of it is most unlikely that we will see any sort of substantial investment from those companies in new generation capacity. 
 The Minister said it is interesting that one of the country’s biggest line companies wants to buy only generating assets that exist. Well it wants to do that because it knows how hard it is to get new generation established. We have seen in the last 12 months the falling over of the very large project on the Waitaki River and although one or two new wind farms have opened up they are just nice little green adjuncts to the generating capacity of the big companies. 
I ask the Minister whether he might comment on corporate separation. What exactly is the purpose of having a statement about corporate separation in this bill and for that matter the arm’s-length rules that relate to the preparation of the contracting of and the purchasing of reserve generation? We need to understand that this Government is proposing to smooth out any possibility of interruption to electricity supply by creating reserve capacity. Well how do we create reserve capacity when already there is more demand than capacity to deliver? 
Hon David Cunliffe 
: Read the State-Owned Enterprises Act. 
GERRY BROWNLEE 
: What we will see over a period of time is the Government encouraging State generators—and there is good evidence of it happening now—to create that reserve capacity effectively by rationing through price. It is the consumer who will pay for that. I heard a member on the other side of the Chamber interject: “Read the State-Owned Enterprises Act.” I ask his Minister to explain how one’s reading the Act is relevant or helpful in understanding how this committee of well-meaning people is going to work to get reserve capacity in this country. 
Hon David Cunliffe 
: Would the member like me to take a call? 
GERRY BROWNLEE 
: I would very much like the member to take a call. 
JILL PETTIS (Labour—Whanganui) 
: 
 I move  
That the question be now put 
. 
The CHAIRPERSON (Hon Clem Simich) 
: We have had over an hour on this part but I think the Committee would like to hear some more good sense. 
Hon RICHARD PREBBLE (ACT) 
: 
 I think that the Greens despite suggesting they would not would actually be very interested in what I have to say. I am obliged to the Minister for taking a call—it was very parliamentary of him—and pointing out to me that there has been an amendment in a subsequent Act. Following the 1999 Act in 2001 “new renewable energy source” is defined. I am obliged to the Minister and I have now read it. It certainly does not rule out nuclear energy and it states that a new renewable energy source means an energy source that occurs naturally the use of which will not permanently deplete New Zealand’s energy sources of that kind. What that means is that an imported coal-fired station would meet this definition. Why that is important for those of us who know about energy is that in fact the cheapest way to produce energy in New Zealand is to set up a large coal-fired station and import the coal from Queensland. Indeed that is exactly what one of the State-owned enterprises did. When there was a coal shortage it was importing coal from Australia. 
I find it simply amazing that the Green Party is saying and this bill is saying that a line company—and who would want to do this; well it would be the Auckland line company—can build the 150 megawatt station providing the coal that it burns does not deplete New Zealand’s coal. So here we have the Green Party saying: “We are in favour of coal–fired stations provided it is not New Zealand coal.” That is what it says I will read it out. It means an energy source that occurs naturally the use of which will not permanently deplete New Zealand’s energy sources of that kind. It goes on to say that it has to be replenished if it is in New Zealand. I might point out that this definition clearly allows wood-fired stations because wood would renew within 50 years. So the Greens are in favour of a wood-fired station which I assure members has all the attributes of a coal-fired station. 
Here we have the Green Party saying—actually it is more than saying. I think this bill is almost a direction. It is going to become an absolute certainty that the line companies want to get into generation. We know that because they came along to the Commerce Committee and said they wanted to build a station bigger than 50 megawatts. We even had the United Future party telling us that Solid Energy wants to build a 150 megawatt coal-fired power station. Well if it buys a line company it will be able to do it because then it will come under the exemption and then it will be allowed to build as big a power station as it likes provided it does not use New Zealand coal. That is all the renewable energy sources provision does. It says that we cannot burn New Zealand gas but we can import it from Indonesia and there are people who have said: “Let us bring in liquid gas and have a gas-fired station from liquefied petroleum gas.” That is perfectly OK by the Greens because no doubt they read this clause. 
I have to say to the Committee that I had not appreciated until the Minister drew it to my attention that in 2001 and no doubt it was he who did this he managed to—I will not say con the Greens—persuade the Greens that somehow we are helping the whole planet if we burn Australian coal and not New Zealand coal. 
 The odd thing is of course that New Zealand coal is dug up and sent to Indonesia and the Indonesians send their coal here and that is OK! That is all right; it helps the planet! [ 
Interruption 
] The Green member Sue Kedgley is interjecting from her seat. I ask her to explain to us whether that is what she meant. Is that Green Party policy? Could we have the Green physics that will let us know that somehow or other we help the planet if the Indonesians burn our coal and we burn their coal. 
Hon Maurice Williamson 
: What if they sent ours back? 
Hon RICHARD PREBBLE 
: That is a point but no I do not think that would be allowed. I think we would have to test the Indonesian coal to make sure it is not our coal that has been sent there and brought back again because I think that would be naughty. Under this provision that is what “renewable energy” means. Interestingly what it does not mean is “hydro” and “geothermal” and Lord knows why that is. 
Hon DAVID BENSON-POPE (Minister of Fisheries) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 70 
New Zealand Labour 51; Green Party 9; United Future 8; Progressive 2. 
Noes 47 
New Zealand National 27; New Zealand First 12; ACT New Zealand 8. 
Motion agreed to. 
The question was put that the following amendment in the name of the Hon Roger Sowry to clause 22 be agreed to: 
to omit paragraph (a). 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 47 
New Zealand National 27; New Zealand First 12; ACT New Zealand 8. 
Noes 71 
New Zealand Labour 51; Green Party 9; United Future 8; Progressive 2; Awatere Huata 1. 
Amendment not agreed to. 
A party vote was called for on the question  
That Part 2 be agreed to. 
Ayes 71 
New Zealand Labour 51; Green Party 9; United Future 8; Progressive 2; Maori Party 1. 
Noes 47 
New Zealand National 27; New Zealand First 12; ACT New Zealand 8. 
Part 2 agreed to. 
Part 3 Amendments to Commerce Act 1986 
Hon ROGER SOWRY (National) 
: 
 Part 3 is a relatively narrow part which amends the Commerce Act. I want to bring attention to what I think is a very serious issue. I will do it quickly now; I know that we will have to deal with this part again when the Committee resumes sometime next sitting day. 
Subsection (3) of new section 57CA inserted by clause 30B refers to the Commerce Commission and states: “The Commerce Commission must if asked by the Energy Commission to do so reconsider an existing authorisation or undertaking and to the extent that the Commission considers it necessary or desirable to do so”. What we have is the Commerce Commission having to dance to the Energy Commission’s tune. 
If we look at an earlier part of the bill we see that that commission is able to be directed by the Minister. So let us go through the food chain. The Minister can direct the commission about something to do with lines company charging or the regulatory environment or the environment those companies function under. The commission then toddles off to the Commerce Commission and the Commerce Commission is required to have a look at it. We have in this country an independent Commerce Commission—or we have had until this bill is passed. Now we are to have a Commerce Commission that is being brought into political question by its dancing to somebody else’s tune. 
Not only that but the Minister is further muddying the waters by proposing to have some commissioners who are joint commerce commissioners and energy commissioners. So they will be answering to the Minister one moment then sitting on a case supposedly independently the next. Imagine if in the Air New Zealand - Qantas debacle that went through the Commerce Commission the Minister could have gone to the transport authority and said he wanted it to do A B and C and to make sure the Commerce Commission looked at A B and C and the transport authority could then have toddled off to the Commerce Commission and said it wanted it to have a look at this and this and the Commerce Commission was obliged to look at this and this because the Minister had directed it to do so and there was cross-accreditation of commissioners. 
Progress reported. 
The House adjourned at 9.56 p.m.